US Magnesium - Chapter 11 APA Summary

Gas Turbine Generator Sale Summary

Parties Involved

• Seller: US Magnesium LLC, Debtor and Debtor in Possession (Case No. 25-11696 (BLS), U.S. Bankruptcy Court for the District of Delaware)
• Purchaser: Total Energy Corp.

Asset Being Sold

• A 26MW GE Frame SPA (MS5001) gas turbine generator package (the "Turbine"), including but not limited to the turbine, generator, gearbox, starting system, lubrication system, control system, exhaust system, inlet air filtration, and all ancillary equipment and components as depicted and detailed in drawing SOM6645548.
• The Turbine is sold "as is" and "where is" and with all faults, and the Seller makes no representation or warranty whatsoever with respect to the Turbine, including, without limitation, any (a) warranty of merchantability; (b) warranty of fitness for a particular purpose; (c) warranty of title; (d) warranty against infringement of intellectual property rights of a third party; or (e) warranty that the transfer complies with the provisions of the Uniform Commercial Code. By accepting the Turbine and the Bill of Sale, Purchaser acknowledges that it has not relied on any representation or warranty made by the Seller or any other person on its behalf.
• Purchaser, at its own expense, is required to pick up, load, and remove the Turbine within ninety (90) days following entry of the Sale Order.

Purchase Price and Consideration

• Purchase Price: $7,511,010.19 (Seven Million Five Hundred Eleven Thousand Ten Dollars and Nineteen Cents), to be paid within thirty (30) days of approval by the Bankruptcy Court.
• The Purchaser is to submit a good faith deposit of $2,000,000.00 (Two Million Dollars) in conjunction with signing the Bill of Sale, to be applied toward the Purchase Price.
  • If payment of the Purchase Price is not made within thirty (30) days of Bankruptcy Court approval, the deposit will be deemed non-refundable and retained by the Seller.

Sale Free and Clear

• Pursuant to section 363(f) of the Bankruptcy Code, the Turbine is sold free and clear of all liens, claims, encumbrances, and interests.
• Wells Fargo Bank, N.A. ("Wells Fargo") shall retain a lien on the net sale proceeds (net of costs and expenses directly incurred to transfer title and deliver the Turbine to Purchaser). Such net proceeds shall be paid to Wells Fargo as soon as practicable after the Debtor's receipt thereof, and in no event later than three (3) business days after receipt.
• Upon the Debtor's payment of the sale proceeds to Wells Fargo in good funds, any valid or asserted lien, claim, encumbrance, or interest on the Turbine or sale proceeds shall be deemed waived and released, and shall automatically no longer attach to the Turbine.
• All persons or entities holding liens, claims, encumbrances, or interests against the Turbine are permanently enjoined from asserting such claims against the Purchaser or its successors, assigns, or property.
• For the avoidance of doubt, except with respect to its asserted lien or interest in the Turbine and related sale proceeds, nothing in this Order shall affect or impair Tooele County's other rights reserved under paragraph 43 of the separate, prior Sale Order [D.I. 583].

No Contingencies

• There are no diligence contingencies, financing contingencies, or other contingencies applicable to the Bill of Sale and Purchaser's obligations to perform, other than the entry of the Sale Order.

Good Faith Purchaser

• The transaction was negotiated, proposed, and entered into by the Debtor and Purchaser in good faith, without collusion, and from arm's length bargaining positions.
• Purchaser is a "good faith" purchaser within the meaning of section 363(m) of the Bankruptcy Code and is entitled to all protections afforded thereby.

Sale Order Effectiveness

• The Sale Order is effective and enforceable immediately upon entry. The fourteen (14)-day stay provided under Bankruptcy Rule 6004(h) is expressly waived.
• Time is of the essence in closing the Sale, and the Debtor and Purchaser intend to close as soon as practicable.

Governing Law and Jurisdiction

• The Bill of Sale is governed by and construed in accordance with the laws of the State of Delaware. All disputes are subject to the jurisdiction of the U.S. Bankruptcy Court for the District of Delaware.
• The Bankruptcy Court retains jurisdiction with respect to all matters arising from or related to the implementation, interpretation, and enforcement of the Sale Order and the Revised Bill of Sale.

Additional Provisions

• No bulk sales, bulk transfer, or similar law of any state or jurisdiction applies to the Sale; the Debtor and Purchaser waive any requirement of compliance with, and any claims related to noncompliance with, such laws.
• This Order is good and sufficient evidence of the transfer of title in the Turbine to the Purchaser, and a certified copy may be filed or recorded with the appropriate clerks, recorders, and governmental agencies to evidence the cancellation of all liens, claims, encumbrances, and interests.
• The Order and the Revised Bill of Sale are binding upon the Debtor and its successors and assigns, all creditors and interest holders (whether known or unknown), the Purchaser and its successors and permitted assigns, and any subsequent trustee appointed in the chapter 11 case or upon conversion to chapter 7.
• All objections to the Motion or the relief granted that have not been withdrawn, waived, or settled are overruled and denied on the merits.

