Republic National Distributing Company - Chapter 11 APA Summary

Control State Brokerage Business Sale Summary

Posture

• The court entered the sale order on Sept. 18, 2026, approving a private sale of the debtors' "control state" beverage brokerage business to the Martignetti entities without any postpetition auction; the order authorizes the debtors to close immediately upon entry, waiving any stay of effectiveness, and cautions that any objector must diligently seek an appeal and stay before closing or risk mootness.
• No bidding procedures, bid protections, overbid increments, or auction mechanics are part of this transaction. The court found that the debtors and their advisors ran a robust prepetition marketing process that afforded a full and fair opportunity for higher or better offers, that the purchase agreement is the highest and best offer, and that a postpetition public sale process or auction would have decreased value by creating uncertainty and deteriorating supplier relationships, which are essential to the value of the assets.

Purchase Price

• Consists of the sum of:
  • $14.5 million in cash;
  • plus the estimated laid-in cost of all saleable vendor-of-record inventory as of closing, with the estimate to be agreed by the parties at least three business days before closing (together with the fixed amount, the cash payment); and
  • the assumption of the assumed liabilities.
• Laid-in cost is the original purchase price based on actual cost to the sellers, plus freight, fuel, taxes due on purchase, customs charges and duties, and brokerage charges, less all discounts, rebates, and special purchase allowances, established by supplier and seller invoices and records.
• The purchaser pays the cash payment less the deposit at closing by wire transfer.
• Inventory true-up: the escrow agent retains 25% of the estimated inventory price at closing as the VOR adjustment escrow. Within 30 days after closing the parties close the books on the inventory and negotiate in good faith over the difference between actual and estimated inventory price, with either party able to petition the chosen courts if they cannot agree within that period. Any shortfall is released to the purchaser and any excess to the sellers out of the escrow, with the balance released to the other side, and either party pays the difference in cash to the extent it exceeds the escrowed amount.
• The purchase price is allocated among the acquired assets under section 1060 of the tax code per an agreed allocation methodology, with the purchaser to propose an allocation within 75 days after the final purchase price is determined.

Deposit

• 10% of the cash payment, funded with SRS Acquiom as escrow agent on or before the Sept. 4, 2026, effective date and not subject to any lien, attachment, or judicial process of any creditor of either side.
• The sellers retain the deposit, plus any investment income, if they terminate for the purchaser's breach (or if the purchaser terminates in circumstances where the sellers could have terminated for its breach), which the agreement characterizes as liquidated damages rather than a penalty; on any other termination the deposit returns to the purchaser. Release instructions are due within five business days of termination in either case.
• At closing the full deposit, less the VOR adjustment escrow amount, is released to the sellers and credited against the cash payment.

Parties

• Sellers: Republic National Distributing Company, LLC; RNDC New Hampshire, LLC; RNDC General, LLC; K&L Beverage Company, LLC; Young's Market Company of Oregon, LLC; RNDC-NWS, LLC; NWS Michigan, LLC; National Wine & Spirits, LLC; and L&L Wine and Liquor, LLC. Only RNDC, RNDC New Hampshire, K&L, and Young's Market are debtors.
• Purchaser: Martignetti Companies Control State, LLC; Martignetti Companies of New Hampshire, LLC; and Martignetti Companies of Utah, LLC.
• The court found the purchaser is a good-faith purchaser entitled to section 363(m) protection, is not an insider or affiliate of any seller, and shares no common incorporators, directors, members, or controlling stockholders with the sellers.
• RNDC acts as seller representative with unilateral authority to bind every seller, including waiving conditions and agreeing to amendments, and the purchaser is entitled to rely on its actions.

Non-Debtor Sellers

• RNDC-NWS, NWS Michigan, National Wine & Spirits, and L&L Wine and Liquor are the only entities operating and owning the business in Michigan, and RNDC General is the only such entity in Ohio; none is a debtor in any bankruptcy proceeding, and RNDC General represents that it is and will remain solvent after closing. Certain supplier contracts relating to the Ohio and Michigan business may have been entered into by RNDC, and RNDC makes available to those sellers certain services, systems, and assets necessary to operate the business there.
• The sale order expressly does not reach the non-debtor sellers: none of their assets are being sold under section 363, none of their contracts or leases are being assigned under section 365, and none of the order's findings or conclusions apply to them. The debtors have no obligation to pay cure costs or pre-closing liabilities on those assignments, though the non-debtor sellers' own obligations under the agreement to pay pre-closing liabilities are preserved. Each non-debtor seller is receiving a portion of the purchase price representing fair value for the portion of the business it sells.
• The debtors are authorized to take all corporate actions necessary to cause the non-debtor sellers to monetize substantially all of their assets under the agreement, and the automatic stay is lifted to the extent necessary to allow the purchaser, the non-debtor sellers, and the non-debtor owners of the Michigan and Ohio joint ventures to act under the agreement.

Assets Being Sold

• All right, title, and interest of each seller in the assets, properties, goodwill, and rights related primarily to or used primarily in the operation of the control-state brokerage business, other than excluded assets, free and clear of encumbrances except permitted encumbrances, including:
  • the sellers' commercial relationships with the suppliers in the territories with respect to the brands;
  • leasehold and subleasehold estates in the leased real property, but only the leases scheduled as assigned leases;
  • acquired IT, consisting of office furniture, furnishings and equipment at the leased premises, employee cell phones, laptops and tablets on the sellers' company plan for employees who join the purchaser, and computer and telecommunications equipment located at the assigned-lease premises;
  • all saleable vendor-of-record inventory, meaning in-code inventory from purchaser-identified continuing suppliers that can be processed and received by a retail account in its existing packaging at closing and is not damaged, spoiled, discontinued, obsolete, or otherwise unmerchantable;
  • tangible personal property located in the territory, including point-of-sale and promotional materials, and copies of non-privileged customer, sales, route, vendor, financial, compliance, and product-development records, with originals of business records transferred at closing and the sellers permitted to keep copies;
  • transferable intangible property, including transferred permits, guaranties, warranties and indemnities in favor of the sellers relating to other acquired assets, and telephone and facsimile numbers used primarily in the business; and
  • the leases and other contracts listed on the assigned-contracts schedule.
• Tangible or intangible property held under a contract does not transfer unless that contract is an assigned contract.
• Territory by seller: RNDC covers Maine, Vermont, Alabama, Iowa, Mississippi, North Carolina, Pennsylvania, Utah, West Virginia, Wyoming, Montana, and Virginia; RNDC New Hampshire, New Hampshire; RNDC General, Ohio; K&L, Idaho; Young's Market, Oregon; and the Michigan non-debtor sellers, Michigan. Each territory is limited to control-state brokerage business.

Excluded Assets

• Cash and cash equivalents, bank accounts (other than any the parties agree to include), deposits, prepaid expenses and rights to credits, refunds or rebates, professional retainers, and all accounts and notes receivable, including supplier receivables and amounts due from employees and related parties.
• All avoidance claims and causes of action under chapter 5 of the Bankruptcy Code or applicable law and their proceeds; all other claims, causes of action, rights of recovery, set-off, and recoupment arising out of events on or before closing, including those against suppliers, vendors, and contract counterparties; and all claims related to excluded assets or excluded liabilities.
• All contracts other than assigned contracts; all rights under employee benefit plans; income tax refunds, attributes, and assets; equity interests of any seller or other person; and amounts owing from seller affiliates.
• All current and prior insurance policies, including D&O policies, together with all recoveries and rights to assert claims under them.
• All intellectual property other than acquired IT, including the sellers' logos, websites, social media accounts, domain names, and email addresses, and all licenses, permits, authorizations and orders other than the transferred permits.
• Contracts, inventory, and assets relating to the brokerage, sale, or distribution of non-alcoholic beverage products in New Hampshire and, absent mutual written agreement before closing, Pennsylvania; tangible assets located outside the territory; assets used primarily in a business other than the business; and assets listed on the excluded-assets schedule, which the parties may amend by mutual consent through closing.

Assumed and Excluded Liabilities

• The purchaser assumes only liabilities under the assigned contracts arising from and after closing; liabilities arising out of its own conduct of the business or ownership of the acquired assets from and after closing, including environmental, health, and safety matters attributable to its post-closing ownership or operation; amounts it is required to pay under the agreement, including all transfer taxes; and taxes on the acquired assets, assumed liabilities, or business for taxable periods beginning after closing, excluding taxes of the sellers.
• Everything else is an excluded liability, expressly including all liabilities arising from the sellers' pre-closing supplier relationships; accounts payable and other liabilities related to saleable VOR inventory arising before closing; all liabilities of NWS Michigan, RNDC-NWS, and L&L Wine and Liquor under financing or leasing arrangements with Wells Fargo Capital Finance, LLC, Wells Fargo Bank, N.A., or Banc of America Leasing & Capital, LLC; and all cure costs. The sale order confirms that nothing in it obligates the purchaser to pay or discharge any excluded liability, including cure costs.

Credit Bid

• No credit bid was made; the lenders gave it up as part of the deal. The DIP credit agreement, the prepetition first lien credit agreement, and paragraph 26 of the final DIP order each gave the DIP agent and the prepetition agent, acting at the direction of their respective required lenders, the unqualified right to credit bid up to the full amount of the DIP facility loans and prepetition loans in any sale of their collateral, subject to paragraph 16 of the final DIP order, section 363(k), the carve-out, and any court-approved bidding procedures, and in the prepetition agent's case subject to satisfaction of all DIP obligations and obligations secured by permitted prior senior liens.
• Section 6.3 of the DIP credit agreement barred any disposition of the debtors' assets without the prior written consent of the required lenders. The required DIP lenders consented to the sale and, together with the required lenders under the prepetition first lien credit agreement, waived the applicability of those sections and paragraph 26, including waiving the agents' and their designees' right to credit bid for the purchased assets.
• The court found that consent and waiver a material component of the overall consideration the sellers provided to the purchaser and a material inducement to the purchaser's entry into the agreement, payment of the purchase price, and consummation of the sale, and that the purchaser would not have signed without it.

Free and Clear; Successor Liability

• The debtors' purchased assets transfer free and clear of all encumbrances other than permitted encumbrances and assumed liabilities under sections 105(a) and 363(f), with valid and perfected encumbrances attaching to the net sale proceeds attributable to the affected property in the same order of priority, validity, force, and effect, subject to the estates' rights, claims, and defenses. The court found each standard of section 363(f)(1)–(5) satisfied as to every lienholder and that holders who did not object, or who withdrew objections, are deemed to have consented under section 363(f)(2).
• Permitted encumbrances, the principal carve-out from that transfer, are real estate taxes not yet due, being contested in good faith, or whose nonpayment the Bankruptcy Code permits; ordinary-course mechanics' and similar liens not yet due; zoning, building-code, and land-use laws not violated by the current use; easements, covenants, and restrictions of record that do not materially impair use of the property in the business; the lessors' and sublessors' interests under the leases; and, only before closing, encumbrances the sale order removes or releases.
• Wells Fargo Bank, as prepetition agent and DIP agent, consents to the free-and-clear sale as to all claims and liens under the prepetition credit facilities and the DIP facility loans and to the release and termination of those liens; the purchaser is authorized to execute and file termination statements for the DIP and prepetition liens, as are the debtors and the DIP agent.
• The assets are also sold free and clear of reclamation rights, and the parties waive bulk-sales compliance, with the transfer intended to be free of any encumbrance arising under bulk-sales laws.
• The purchaser and a broadly defined group of purchaser parties, including its affiliates, equityholders, lenders, funds, agents, insurers, attorneys, and their respective directors, officers, and employees, are not successors to the debtors or their estates under any theory of law or equity, and the sale is not a consolidation, merger, or de facto merger. All persons are enjoined from pursuing encumbrances against the purchaser or the purchased assets and from asserting fraudulent transfer or conveyance claims against them with respect to the purchased assets. Direct claims of the debtors, their estates, the committee, or any successor estate representative against the purchaser are preserved except to the extent they arise out of or relate to the debtors, the purchased assets, or the purchaser's acquisition of them.
• After the closing date the debtors have no further liability with respect to the purchased assets, and post-closing claims relating to those assets asserted against the debtors are deemed disallowed.
• The order and the agreement bind the debtors, their estates and creditors, the other sellers, holders of encumbrances, counterparties to the assigned contracts and leases, and any trustee, examiner, or receiver later appointed, including on conversion to Chapter 7; the agreement is specifically enforceable without bond and is not subject to rejection or avoidance; and its terms survive confirmation of any plan, dismissal, or conversion, with no later plan or order permitted to change, supersede, or conflict with them.

