TRM NRE Holding - Chapter 11 Bidding Procedures / APA Summary

Private Sale Summary — Paducah Locomotives

Overview

• On Aug. 5, 2026, the U.S. Bankruptcy Court for the District of Delaware (Chief Judge Karen B. Owens), in In re TRM NRE Holding LLC, et al., Case No. 26-10568 (KBO) (jointly administered), entered an order pursuant to section 363 of the Bankruptcy Code authorizing the private sale of the Purchased Locomotive Assets free and clear of liens, claims, and encumbrances (the "Paducah Locomotives Sale") [Docket No. 234; related Docket No. 189].
• The Purchased Locomotive Assets consist of locomotives and related assets located at the Debtors' operating facility in Paducah, Ky. (the "Paducah Facility"). The Debtors describe themselves as one of the world's leading independent providers of locomotive and rail equipment services.
• The sale was pursued in connection with the Debtors' intended exit from the Paducah Facility, which the Debtors intended to complete no later than Aug. 27, 2026 as part of an agreement in principle with their landlord; per the Motion, an exit by that date entitles the Debtors to a $200,000 incentive payment.
• The Court found that the Buyer's offer, as embodied in the Purchase Agreement, is the highest or otherwise best offer for the Purchased Locomotive Assets, and that the sale and the terms of the Purchase Agreement — including its structure as a private sale — are fair, reasonable, and in the best interest of the Debtors, their estates, their creditors, and other parties in interest.
• The Purchase Agreement, substantially in the form attached to the Order as Exhibit 1, is approved, as are the "Logistical Conditions" set forth in paragraph 4 of the Order. The Court's determination rests on the Motion, the Karn Declaration, the First Day Declaration, and the record of these chapter 11 cases.
• All objections not withdrawn, waived, or settled, together with all reservations of rights included therein, were denied and overruled on the merits with prejudice.

Parties Involved

• Seller: TRM NRE Acquisition LLC, executed by Shaun Karn, CEO
• Buyer: LHAG Inc., executed by George L. Bakeris, President (the Motion and the Purchase Agreement preamble render the name "LHAGS Inc.").
  • Per the Motion, the Buyer and its affiliates are not "insiders" as that term is defined in section 101(35) of the Bankruptcy Code.
• The Debtors in these jointly administered chapter 11 cases are TRM NRE Holding LLC (7519) and TRM NRE Acquisition LLC (0748) — the parenthetical figures being the last four digits of each Debtor's federal tax identification number — with headquarters and mailing address at 908 Shawnee Street, Mount Vernon, Ill. 62864.
• The Court found that the sale was undertaken on an arm's-length basis, without collusion of any kind, and in "good faith" within the meaning of section 363(m) of the Bankruptcy Code, entitling the Buyer to all attendant protections.

Marketing Process and Private Sale Rationale (per the Motion)

• The Debtors began marketing the Purchased Locomotive Assets and other parts, machinery, and equipment at the Paducah Facility on or around April 2026, engaging Edward D. Biggs III, LLC ("Biggs"), a locomotive industry expert familiar with the Debtors' assets, to assist with the marketing and sale process.
• Biggs contacted more than eight strategic buyers over a two-and-a-half-month period; the Debtors' internal sales team received several direct offers from industry participants as well as quotes from a separate liquidation firm for all assets at the facility. At least four parties submitted bids, and the Debtors consulted their prepetition first lien lender, Great Rock Capital, and the DIP Lender before entering into the Purchase Agreement.
• The Debtors proceeded by private sale rather than a formal auction on the basis that they have no further use for the assets, that the indicative values received over the preceding three months supported an efficient and cost-effective disposition, and that avoiding auction-related administrative expense supported a value-maximizing exit from the Paducah Facility. The Motion also cited the wind-down of Paducah operations and the reduced operating costs associated with an expeditious exit as business justification.
• The Motion further requested a finding that the Buyer is not a successor in interest to any Seller for any purpose and that the sale is free and clear of successor liability claims; the entered Order should be checked for the corresponding finding.