Post-Effective Remaining Assets Bidding Procedures Summary

Bidding Procedures Order

• On Oct. 2, 2026, Judge Brendan L. Shannon entered the order approving the bidding procedures and the stalking horse bid protections, scheduling the auction and sale hearing, and approving the form and manner of the sale notice and notice of auction results [D.I. 1188], granting the debtor's motion [D.I. 1152] to the extent set forth in the order. The sale objection deadline, bid deadline, auction, post-auction objection deadline, sale hearing and closing deadline were approved as proposed.
• The court found the bidding procedures fair, reasonable and appropriate, negotiated in good faith and at arm's length, designed to maximize recoveries and promote competitive bidding, consistent with the debtor's fiduciary duties and compliant with Local Rule 6004-1(c). It further found that the debtor, with its advisors, had engaged in a robust and extensive marketing and sale process, which the procedures are designed to continue.
• The court found the bid protections fair and reasonable, actual and necessary costs of preserving the estate within sections 503(b) and 507(a), reasonably tailored to facilitate bidding by providing a baseline of value, and a material inducement for and condition necessary to keep the stalking horse bidder bound. Without them, the court found, the stalking horse bidder would be unwilling to remain obligated under the stalking horse APA, including to hold its committed offer open while subject to higher or better offers.
• Any objections or reservations of rights not adjourned, withdrawn or resolved were overruled on the merits with prejudice.
• The order is effective and enforceable immediately on entry, with any rule that would delay effectiveness waived. It binds the debtor, including any chapter 7 or chapter 11 trustee or other fiduciary appointed for the estate, and controls over the motion to the extent of any inconsistency. It authorizes the debtor to take any action necessary to implement it without further order, and the court retains jurisdiction over its implementation, interpretation and enforcement.
• The debtor must serve the sale notice as soon as reasonably practicable on the sale notice parties, by email if available or otherwise by first-class mail, and post the sale notice and the order on the case information website. Service is not required on any party for whom no email or physical address can be obtained after reasonable diligence, and no supplemental service is required for notices returned as undeliverable if sent to the address on file in the debtor's books and records. Service in that manner constitutes good and sufficient notice of the auction, sale hearing and sale objection deadline.

Stalking Horse Bid

• Total estimated purchase price of approximately $52.1 million, consisting of an initial cash purchase price of approximately $16.75 million plus contingent consideration estimated at an additional approximately $35.35 million.
• The consideration components are:
  • $16.75 million in cash, of which $16.5 million is payable to the debtor for delivery to Wells Fargo Bank, N.A., the debtor's prepetition secured lender, and $250,000 is payable to the USM Liquidating Trust in consideration of its continuing cooperation and support in connection with the delivery of appropriate water rights from Skull Valley Water Group, LLC to the buyer, both as the buyer determines in its reasonable discretion;
  • a tailings royalty of 1% of gross revenues received by the buyer from the sale of lithium and other mineral values extracted from the tailings, net of and payable only after royalty payments owed to the Utah Division of Forestry, Fire, and State Lands or the State of Utah, estimated at approximately $30.3 million over 10 to 13 years; and
  • amounts payable on account of brine sales, estimated at approximately $5.05 million over seven years.
• Title to the site materials is unsettled, and the contingent consideration follows ownership: where ownership of a purchased asset is in bona fide dispute between the estate or its creditors and the Utah Division of Forestry, Fire, and State Lands, the buyer takes the estate's right, title and interest, if any, by quitclaim, and both the tailings royalty and the brine payments run to the party finally determined to own the tailings and the brines, with royalty accruing over any disputed period escrowed pending that determination. The motion nonetheless counts both streams, roughly $35.35 million, in the total estimated purchase price, and the LOI states it is not an admission in any dispute over ownership of assets at the site.
• The $250,000 liquidating trust allocation is conditional: if the trust fails to deliver the contemplated cooperation, or files or makes any statement objecting to or not supporting the sale, the cash purchase price is reduced by $250,000 and the entire $16.5 million balance goes solely to the debtor.
• The brine consideration runs from the earlier of completion of the first 30-day period in which the buyer monetizes any tailings or June 30, 2027, in monthly installments of $60,000 until the aggregate brine consideration is paid in full. That amount reflects estimated utilization of 12,000 tons per month at an agreed $25.00 per ton, such that aggregate brine payments equal 20% of the value of total brine tonnage at that per-ton value. On the buyer's preliminary estimate of approximately 1 million tons, the aggregate brine consideration would be $5 million payable over roughly 83 months, subject to confirmation through the buyer's sampling program and to reduction for tons sold in the ordinary course through Dec. 31, 2026; the final tonnage will be fixed in the APA. The buyer owes the brine payments whether or not it actually sells or uses the brines, including on a bulk sale to a third party, and may repurchase and extinguish the tailings royalty and/or brine payments at the net present value of the remaining projected payments on terms to be agreed in the APA. At closing the buyer takes the brines free and clear of any lien, claim, interest or encumbrance and of any further obligation in respect of them, leaving the brine payments as they accrue the seller's only post-closing recourse.
• Interim brine and halite economics run to the estate: through Dec. 31, 2026 the buyer continues brine sales as magnesium chloride product to existing customers in the ordinary course and pays the seller 70% of the magnesium chloride value of brine sold or used; halite sales from the Halite Area, estimated at 221,000 tons and expected to continue through January 2027, are treated the same way, with 70% of halite value paid to the debtor and Wells Fargo as they jointly direct. On either stream the buyer may elect, in its sole discretion and including on environmental-risk grounds, to have the seller conduct the sales instead on consistent terms.
• The stalking horse bid is the letter of intent dated Sept. 10, 2026 with Mariana Minerals Co. Only sections 3 through 12 of the LOI are binding on execution; the economic terms in section 2 are non-binding and subject to a definitive asset purchase agreement and court approval, and no binding purchase obligation exists until the APA is executed, delivered and approved. The bid protections section of the LOI is expressed as a 3% break-up fee on the cash purchase price plus expense reimbursement, payable as allowed administrative expenses, together with a minimum initial overbid exceeding the sum of the cash purchase price, break-up fee, expense reimbursement and $1 million, and subsequent increments of not less than $750,000.
• The debtor seeks authority to enter into the stalking horse transaction unless a higher or otherwise better qualified bid is submitted for the purchased assets, as determined by the debtor with Wells Fargo's written consent and in consultation with the consultation parties, with the stalking horse bid serving as the minimum bid for those assets. Under the bidding procedures order the stalking horse bidder is deemed a qualified bidder and its bid a qualified bid for all purposes, including with respect to partial bids, and if no other qualified bids are submitted the debtor will deem Mariana the successful bidder; the order describes that bid as the one set forth in the stalking horse APA, and the filing does not indicate that the APA has been executed.