Assumption and Assignment

• The order approves assumption and assignment only of the debtors' assigned contracts and leases identified on Exhibit 2, free and clear of encumbrances other than assumed liabilities and permitted encumbrances, effective at closing or such later date as the agreement or a separate order provides. Anti-assignment, termination, recapture, penalty, renewal-conditioning, and change-of-control provisions in those contracts are void and unenforceable, and the debtors are relieved of further liability under section 365(k) upon assignment.
• Every counterparty is deemed to have consented, and the purchaser is deemed to have demonstrated adequate assurance of future performance under sections 365(b)(1)(C) and 365(f)(2)(B). No rent or payment accelerations, assignment fees, increases, or similar charges may be imposed on the debtors or the purchaser, counterparties may not charge for documents needed to effect the transfers, and counterparties are barred from asserting pre-closing indemnity or warranty defaults or any counterclaim, defense, or setoff against the purchaser.
• Designation rights: through the designation deadline, one business day before closing, the purchaser may add any available contract that is an excluded asset as an assigned contract or strike any contract from the schedule so that it becomes an excluded asset, in each case with no adjustment to the purchase price, with the schedule deemed automatically amended. The debtors may correspondingly amend Exhibit 2 until the designation deadline on prompt notice to any affected counterparty, which retains a reasonable opportunity to object on any grounds.
• Disputed contracts: where a cure or assumption objection is unresolved at the designation deadline, the deadline extends automatically, including past closing, until the earliest of deemed or consented rejection, 10 business days after the court finally determines the dispute, or 10 business days after consensual resolution. The sellers may not reject or consent to deemed rejection of a disputed contract without the purchaser's written consent, and if the purchaser does not designate the contract within that extended period it becomes an excluded asset. A disputed contract is not assumed or assigned at closing and will not be until the dispute is resolved and cure costs are paid, though a dispute over one contract delays neither the assumption of others nor the closing. The debtors reserve the right to reject any disputed contract post-closing.
• Objection resolution: the parties must use best efforts to resolve cure and assumption objections; the sellers may not settle an adequate-assurance objection without the purchaser's prior written consent but are solely responsible for, and may settle without consent, all cure-cost and other objections; and unresolved objections go to the court on an expedited basis. Timely filed objections unresolved at entry of the sale order are continued to a future noticed hearing.

Cure Costs

• The sellers, not the purchaser, pay all cure costs; cure costs are excluded liabilities and are not assumed.
• The debtors pay cure costs for their assigned contracts and leases on or as soon as practicable after the closing date, but may not pay cure on any contract subject to an unresolved counterparty objection. For a disputed contract, the debtors pay only as consensually agreed or after the court enters an order fixing the amount, at which point the contract is deemed assumed and assigned. The sellers must give the purchaser reasonable evidence of payment.
• A counterparty that failed to timely file and serve an assignment objection is barred from objecting to assumption or assignment, and the amount on the cure schedule is the only amount necessary to cure defaults under section 365. A counterparty noticed of a cure amount, or of the absence of one, that did not object is deemed to have consented and to have waived any right to assert or collect other cure amounts arising before closing.

Supplier Relationships and Rejected Contracts

• At closing each seller must discontinue and terminate its supplier relationships in the territory with respect to all applicable brands and, where applicable, reject contracts relating solely to the debtors and covering only the territory. The order authorizes and directs the debtors to do so and rejects all rejected contracts under the agreement effective as of the closing date.
• The court found this machinery an integral component of the sale, necessary to allow the purchaser to establish direct relationships with suppliers in the territory and to maximize the value of the purchased assets.
• From the effective date forward, no seller may assign, convey, transfer, or dispose of any distribution or brokerage rights with any supplier in the territory to anyone other than the purchaser.

Use of Proceeds

• On the closing date the debtors must transfer the net proceeds of the sale for application to the DIP new money loans and related DIP obligations, as required by paragraph 5 of the final DIP order and the DIP loan documents and subject in all respects to the carve-out and paragraph 16 of the final DIP order, with the debtors free to reborrow any amounts so repaid consistent with the DIP loan documents and DIP budget.
• Proceeds the final DIP order permits the debtors to retain, including proceeds from the sale of unencumbered property, are not swept. Net proceeds from the non-debtor sellers' assets include only distributions made to the debtors on account of their interests in those entities.
• The debtors must provide the committee with the final funds flow, including the gross cash payment and inventory price, the amounts payable to each debtor and each non-debtor seller, and the proposed application of proceeds received by the debtors.

Closing Conditions

• Closing occurs on the third business day after the conditions are satisfied or waived, by telephone conference and electronic exchange of documents, and is deemed effective as of 11:59 p.m. Central time on the closing date.
• Conditions to the purchaser's obligation include:
  • the sellers' Article III representations true and correct except where the failure has not had a material adverse effect, with the fundamental representations, meaning organization and good standing, authority and enforceability, title to the acquired assets, and no illegal payments, true and correct in all material respects, plus the sellers' material performance of their covenants, confirmed by an officer's certificate;
  • no material adverse effect between the effective date and closing;
  • receipt by closing of all federal and state licenses and permits for the sale and distribution of alcoholic beverages in the territory listed on the applicable schedule, and receipt of the scheduled third-party consents;
  • entry of the sale order as a final order, not stayed, vacated, reversed, or modified without the purchaser's consent;
  • a supplier threshold: neither side has received written notice from any supplier on the applicable schedule that it will not do business with the purchaser in the territory after closing, or will move to a competitor, where the affected suppliers represent in the aggregate more than 10% of the business's commission revenue plus VOR gross profit for the twelve months ended Dec. 31, 2025;
  • delivery of an executed transition services agreement, bills of sale, and assignments of the assigned leases, along with a 90-day license for the premises at 13000 Eckles Road, Livonia, Mich.; and
  • evidence from NWS Michigan, RNDC-NWS, and L&L Wine and Liquor of the release of scheduled encumbrances, including UCC-3 terminations, to the extent not covered by the sale order, which does not address encumbrances of non-debtor sellers.
• Conditions to the sellers' obligation mirror the core items: accuracy of the purchaser's representations in all material respects and its material performance of covenants, an officer's certificate, an executed assumption agreement, executed lease assignments and the Livonia license, and entry of a sale order not stayed, vacated, or modified without their consent. Any condition unsatisfied at closing is deemed waived by the benefited party, and neither side may rely on a failed condition it caused.
• Material adverse effect is measured against the business, acquired assets, and assumed liabilities taken as a whole and excludes general economic, political, and social conditions, force majeure and health events, changes in the price of equipment or supplies used in the business, financial, banking, and securities market conditions, changes in GAAP or law, the negotiation, announcement, or pendency of the transaction and the purchaser's identity or plans, any failure to hit projections, anything publicly known or within the purchaser's knowledge at the effective date, and the matters set forth on the schedules; only the first five of those may be counted, and then only to the extent they hit the sellers disproportionately relative to similarly situated participants in their industries and geographies.

Termination

• Outside date: Sept. 22, 2026, with the purchaser holding sole discretion to extend up to an additional 60 calendar days on notice. Neither side may terminate on that ground if its own failure to perform caused the delay.
• Either side may also terminate on mutual written consent or upon a final, binding, non-appealable order prohibiting the closing or declaring the transactions unlawful.
• Buyer and seller breach rights run in parallel: each may terminate for the other's covenant breach or untrue representation that would cause the corresponding bring-down condition to fail, subject in each case to a cure period running to the earlier of two business days before the outside date and 15 business days after notice of the breach, and neither may terminate while itself in material breach. The purchaser's failure to consummate the closing is expressly not curable.
• Any debtor may terminate if its governing body determines that proceeding, or failing to terminate, would be inconsistent with its fiduciary duties.
• Termination voids the agreement and ends all obligations, but does not relieve a party of liability for a willful breach occurring before termination, and the purchaser's failure to consummate the closing when obligated to do so is itself deemed a willful breach; specific performance and other equitable remedies remain available to enforce surviving provisions.

Restrictive Covenants

• Non-competition: for five years from closing, each seller and its controlled affiliates may not own an interest in, operate, join, control, or participate in any person providing, soliciting orders for, selling, warehousing, distributing, or marketing beverage products in the territory that compete with the products of the business, or interfere with the purchaser's supplier arrangements. Non-alcoholic beverage activity in New Hampshire, and in Pennsylvania absent mutual agreement to include those assets, is carved out.
• Confidentiality runs for the same restricted period and covers customer lists and requirements, license and customer contract terms, pricing, marketing and sales techniques, and planning and financial information of the business, subject to carve-outs permitting the purchaser to confer with suppliers, business employees, and licensing authorities.
• Non-disparagement binds both sides. Breach of any of these covenants entitles the damaged party to injunctive relief without proving actual damage and, if it prevails, to its costs and reasonable attorneys' fees, and the restricted period tolls for the duration of any breach.

Employee Matters

• The sellers cease operating the business in the territory on the closing date. The purchaser sets the initial terms and conditions of employment for anyone it hires and, on request, provides a list of identified employees whose responsibilities relate primarily to the business together with potential roles at the purchaser.
• The sellers remain solely responsible for all compensation and amounts payable to current and former employees, officers, directors, contractors, and consultants for service on or before closing, including hourly pay, commissions, bonuses, salary, accrued but unused vacation and paid time off, fringe, pension and profit-sharing benefits and severance, plus the employer portion of related taxes; for all severance, retention bonuses, and other amounts triggered by the transaction; and for all employer notice obligations, including under the WARN Act and the National Labor Relations Act, and any liability associated with a WARN notice arising in connection with the business through closing.
• The purchaser represents that it does not currently plan any plant closings, reductions in force, or terminations affecting business employees that, aggregated with pre-closing seller conduct, would trigger WARN obligations. From and after closing the purchaser may offer employment to and hire any seller employees providing services to it or the business, including under the transition services agreement, notwithstanding any other provision of either agreement, though no such employment may commence before the services involving that employee under the transition services agreement are complete.
• Pension plans: the debtors are the contributing sponsor or a member of the contributing sponsor's controlled group for the Retirement Plan for Employees of Block Distributing Company, Ltd. and the Retirement Income Plan for Nonbargaining Unit Employees of Young's Market Company, LLC. The debtors must store and preserve all pension plan documents until the PBGC completes its investigation, retain copies of any transferred under the order, may not abandon or destroy them, and must make them available to the PBGC for inspection and copying.

Indemnification by the JV Sellers

• Only the JV sellers, RNDC General, NWS Michigan, and L&L Wine and Liquor, indemnify, individually and severally rather than jointly, and only for the first year after closing. Coverage runs to breaches of their Article III representations, breaches of fundamental representations, their excluded liabilities, and non-fulfillment of their post-closing covenants. No JV seller is liable for any other seller's breach or excluded liability.
• Purchaser indemnification runs in parallel to each JV seller for the same one-year period, covering breaches of the purchaser's representations, breaches of its fundamental representations, meaning its organization, its authorization of the agreement, and its brokers representation, and non-fulfillment of its post-closing covenants.
• Basket: $225,000, with recovery only above that amount on representation-breach claims. Per-claim threshold: $25,000, below which an individual loss or series of related losses does not count toward the basket. Neither applies to fundamental-representation breaches or fraud.
• Caps: each JV seller's maximum aggregate liability is 50% of the aggregate cash proceeds it actually receives; the purchaser's is the purchase price. Neither cap applies to fraud. Indemnification is the exclusive post-closing remedy other than fraud and specific enforcement of post-closing covenants, and indemnity payments are treated as purchase price adjustments for tax purposes.
• Outside that indemnity, the representations and the pre-closing covenants terminate at closing and no claim on them may be brought afterward; post-closing covenants survive on their own terms, or for 12 months where none is stated. The purchaser acknowledges it relies solely on the Article III representations as qualified by the schedules and on the sellers' closing certificate, not on the data room, the projections, or any other information furnished, with claims for fraud preserved.
• Recoveries run net of any tax benefit realized and any insurance or other reimbursement actually collected, less collection costs, and are subject to a duty to mitigate; no purchaser indemnified party may recover consequential, incidental, or indirect damages, lost profits, diminution in value, or special, exemplary, or punitive damages, other than punitive damages paid to an unrelated third party under a final non-appealable judgment, and no multiple-of-profits or multiple-of-cash-flow methodology may be used to compute losses.

Post-Closing Arrangements

• A transition services agreement in agreed form is a condition to closing.
• The purchaser is authorized as of the closing date to operate under the sellers' licenses, permits, registrations, and governmental authorizations with respect to the debtors' purchased assets to the maximum extent permitted by law; where it cannot, those licenses remain in effect while the purchaser, with seller assistance, works promptly to secure new issuances. Subject to section 525(a), no governmental unit may revoke or suspend any right, license, trademark, or permission relating to the purchased assets on account of the filing or pendency of the cases or the sale. No seller may cancel its existing federal basic permits, or its state or county wholesaler and importer licenses, until the purchaser has obtained its own.
• Books and records: the purchaser must give each seller reasonable access to acquired books and records and to identified employees, officers, and advisors as needed for the seller's wind-down, tax filings, and responses to governmental inquiries, may not dispose of those records for two years after closing without notice and an opportunity for the seller to take possession, and must provide reasonable assistance with wind-down activities such as locating documents for tax returns, claims reconciliation, and insurance and benefit claims processing. Access runs both ways: each seller must give the purchaser comparable access to its retained records and accounting ledgers relating to the business and may not dispose of them for two years after closing, or until it dissolves if sooner, without the same notice and opportunity to take possession.
• Misdirected funds are forwarded both ways: a seller receiving money on a purchaser account debtor from post-closing sales forwards it to the purchaser, and the purchaser receiving money on a seller account debtor from pre-closing sales, which is an excluded asset, forwards it to the seller.
• Assignment of the agreement requires the other side's consent, with two exceptions: the sellers may assign to a wind-down trustee, liquidation trust, or similar vehicle under a confirmed Chapter 11 plan of liquidation, and that vehicle may transfer, assign, and sell its right to receive the purchase price proceeds; and the purchaser may assign to a subsidiary or affiliate, or to its lenders as security, without release from its own obligations.
• Insurance coverage maintained by the sellers or their affiliates ceases to cover the business, acquired assets, and assumed liabilities at closing, and no further coverage is available to the purchaser under those policies, which are themselves excluded assets. For pre-closing periods the purchaser may still make claims and take the proceeds on matters relating to the acquired assets or assumed liabilities, and on request the applicable seller must use commercially reasonable efforts to pursue or permit recovery under its occurrence-based policies and remit what it collects, net of its reasonable documented out-of-pocket collection costs.

