Yardbird Group - Chapter 11 Bidding Procedures Summary

Bidding Procedures / Asset Purchase Agreement Summary

Stalking Horse Bid

• SH Acquisition, LLC will acquire substantially all of the debtors' assets for an aggregate purchase price consisting of:
  • A credit bid of all DIP facility obligations outstanding at closing plus the outstanding Brightwood prepetition obligations, allocated first to the DIP obligations until paid in full and thereafter to the prepetition facilities;
  • Assumption of the assumed liabilities; and
  • The excluded cash, meaning cash on hand and DIP draws equal to the $250,000 wind-down amount plus enough to cover the DIP-budgeted ordinary-course administrative expenses accrued but unpaid at closing that are neither assumed liabilities nor inside the wind-down budget.
• The motion's narrative describes that third component differently, as assumption and assignment of the assigned contracts and payment of cure obligations; the APA and the motion's own term chart carry the excluded cash instead.
• The credit bid is made by Brightwood Loan Services LLC, as administrative and collateral agent under both the DIP facility and the prepetition facilities, on behalf of the DIP lenders and prepetition lenders pursuant to an irrevocable bid direction letter, and excludes indemnities, expenses and agency fees. The prepetition obligations consist of an initial term loan with $11,215,290 of principal outstanding and delayed-draw term loans with $2,108,962 of principal outstanding, in each case plus accrued and unpaid interest, fees and other amounts.
• The stalking horse bidder is deemed a qualified bidder and its bid a qualified bid without further action, a status the proposed order provides cannot be abrogated by later amendment of the bidding procedures absent further court order; if no other qualified bids are submitted, it becomes the successful bidder and the debtors will seek approval of its bid at the sale hearing without an auction.
• The buyer is not required to post a good-faith deposit; the parties agree its commitment to credit bid constitutes adequate assurance of its ability to close and sufficient consideration in lieu of cash.
• The debtors state the agreement provides that a significant amount of prepetition unsecured claims will be assumed and paid by the buyer and ensures the estates retain enough funds to pay ordinary-course administrative expenses and wind down.

Bid Protections

• Break-up fee: None.
• Expense reimbursement: up to $275,000, covering the buyer's reasonable and documented out-of-pocket costs, including outside legal, financial advisor and other advisor fees, incurred in connection with the negotiation, documentation and implementation of the APA.
• Payable on termination for failure to close by the outside date, on a final non-appealable legal restraint, on court approval of the sellers' entry into or pursuit of an alternative restructuring proposal, or under the buyer's breach-and-process termination rights; the obligation survives termination and constitutes a section 503(b) administrative expense subject to court allowance. The APA conditions all four triggers on the sellers terminating, though the last of them is a buyer-only right, while the motion describes the fee as payable on the occurrence of those events whichever side terminates. The proposed bidding procedures order approves the reimbursement, accords it administrative priority, and authorizes payment without further order of the court.
• No other bidder is entitled to any termination or break-up fee, expense reimbursement, or other bidding protection, and each competing bid must acknowledge as much.
• The debtors state the DIP secured parties agreed to provide the financing for the sale process only on the condition that the debtors accept the stalking horse APA, which provides for the expense reimbursement.

Credit Bid

• The stalking horse bidder has an absolute and unconditional right under section 363(k) to credit bid all or any portion of its outstanding secured obligations, including its secured claims under the DIP facility and the Brightwood prepetition obligations, notwithstanding any earlier or lower credit bid, and may increase its credit bid up to the full amount of those obligations throughout the auction. That right remains subject in all respects to the challenge period under the interim or final DIP order.
• The proposed sale order would end that reservation: on entry, the DIP order challenge period terminates, no party may assert a challenge and every challenge is deemed forever waived, barred and released; the liens securing the Brightwood prepetition obligations cease to be subject to challenge; and the debtors' stipulations to the validity, perfection and first priority of those liens and to the prepetition secured parties' unqualified right to credit bid the entirety of them become binding on all parties in interest. Closing is separately conditioned on the challenge period having run with no challenge asserted.
• Any qualified bidder holding a valid and perfected lien on estate assets may credit bid up to the amount of its claims against the collateral securing them, whether or not those liens remain subject to a challenge period, and a credit bid may be applied only to assets in which the bidder holds a perfected security interest.
• For purposes of valuing competing bids and selecting the successful bid, the full face amount of a qualifying credit bid is deemed to have the same value as an equivalent amount of cash, and no credit bid may be treated as inferior to a cash bid merely because it is a credit bid.
• No party may seek to preclude or limit the credit bid rights of the DIP agent, DIP lenders, prepetition agent or their designees, and the motion states that any such action would itself be an event of default under the DIP facility. The operative documents carry the bar without that consequence: the bidding procedures protect the DIP secured parties and their designees, and the proposed sale order the prepetition secured parties and theirs.
• A credit bid by the DIP secured parties or prepetition secured parties automatically qualifies as a qualified bid, and those parties automatically qualify as qualified bidders.