Bid Protections

• Break-Up Fee: $502,500, equal to 3% of the $16.75 million cash purchase price; the motion elsewhere describes the fee as approximately 3% of the consideration the stalking horse bidder offered, which it puts at $52.1 million in total.
• Expense Reimbursement: the stalking horse bidder's reasonable and documented fees and out-of-pocket expenses actually incurred, with no cap or dollar figure stated in the motion, the bidding procedures or the LOI, though the bidding procedures order approves the dollar amounts of both protections without stating them. Because the minimum initial overbid is defined to include the aggregate amount of the bid protections, no fixed dollar floor for a competing bid appears in the filing.
• Both are payable only if the debtor consummates a sale under a qualified bid other than the stalking horse bid where the assets sold include those the stalking horse bid covers. The bidding procedures add a further condition the motion body does not carry: payment is owed solely to the extent net proceeds payable to the debtor exceed $16.5 million. Payment is otherwise subject to the bidding procedures order and the stalking horse APA.
• The bidding procedures order authorizes and directs the debtor to pay the break-up fee and expense reimbursement in accordance with the stalking horse APA and the bidding procedures without further order of the court, and approves the dollar amounts of both.
• Any subsequent bid by the stalking horse bidder at the auction, in any round, is deemed comprised of a credit in the full amount of the break-up fee and expense reimbursement plus a cash bid for the remainder of the purchase price.

Overbid

• Minimum Initial Overbid: minimum closing cash equal to the $16.5 million minimum cash payable to the debtor at closing under the stalking horse bid, plus the aggregate amount of the bid protections, plus $1,000,000. The LOI's binding sale-process covenant sets that floor off the full $16.75 million cash purchase price rather than the $16.5 million payable to the debtor, a $250,000 difference.
• Minimum Subsequent Increment: $750,000 in each round after the first.
• Consideration above the starting bid may be cash or non-cash, with non-cash value determined by the debtor in consultation with the consultation parties. Absent Wells Fargo's written consent, every starting bid, leading bid, successful bid and alternate bid other than the stalking horse bid must carry minimum closing cash of at least the minimum initial overbid and give the debtor an unconditional right to terminate if the transaction has not closed by the closing deadline.

Good Faith Deposit

• Stalking Horse: $1.5 million, funded into escrow within two business days of execution of the LOI, fully refundable and creditable against the cash purchase price at closing. Its use, release and return are governed by the stalking horse APA rather than the bidding procedures. The deposit increases by any additional deposit funded in connection with a diligence extension, on the same refundable and creditable terms.
• Other Bidders: 10% of the consideration set forth in the bid, by wire to the debtor or a deposit agent. A bidder that increases its bid at the auction and is named successful or alternate bidder must top up its deposit to 10% of the price submitted at the auction within two days after the auction.
• Deposits are held in escrow and do not become property of the debtor except as the procedures provide. Losing qualified bidders' deposits, with interest, are returned within four business days after entry of the proposed sale order; the successful bidder's deposit is credited at closing; alternate bidders' deposits are released four business days after consummation of the successful bid. The debtor may retain and keep as damages the deposit of a bidder that breaches its purchase agreement, and reserves all additional damages and remedies.
• Escrowed funds are not property of the estate unless and until released to the seller, and are released only at closing or returned to the buyer on termination.