Preserved Rights

• Nothing in the sale order modifies, supersedes, or impairs the final DIP order [Docket No. 275], the preserved challenge claims, or any rights under paragraph 16 of that order. Preserved challenge claims are the claims, causes of action, objections, and defenses that are the subject of a challenge or standing motion timely asserted on or before the investigation termination date under paragraph 16 of the final DIP order, together with all rights and remedies available under that order, and the committee's rights and those of any successor under paragraph 16 are expressly preserved against entry of the order, approval or consummation of the sale, closing, and any application or distribution of sale proceeds.
• Where the sale order and the final DIP order conflict, the final DIP order controls, including as to the rights, obligations, priorities, and remedies in paragraph 16; the sale order otherwise controls over the sale documents and any prior order or pleading related to the motion.
• The order is not an admission as to the amount, basis, priority, or validity of any claim or lien, and the rights of all parties in interest to contest the extent, validity, or perfection of, or to seek avoidance of, any lien are reserved, as are the debtors' rights in and interests in the non-debtor sellers. All other unresolved objections are overruled with prejudice, except that unresolved assignment and rejection objections are deferred to a later date.

Amendments

• The parties may modify, amend, supplement, or restate the purchase agreement and related documents in a signed writing without further court order, but must promptly provide any such change to the committee; any modification with a material or adverse effect on the estates requires notice to the court and the committee and a further court order while the cases remain pending.

Governing Law and Forum

• Delaware law governs except where mandatory Bankruptcy Code provisions apply. Disputes go to the bankruptcy court and any federal court hearing an appeal from it, or, if the bankruptcy court is unwilling or unable to hear the matter, the Delaware Court of Chancery or another Delaware court. The court retains exclusive jurisdiction to interpret, implement, and enforce the sale order and the purchase agreement and to adjudicate disputes relating to the sale.

Key Dates

• Petition Date: July 26, 2026
• APA Effective Date: Sept. 4, 2026 (the sale order recites the agreement as dated Sept. 5, 2026)
• Assignment Objection Deadline: the date of the sale hearing; for contracts or leases added to the cure schedule after the motion was filed, 14 days after service of notice on the counterparty
• Sale Order Entered: Sept. 18, 2026
• Designation Deadline: one business day before closing, subject to automatic extension for disputed contracts
• Inventory Estimate Agreed: at least three business days before closing
• Closing: third business day after satisfaction or waiver of the closing conditions
• Inventory True-Up: within 30 days after closing
• Outside Date: Sept. 22, 2026, extendable by the purchaser by up to 60 additional calendar days

RNDC Alaska Sale Summary

Posture

• On Oct. 1, 2026, the debtors moved [Docket No. 524] for approval of a private going-concern sale of substantially all of the assets of RNDC Alaska, LLC, together with certain Washington inventory bound for Alaska, to CoHo Distributing, LLC, dba Columbia Distributing, free and clear of all encumbrances and without an auction. The motion also seeks authority to assume and assign any contracts the purchaser later designates and approval under Bankruptcy Rule 9019 of a mutual claim release. Objections are due 21 days after filing. The sale order is proposed and has not been entered; it would be effective immediately on entry, waiving the Bankruptcy Rule 6004(h) and 6006(d) stays, and cautions that any objector must seek an appeal and stay before closing or risk mootness.
• The debtors project that they will lack the liquidity to sustain Alaska operations if the sale does not close by Oct. 30, 2026. They also state that any delay risks further loss of suppliers, many of which have no long-term agreements with the debtors.
• No bidding procedures, bid protections, or auction are proposed. Lazard ran the prepetition marketing process, contacting more than 50 parties and signing confidentiality agreements with more than 25. Four parties, including Columbia, expressed interest in Alaska, and two submitted indications of interest that included it. The other bidder wanted only the beer distribution business, packaged with non-debtor joint venture markets in Idaho, Kentucky, and Michigan, which would have left the debtors to wind down or separately sell the Alaska wine and spirits business.
• The debtors and Columbia signed a non-binding letter of intent for Alaska, Oregon, and Washington on April 16, 2026. Licensing requirements and operational complexity led the parties to carve out Alaska, and the Washington and Oregon sale closed out of court on June 30, 2026. No alternative proposal for Alaska has been received, including after exclusivity ended in June 2026. The debtors describe the Alaska operations as dependent on Washington for suppliers, warehousing, infrastructure, and employees, which they say makes Columbia uniquely suited as buyer. The lenders and the debtors' Alaska joint venture partner support the sale.
• Under the proposed order, the court would find that the debtors ran a robust prepetition marketing process, that the purchase price is the highest or otherwise best offer, and that a postpetition public sale process or auction would decrease value by creating uncertainty with the debtors' Alaska suppliers and partners. The debtors filed the Declaration of Ryan Murphy in support of the motion.

Purchase Price

• Consists of the sum of:
  • the aggregate laid-in cost of all inventory and dunnage (the inventory price), which the motion puts in excess of $10.0 million; inventory subject to an assigned purchase order is not counted as inventory;
  • plus $2.1 million for the equipment; and
  • the assumption of the assumed liabilities, including payment of supplier payables and cure costs by the purchaser.
• The purchaser's payment of approximately $2.0 million in supplier payables reduces the net cash proceeds. The debtors estimate the estates will realize approximately $3.0 million of net proceeds at or around closing, after transaction expenses and mandatory withholdings. A further approximately $2.0 million will be held in escrow pending the final cash payment.
• Laid-in cost is the actual invoiced cost paid or owed by the seller to qualifying suppliers for the inventory, plus freight, excise taxes, and delivery costs to take physical possession, under the transaction accounting principles. It excludes storage and handling costs after receipt. For dunnage, laid-in cost is the amount of reimbursable deposits held by qualifying suppliers.
• Estimates: at least five business days before closing, the seller delivers its estimate of the inventory price from its ERP system. On the same timeline, the purchaser delivers its estimate of the post-July supplier liability amount.
• Closing payments are made by wire transfer:
  • To the seller, the estimated cash payment, which equals 75% of the estimated inventory price plus the equipment price, less the July supplier liability amount, the estimated post-July supplier liability amount, the cure costs, and the deposit.
  • To each qualifying supplier, directly, its July supplier liability amount under its supplier payoff letter.
  • To contract counterparties, directly, the cure costs.
  • Into escrow, the remaining 25% of the estimated inventory price as the adjustment escrow.
• Inventory true-up: the parties take an itemized physical count. The Alaska inventory is counted at the Alaska facilities, and the Washington inventory is counted as it is staged and removed after closing. The parties work toward agreement on the inventory price within 60 days after closing. The post-July supplier liability amount is fixed from actual supplier invoices covering Aug. 1, 2026, through closing. Remaining disputes go to Kroll, LLC (or a mutually acceptable substitute) as accounting firm. The firm must adopt one side's position on each item in full and rule within 30 days. Its fees are allocated by the share of the contested amount each side lost, and its determination is final and binding absent fraud or manifest error. This process is the parties' exclusive remedy for adjustment disputes.
• The final cash payment equals the final inventory price plus the equipment price, less the final supplier liability amounts, the cure costs, the deposit, and out-of-code return costs. If it falls below the estimate, the shortfall is released to the purchaser from escrow, capped at the escrow amount, and the balance goes to the seller. If it exceeds the estimate, the purchaser pays the difference, capped at the escrow amount, and the full escrow is released to the seller. In either case the escrow is the sole source of recovery. Within five business days after the final cash payment is determined, the purchaser pays any unpaid post-July supplier liability amount directly to each qualifying supplier.
• The purchase price is allocated among the acquired assets under section 1060 of the tax code per an agreed methodology. The purchaser proposes an allocation within 75 days after the final purchase price is determined. The seller has 30 days to object, and unresolved disputes go to the accounting firm. Adjustment payments are treated as purchase price adjustments for tax purposes.

Deposit

• $0.6 million, funded with SRS Acquiom as escrow agent promptly after the Sept. 19, 2026, effective date.
• The deposit is applied to the purchase price at closing. If the seller terminates for the purchaser's breach, the deposit is released to the seller within two business days. It is deemed fully earned and is the seller's sole and exclusive remedy, and the purchaser's monetary liability is capped at the deposit amount. On any other termination, including the seller's fiduciary out, the deposit returns to the purchaser.
• Under the proposed order, the deposit and the adjustment escrow are not estate property and are not subject to any encumbrance, including DIP liens, until disbursed to the seller. Any amount disbursed to the seller is then applied in accordance with the DIP orders.

Parties

• Seller: RNDC Alaska, LLC. Young's Market Company of Washington, LLC, dba Republic National Distributing Company of Washington, is a seller solely as to the Washington inventory. K&L Beverage Company, LLC is party as license holder, solely for the licensing covenant. Republic National Distributing Company, LLC is party as RNDC owner, solely for the restrictive covenants, further assurances, and the claim release. The APA recitals identify the seller, the license holder, and the RNDC owner as debtors.
• Purchaser: CoHo Distributing, LLC, dba Columbia Distributing, an Oregon limited liability company. The motion describes it as having more than 90 years of beverage distribution experience in Washington and Oregon. The APA references Meritage Group as an equity sponsor or investor of the purchaser.
• The proposed order would find the purchaser a good-faith purchaser entitled to section 363(m) protection, not an insider or affiliate of any debtor, and sharing no common incorporators, directors, members, or controlling stockholders with the debtors. The motion describes the negotiations as spanning five months.

Assets Being Sold

• All of the seller's right, title, and interest in the acquired assets, free and clear of encumbrances except permitted encumbrances, consisting of:
  • Alaska inventory: undamaged, unopened inventory in Alaska of the scheduled brands from any qualifying supplier, meeting the inventory conditions:
    • package beer and non-alcoholic product must have at least 45 days of code life after closing, and draft at least 30 days;
    • wine must be one of the following: of the supplier's two most recent vintages and saleable to a retail account in its existing packaging; non-vintaged wine received within one year before closing; wine with a laid-in cost above $450 per nine-liter case that the parties agree to include; or wine on the applicable schedule;
    • spirits, package beer, and non-alcoholic product must carry current labels and be saleable to a retail account in existing packaging;
  • Alaska dunnage: functional and undamaged dunnage, pallets, slip boards, and kegs for the brands, together with related deposits with designated suppliers;
  • Washington inventory: undamaged, unopened inventory and dunnage meeting the inventory conditions, located in Washington, solely to the extent discretely bound for Alaska and expressly designated for receipt by the applicable qualifying supplier;
  • equipment: warehouse and delivery equipment in Alaska, including forklifts, floor cleaners, motor vehicles, trailers, automated warehouse systems, and office and computer equipment and furniture, together with the related equipment leases on the contract and cure schedule;
  • other tangible personal property in Alaska, plus point-of-sale materials in Washington relating to the Washington inventory. This includes packaging, draft tapping equipment, supplies, fuel and oil, promotional materials, tap handles, and non-privileged customer, sales, route, vendor, financial, compliance, and product-development records;
  • the assigned contracts; and
  • the assigned purchase orders, meaning outstanding product purchase orders submitted before closing to qualifying suppliers that have not shipped or remain in transit at closing.
• A qualifying supplier is a supplier that has delivered to the purchaser, by closing, both an executed new supplier contract and an executed supplier payoff letter. The territory is Alaska.

Excluded Assets

• Everything other than the acquired assets. Leased equipment whose lease is not on the contract and cure schedule at closing is an excluded asset and does not transfer. The seller has 30 days after closing to remove excluded assets.

Assumed and Excluded Liabilities

• The purchaser assumes only the following:
  • liabilities under the assigned contracts arising or due from and after closing;
  • liabilities from its own ownership of the acquired assets that arise from facts first occurring on or after the closing date;
  • 50% of transfer taxes;
  • liabilities under the assigned purchase orders;
  • taxes on the acquired assets and assumed liabilities for periods beginning after the closing date; and
  • the limited obligation to pay qualifying suppliers the July supplier liability amount and the finally determined post-July supplier liability amount, in each case only to the extent it reduced the purchase price otherwise payable to the seller.
  These supplier payments are not an assumption of any supplier contract or other supplier liability of the seller.
• Everything else is an excluded liability, expressly including the following:
  • affiliated plan liabilities, and all liabilities under collective bargaining agreements, benefit plans, Title IV and section 302 of ERISA, multiemployer plans, and COBRA;
  • all employment, compensation, and termination liabilities, including those tied to the seller's identification of business employees or an employee's failure to accept an offer;
  • all indebtedness of the seller or its affiliates, including debt secured by the acquired assets;
  • the seller's transaction expenses and broker fees;
  • liabilities under non-assigned contracts, and pre-closing liabilities under assigned contracts other than cure costs paid under the APA;
  • pre-closing operating and environmental liabilities;
  • 50% of transfer taxes, and taxes for periods ending on or before closing; and
  • all supplier contracts and supplier liabilities beyond the specified supplier payments.