Assets Being Sold

• All right, title, and interest in certain locomotives and purchased assets located at the Paducah Facility and identified on Exhibit 1 to the Locomotive Sale Agreement dated July 15, 2026 (the unit schedule is not itemized in the filed document). On the Payment Date, the Buyer takes possession of the Purchased Assets from the Seller, AS-IS and WHERE-IS.
• The Purchased Assets are conveyed "AS IS," "WHERE IS," and "WITH ALL FAULTS." Apart from the Seller's title warranty, the Seller makes no representation or warranty as to merchantability, fitness for use, design, condition, quality, materials, or workmanship.
• The Buyer has inspected the locomotives and is satisfied with their condition.
• Liabilities allocation:
  • All liabilities, claims, costs, expenses, revenues, and obligations attributable to each Purchased Asset for any period prior to the Payment Date remain the responsibility of the Seller.
  • All such items attributable to each Purchased Asset on and after the Payment Date are the responsibility of the Buyer.
  • The "Payment Date" is the date on which the Purchase Price is paid in full to the Seller in accordance with Section 2.2.
• The Buyer bears all federal, state, and local sales, use, property, transfer, customs, value-added, and other similar taxes, fees, or duties applicable to its purchase, as well as PAL and CSX transportation waybill and expense, and is solely responsible for each locomotive being accepted and interchanged per PAL and CSX interchange requirements.
• Nothing in the Motion, the Purchase Agreement, or the Order constitutes an approval, assumption, or rejection of any agreement, contract, program, policy, or lease under section 365 of the Bankruptcy Code.

Purchase Price and Payment Terms

• Purchase Price: $2.1 million in cash.
• Deposit: $1 million, payable on the date of execution of the Agreement and non-refundable other than as set forth in Section 3.7. Per the Motion, the Debtors received the Deposit.
• The Deposit is released to the Seller and the remainder of the Purchase Price becomes payable upon satisfaction of the Court-order condition in Section 3.3(d). All payments are to be made by wire transfer in immediately available funds without cost to the Seller.

Deposit and Expense Reimbursement

• If the Seller terminates the Agreement other than as a result of the Buyer's breach or failure to perform its obligations as and when due, the Buyer is entitled to (a) return of the Deposit and (b) expense reimbursement not to exceed $25,000 in the aggregate for actual, reasonable, and documented expenses incurred after the date of the Agreement in connection with preparing to remove the Purchased Assets by the Removal Deadline.
• In all other scenarios, the Deposit is non-refundable and no expense reimbursement is due or payable.
• The Debtors are authorized to execute, deliver, perform under, and consummate the Purchase Agreement — including payment of the Expense Reimbursement to the extent applicable — together with all additional instruments and documents that may be reasonably necessary or appropriate to consummate the sale of the Purchased Locomotive Assets.

Sale Free and Clear

• The Court found the conditions of section 363(f) of the Bankruptcy Code satisfied in full, permitting a sale free and clear of any liens, claims, encumbrances, and other interests. (The Motion had proceeded principally under section 363(f)(2), on the basis that each lienholder had consented or would be deemed to consent absent objection, with the alternative that any objecting lienholder could be compelled to accept a money satisfaction of its interest.)
• Upon consummation, the Purchased Locomotive Assets and good and marketable title thereto transfer to the Buyer free and clear, with all liens, claims, encumbrances, and other interests attaching to the sale proceeds in order of priority and with the same validity, force, and effect they now have against the assets, subject to any claims, defenses, setoffs, or rights of recoupment the Debtors may possess.
• The sale constitutes a legal, valid, and effective sale vesting the Buyer with all of the Debtors' right, title, and interest in the Purchased Locomotive Assets.

Representations and Warranties

• Each Party represents, as of the Effective Date, that it is duly organized and validly existing in its state of incorporation or organization, has all power and authority necessary to consummate the Transaction, that the individual executing the Agreement on its behalf was duly authorized to do so, and that the Agreement and all related certificates, documents, instruments, and agreements constitute (or upon closing will constitute) legal, valid, and binding obligations enforceable in accordance with their terms.
• The Seller represents and warrants that it owns and is able to deliver good and marketable title to the Purchased Assets free and clear of all liens, charges, security interests, and other encumbrances, has the lawful right to dispose of such title, has no undisclosed liabilities with respect to the Purchased Assets, and that no actions, suits, claims, or proceedings are pending or, to its knowledge, threatened with respect to the Purchased Assets.
• The Buyer represents that no actions, suits, or proceedings are pending or, to its knowledge, threatened with respect to the Transaction that, if adversely determined, would materially hinder or prevent the Buyer's ability to carry out the Transaction.