Parties Involved

• Seller: US Magnesium LLC, the post-effective-date debtor, acting at the direction of the collateral liquidation manager, Focus Management Group USA Inc.
• Purchaser: Mariana Minerals Co, on behalf of a company to be sponsored by Mariana, as stalking horse bidder. The LOI describes Mariana as an independent minerals project developer and operator supplying minerals used in energy and technology, including lithium.
• The bidding procedures order finds the stalking horse bidder is a third-party purchaser unrelated to the debtor and that neither it nor its affiliates, subsidiaries, officers, directors, members, partners, principals or their representatives, successors or assigns is an insider within section 101(31).
• Consultation Parties: Wells Fargo; the Utah Division of Forestry, Fire, and State Lands, or FFSL, which purchased the Rowley Property real estate and related State of Utah agreements from the debtor under the Feb. 5, 2026 sale order [D.I. 583] and the Jan. 26, 2026 asset purchase agreement [D.I. 528]; and the liquidating trustee, in each case with their legal and financial advisors. The consultation parties may seek expedited relief from the court if they disagree with any debtor action or decision under the procedures, and their rights are expressly reserved.
• SB360 Capital Partners, LLC serves as consultant to the debtor at the collateral liquidation manager's direction under retention approved June 1, 2026 [D.I. 923], and receives all bid documents and diligence requests.
• Wells Fargo, which the debtor identifies as the likely main economic beneficiary of the sale, supports the bid protections and holds written consent rights over bid qualification waivers, joint bids, bid-deadline extensions and any deviation from the minimum closing cash and termination requirements.
• The debtor anticipates that Wells Fargo may seek customary mutual releases at closing, to be set forth in the sale order.
• Counsel: Gellert Seitz Busenkell & Brown for the debtor; Otterbourg and Burr & Forman for Wells Fargo; Cohne Kinghorn and Hogan McDaniel for FFSL; Geoffrey T. Raicht PC and Young Conaway Stargatt & Taylor for the stalking horse bidder; and Eversheds Sutherland and Cole Schotz for the USM Liquidating Trust.

Assets Being Sold

• Substantially all assets that remain owned by the debtor, generally consisting of personal property subject to Wells Fargo's lien, other than the excluded assets. Before the petition date the debtor operated a facility at the Rowley Property adjacent to the Great Salt Lake producing primary magnesium and magnesium alloys, along with liquid chlorine, lithium carbonate and other chemicals and mineral salts.
• Purchased assets comprise all assets, properties and rights of the debtor of every kind and wherever located other than excluded assets, including the required lithium equipment identified on Schedule A; the site materials; all machinery, equipment, fixtures constituting estate property, rectifiers, busbar, transformers and electrical distribution infrastructure; the lithium/DLE plant and related facilities; spare parts and consumables inventory; rolling stock; transferable permits; insurance policies and transferable rights and proceeds thereunder; copies of books and records; and any executory contracts and unexpired leases the buyer designates for assumption and assignment under section 365.
• The intellectual property conveyed includes process know-how, trade secrets, technical documentation, engineering records, operating procedures, drawings and laboratory, sampling and assay data relating to the debtor's magnesium, magnesium chloride, chlorine/HCl and lithium operations, including the molten magnesium chloride iron-removal process.
• Site materials means the debtor's right, title and interest, if any, in the existing lithium-bearing tailings, residues and stockpiles at the site, and the existing brine, pond solids and pond inventory in the Star Pond, each as mapped on Schedule B. The buyer may elect to take all or part of the site materials as an exclusive, assignable right to access, extract, process, remove and monetize the lithium and other mineral values rather than by conveyance of title, and may direct that title be conveyed or quitclaimed to a party it designates, including FFSL, subject to that exclusive right, on the same "as is, where is" basis and without consideration adjustment.
• Excluded assets are limited to cash, accounts receivable and avoidance actions except as agreed in the APA; assets identified on the schedule of previously sold assets delivered at LOI execution; and specific assets identified on a schedule of excluded assets to be attached to the APA. A buyer designation carries no purchase-price adjustment, and a debtor designation triggers the buyer's termination and expense-reimbursement rights. Neither the site materials nor the required lithium equipment may be designated excluded, and Schedule C provides that any asset not specifically identified there is conclusively a purchased asset. The Local Rule 6004-1 disclosure states that no sale of avoidance actions is contemplated.
• The buyer acquires no fee interest in any land, buildings or other real property of FFSL or the State of Utah and assumes no liability associated with that real property; its use of and access to the site is addressed through the separate arrangements described in the LOI. The parties likewise disclaim any interest in the Stansbury Basin, which the LOI acknowledges is owned by FFSL and/or the State and which is neither site materials nor a purchased asset.
• The sale is on an "as is, where is" basis without representations or warranties of any kind by the debtor, its agents or its estate.