Supplier Payments

• The purchaser pays each qualifying supplier directly. It pays the July supplier liability amount, meaning amounts the seller owed for the acquired assets as of July 31, 2026, per the supplier payoff letter, at closing. It pays the post-July supplier liability amount, meaning invoices from Aug. 1, 2026, through closing, after the true-up. Each payoff letter provides for automatic release of the supplier's encumbrances on the acquired assets upon full payment and authorizes filing of the related terminations.
• The seller must review proposed payoff letters within three business days or is deemed to consent. The window shortens to one business day for later material deviations from the agreed form for a supplier already reviewed.
• Under the proposed order, the following protections apply:
  • The supplier payments and cure costs are not net sale proceeds, estate property, or DIP collateral, and are not avoidable or recoverable under chapter 5 or otherwise from the purchaser parties, any qualifying supplier, or any counterparty.
  • After closing, no supplier has any claim against the purchaser parties or the acquired assets on account of the debtors' liabilities.
  • Each qualifying supplier consents to the free-and-clear sale and the release of its encumbrances upon payment under its payoff letter.
  • Each supplier may enter a new supplier contract with the purchaser for the brands in the territory effective at closing. Provisions in the debtors' supplier contracts that restrict that appointment or require the seller's notice or consent are unenforceable by the debtors, their estates, or any bound party.
  • New supplier contracts are not an assumption or assignment of any debtor supplier contract.

Credit Bid

• No credit bid is proposed. Section 6.3 of the DIP credit agreement bars any disposition of the debtors' assets without the required lenders' prior written consent. Section 6.3 of the DIP credit agreement, section 6.3 of the prepetition first lien credit agreement, and paragraph 26 of the final DIP order each give the DIP agent and the prepetition agent, at the direction of their required lenders, the unqualified right to credit bid the full amount of their loans.
• Under the proposed order, the required DIP lenders consent to the sale. Together with the required prepetition first lien lenders, they waive those provisions, including the agents' right to credit bid for the acquired assets. Wells Fargo Bank, as prepetition agent and DIP agent, consents to the free-and-clear sale and to the release and termination of its liens on the acquired assets. The court would find the consent and waiver a material component of the transaction and a material inducement to the purchaser, which would not have signed the APA without it. The motion states the debtors obtained Wells Fargo's consent before filing.

Free and Clear; Successor Liability

• The acquired assets would transfer free and clear of all encumbrances other than permitted encumbrances and assumed liabilities under sections 105(a) and 363(f). Valid and perfected encumbrances would attach to the net proceeds attributable to the affected property, with the same priority, validity, force, and effect, subject to the estates' rights, claims, and defenses. The proposed order would find section 363(f) satisfied as to every lienholder. Holders that do not object, or that withdraw their objections, are deemed to consent under section 363(f)(2).
• Permitted encumbrances are limited to the interests of lessors and sublessors under equipment leases.
• The free-and-clear relief expressly covers the following, whether assessed before, at, or after closing:
  • WARN Act, ERISA, and COBRA liabilities;
  • multiemployer plan withdrawal liability (complete, partial, or mass, including any triggered by the sale or the debtors' cessation of covered operations), together with reallocation liability, delinquent contributions, interest, liquidated damages, and fees;
  • reclamation rights; and
  • bulk-sales compliance, which the parties waive.
• The purchaser and a broadly defined group of purchaser parties are not successors, alter egos, successor or joint employers, or continuations of the debtors, and the sale is not a merger or de facto merger. The purchaser parties are not employers under ERISA sections 4001(b)(1) or 4212(a) with respect to any multiemployer plan, and are not in a controlled group with any debtor. No liability is imposed under ERISA section 4212(c), and the sale is not a transaction described in ERISA section 4204. No collective bargaining agreement is an assigned contract or assumed liability, and hiring the debtors' employees does not adopt any such agreement or any contribution obligation.
• All persons, including multiemployer plans and their fiduciaries, are enjoined from pursuing encumbrances against the purchaser parties or the acquired assets and from asserting fraudulent transfer claims with respect to the acquired assets. After closing the debtors have no further liability for the acquired assets, and post-closing claims relating to them asserted against the debtors are deemed disallowed.
• The order and the APA would bind the following, and would survive confirmation of any plan, dismissal, or conversion, with no later plan or order permitted to conflict with them:
  • the debtors, their estates, creditors, and equityholders;
  • encumbrance holders, counterparties to assigned contracts and assigned purchase orders, the suppliers, and each multiemployer plan;
  • any later-appointed trustee, examiner, or receiver; and
  • the wind-down debtors, plan administrator, litigation trust, and litigation trustee under the debtors' plan.
  The APA is specifically enforceable without bond and not subject to rejection or avoidance.

Assumption and Assignment

• As of the motion, no contracts have been designated as assigned contracts, and the Exhibit 2 cure schedule lists none. Before the closing date, the purchaser may, in its sole discretion, add any available contract to the contract and cure schedule or remove any contract from it. A removed contract becomes an excluded asset with no purchaser liability. These designations do not affect the purchase price, though they change cure costs and therefore the final cash payment. No collective bargaining agreement may be an assigned contract. To the extent an assigned purchase order is executory, it is treated as an assigned contract under the proposed order.
• Each assigned contract is deemed assumed and assigned on the later of the closing date and resolution of any assignment or cure objection, subject to payment of cure. The seller serves a cure notice on each counterparty, the U.S. Trustee, and the committee. Objections are due 14 days after service, or a later date agreed by the debtors and the purchaser. A counterparty that does not timely object is barred from objecting, and the scheduled cure amount is the only amount needed to cure defaults. If a finally determined cure exceeds the scheduled amount, the purchaser may accept it or remove the contract.
• Disputed contracts are not assumed or assigned at closing. Cure on a disputed contract is paid only as agreed by the purchaser and the counterparty, or after the court fixes the amount. A dispute over one contract delays neither the others nor the closing. Unresolved objections are continued to a later noticed hearing, and the debtors reserve the right to reject any disputed contract after closing.
• Under the proposed order, the following apply to the assigned contracts:
  • anti-assignment, termination, recapture, penalty, renewal-conditioning, and change-of-control provisions are void;
  • counterparties are deemed to consent, and the purchaser is deemed to have shown adequate assurance under sections 365(b)(1)(C) and 365(f)(2)(B);
  • the debtors are relieved of further liability under section 365(k);
  • no rent accelerations, assignment fees, or similar charges may be imposed, and counterparties may not charge for documents needed to effect the transfers; and
  • counterparties are barred from asserting pre-closing indemnity or warranty defaults, or any counterclaim, defense, or setoff, against the purchaser parties.

Cure Costs

• The purchaser pays cure costs directly to counterparties at closing, and the amount is deducted from the cash payment to the seller. The motion states that the purchaser will cure all defaults under the assigned contracts. The proposed order separately states that nothing in it obligates the purchaser to pay any excluded liability, including any cure costs. No cure is paid on a contract with an unresolved counterparty objection.
• A counterparty that was noticed of a cure amount, or of the absence of one, and did not object is deemed to consent and to waive any right to collect other cure amounts arising on or before closing.

Claim Release

• The seller, each debtor and its estate, and their related parties release the purchaser and its related parties from all claims arising from the beginning of time through the closing date, including unknown claims; the release expressly waives California Civil Code section 1542 and similar laws. The purchaser and its related parties give a parallel release to the seller, each debtor and its estate, and their related parties. Any releasing party that asserts a released claim must indemnify the released parties for resulting losses.
• Each release excepts claims for fraud, claims under the express terms of the APA, and claims related to the two Brand Purchase Agreements of June 30, 2026, between the purchaser and Young's Market Company of Oregon LLC and Young's Market Company of Washington LLC, respectively (the Oregon and Washington sales).
• The debtors state they do not believe they hold material viable claims against the purchaser, that pursuing any such claims would not be a prudent use of estate resources, and that the purchaser required the release as a condition of the deal. Under the proposed order, the court would approve the release under sections 105(a) and 363(b) and Bankruptcy Rule 9019, effective at closing. It would bind the debtors' estates, the wind-down debtors, the plan administrator, the litigation trust and trustee, and any trustee.

Use of Proceeds

• On the closing date, the debtors must transfer the net proceeds for permanent application against the DIP secured obligations, in accordance with the DIP orders and loan documents and subject to the carve-out and paragraph 16 of the final DIP order [Docket No. 275]. The debtors may reborrow repaid amounts consistent with the DIP loan documents and budget. The motion states the proceeds will pay down the new money revolving DIP loans and fund administration of the cases while the debtors close sales of their remaining markets and pursue an orderly wind-down.
• Net proceeds exclude the supplier payments, the cure costs, the deposit, and the adjustment escrow, the last two until released to the seller. Any such amount released to the debtors is applied under the DIP orders. The debtors must provide the committee with the final funds flow, including the gross cash payment and inventory price, the amounts payable to each debtor, and the proposed application of proceeds.

Closing Conditions

• Closing occurs on the third business day after the conditions are satisfied or waived, by telephone conference and electronic exchange of documents. It may not occur before Oct. 26, 2026, without the purchaser's written consent, and is deemed effective as of 12:01 a.m. Pacific time on the closing date.
• Conditions to the purchaser's obligation include:
  • the seller's Article III representations true and correct, disregarding materiality qualifiers, except where the failure has not had a material adverse effect;
  • the fundamental representations (organization and good standing, authority and enforceability, no conflict with organizational documents, title to the acquired assets, and brokers) true and correct to the heightened standards specified, plus the seller's material performance of its covenants, confirmed by an officer's certificate;
  • no law making the transaction illegal, and no order or pending action restraining the closing;
  • receipt of the scheduled federal, state, and local alcoholic beverage licenses and approvals for Alaska;
  • a supplier threshold: executed new supplier contracts and supplier payoff letters from scheduled suppliers accounting in the aggregate for at least 85% of the gross profit attributable to all suppliers for the twelve months ended June 30, 2026;
  • executed lease agreements for 6307 Arctic Spur Road, Anchorage; 8420 Airport Boulevard, Juneau; and 945 Elizabeth Street, Fairbanks;
  • entry of the sale order, in form and substance acceptable to the purchaser, as a final order; and
  • delivery of the final assigned purchase order schedule.
• Conditions to the seller's obligation are the accuracy of the purchaser's representations in all material respects, its material performance of covenants, no order or pending action restraining the closing, and an officer's certificate. Any condition unsatisfied at closing is deemed waived by the benefited party.
• Material adverse effect is measured against the business in Alaska, the acquired assets, and the assumed liabilities taken as a whole. It excludes:
  • industry economic conditions;
  • political and social conditions, including tariffs and hostilities;
  • natural disasters and health events;
  • financial market conditions;
  • changes in GAAP or law;
  • actions required by the APA, and the announcement or pendency of the transaction and the purchaser's identity or plans;
  • any failure to meet projections or to win or keep customers; and
  • actions or breaches by the purchaser.
  The first four exclusions may be counted to the extent they affect the seller disproportionately relative to other participants in its industries and geographies.

Termination

• Outside date: Nov. 30, 2026. Neither side may terminate on that ground if its own breach caused the failure to close.
• Either side may also terminate on mutual written consent, or upon a final, non-appealable order prohibiting the closing or declaring the transaction unlawful, unless its own breach caused the order.
• Buyer and seller breach rights run in parallel. Each may terminate for the other's breach that would cause the corresponding bring-down condition to fail, including the purchaser's failure to close. Each is subject to a cure period running to the earlier of two business days before the outside date and 30 days after notice. Neither may terminate while itself in material breach.
• The purchaser may also terminate if the sale order has not been entered and become a final order by 11:59 p.m. Eastern time on Nov. 30, 2026, unless the parties extend that deadline in writing.
• The seller may terminate if its governing body determines that proceeding, or failing to terminate, would be inconsistent with its fiduciary duties. In that case, joint instructions to return the deposit to the purchaser are due within one business day.
• Termination voids the agreement and ends all obligations, subject to survival of certain provisions. Specific performance remains available to enforce surviving terms, but the purchaser may not use it in respect of a termination by the seller for the purchaser's breach.

Restrictive Covenants

• Non-competition: for five years from the closing date, the seller and the RNDC owner, and their controlled affiliates, may not own an interest in, operate, join, control, finance, or participate in any person providing, soliciting orders for, selling, warehousing, distributing, or marketing beverage products in Alaska that compete with the purchaser's business there.
• Non-recruitment: for the same period, the seller and the RNDC owner may not solicit or hire continuing employees. General advertising not targeted at them, and hiring individuals whose employment with the purchaser ended at least nine months earlier, are carved out.
• Confidentiality runs for the same period. It covers customer lists and requirements, license and customer contract terms, pricing, marketing and sales techniques, and planning and financial information of the Alaska business. Carve-outs apply for public, independently developed, or legally compelled information, routine regulatory examinations, and wind-down activities.
• A breach entitles the damaged party to injunctive relief without proving actual damage and, if it prevails, to its costs and reasonable attorneys' fees. The restricted period tolls for the duration of any breach.