Closing Conditions

• The "Closing Date" is the date on which the Purchase Price is paid to the Seller in accordance with Section 2.2 and the Bill of Sale is delivered to the Buyer.
• Conditions precedent to the Buyer's obligation to close:
  • Delivery by the Seller, on or before the Closing Date and after receipt of full payment of the Purchase Price, of a final consolidated Bill of Sale in the form attached as Exhibit 2 to the Purchase Agreement, evidencing the purchase and sale of all of the Purchased Assets.
  • Performance by the Seller of all covenants and agreements required of it on or prior to the Closing Date.
  • Accuracy in all material respects of the Seller's representations and warranties as of the Effective Date and the Closing Date.
• Conditions precedent to the Seller's obligation to close:
  • Payment of the Purchase Price in full, which Section 3.3(a) states is to be paid "upon execution of this Agreement" — a formulation that sits alongside, and is not reconciled with, the Section 2.2 mechanics of a $1 million Deposit at execution and the balance upon satisfaction of the Section 3.3(d) court-order condition. The Purchase Price is non-refundable except where the Buyer has performed its obligations and is not in default of any payment or other obligation, in which case it is refundable solely if the Seller fails or refuses to close through no fault of the Buyer. If the Buyer fails to perform or defaults on any payment requirement, the Seller retains the Purchase Price as non-refundable.
  • Performance by the Buyer of all covenants and agreements required of it on or prior to the Closing Date.
  • Accuracy in all material respects of the Buyer's representations and warranties as of the Effective Date and the Closing Date.
  • Entry by the Bankruptcy Court of an appropriate order authorizing the Transaction no later than Aug. 7, 2026.
• Transfer of title and risk of loss occurs upon the Seller's receipt of the Purchase Price in accordance with Section 2.2.
• Each Party may waive its conditions precedent in writing, without relinquishing any post-Closing claim for breach of any representation, warranty, or covenant except as expressly waived in writing.

Access and Removal (Logistical Conditions)

• Upon receipt of the Deposit, the Buyer and its contractors have the right to access the site where the Purchased Assets are located solely to prepare to dismantle and remove them, with removal permitted after title transfers. Per the Motion, the Buyer was permitted to begin preparing to take possession upon signing the Purchase Agreement.
• The Order approves reasonable and appropriate access by the Buyer and its contractors to the Paducah Facility on a twenty-four (24) hour basis, without restrictions, until Sept. 7, 2026, for the sole and exclusive purpose of taking possession of, and removing the Purchased Locomotive Assets from, the Paducah Facility by the Removal Deadline, subject to:
  • The Buyer maintaining customary and appropriate insurance at all relevant times; and
  • From and after the date the Debtors surrender possession of the Paducah Facility, the Buyer and the Landlord entering into a customary and reasonable access agreement with respect to the facility. (Per the Motion, the Debtors targeted surrender of the facility by no later than Aug. 27, 2026, ahead of the Sept. 7, 2026 Removal Deadline.)
• The Buyer and its contractors are authorized to operate and relocate the Purchased Locomotive Assets to designated locations supporting their preparation and removal, provided the Buyer does not interfere with the Debtors' business operations.
• To the extent the Buyer has not removed any assets listed on Exhibit 1 to the Purchase Agreement from the Paducah Facility by the Removal Deadline of Sept. 7, 2026, title to such assets reverts to the Debtors under the Order (Section 3.6 of the Agreement states the corollary: the Seller retains title to any such assets).

Use of Proceeds

• All net proceeds of the sale must be remitted to the Prepetition Agent no later than two business days following closing and applied as repayment of the Prepetition Secured Obligations in accordance with the Final DIP Order and the Prepetition Loan Documents, without regard to any prepayment penalties, premium, fees, or the like. (The Motion had provided that payment of the Purchase Price would be made directly to the Debtors.)
• The unpaid balance of the Prepetition Secured Obligations remaining after such application stays outstanding and continues to be secured by the Prepetition Liens and Adequate Protection Liens on the Debtors' remaining property to the extent provided in the Final DIP Order. Nothing in the Order constitutes a satisfaction, release, discharge, or waiver of such obligations or liens, except with respect to the Purchased Locomotive Assets upon actual receipt and application of the net proceeds.
• Upon closing, the Debtors are authorized to fund up to $105,000 with respect to Biggs — Edward D. Biggs III, LLC, the locomotive industry expert engaged to assist with the marketing and sale process — into escrow from the sale proceeds, free and clear of liens, claims, encumbrances, and interests. The $105,000 figure reflects the 5% of gross sale proceeds provided for under Biggs' engagement terms; the Motion had sought authority to remit that amount to Biggs directly at closing, while the Order instead escrows it.
  • Any Purchase Price adjustment or change in consideration triggers a pro rata adjustment to the escrowed amount (or such other basis as the Debtors and Prepetition Secured Parties may agree).
  • No amount may be paid to Biggs absent further order of the Court, upon motion or application on notice to the U.S. Trustee and any other party required to be served under the Bankruptcy Code, Bankruptcy Rules, or Local Rules. All parties' objections are reserved, including any objection that Biggs is a "professional" subject to sections 327-331 of the Bankruptcy Code.