Assumed Liabilities, Contracts and Employees

• The stalking horse bid provides for no assumption of the debtor's liabilities. The buyer assumes no liability or obligation of the seller, FFSL or the State, or of any predecessor, successor (including any liquidating trustee or plan administrator), affiliate or owner of any of them, whether known or unknown and contingent or fixed, expressly including environmental liability under CERCLA, RCRA or analogous state law and the court-ordered pond liner installation and any other remediation, reclamation or closure obligation relating to the site; liability relating to pre-closing ownership or operation of any asset; and any tax, employee, benefits, WARN Act, pension or successor liability.
• The bid contemplates possible assumption and assignment of contracts to the stalking horse bidder, but the debtor is presently unaware of any contracts that are assumable and assignable and reserves all rights.
• Employees: upon closing the buyer may extend employment or consulting offers to certain current or former operational, engineering and maintenance employees identified in its sole discretion. Any offer to an insider of the debtor made before closing will be disclosed to the court before the sale hearing.
• The debtor retains reasonable access to books and records for audit, permitting, regulatory and litigation purposes.

Bid Requirements

• Participation: each interested party must deliver to SB360 an executed confidentiality agreement satisfactory to the debtor; a statement and factual support demonstrating a bona fide interest in purchasing some or all of the assets and identifying which assets; a description of the diligence it wishes to conduct and the date before the bid deadline by which it will be complete; and sufficient information for the debtor to determine financial wherewithal and corporate, legal or other authorization, which may include audited financial statements, or, for a newly formed acquisition entity, sponsor financial statements plus a written sponsor commitment for the entity's obligations. Parties clearing that gate are designated potential bidders and receive data room access; diligence access ceases if a potential bidder does not become a qualified bidder or the process terminates.
• Required bid documents, due by the bid deadline, are a letter making the offer irrevocable until consummation of a transaction involving the debtor's assets and any other assets identified; a duly authorized and executed agreement based on the stalking horse bid or stalking horse APA, marked to show revisions and with all exhibits, schedules and a proposed form of approval order, with a "conceptual" or "issues list" markup expressly insufficient; written evidence of financial wherewithal, operational ability and corporate authorization and, where applicable, a firm financing commitment, in each case acceptable to the debtor in its sole discretion; and a written acknowledgment covering the bidder's diligence opportunity, sole reliance on its own investigation, non-reliance on any statements or warranties by the debtor or its advisors, and absence of collusive conduct.
• A bid will be considered only if it:
  • identifies the legal name of the purchaser, including any sponsors of a newly formed acquisition entity, and the representatives authorized to appear and act for the bidder;
  • identifies the debtor assets and any other assets to be purchased, states clearly which liabilities would be assumed, and sets forth the consideration and its form;
  • sets forth minimum closing cash which, if not a partial bid, is at least the minimum initial overbid;
  • is not conditioned on obtaining financing or on further due diligence;
  • gives the debtor, with Wells Fargo's consent, and Wells Fargo an unconditional right to terminate if the transaction has not closed by the closing deadline;
  • describes all governmental, licensing, regulatory or other approvals or consents required, with evidence satisfactory to the debtor of the ability to obtain them as soon as practicable and no later than the closing deadline, along with any material contingencies applying to them;
  • if not a partial bid, is not materially more burdensome, less favorable or more conditional than the stalking horse bid, as determined by the debtor in its sole discretion;
  • agrees to serve as alternate bidder if selected as the next highest or best bid;
  • is accompanied by the 10% good faith deposit;
  • waives any transaction fee, break-up fee, expense reimbursement or similar payment and any section 503(b) substantial contribution claim, the stalking horse bidder excepted; and
  • is received on or before the bid deadline.
• The debtor may deem a non-conforming bid a qualified bid with Wells Fargo's written consent, may approve joint bids in its reasonable discretion with the same consent, and may allow a bidder to cure deficiencies through and after the bid deadline; deposits of bidders that fail to cure are returned.
• Bids may be evaluated on any grounds consistent with applicable law, including purchase price, transaction structure and execution risk, termination provisions, financing availability, anticipated timing to closing and the presence and likely timing of regulatory or other approvals, which may themselves be grounds for the debtor to determine a bid is not qualified or not higher or better.
• Submitting a bid is deemed an acknowledgment that the bidder accepts the procedures, consents to the court's jurisdiction, intends to consummate if selected, and waives all rights to contest the debtor's determinations in the process. A qualified bid may not be amended, modified or withdrawn during its irrevocability period absent the debtor's written consent, except to improve its terms.