Employee Matters

• The purchaser may meet with business employees and, in its sole discretion, extend employment offers effective at and contingent on closing. It has no obligation to hire any particular number. The motion states the sale is expected to provide employment opportunities for nearly all of the debtors' Alaska employees.
• The seller may not interfere with hiring. Immediately before closing, the seller must terminate all continuing employees and waive any restrictive covenants binding employees or consultants the purchaser hires.
• The purchaser has no liability under the WARN Act or any WARN notice arising in connection with the business through closing. It is responsible for the seller's WARN liability to the extent the purchaser causes an employment loss for any continuing employee within 90 days after closing.
• COBRA: the seller's selling group remains responsible for M&A qualified beneficiaries while it maintains a group health plan. The purchaser is responsible for continuing employees whose qualifying event occurs after the closing date. The purchaser assumes no affiliated plan liabilities under Title IV of ERISA or with respect to any multiemployer plan.

Survival and Reliance

• The APA contains no indemnification. The representations and pre-closing covenants terminate at closing, and no claim on them may be brought afterward except for fraud. Post-closing covenants survive on their own terms, or for 12 months where none is stated.
• The purchaser acknowledges it relies solely on the Article III representations and the seller's closing certificate. It does not rely on the "Project Arrow MA" data room, the projections, or any other information furnished. Fraud is narrowly defined as intentional common-law fraud under Delaware law in the express representations or the certificate.
• The purchaser waives set-off against the purchase price and other APA payments based on matters outside the transaction documents, including the Oregon and Washington Brand Purchase Agreements.

Post-Closing Arrangements

• Licenses: as of the closing date, the purchaser is authorized to operate under the license holder's and the seller's licenses, permits, and governmental authorizations to the maximum extent permitted by law. Where it cannot, those licenses remain in effect while the purchaser, with their assistance, secures new issuances. The license holder and the seller must take all actions needed to facilitate the purchaser's alcoholic beverage licensing in Alaska, including relinquishing their licenses on the purchaser's written request, without further court order. Subject to section 525(a), no governmental unit may revoke or suspend any right, license, trademark, or permission relating to the acquired assets on account of the cases or the sale.
• Washington inventory: after closing, the purchaser may access the debtors' Washington facilities to inspect, stage, and remove the Washington inventory.
• Out-of-code returns: if product is returned to the purchaser within 30 days after closing and found to have been out of code at or before closing, the seller reimburses the purchaser within 10 business days after notice. Reimbursement covers credits issued on pre-closing sales and the laid-in cost of returned product included in the inventory price.
• Books and records: the purchaser must give the seller reasonable access to acquired records for its wind-down, tax filings, and responses to governmental inquiries. It may not dispose of those records for two years after closing without notice and an opportunity for the seller to take possession. The seller must give the purchaser comparable access to its retained records relating to the Alaska business or the Washington inventory. It may not dispose of them for six years, or before dissolution if sooner, without the same notice and opportunity. Each side must reasonably cooperate in litigation over pre-closing matters involving the acquired assets or assumed liabilities.
• Misdirected funds are forwarded both ways. Under the proposed order, amounts the debtors receive that are owed to the purchaser are held in trust for it and are not estate property. Other amounts the seller owes the purchaser under the sale documents, apart from amounts payable only from escrow, are allowed administrative expenses under sections 503(b) and 507(a)(2).
• Non-assignable assets: where a required third-party consent has not been obtained, the parties pursue the consent and cooperate on a pass-through arrangement for up to six months after closing.
• Assignment of the APA requires the other side's consent. The purchaser may assign to a subsidiary or affiliate, or to its lenders as security, without release from its own obligations.

Preserved Rights

• Application of the net proceeds is subject in all respects to the carve-out and paragraph 16 of the final DIP order. The proposed order is not an admission as to the amount, basis, priority, or validity of any claim or lien. The rights of all parties in interest to contest the extent, validity, or perfection of, or to seek avoidance of, any lien are reserved, without limiting the purchaser parties' rights under the sale documents.
• The sale order controls over the sale documents and any prior order or pleading related to the motion. Unresolved objections are overruled with prejudice, except that unresolved assignment objections are deferred to a later date.

Amendments

• The parties may modify, amend, supplement, or restate the APA and related documents in a signed writing without further court order. Any modification with a material adverse effect on the estates requires notice to the court and a further court order while the cases remain pending.

Governing Law and Forum

• Delaware law governs except where mandatory Bankruptcy Code provisions apply. Disputes go to the bankruptcy court and any federal court hearing an appeal from it. After the cases close, or if the bankruptcy court is unwilling or unable to hear the matter, disputes go to the Delaware Court of Chancery or another Delaware court. The parties waive jury trial.
• The court would retain exclusive jurisdiction to interpret, implement, and enforce the sale order and the APA. Two exceptions apply: actions by the parties under the APA go to the chosen courts, and the accounting firm has exclusive jurisdiction over purchase price adjustment disputes.

Key Dates

• Letter of Intent (Pacific Northwest): April 16, 2026
• Washington and Oregon Sale Closed (out of court): June 30, 2026
• Petition Date: July 26, 2026
• APA Effective Date: Sept. 19, 2026
• Sale Motion Filed: Oct. 1, 2026 [Docket No. 524]
• Objection Deadline: 21 days after filing of the motion
• Assignment Objection Deadline: 14 days after service of the cure notice, or a later date agreed by the debtors and the purchaser
• Estimated Inventory Price and Estimated Post-July Supplier Liability Amount: at least five business days before closing
• Assigned Purchase Order Schedule: three to five business days before closing
• Earliest Closing: Oct. 26, 2026, absent the purchaser's written consent
• Debtors' Stated Liquidity Deadline for Alaska Operations: Oct. 30, 2026
• Closing: third business day after satisfaction or waiver of the closing conditions
• Out-of-Code Return Window: 30 days after closing
• Inventory Count Period: 60 days after closing
• Outside Date and Sale Order Final Order Deadline: Nov. 30, 2026

RNDC Kentucky Sale Summary

Posture

• On Oct. 13, 2026, the debtors filed an emergency motion [Docket No. 572] concerning the sale of substantially all of the assets of non-debtor RNDC Kentucky to KEG1 River City, LLC. RNDC, which owns 68.75% of RNDC Kentucky, seeks authority to consent to the sale and take related corporate action, to comply with the APA's restrictive covenants, and to enter into and perform under a transition services agreement. The motion also seeks approval under Bankruptcy Rule 9019 of a settlement with Fifth Generation, the supplier of Tito's Handmade Vodka and Lalo Tequila. Relief is requested by 4:00 p.m. Central time on Oct. 22, 2026.
• The debtors state that none of the acquired assets are estate property and that the sale itself does not require court approval, so they do not seek approval of it. KEG1 requires court approval of the debtors' consent and their undertakings as a condition of the deal. Under the RNDC Kentucky operating agreement, NWS's consent is also required for any sale of substantially all of RNDC Kentucky's assets, and NWS holds a right of first refusal on any sale of RNDC Kentucky's equity.
• The proposed order would be effective immediately on entry, waiving the Bankruptcy Rule 4001(a)(4) and 6004(h) stays. It cautions that any objector must appeal and seek a stay before consummation of the sale or the settlement, as applicable, or risk mootness. The debtors filed the Declaration of Ryan Murphy and the Declaration of John R. Castellano in support of the motion.
• Prepetition marketing: the company contacted more than 50 potential financial and strategic purchasers. Fourteen parties, including KEG1, expressed interest in Kentucky, signed confidentiality agreements, and received diligence access, and six submitted indications of interest.
• In May 2026 the company signed a letter of intent with Breakthru Beverage Group, LLC for an equity sale of the company's interests in both its Kentucky and Indiana joint ventures, with NWS retaining its equity. The debtors state they chose Breakthru because its proposal was expected to reduce supplier attrition and included a going-concern sale of Indiana, and because it was the only proposal NWS supported at the time. Breakthru said it would not proceed if the debtors filed for chapter 11 and terminated the letter of intent after the filing.
• The company then re-engaged prior bidders and other potential purchasers and received three indications of interest, including KEG1's. According to the debtors, the other parties attributed materially lower value to RNDC Kentucky's distribution rights and to its real estate relative to appraised value. The parties signed a non-binding letter of intent with KEG1 on Aug. 8, 2026.
• Timing: the debtors state they will lack the liquidity to sustain operations, provide the TSA services, and pay down the DIP facility by maturity if the sale does not close by Oct. 30, 2026. The DIP facility matures on Oct. 29, 2026, unless the DIP lenders extend it. The DIP credit agreement also requires the plan effective date or the closing of sales of substantially all assets by Oct. 29, 2026, unless the DIP lenders agree otherwise. The debtors, with the DIP lenders' consent, expect to close on or before Oct. 30, 2026.
• The debtors also cite the risk of losing suppliers, many of which lack long-term agreements with RNDC Kentucky. Fifth Generation will appoint a different Kentucky distributor if the sale does not close by Nov. 9, 2026. The DIP lenders support the sale and the debtors' performance.
• Under the proposed order, the court would find the following:
  • the sale documents were negotiated in good faith and at arm's length;
  • the purchaser is not an insider or affiliate of the debtors or the seller and shares no common incorporators, directors, members, or controlling stockholders with them;
  • the APA was not entered into to hinder, delay, or defraud creditors; and
  • the debtors' consent and performance are a sound exercise of business judgment and a proper exercise of their fiduciary duties.

Purchase Price

• Consists of the sum of:
  • for the distribution rights, $50,045,341, less 1.5 times the gross profit of brands from material suppliers that are not approved brands and 0.5 times the gross profit of all other non-approved brands, each for the twelve months ended May 31, 2026 (the distribution rights price). Approved brands are those whose supplier gives supplier approval;
  • plus the inventory price, which is the laid-in cost of inventory other than dunnage multiplied by the applicable inventory factor, plus reimbursable deposits held by approved-brand suppliers for dunnage;
  • minus the supplier liability amount as of the calculation time, netted against supplier receivables for each supplier and never below zero for any supplier;
  • plus prepaid expenses as of the calculation time;
  • plus customer accounts receivable, net of reserves, as of the calculation time;
  • plus $6.0 million for the equipment, adjusted to the actual net book value of the owned equipment at closing, and $43.0 million for the owned real property; and
  • the assumption of the assumed liabilities.
• The debtors state that approximately $7.8 million of the expected purchase price is tied to RNDC Kentucky's exclusive distribution of Tito's and Lalo, and that KEG1 has also agreed to buy approximately $1.4 million of Tito's and Lalo inventory. Fifth Generation is a material supplier.
• Gross profit for a brand is gross sales dollars (including service-based revenue such as split case and delivery fees), plus supplier brokerage commissions and rebates, less supplier investments as reflected on the seller's internal P&L, laid-in cost, and excise taxes not already in laid-in cost. No LIFO adjustment is applied.
• Laid-in cost is the actual invoiced cost paid or owed to suppliers for the inventory, plus freight, excise taxes, and delivery costs to take physical possession, using the "latest value" accounting method under the transaction accounting principles and without any LIFO adjustment. For dunnage, laid-in cost is the reimbursable deposits held by suppliers.
• Inventory factors:
  • 100% for standard inventory;
  • 25% for aging inventory, meaning volume that expires or goes out of code within 60 days after the calculation time;
  • 75% for tier 1 excess inventory: spirits between 12 and 18 times the depletion rate, and wine between 9 and 18 times;
  • 50% for tier 2 excess inventory: spirits above 18 times the depletion rate, and wine between 18 and 24 times;
  • 25% for tier 3 excess inventory: wine above 24 times the depletion rate, and beer, ready-to-drink, and non-alcoholic products above 9 times;
  • 0% for unsalable inventory, which includes out-of-code, damaged, recalled, or customer-returned product and product with a zero depletion rate (other than new products); and
  • for scheduled inventory, the factor set opposite it on the inventory schedule, which controls over any other category.
  Where non-scheduled inventory falls into more than one category, the lowest factor applies. The depletion rate is average monthly sales to unaffiliated retail customers over the six months ended Aug. 31, 2026, subject to agreed adjustments for seasonality and new or discontinued products.
• The calculation time is 11:59 p.m. Central time on the closing date. Calculations are made without giving effect to the transaction.
• Estimates: the seller delivers a draft supplier-by-supplier estimate of the supplier liability amount at least 10 calendar days before the anticipated closing. It delivers an estimated closing statement covering each price component at least five calendar days before closing. If the parties disagree, the estimated closing statement reflects the seller's good-faith estimates.
• Closing payments are made as follows:
  • Into escrow with SRS Acquiom, $5.0 million plus 10% of the estimated inventory price (the motion's term summary states five percent).
  • To RNDC Kentucky's lenders, directly, the amounts needed to pay off the closing indebtedness under the payoff letters.
  • To the seller, the balance of the estimated cash payment.
• True-up:
  • The parties jointly take an itemized physical inventory count after the close of business on the closing date and work to agree on the inventory price within five business days after closing.
  • The purchaser delivers an adjustment statement within 60 days after closing. The seller has 30 days to dispute it, followed by a 30-day resolution period.
  • Remaining disputes go to Kroll, LLC (or a mutually acceptable substitute) as accounting firm. Its ruling is due within 30 days and must fall between the two sides' positions. Its fees are allocated by the share of the contested amount each side lost, and its determination is final and non-appealable.
  • This process is the parties' exclusive remedy for adjustment disputes. For the supplier liability amount, the parties may take into account supplier information exchanged after closing about transactions before the calculation time.
• If the final cash payment falls below the estimate, the shortfall is paid to the purchaser from escrow. The seller pays any amount by which the shortfall exceeds the escrow fund within three business days. If the final cash payment exceeds the estimate, the purchaser pays the difference.
• The purchase price is allocated among the acquired assets under section 1060 of the tax code per an agreed methodology. The purchaser proposes an allocation within 75 days after the final purchase price is determined. The seller has 30 days to object and the parties 30 days to negotiate, after which disputes go to the accounting firm. Adjustment and escrow payments are treated as purchase price adjustments for tax purposes.