DIP Budget and Milestone Amendments

• The budget attached as Exhibit 2 to the Order is deemed the "New Approved Budget" for all purposes under the Final DIP Order [Docket No. 149], replacing and superseding the Existing Approved Budget approved on May 12, 2026.
• The DIP Lender and the Prepetition Secured Parties affirmatively, unconditionally, and irrevocably waive all known Termination Events, Cash Collateral Termination Events, defaults, and known events of default of every kind arising under or related to the Final DIP Order or the DIP Loan Documents existing prior to or as of the date of the Order.
• Beginning with the week ending Aug. 14, 2026 (week 14 of the New Approved Budget), variance testing of actual receipts and disbursements continues on a weekly basis, in accordance with the terms of the Final DIP Order or the DIP Loan Documents, against the New Approved Budget rather than the Existing Approved Budget, with the "Testing Periods" (as defined in the DIP Term Sheet) building incrementally from a two-week test covering weeks 13-14 to cumulative rolling four-week periods in week 16 and thereafter. Except as otherwise set forth in the Order, adoption of the New Approved Budget creates no grace period, holiday, suspension, restart, or reset of variance testing; to the extent of any conflict, the Final DIP Order and DIP Loan Documents are deemed amended to permit the Test Periods to build to a rolling four-week period.
• Due to Court availability, Case Milestones under the Final DIP Order are amended to require entry of an order approving the adequacy of the disclosure statement for the Agreed Plan by Sept. 10, 2026, and entry of an order confirming the Agreed Plan by Oct. 20, 2026.
• The Prepetition Secured Parties' consent to the sale is limited to the transaction approved by the Order and does not constitute consent to any other sale, disposition, or use of Cash Collateral or other Prepetition Collateral, or to any other application of proceeds. All rights and remedies under the Final DIP Order, the Prepetition Loan Documents, and applicable law are expressly reserved, including the right to object to the Debtors' Combined Disclosure Statement and Joint Chapter 11 Plan filed July 30, 2026 at ECF No. 214.

Amendments

• The Purchase Agreement may be modified, amended, or supplemented by the parties in a signed writing and without further order of the Court, subject to the reasonable consent of the Prepetition Secured Parties to the extent of any Purchase Price reduction or adverse change in consideration, and provided that no such modification has a material adverse effect on the Debtors or their estates.
• Under the Agreement itself, no waiver, alteration, modification, amendment, or supplement is effective except by written instrument signed by both the Buyer and the Seller, and then only in the specific instance and for the specific purpose given; the entire-agreement clause further requires that any modification, addition, limitation, or release of the Agreement's terms be made by a written agreement signed by both parties and expressly referencing the Agreement.

Post-Closing and Other Provisions

• The 14-day stay under Bankruptcy Rule 6004(h) is waived, and the Debtors and the Buyer are authorized to implement the relief granted immediately and to take all actions necessary to do so.
• The Order binds the Debtors, their estates and creditors, all holders of known or unknown liens against the Purchased Locomotive Assets, and the Buyer and its successors and assigns, including any trustees subsequently appointed in the chapter 11 case or upon conversion to chapter 7, and inures to the benefit of the Debtors, their estates, their creditors, the Buyer, and their respective successors and assigns.
• The Court retains jurisdiction over all matters arising from the interpretation, implementation, or enforcement of the Order.
• The Agreement is governed by Delaware law without regard to its conflict-of-laws provisions, with Delaware as the choice of forum for all legal proceedings arising from or related to the Agreement and the Parties waiving, to the fullest extent permitted by law, any objection to that forum. Sections 4 through 13 are deemed remade as of the Closing with respect to the Purchased Assets and the Transaction and survive the Closing.
• Each Party will make, do, and execute all further reasonable acts, documents, and assurances either Party may deem requisite to more effectively convey the Purchased Assets to the Buyer; notwithstanding anything to the contrary, the Seller has no obligation to take, or refrain from taking, any action that would be inconsistent with applicable law, including fiduciary duties.
• The Agreement inures to the benefit of, is binding upon, and is enforceable by the Parties and their respective successors, administrators, and permitted assigns; contains the entire agreement between the parties and supersedes all prior oral or written agreements, understandings, and representations; may be executed in any number of counterparts, including counterparts delivered by electronic means; and any term that is void, prohibited, or unenforceable in a jurisdiction is severable as to that jurisdiction without invalidating the remaining terms.

Key Dates

• Petition Date: April 21, 2026
• Existing Approved Budget Approved (now replaced and superseded): May 12, 2026
• Locomotive Sale Agreement Effective Date / Deposit Payable: July 15, 2026
• Combined Disclosure Statement and Joint Chapter 11 Plan Filed: July 30, 2026 (ECF No. 214)
• Sale Order Entered: Aug. 5, 2026
• Outside Date for Court Order Authorizing the Transaction: Aug. 7, 2026
• Variance Testing Against New Approved Budget Commences: Week ending Aug. 14, 2026
• Targeted Exit from the Paducah Facility: no later than Aug. 27, 2026
• Net Proceeds Remittance to Prepetition Agent: Within two business days following closing
• Removal Deadline: Sept. 7, 2026
• Disclosure Statement Approval Milestone: Sept. 10, 2026
• Plan Confirmation Milestone: Oct. 20, 2026