Auction Details

• If more than one qualified bid is received, the auction will be held Oct. 14, 2026 at 10 a.m. ET at the offices of debtor's counsel, Gellert Seitz Busenkell & Brown, in Wilmington, Delaware, and/or by remote video. Only the debtor, the consultation parties and qualified bidders, with their advisors, may attend, and only qualified bidders may submit subsequent bids.
• The debtor may cancel the auction and seek approval of the stalking horse bid and any partial bids at the sale hearing if no qualified bid other than the stalking horse bid is submitted for the assets the stalking horse bid covers; if partial bids for non-overlapping lots do not in the aggregate exceed the stalking horse bid for those assets; or if the partial bids received cover only assets excluded from the stalking horse bid. The stalking horse bidder gets reasonable advance notice of any cancellation, and the debtor must file the notice of auction results designating Mariana the successful bidder within one calendar day of that determination.
• Bids for less than all or substantially all of the assets are partial bids; the debtor may conduct separate auctions for each auction lot and may combine partial bids into a lot to compete against the stalking horse bid, provided any combination collectively meets the minimum closing cash and unconditional termination requirements absent Wells Fargo's consent. Auction lots may be designated at any time before the auction.
• Before the auction the debtor will notify each qualified bidder of its status and circulate the starting bid, an explanation of how it values that bid, a list of all qualified bidders, and a copy of the starting bid marked against the stalking horse bid. Bidding proceeds in rounds from the starting bid, with the debtor announcing the leading bid between rounds and each round concluding after every participating bidder has had the opportunity to bid with written confirmation of the leading bid. The debtor may announce additional procedural rules at the auction so long as they are consistent with the code and the court's orders and disclosed to all qualified bidders, may require a bidder other than the stalking horse bidder to submit additional evidence of its ability to close as part of a subsequent bid, and will maintain a transcript of all bids.
• Before the auction concludes the debtor, in consultation with the consultation parties, will evaluate each bid on financial and contractual terms and on factors affecting speed and certainty of closing, identify the successful bid or bids and the next highest or best alternate bid or bids, and notify participating bidders of the identity and material terms of each. Every qualified bidder is deemed to agree to serve as alternate bidder if designated.

Sale Hearing and Closing

• The sale hearing is set for Oct. 16, 2026 at 10 a.m. ET before Judge Brendan L. Shannon in the Delaware bankruptcy court, 824 North Market Street, Wilmington, or by such virtual or electronic means as the court may determine, subject to adjournment by announcement in open court or notice on the docket. The debtor will seek approval of the successful bid and, at its election, the alternate bid; presentation to the court is not acceptance, which occurs only on court approval.
• If the debtor and the successful bidder fail to consummate, the debtor will file a notice, upon which the alternate bid is deemed the successful bid and the debtor is authorized but not directed to close with the alternate bidder without further order. Where the failure results from a breach by the successful or alternate bidder, the debtor may retain that bidder's good faith deposit as damages and reserves all additional damages and remedies under the applicable purchase agreement.
• The debtor will file the notice of auction results within 24 hours after the auction concludes and the successful and alternate bids are selected, will post it to the case information website, and will file a final form of sale order agreed with the successful bidder as soon as practicable after the auction.
• All proceeds received by the debtor are to be remitted to Wells Fargo without deduction or offset of any kind, in repayment of its senior secured claims as required under the plan. As of the petition date the debtor owed Wells Fargo in excess of approximately $67 million, secured by substantially all of its assets, and was granted additional liens and protections during the case.
• The debtor intends to close as soon as possible after the sale hearing and no later than the closing deadline. No credit bidding is contemplated under the bidding procedures, though Wells Fargo reserves all rights, and the filing states there is no tax exemption and no interim arrangement with the proposed buyer.

Closing Conditions, Diligence and Termination

• Closing conditions are execution of an APA acceptable to the buyer in its sole and absolute discretion; approval of the buyer as stalking horse purchaser for all the purchased assets, with break-up fee, expense reimbursement and bid protections; and entry of a sale order acceptable to the buyer in its sole and absolute discretion that conveys the assets free and clear under section 363(f), finds the buyer a good-faith purchaser entitled to section 363(m) protection with no successor, transferee, derivative or vicarious liability and injunctive provisions enforcing that finding, and waives the Rule 6004(h) stay. The parties must execute the stalking horse APA, in form and substance satisfactory to Wells Fargo, no later than 10 days before the sale hearing, and the bidding procedures and the orders approving them must themselves be satisfactory to the buyer in its sole discretion, failing which it may terminate on written notice.
• The bid carries no conditions to closing requiring regulatory approvals, but the debtor understands that closing is effectively, though not formally, conditioned on Mariana being named the highest and best bidder for the FFSL assets in FFSL's separate out-of-court competitive lease offering process.
• Mariana holds an unconditional right to terminate during a 45-day diligence period running from the Sept. 4, 2026 access commencement date through Oct. 19, 2026. Mariana may extend once for 30 days, to Nov. 18, 2026, on written notice citing a delay, requirement or process outside its reasonable control and a further $200,000 escrow deposit, with FFSL's failure to select a CLO winner by Oct. 2, 2026 expressly qualifying as such a delay; that extension is effective only upon FFSL extending the debtor's site access arrangements for a commensurate number of days, and the extension deposit comes due only then. The period also extends automatically by one day for each day the buyer is denied contemplated site access, and may be extended further as the debtor agrees in writing with Wells Fargo's written consent.
• Buyer access and continued diligence are conditioned on an extension of the Amended Access Agreement among FFSL, the debtor and Wells Fargo, which was set to terminate Sept. 15, 2026 and whose extension terms the LOI describes as negotiated and in substantially agreed form.
• The closing deadline is the expiration of the diligence period as extended. The debtor, with Wells Fargo's consent, or Wells Fargo alone may terminate if closing has not occurred by that date, and the deposit is returned in full within two business days of any termination notice.
• The buyer may also terminate if the seller fails or refuses to convey any designated core asset (the required lithium equipment, rectifiers, busbar and electrical distribution infrastructure, the IP and the copies of books and records) or any asset is determined incapable of conveyance, or if the debtor designates an asset as excluded over the buyer's written objection or refuses to convey another purchased asset the buyer deems necessary to operate the site. On such a termination the seller must return the deposit in full and reimburse the buyer's documented out-of-pocket costs, including the costs of designing and conducting the sampling program, as an allowed administrative expense.
• Standstill: from execution of the LOI until termination, the debtor may not sell, transfer, scrap, dismantle, cut, remove, abandon or encumber equipment, machinery, materials or other assets at the site, including the required lithium equipment, rectifiers, busbar, electrical infrastructure and site materials, and must suspend all pending marketing, auction and salvage processes as to them; ordinary-course brine and halite sales continue as contemplated. The debtor must maintain existing insurance and preserve all books, records, technical documentation and IP.
• Exclusivity ran from execution of the LOI until the debtor filed this motion, subject to a fiduciary out requiring notice to the buyer within two business days; where the bid procedures conflict with that exclusivity, the bid procedures control. Nothing in the LOI or the procedures obligates Mariana to serve as stalking horse purchaser, to submit, maintain or increase any bid, or to execute the APA.