Deposit and Escrow

• The APA does not provide for a deposit.
• The escrow supports the post-closing true-up and the seller's indemnification obligations, and it is the sole source of recovery for the purchaser's indemnification claims. On the business day after the six-month anniversary of closing, the escrow agent releases the remaining fund to the seller. Amounts covered by pending good-faith indemnification claims and undistributed joint instructions are held back. Held-back amounts are released within two business days after the related claim is resolved.

Parties

• Seller: Republic National Distributing Company, LLC, a Kentucky limited liability company (RNDC Kentucky), a non-debtor joint venture owned 68.75% by RNDC, with NWS holding the minority interest.
• RNDC (Republic National Distributing Company, LLC, a Delaware limited liability company, referred to in the APA as RNDC Parent) is a party solely for the restrictive covenants, the bankruptcy court approval covenant, and its fiduciary termination right. It is not a seller.
• National Wine & Spirits, Inc., an Indiana corporation (NWS), is a party solely for the restrictive covenants and the NWS support covenants. It is not a seller.
• Purchaser: KEG1 River City, LLC, a Delaware limited liability company. The motion describes KEG1 as a leading alcoholic beverage distributor in Kentucky and six other states.
• The purchaser may designate affiliates to buy assets, assume liabilities, or take title, on notice at least five business days before closing, and remains primarily liable until the transfer. It may also substitute an affiliate or commonly controlled entity as purchaser before closing. That requires an assumption agreement, no material delay or impairment of required approvals, and credit support reasonably satisfactory to the seller. Once those conditions are met, the original purchaser is released.

Debtors' Approvals and Undertakings

• Under the proposed order, the debtors would be authorized to:
  • execute the APA solely for the restrictive covenants, bankruptcy court approval, and fiduciary termination provisions;
  • consent to and approve the seller's consummation of the sale;
  • take all corporate actions necessary to cause the seller to monetize substantially all of its assets; and
  • enter into and perform under the TSA, including providing the TSA services.
  Actions the debtors took before entry of the order would be ratified.
• RNDC must use reasonable best efforts to obtain, as promptly as practicable, an approval order acceptable to the purchaser. The order must approve RNDC's exercise of its voting and consent rights, its participation in the sale, its performance of the TSA, and the release of any liens or claims affecting the acquired assets or RNDC's equity in or proceeds from the seller. That release expressly includes DIP liens.
• The automatic stay would be lifted to the extent necessary for the purchaser and the seller to implement and consummate the sale.
• The APA and the TSA would not be subject to rejection or avoidance by the debtors, their estates, creditors, equity holders, or any trustee, examiner, or receiver. Any trustee would be authorized to operate the debtors' businesses as needed to comply with the order.
• The debtors characterize their obligations as limited. They state that, because they are selling all remaining assets and winding down, the restrictive covenants will not materially burden the estates.

NWS Matters

• Until the earliest of closing, valid termination, or any amendment or other material change to the transaction terms, NWS must:
  • approve, consent to, and support the sale, and exercise all of its voting, consent, and governance rights under the RNDC Kentucky operating agreement in favor of it;
  • not withdraw or adversely condition that support;
  • not solicit, negotiate, support, or enter into any competing acquisition proposal;
  • not exercise any consent right, right of first refusal, matching right, or similar right to support a competing proposal or impede the sale; and
  • reasonably cooperate on supplier retention, regulatory approvals, transition matters, documentation, and bankruptcy court approval.
• The purchaser is entitled to specific performance of these obligations. NWS reserves the right to review and approve the form of approval order. Its advance consent does not extend to the seller's proposed allocation or use of sale proceeds.

Assets Being Sold

• All of the seller's right, title, and interest in the assets, properties, goodwill, and rights related primarily to or used primarily in the business of distributing beverage products, including the brands, from the suppliers in Kentucky, other than excluded assets. The assets transfer free and clear of encumbrances except permitted encumbrances, and include:
  • the exclusive distribution rights for the scheduled brands from the scheduled suppliers in Kentucky, to the extent supplier approval is obtained;
  • inventory of approved brands, including aging, excess, scheduled, and unsalable inventory, plus functional and undamaged dunnage, pallets, slip boards, and kegs for approved brands and the related reimbursable deposits held by suppliers;
  • retail trade accounts receivable as of the calculation time, excluding notes receivable and amounts due from employees, suppliers, or related parties;
  • transferable prepaid expenses, credits, and rebate rights relating to approved-brand suppliers or assigned contracts;
  • warehouse and delivery equipment in Kentucky, including forklifts, motor vehicles, trailers, automated warehouse systems, and office and computer equipment and furniture. Leased equipment transfers only if its lease is an assigned contract;
  • the owned real property at 2801 Blankenbaker Parkway, Louisville, with all buildings, improvements, fixtures, and appurtenant rights, together with leasehold estates under the leases, which are assigned contracts;
  • other tangible property in Kentucky used primarily in the business. This includes packaging, draft tapping equipment, supplies, fuel and oil, point-of-sale and promotional materials for approved brands, and originals or copies of customer, sales, route, vendor, financial, compliance, and product-development records;
  • other intangible property, including:
    • transferable licenses and permits, specifically including those issued by Louisville Metro Alcohol Beverage Control, Kentucky Alcoholic Beverage Control, and the Alcohol and Tobacco Tax and Trade Bureau;
    • receivables from approved suppliers;
    • guaranties, warranties, and indemnities;
    • rights to make claims under the seller's occurrence-based insurance policies for pre-closing matters relating to the acquired assets or assumed liabilities; and
    • telephone and facsimile numbers;
  • the leases and the other contracts on the assigned-contracts schedule; and
  • all goodwill and going-concern value of the business.
• Property held under a contract does not transfer unless that contract is an assigned contract. The territory is Kentucky.

Excluded Assets

• The "Republic National Distributing Company" and "RNDC" business names, and all other intellectual property, including logos, websites, social media accounts, domain names, and email addresses.
• Cash and cash equivalents and bank accounts (other than any the parties agree to include). Deposits other than supplier-held dunnage deposits for approved brands. Prepaid charges and professional retainers other than the acquired prepaid expenses. Accounts and notes receivable other than customer accounts receivable and approved-supplier receivables, including amounts due from employees and related parties.
• Inventory that does not qualify as inventory; contracts other than assigned contracts; employee benefit plan rights; tax refunds, attributes, and assets; equity interests; and amounts owing from seller affiliates.
• Claims relating to excluded assets or excluded liabilities. Other pre-closing claims, rights of recovery, set-off, and recoupment, except to the extent relating to an acquired asset, assigned contract, or assumed liability. Claims against suppliers, vendors, and contract counterparties arising from pre-closing events.
• All current and prior insurance policies, including D&O policies, and their recoveries. Financial, organizational, and tax records; records the seller must retain by law; privileged materials; and sale-process materials, including bids received from third parties.
• Assets used in a business other than the business; tangible assets outside Kentucky; licenses and permits other than the transferred permits; and assets on the excluded-assets schedule, which the parties may amend by mutual written consent through closing.

Assumed and Excluded Liabilities

• The purchaser assumes only the following:
  • unfulfilled retail customer purchase orders submitted before closing, and ordinary-course inventory purchase orders the purchaser accepts, including unpaid in-transit inventory;
  • liabilities for returnable supplier packaging arising from the purchaser's post-closing possession or use, customer deposits on transferred inventory and returnable containers, and retail customer dunnage deposits;
  • supplier liabilities, solely to the extent included in the finally determined supplier liability amount;
  • liabilities for in-transit inventory received on or after the closing date;
  • liabilities under the assigned contracts first arising after closing and not resulting from any pre-closing act, breach, rebate accrual, chargeback, or other pre-closing liability of the seller;
  • payables and marketing fund commitments to approved suppliers that first arise after closing;
  • liabilities from the purchaser's own post-closing conduct of the business and ownership of the acquired assets, including environmental, health, and safety matters;
  • amounts the purchaser must pay under the APA; and
  • taxes on the acquired assets, assumed liabilities, or business for periods beginning after the calculation time.
• Everything else is an excluded liability, expressly including:
  • liabilities from the seller's pre-closing ownership or operation of the business, other than the supplier liabilities;
  • liabilities relating to excluded assets;
  • retained supplier liabilities;
  • taxes for periods ending on or before the closing date, and any other seller taxes;
  • pre-closing employment and termination liabilities, pre-closing workers' compensation claims, and liabilities under employee benefit plans, including under Titles I and IV of ERISA; and
  • the seller's transaction expenses.
• Transfer taxes are split 50/50, except that real property transfer taxes and deed taxes are paid entirely by the seller.

Supplier Approvals and Supplier Liabilities

• Supplier approval is written evidence, reasonably satisfactory to the purchaser, that a supplier has approved the purchaser as its authorized distributor in Kentucky on terms acceptable to the purchaser. It may take the form of a new distribution agreement, a written appointment, an assignment or novation, or a consent. The purchaser is not required to assume any of the seller's existing distribution agreements.
• Mandatory supplier consents are a closing condition. They consist of supplier approval from a supplier whose name is blank in the filed APA, plus at least five other material suppliers.
• If any other supplier withholds approval, the closing proceeds. The seller retains that supplier's distribution rights, inventory, and point-of-sale materials, and the price components are reduced to exclude them.
• If a withholding supplier gives approval within 90 days after closing, the parties transfer its distribution rights, inventory, and related assumed liabilities, with the price components increased accordingly, effective as of the closing date.
• The purchaser must keep withholding-supplier inventory at the facilities for 90 days with reasonable care and give the seller, the supplier, and any new distributor access to retrieve it. Title and risk of loss stay with the seller. If the inventory has not been removed and approval has not been obtained by the end of that period, title passes automatically to the purchaser, which may dispose of it.
• The parties must cooperate to obtain supplier approvals. Without the purchaser's consent, the seller may not:
  • enter into supplier arrangements that would adversely affect the distribution rights or the purchaser's ability to obtain approval;
  • knowingly encourage suppliers to use the transaction to modify those rights; or
  • act to impede approvals.
  The seller is not required to litigate or arbitrate to enforce distribution rights.
• Supplier liabilities are the seller's monetary obligations to an approved supplier from ordinary-course handling of its products, for periods through the calculation time, whether invoiced or not. They include product purchases, freight, rebates, allowances, promotional and depletion programs, chargebacks, returns, credits, and supplier advances. The purchaser may contact suppliers before closing to confirm these amounts.
• Retained supplier liabilities stay with the seller. These include:
  • breach, termination, and nonrenewal claims;
  • franchise and distributor termination statutory claims;
  • indemnities, litigation, fines, and penalties;
  • fraud and willful misconduct;
  • product liability;
  • seller taxes;
  • obligations attributable to periods after the calculation time, other than under assigned contracts;
  • liabilities of RNDC, NWS, or other seller affiliates; and
  • any supplier liability not included in the finally determined supplier liability amount.

Owned Real Property

• The owned real property is the land at 2801 Blankenbaker Parkway, Louisville, priced at $43.0 million. It is conveyed by special warranty deed, subject only to real estate permitted encumbrances.
• Title process:
  • The purchaser orders an ALTA 2021 extended coverage owner's title commitment from Mercantile Title Agency, Inc. within five business days after the effective date. It may obtain an ALTA/NSPS survey, and it pays for the title policy and survey.
  • The purchaser has 15 business days after receiving the commitment, title documents, and survey to object to monetary liens, which are mandatory cure items. The seller has until closing to cure them. If the seller does not, the purchaser pays them and receives a credit against amounts due to the seller at closing.
  • Matters the purchaser does not object to, and non-monetary matters that do not materially interfere with the property's use or value, become real estate permitted encumbrances.
• Real estate taxes for the year of closing are prorated as of the closing date. If actual amounts are not known, they are estimated at 105% of the most recent amounts and later trued up, and the purchaser may collect the seller's share of the true-up from escrow. Utilities and similar charges are prorated as of the closing date.
• If a casualty or condemnation occurs before closing, the purchaser receives a credit for, or an assignment of, the insurance or condemnation proceeds.
• The purchaser may not conduct Phase II or other invasive environmental sampling. The one exception is sampling, with the seller's consent, to investigate a recognized environmental condition identified in a Phase I report under an approved sampling plan.
• The seller must provide materials on the property's eligibility under the Kentucky Brownfield Program (KRS 224.1-415). It must also cooperate after closing, at the purchaser's expense, in maintaining or transferring the program's benefits.