Marketing Process

• The court confirmed the official committee of unsecured creditors' second amended combined disclosure statement and plan of liquidation [D.I. 976] on June 22, 2026 [D.I. 1000], and the effective date occurred July 7, 2026 [D.I. 1040]. Under plan section 15.3, prepetition collateral subject to Wells Fargo's liens — inventory, receivables, equipment, fixtures and intellectual property, and proceeds — vested in the debtor to be administered by the collateral liquidation manager, while all other remaining assets vested in the liquidating trust under section 15.2. The collateral liquidation manager is authorized to manage, sell and distribute net proceeds of post-effective-date debtor property in accordance with the prepetition credit agreement, the combined disclosure statement and plan, the committee settlement and court orders.
• SB360 has contacted approximately 383 potential purchasers since roughly mid-May 2026 and continues outreach and responses to inquiries. Many assets have already been noticed for sale under the de minimis sale procedures order; alongside those efforts the parties engaged prospective bidders on the majority of the operating assets — property, plant and equipment — at the Rowley Property.
• SB360 first approached Mariana on approximately June 22, 2026 based on its knowledge of Mariana's business interests and assets in Utah, then developed the interest over a months-long process involving negotiations with Mariana and extensive communications with FFSL as owner of the Rowley Property real estate, Wells Fargo as lienholder on all of the debtor's assets, and the liquidating trust as holder of certain water rights at or near the property. Marketing continues under the procedures, with a non-confidential presentation available and virtual data room access for parties executing a confidentiality agreement.
• The debtor filed Chapter 11 on Sept. 10, 2025.

Related Non-Debtor Processes

• Because consummation requires FFSL's agreement as owner of the real property, FFSL is running its own out-of-court competitive lease offering process to solicit bids for the lease of FFSL-owned assets, expected to run concurrently with the timeline proposed in the motion and, under the CLO as currently structured, to select a winning bidder by Oct. 2, 2026. Mariana's proposed purchase and/or lease of the FFSL assets at or near the Rowley Property is subject to that process under Utah law.
• The CLO covers site access to areas under FFSL's administration or control, the real estate and State of Utah agreements FFSL bought from the debtor in February 2026, permitting, the State royalty framework and related environmental matters. Mariana also states it will negotiate in good faith a royalty to the State of Utah on lithium production, which ranks ahead of the estate's tailings royalty, along with contributions to reclamation and remediation of the site, closed-loop processing designed to limit net water consumption and local employment.
• The bidding procedures authorize but do not direct the debtor to solicit and accept bids proposing purchases of non-debtor assets, such as those of FFSL or the liquidating trust, or otherwise contingent on or related to transactions involving such assets.
• Water access: the parties are to negotiate in good faith with Skull Valley Water Group, LLC for an arrangement giving the buyer water access sufficient for its intended operations as it determines in its sole discretion, which may take the form of the buyer acquiring the debtor's membership interest in Skull Valley Water Group, a contractual water supply, delivery or access right, or another mutually agreeable relationship. At a minimum, and subject to the buyer's agreement, the buyer is to have contractual access to all water necessary for its potential lithium and/or magnesium operations at the site under the existing joint venture and organizational agreements of Skull Valley Water Group as in effect at the LOI date, with the parties intending that water continue to be supplied on the economic terms designed under that JV agreement.