Liens and Credit Bid

• No credit bid is proposed. The proposed order would find that the debtors hold no liens on the seller's assets. It would also find that the DIP liens do not encumber, attach to, or otherwise affect the acquired assets or the debtors' equity interests in or rights to proceeds from the seller.
• The debtors would be authorized to release any liens or claims, including DIP liens, affecting the acquired assets or RNDC's equity interests in or rights to proceeds from the sale. The debtors and the DIP agent would be authorized to file UCC termination statements and other release documentation.
• Payoff letters for the closing indebtedness on the applicable schedule are a closing condition. They must provide that, once the stated amounts are paid at closing, the seller has no further obligations on that debt.
• Permitted encumbrances are:
  • real estate taxes not yet due or contested in good faith;
  • zoning and land-use laws not violated by the current use;
  • easements, covenants, and restrictions of record, other than mandatory cure items;
  • landlords' interests under the leases;
  • the real estate permitted encumbrances; and
  • only before closing, the encumbrances of the seller's and its affiliates' secured lenders.

Successor Liability

• The proposed order contains no section 363(f) free-and-clear relief and no injunction against claims against the purchaser. It would find that neither the purchaser nor its affiliates are successors to the debtors or their estates under any theory of law or equity, and that the sale is not a consolidation, merger, or de facto merger with the debtors. It would also provide that the purchaser has no liability for any claims or obligations of the debtors or their estates as a result of acquiring the acquired assets.
• The parties waive compliance with bulk-sales laws.

Closing Conditions

• Closing occurs on the third business day after the conditions are satisfied or waived, by telephone conference and electronic exchange of documents. It is deemed effective as of the calculation time.
• Conditions to the purchaser's obligation include:
  • the seller's non-fundamental Article III representations true and correct except where the failure has not had a material adverse effect;
  • the fundamental representations (organization and good standing, authority and enforceability, title to the acquired assets, and brokers) true and correct in all material respects, plus the seller's material performance of its covenants, confirmed by an officer's certificate;
  • no material adverse effect between the effective date and closing;
  • no law making the transaction illegal, and no order or pending action restraining the closing;
  • receipt of the scheduled federal and state alcoholic beverage licenses and permits for Kentucky;
  • an executed escrow agreement, bills of sale, deeds for the owned real property, and an assumption agreement;
  • an executed TSA substantially in the agreed form, with its schedules completed in form and substance satisfactory to the purchaser in its sole discretion;
  • entry of the approval order, not stayed, vacated, or modified without the purchaser's consent;
  • delivery of payoff letters for the closing indebtedness;
  • receipt of the scheduled consents and the mandatory supplier consents; and
  • availability of the purchaser's financing at closing in an amount sufficient, together with other available funds, to pay the purchase price. The purchaser may not rely on this condition if the failure was primarily caused by its material breach of the financing covenant.
• Conditions to the seller's obligation are:
  • the accuracy of the purchaser's representations in all material respects and its material performance of covenants;
  • no order or pending action restraining the closing;
  • an officer's certificate, an assumption agreement, and an executed escrow agreement; and
  • entry of the approval order, not stayed, vacated, or modified without the seller's consent.
  Any condition unsatisfied at closing is deemed waived by the benefited party, and neither side may rely on a failed condition it caused.
• Material adverse effect is measured against the business, acquired assets, and assumed liabilities taken as a whole. It excludes:
  • general business and economic conditions;
  • political and social conditions, including tariffs and hostilities;
  • natural disasters, health events, and other force majeure;
  • changes in the price of equipment or supplies;
  • financial market conditions;
  • changes in GAAP or law;
  • actions required by the APA, and the negotiation, announcement, or pendency of the transaction and the purchaser's identity or plans;
  • any failure to meet projections;
  • actions or breaches by the purchaser;
  • the bankruptcy cases, DIP financing, and objections filed in the cases; and
  • scheduled matters.
  The first seven exclusions may be counted to the extent they affect the seller disproportionately relative to similarly situated participants in its industries and geographies.

Financing

• The purchaser represents that it is actively pursuing financing and has not received written notice from any prospective source that financing will be unavailable on reasonably acceptable terms.
• The purchaser must use commercially reasonable efforts to obtain debt financing sufficient to pay the purchase price. It must also pursue alternative financing before the outside date if the original financing becomes unavailable, and keep the seller informed of material developments.
• The seller must provide limited financing cooperation at the purchaser's expense. It is not required to create new financial information, become an obligor, pay fees, or act in a way that would interfere with the business or the bankruptcy cases. Neither the seller nor its affiliates has any liability for a failure or delay in obtaining financing. The purchaser reimburses and indemnifies the seller for its cooperation.
• The seller may seek specific performance to compel closing only if all of the following are true:
  • all closing conditions are satisfied or waived;
  • the financing has been funded or is confirmed to fund at closing;
  • the seller has confirmed in writing that it will close; and
  • the purchaser has failed to close by the outside date.
  The purchaser's failure to close is not a breach unless all of its closing conditions are satisfied or waived.

Termination

• Outside date: Dec. 1, 2026. Neither side may terminate on that ground if its own failure to perform caused the failure to close. If either side brings a specific performance action before the outside date, the outside date extends for as long as the action is pending plus 10 business days, or as the court sets.
• Either side may also terminate on mutual written consent, or upon a final, binding, non-appealable order prohibiting the closing or declaring the transaction unlawful, unless its own failure to perform caused the order.
• Buyer and seller breach rights run in parallel. Each may terminate for the other's breach or untrue representation that would cause the corresponding bring-down condition to fail. Each is subject to a cure period running to the earlier of two business days before the outside date and 30 days after notice. Neither may terminate while itself in material breach. The purchaser's failure to consummate the closing is expressly not curable.
• The purchaser may also terminate if a material adverse effect has occurred.
• RNDC may terminate if its board or other governing body determines in good faith, after consulting its financial advisors and outside bankruptcy counsel, that failing to terminate would be inconsistent with its fiduciary duties. Separately, nothing in the APA requires the seller or its managers to act inconsistently with their fiduciary obligations.
• Termination voids the agreement and ends all obligations. It does not relieve a party of liability for a willful breach before termination. Specific performance remains available to enforce surviving provisions.

Restrictive Covenants

• Non-competition: for three years from the closing date, the seller and its controlled affiliates may not own an interest in, operate, join, control, or participate in any person providing, soliciting orders for, selling, warehousing, distributing, or marketing beverage products in Kentucky that compete with the products of the business. Prohibited participation includes acting as a joint venturer, agent, consultant, or creditor.
• Non-recruitment: for the same period, the seller and its controlled affiliates may not hire or solicit transferred employees. General advertising not targeted at them is carved out, as is hiring individuals whose employment with the purchaser ended at least six months earlier.
• Non-disparagement binds both sides. Statements needed to correct incorrect public statements, and statements made in connection with any action, are carved out.
• Confidentiality runs for the same period. It covers customer lists and requirements, license and customer contract terms, pricing, marketing and sales techniques, and planning and financial information of the business. Carve-outs apply for public, independently developed, or third-party-sourced information, legally compelled disclosure, routine regulatory examinations, and winding up and dissolving the seller.
• A breach entitles the damaged party to injunctive relief without proving actual damage and, if it prevails, to its costs and reasonable attorneys' fees. The restricted period tolls for the duration of any breach. A court may modify an overbroad covenant to make it enforceable.
• RNDC is bound by these covenants to the same extent as the seller and must cause its controlled affiliates to comply. NWS is bound to the same extent until the first anniversary of the closing date.

Employee Matters

• The purchaser may meet with business employees from the effective date. At least five business days before closing, it extends at-will offers to the business employees it selects in its sole discretion, subject to its ordinary new-hire requirements. Employees who accept become employees of the purchaser on the day after the closing date. The purchaser has no obligation to make offers to any or all business employees.
• The seller retains all liability for transferred employees' earned and unused vacation and paid time off and pays it out to the extent required by law or the applicable plan. It also retains pre-closing employment and termination liabilities.
• WARN Act: a WARN notice the seller gives is not a breach, and the seller keeps WARN liability through closing. The purchaser is responsible for WARN liability arising from aggregation of employment losses it causes for transferred employees within 90 days after closing. It is not responsible for any inadequacy or untimeliness of the seller's notice.
• COBRA: while the seller's selling group maintains a group health plan, it is responsible for M&A qualified beneficiaries whose qualifying event occurs on or before the closing date. The purchaser is responsible for those whose qualifying event occurs afterward. If the selling group ceases to maintain a plan, the seller must notify the purchaser and provide a list of affected beneficiaries. It must also indemnify the purchaser for the resulting COBRA costs.
• The seller represents that it has no multiemployer or defined benefit plan obligations for business employees. It also represents that, in the 90 days before closing, no business employees will have been terminated, laid off, or had hours cut by more than 50%, other than employees the purchaser does not hire or offer employment to and scheduled exceptions.

Indemnification

• The seller indemnifies the purchaser indemnified parties for breaches of its representations, including fundamental representations, for its excluded liabilities, and for non-fulfillment of its post-closing covenants.
• The purchaser indemnifies the seller indemnified parties for the following:
  • breaches of its representations, including its fundamental representations of organization, authorization, and brokers;
  • the assumed liabilities;
  • non-fulfillment of its post-closing covenants; and
  • actions arising from its post-closing employment, terms of employment, or termination of business employees.
• Survival: fundamental representations survive for three years after closing. Other representations survive until the six-month escrow release date. Pre-closing covenants terminate at closing, and post-closing covenants survive on their own terms or for 12 months where none is stated. Notice of a claim before the applicable deadline is a condition precedent to recovery.
• Deductible: $350,000, with recovery only above that amount on non-fundamental representation claims. Per-claim threshold: $25,000, below which an individual loss or series of related losses does not count. Neither applies to fundamental representation breaches, excluded or assumed liabilities, or fraud. Materiality qualifiers in the seller's representations are disregarded in determining breach and losses, with limited exceptions.
• The escrow fund is the sole source of recovery for the purchaser's indemnification claims, and the purchaser may set off indemnification only against the escrow. Indemnification is the exclusive post-closing remedy other than fraud and specific enforcement of post-closing covenants.
• Losses are subject to the following limits:
  • recoveries are net of insurance and other third-party recoveries, and subject to a duty to mitigate;
  • no duplicate recovery, and no recovery of amounts already reflected in a purchase price adjustment or in the assumed liabilities;
  • no punitive, exemplary, special, consequential, incidental, or indirect damages, except those that are the reasonably foreseeable and direct result of the matter or that are paid to an unrelated third party; and
  • no multiple-of-profits or similar methodology, except that breaches of the gross profit by brand representation for approved brands may be measured using the applicable 1.5x or 0.5x multiple in the distribution rights price formula.
  Indemnity payments are treated as purchase price adjustments for tax purposes.
• The purchaser acknowledges it relies solely on the express representations, meaning the Article III representations as qualified by the schedules, the seller's closing certificate, and the deeds. It does not rely on the "Project Arrow MA" data room, the projections, or any other information furnished. Fraud is narrowly defined as intentional common-law fraud under Delaware law in the express representations or the certificate. The purchaser waives set-off against the purchase price except against the escrow for indemnification.

Transition Services Agreement

• The TSA is between RNDC, as provider, and the purchaser, as recipient. The motion states that the TSA terms are still being negotiated, that the purchaser currently requires IT infrastructure and support services, and that the services will end no later than Nov. 30, 2026. The debtors state that RNDC Kentucky depends on them for IT infrastructure, support, and back-office services. They also state that the expected net proceeds, together with any TSA fees, will far exceed the cost of providing the services.
• The provider performs the services on the services schedule for each service term, at a level not materially less favorable than during the baseline period, the 12 months before the TSA effective date. Excluded are installation or implementation of new systems and the services on the excluded-services schedule. The recipient may request additional services that meet all of the following:
  • the provider furnished them to the business during the baseline period;
  • they are reasonably necessary to run the business;
  • the recipient cannot reasonably obtain them elsewhere; and
  • the provider is reasonably able to provide them.
  The provider may use subcontractors but remains responsible for them.
• Fees: the recipient pays fixed monthly fees in advance and pass-through third-party costs in arrears, within 30 days of invoice and without offset. Under the APA, the purchaser bears all reasonable costs of the services and must pre-fund them if the seller reasonably requests. The recipient also bears the cost of obtaining third-party consents.
• Termination:
  • The provider may terminate for the recipient's uncured material breach (30-day cure), uncured nonpayment (15-day cure), or insolvency.
  • The recipient may terminate individual services on 30 days' notice, but not services on which other continuing services depend. It must reimburse the provider's documented early termination costs, including severance, stranded costs, and third-party breakage, unless it withdraws the notice within five business days after receiving the provider's cost notice.
• The provider must give access to and exports of business data and cooperate in an orderly transition, including making knowledgeable personnel available before their employment ends. The recipient bears material incremental third-party costs of transition assistance.
• Services are provided "as is," with warranties disclaimed. The provider's liability is capped at the fees received for the particular service in the prior 12 months, and it has no liability for consequential or similar damages. Neither limit applies to willful misconduct, gross negligence, fraud, or confidentiality breaches. Each side indemnifies the other against third-party claims arising from its willful misconduct, gross negligence, fraud, or material breach.
• Bankruptcy provisions:
  • The provider has no obligation or liability for services it cannot provide because the necessary assets, resources, or personnel have been sold, are unavailable, or were otherwise disposed of in the chapter 11 cases.
  • The provider must promptly notify the recipient of bankruptcy developments reasonably expected to impair performance and use commercially reasonable efforts to preserve its ability to perform.
  • The provider may assign the TSA to affiliates or successors, including a plan administrator. The recipient may assign it to affiliates or to its lenders as security, without release from its obligations.
  • The bankruptcy court has exclusive jurisdiction over TSA disputes, and the sale order governs any conflict.
• Confidentiality runs until three years after the TSA expires or terminates.