Sale Free and Clear; Successor Liability

• The debtor seeks to sell free and clear of all liens, claims, interests and encumbrances under section 363(f), with those interests attaching to the net sale proceeds in the same order of relative priority and with the same validity, force and effect as against the assets, including Wells Fargo's liens. The debtor asserts that objecting lienholders could be compelled to accept money satisfaction under section 363(f)(5) or that the asserted liens are in bona fide dispute under section 363(f)(4), and asks that any party asserting a prepetition interest that does not timely object be deemed to have consented.
• The debtor seeks a finding that the stalking horse bidder or any successful bidder is a good faith purchaser entitled to the full protections of section 363(m), and each qualified bidder at the auction must confirm it has not engaged in collusion with respect to the bidding or the sale.
• The sale notice provides that assets sold will be free and clear of any claim arising from the debtor's pre-closing conduct, whether known or unknown, due or to become due, accrued, absolute, contingent or otherwise, and that the successful or alternate bidder will not be a successor to the debtor under any theory of law or equity and will have no liability except as expressly provided in its definitive agreement. The debtor anticipates that the sale order will contain findings and conclusions deeming the stalking horse bidder not a successor.

Sampling Program and Data Rights

• The seller must provide the buyer reasonable access to the site, the purchased assets and the debtor's data room, books, records, permit files and environmental reports, including for equipment inspection and inventory and for a program of sampling, drilling, assay and metallurgical test work on the site materials designed and conducted by the buyer, and must use best efforts to obtain any third-party consents required for access. Scope, methods, timing and extent of the sampling program are determined by the buyer in its sole discretion without seller consent. The debtor must also deliver existing sampling and assay data on the tailings and brine, including third-party data in its possession, and provide access to remaining personnel and professionals familiar with the site, the required lithium equipment and the site materials.
• All samples, data, results, analyses, interpretations, models, resource estimates, process designs and flowsheets generated in the sampling program remain the buyer's exclusive property before and after any termination, with no obligation to share them except as law requires. If the buyer seeks to renegotiate the brine payments or tailings royalty based on sampling results, it must provide the seller a workbook of final test results with sample locations, excluding its proprietary interpretations and work product. If the LOI terminates or the sale fails to close, the buyer must provide that same workbook, conditioned on full reimbursement of its documented costs of designing and conducting the sampling program and of assembling and delivering the data, and without representation or warranty; that obligation survives termination.
• At LOI execution the debtor was to deliver a schedule of all assets sold or noticed for sale during the case, including under the de minimis procedures approved at D.I. 793, identifying any not yet removed from the site, and confirms no purchased asset has been sold or noticed to any other person except as disclosed; at the buyer's request the debtor must redirect to the buyer any previously noticed asset still on site, to the extent permitted.

Debtor Reservations

• Subject to Wells Fargo's consent rights and consultation with the consultation parties, the debtor reserves the right to determine which interested parties are potential bidders, which bidders and bids qualify, which qualified bid is the starting bid, and which bids are highest or otherwise best and next highest or best; to reject any bid other than the stalking horse bid as inadequate, non-conforming or contrary to the estate's interests; to impose additional terms on potential bidders other than the stalking horse bidder; to cancel the auction; to waive procedural terms as to potential bidders; to extend the deadlines; and to modify the procedures and add procedural rules.

Objection Deadlines

• Objections to the relief requested in the motion, including entry of the sale order, other than to the conduct of the auction, are due Oct. 9, 2026 at 4 p.m. ET; objections to the conduct of the auction only are due Oct. 15, 2026 at 4 p.m. ET.
• Objections must be in writing, signed by counsel or attested to by the objecting party, conform to the Bankruptcy Rules and Local Rules, state with particularity the legal and factual basis and specific grounds, be filed with proof of service, and be served so as to be actually received by the applicable deadline on counsel to the debtor, Wells Fargo, FFSL, the stalking horse bidder and the USM Liquidating Trust, and on the U.S. Trustee.
• Failure to object timely forever bars assertion of any objection to the motion, entry of the sale order or consummation of the transaction, and is deemed consent to entry of the sale order and to all related transactions.

Key Dates

• Bidding Procedures Order Entered: Oct. 2, 2026 [D.I. 1188]
• Sale Objection Deadline: Oct. 9, 2026 at 4 p.m. ET
• Bid Deadline: Oct. 12, 2026 at 5 p.m. ET
• Auction (if any): Oct. 14, 2026 at 10 a.m. ET
• Notice of Auction Results (target filing date): Oct. 14, 2026
• Post-Auction Objection Deadline: Oct. 15, 2026 at 4 p.m. ET
• Sale Hearing: Oct. 16, 2026 at 10 a.m. ET
• Closing Deadline: Oct. 19, 2026, subject to extension under the stalking horse bid
• The motion assumes the stalking horse APA will be executed in time for an early-October calendar. Should the diligence period and closing deadline extend to Nov. 18, 2026 or later, the debtor anticipates rescheduling the bid deadline, auction, sale hearing and related dates accordingly, likely into early November 2026, so that the APA is executed or the stalking horse bid terminated before the bid deadline and the hearing and closing occur before the closing deadline.