Fifth Generation Settlement

• Parties: RNDC and its debtor affiliates, with certain terms extending to their non-debtor affiliates other than National Distributing Company, Inc. (NDC). The Fifth Generation parties are Fifth Generation, Inc., Fifth Generation Distilled Spirits, Inc., Lalo Spirits, LLC, and their affiliates. The settlement agreement is dated Oct. 13, 2026, though the proposed order recites it as dated Oct. 12, 2026.
• Background:
  • Prepetition, Young's Market Company of Washington, LLC commenced arbitration over Fifth Generation's termination of the debtors' exclusive Washington distribution rights. The Tito's claim is JAMS Arbitration Case No. 40897, and the Lalo claim is AAA Arbitration Case No. 01-26-0004-5489, captioned Republic National Distributing Company, LLC v. Lalo Spirits, LLC.
  • The debtors assert that Fifth Generation terminated without cause, entitling them to fair-market-value compensation under the distribution agreements and Washington franchise law. They put that compensation at $22,462,196 for Tito's and $1,242,198 for Lalo.
  • According to the debtors, Fifth Generation disputes the Tito's claims, which make up over 94% of the total, but has effectively conceded that its Lalo termination was without cause. The arbitrations remain pending.
• Fifth Generation is one of RNDC Kentucky's largest suppliers. It told the debtors it would not appoint KEG1 as its Kentucky distributor of Tito's and Lalo without a comprehensive settlement. The debtors state that RNDC stands to lose more than $6.3 million in expected net proceeds, its 68.75% share of the APA value attributable to Tito's and Lalo, without the appointment. They also state that KEG1 has indicated Fifth Generation's support is critical to its willingness to proceed. The parties negotiated over six weeks, and the debtors state the cash consideration increased significantly from Fifth Generation's initial offer.
• Settlement payment: Fifth Generation pays $9.0 million in cash within three business days after the sale order becomes a final order. The payment is in full satisfaction of the arbitration claims and all other claims relating to the parties' Washington business relationship. Upon receipt, RNDC must dismiss the arbitration claims with prejudice.
• Kentucky distribution:
  • Fifth Generation will not terminate RNDC Kentucky's existing Tito's and Lalo distribution rights during the Kentucky transition period. That period is six months from entry of the sale order and may be extended by agreement of KEG1 and Fifth Generation.
  • Before closing, Fifth Generation gives KEG1 written supplier approval. RNDC continues as distributor of record in the ordinary course until closing.
  • At closing, Fifth Generation appoints KEG1 as distributor of record on terms the two agree, for the Kentucky transition period.
  • Fifth Generation has no obligation to appoint or maintain KEG1 if the sale does not close by Nov. 9, 2026.
  • Court approval of the settlement is a condition precedent to the appointment. The appointment is void if the order is later overturned or modified without Fifth Generation's written consent.
• Debtor trade amounts: Fifth Generation pays RNDC $245,513.69 within three business days after entry of the sale order. That payment is in full and final satisfaction of all trade-related amounts owed to the debtors through Aug. 31, 2026. Amounts arising from Sept. 1, 2026, are to be reconciled by Nov. 16, 2026, with any net amount Fifth Generation owes paid by Nov. 20, 2026. Amounts owed by or to NDC are not affected.
• Non-debtor trade amounts: Fifth Generation owes the company's non-debtor affiliates, excluding NDC, an estimated gross amount of approximately $6.5 million on trade amounts invoiced through Aug. 31, 2026. Fifth Generation pays all proper and undisputed invoices within three business days after entry of the sale order. September 2026 amounts are reconciled by Nov. 16, 2026, and paid by Nov. 20, 2026. October 2026 amounts are reconciled by Dec. 15, 2026, and paid by Dec. 20, 2026.
• Inventory buyback: at the company's option, Fifth Generation or its appointed distributor buys at laid-in cost, and retrieves at its own expense, all saleable Tito's and Lalo inventory from the company's warehouses by Nov. 15, 2026. Saleable inventory means full cases in good condition with the original factory seal. The company must identify the inventory by Oct. 30, 2026. Laid-in cost here is the F.O.B. price plus freight, insurance, import duties and costs, required taxes, and inland transportation.
• Michigan: the company continues as Tito's and Lalo distributor of record in its Michigan authorized distribution agent business in the ordinary course. Fifth Generation will acknowledge in writing the sale of the company's equity in NWS Michigan, LLC to Great Lakes Wine and Spirits, LLC. It also waives any rights under any contract with NWS Michigan with respect to that sale. NWS Michigan, or an affiliate designated by the buyer, continues or is appointed as distributor of record after closing, though Fifth Generation keeps its existing termination rights. The motion states that approval of the Michigan sale will be sought by separate motion.
• Mutual releases: the parties exchange comprehensive mutual releases of claims arising on or before the settlement effective date. These take effect on the later of the sale order becoming a final order and RNDC's receipt of the settlement payment and both trade payments. The releases include unknown claims and waive California Civil Code section 1542. They cover the Washington claims, the Tito's and Lalo distribution arrangements, chapter 5 claims, and trade-related amounts. Excepted are:
  • NDC payables and claims;
  • non-debtor trade amounts not satisfied by the payment;
  • other claims between Fifth Generation and the non-debtor affiliates;
  • amounts payable under the agreement; and
  • enforcement rights.
• Southern release: as a condition of the settlement, Fifth Generation required the debtors to release Southern Glazer's Wine & Spirits, LLC and its affiliates operating in Washington. Southern is Fifth Generation's successor distributor there. The release takes effect once Fifth Generation satisfies its payment and inventory buyback obligations, including the sale order becoming a final order. It covers claims relating to Southern's appointment as Washington distributor of Tito's and Lalo and the company's termination there. That includes any obligation to pay compensation as successor distributor under Washington's Wholesale Distributor/Supplier Equity Agreement Act (RCW 19.126) or under a June 2013 Brand Transfer Agreement between Young's Market Company of Washington and Southern Wine & Spirits of Washington. The release is limited to those matters, and Southern is a third-party beneficiary. Porter Hedges LLP, as conflicts counsel, negotiated the release because Kirkland & Ellis does not represent the debtors on matters adverse or related to Southern.
• The settlement becomes effective upon execution and entry of a Rule 9019 approval order, which may be the sale order. If the sale order does not become a final order, the agreement terminates, including any obligation to maintain KEG1 as distributor. The company represents that, except for affiliates that operated in New York and Illinois, it has not transferred any non-debtor trade receivables from Fifth Generation and will not do so. New York law governs, the bankruptcy court has jurisdiction over disputes, and the debtors may assign the agreement to a plan administrator or liquidating trustee.
• The debtors value the settlement at approximately $18 million in aggregate expected value, excluding net receivables. That figure consists of the settlement payment and the value attributable to Fifth Generation's consent to the Kentucky and Michigan sales. Under the proposed order, the court would approve the settlement and the releases, including the Southern release, under Bankruptcy Rule 9019 and sections 105(a), 362, and 363 of the Bankruptcy Code. The automatic stay would not apply to the settlement parties' performance.

Post-Closing Arrangements

• Licenses: the seller may not cancel its federal basic permits, or its state or county wholesaler and importer licenses, until the purchaser has obtained its own. The seller must cooperate in transferring the transferred permits and obtaining any temporary licenses, subject to limits on cost, liability, and pre-closing effect.
• Non-assignable assets: where a required third-party consent for an asset other than the distribution rights has not been obtained, the parties pursue the consent and cooperate on a pass-through arrangement. The arrangement lasts until the earliest of the consent, six months after closing, and the seller's dissolution.
• Books and records: the purchaser must give the seller reasonable access to acquired records and personnel for its wind-down, tax filings, governmental inquiries, and review of the adjustment statement. It may not dispose of those records for two years after closing without notice and an opportunity for the seller to take possession, and it must assist with wind-down activities. The seller must give the purchaser comparable access to its retained records relating to the business. It may not dispose of them for two years, or until it dissolves if sooner, without the same notice and opportunity.
• Misdirected funds are forwarded both ways.
• Insurance coverage maintained by the seller or its affiliates ceases to cover the business at closing. For pre-closing matters relating to the acquired assets or assumed liabilities, the purchaser may make claims under the seller's occurrence-based policies. The seller must remit what it collects, net of its documented costs.
• Seller support obligations: the purchaser must use reasonable efforts to replace, or substitute itself as primary obligor on, the scheduled guarantees, letters of credit, bonds, and similar arrangements supporting the business. It must obtain a full release of the seller and its affiliates and indemnify them for any liabilities under those arrangements.
• Assignment of the APA requires the other parties' consent. The purchaser may assign to a subsidiary or affiliate, or to its lenders as security, without release from its own obligations, and may substitute a purchaser as described above.

Use of Proceeds

• The debtors expect to realize approximately $30 million of net proceeds at or around closing on account of RNDC's interest in RNDC Kentucky, subject to final supplier consents. That figure is after RNDC Kentucky's funded debt obligations, transaction expenses, amounts needed to fund the orderly wind-down of the business, and net proceeds to NWS.
• The debtors intend to use the net proceeds to pay down the DIP new money loans and to fund the cases through emergence. They state that the settlement payment and the debtor trade payment will also provide liquidity as they pursue an orderly wind-down.

Preserved Rights

• Nothing in the proposed order would modify, supersede, or impair the final DIP order [Docket No. 275], including any rights under paragraph 16 of that order. The order is not an admission as to the amount, basis, priority, or validity of any claim or lien, and it is not an assumption or rejection of any contract under section 365.
• The order and the terms of the APA, the TSA, and the settlement agreement would survive confirmation of any plan, dismissal, or conversion, and no later plan or order could conflict with them. The order would bind:
  • the parties, the settlement parties, and their estates, successors, and assigns;
  • the plan administrator, litigation trustee, and wind-down debtors under the First Amended Joint Chapter 11 Plan [Docket No. 369]; and
  • any other estate representative or trustee.
• The order would govern any inconsistency with the sale documents (as they relate to the debtors' rights and obligations), the settlement agreement, and the Southern release agreement. Unresolved objections would be overruled with prejudice.

Amendments

• The parties may modify, amend, supplement, or restate the APA, the TSA, and related documents in a signed writing without further court order, but must promptly provide any such change to the committee. Any modification with a material or adverse effect on the estates requires notice to the court and the committee and a further court order while the cases remain pending.

Governing Law and Forum

• APA: Delaware law governs. Disputes go exclusively to the Delaware Court of Chancery or, if it lacks jurisdiction, another state or federal court in Delaware. The parties waive jury trial. The accounting firm has exclusive jurisdiction over purchase price adjustment disputes.
• TSA: the bankruptcy court has exclusive jurisdiction, and the APA's governing law provision is incorporated.
• Settlement agreement and Southern release agreement: New York law governs, except where mandatory Bankruptcy Code provisions apply, and disputes go to the bankruptcy court.
• The court would retain exclusive jurisdiction to interpret, implement, and enforce the order, the sale documents (as they relate to the debtors' rights and obligations), the settlement agreement, and the Southern release agreement.

Key Dates

• Letter of Intent (Breakthru Beverage Group): May 2026
• Petition Date: July 26, 2026
• Letter of Intent (KEG1): Aug. 8, 2026
• Settlement Reconciliation Period End: Aug. 31, 2026
• APA Effective Date: Sept. 25, 2026 (the motion states the parties executed the APA on Sept. 28, 2026)
• Settlement Agreement: Oct. 13, 2026 (the proposed order recites it as dated Oct. 12, 2026)
• Sale Motion Filed: Oct. 13, 2026 [Docket No. 572]
• Requested Relief Deadline: 4:00 p.m. Central time, Oct. 22, 2026
• Draft Supplier Liability Estimate: at least 10 calendar days before the anticipated closing
• Estimated Closing Statement: at least five calendar days before closing
• Transfer Offers: at least five business days before closing
• DIP Facility Maturity and DIP Sale Milestone: Oct. 29, 2026, unless extended by the DIP lenders
• Debtors' Expected Closing and Stated Liquidity Deadline: Oct. 30, 2026
• Saleable Inventory Notice to Fifth Generation: Oct. 30, 2026
• Debtor and Non-Debtor Trade Payments: within three business days after entry of the sale order
• Settlement Payment: within three business days after the sale order becomes a final order
• Fifth Generation Closing Deadline for KEG1 Appointment: Nov. 9, 2026
• Inventory Buyback Completion: Nov. 15, 2026
• September Trade Reconciliation and Payment: Nov. 16 and Nov. 20, 2026
• TSA Services End: no later than Nov. 30, 2026
• Outside Date: Dec. 1, 2026
• October Trade Reconciliation and Payment: Dec. 15 and Dec. 20, 2026
• Closing: third business day after satisfaction or waiver of the closing conditions
• Inventory Price Agreement Target: five business days after closing
• Adjustment Statement: within 60 days after closing
• Withholding Supplier Approval and Inventory Removal Window: 90 days after closing
• Kentucky Transition Period: six months from entry of the sale order, extendable by KEG1 and Fifth Generation
• Escrow Final Release Date: business day after the six-month anniversary of closing
• Restricted Period: three years after closing for the seller and RNDC; one year for NWS
• Fundamental Representations Survival: three years after closing