Assets Being Sold

• The debtors intend to sell all, substantially all, or a portion of their assets, to one or more purchasers; the stalking horse bid covers substantially all assets as a going concern.
• Acquired assets sweep in all of the sellers' properties, rights and interests as of closing, tangible or intangible, other than the excluded assets, including cash and cash equivalents (other than the excluded cash), accounts receivable, bank accounts other than those designated to hold the excluded cash, professional fee funds and the utility reserve, deposits and prepayments, the assigned contracts, the leased real property and structures, inventory, all tangible operating assets, transferable permits, books and records, tax returns, transferred employee records, owned intellectual property, assumed benefit plans, insurance policies and proceeds, general intangibles, and guarantees and warranties.
• Avoidance actions are among the acquired assets, including claims under sections 541, 542, 544, 545, 547, 548, 549, 550, 551, 553(b) and 724(a) and state-law equivalents, together with claims against former subsidiaries and against present or former officers, directors, employees, partners, members and representatives of the sellers.
• Excluded assets are the sellers' equity securities; the excluded cash, except for the DIP reversionary interest, meaning whatever excluded cash survives payment of administrative expenses and the wind-down costs under the wind-down budget, which passes to the buyer as an acquired asset; professional retainers and escrowed professional fee funds, subject to the DIP order and to the same reversionary interest; contracts that are not assigned contracts; books and records relating solely to excluded assets or liabilities, non-transferred employees, the sellers' organizational documents, and privileged or legally restricted records; retained seller benefit plans; claims relating to excluded assets or liabilities; the sellers' D&O and fiduciary policies including tail coverage; and the sellers' rights under the APA.
• Assumed liabilities are limited to obligations under assigned contracts arising after closing; liabilities arising from the buyer's post-closing operation of the business; transferred employee obligations accruing from and after closing; liabilities under each assumed benefit plan other than pre-closing COBRA liability; accrued and unpaid PTO for transferred employees under the sellers' PTO policy; ordinary-course postpetition administrative expenses included in the DIP budget that are accrued but unpaid at closing and not covered by the wind-down amount or budget; cure costs for assigned contracts, subject to the cure costs cap; scheduled specified liabilities; and expenses arising under the transition services agreement.
• Everything else is an excluded liability, including cure costs above the cap, all indebtedness (including the prepetition facilities and DIP facility), excluded taxes, pre-closing employment and WARN Act liabilities, collective bargaining liabilities, pre-closing COBRA liability, rejection damages claims, pre-closing tort and environmental liabilities, indemnification claims, liabilities to equity holders, noteholders and lenders, all accounts payable and expenses other than the assumed postpetition expenses, and professional fees of the sellers' advisors.
• The cure costs cap is an amount, not less than zero, to be mutually agreed between the buyer and sellers, reduced by any cure amounts the sellers pay during the case; closing is conditioned on aggregate cure costs not exceeding it, and any cure costs above it are excluded liabilities left with the estates. No figure for the cap is proposed anywhere in the filed documents.

Parties Involved

• Sellers: Yardbird Group LLC, Yardbird Beverly Hills, LLC, Yardbird DFW, LLC, Yardbird DC, LLC, Yardbird Chicago, LLC, Yardbird Denver LLC, YB Las Vegas, LLC, Yardbird DFW Management LLC, Yardbird DFW Concession LLC, and The Bird Singapore LLC. Southern Operations, LLC, the eleventh debtor in these cases, is not a party to the stalking horse APA.
• Buyer: SH Acquisition, LLC, an entity formed by, for the benefit of, and at the direction of the DIP secured parties to assist with the credit bid; its sole member is Brightwood Loan Services, LLC.
• The debtors state the buyer is not an insider or affiliate of any debtor, was represented by separate counsel throughout, negotiated the APA at arm's length, and that the board members approving its designation and the sale process were independent and not conflicted.
• Advisors: Traverse, LLC provides financial and restructuring advisory services and the chief restructuring officer, Albert Altro; Soravine Advisors LLC, engaged Aug. 4, 2026, serves as investment banker and runs the sale process. Adam Paul serves as independent manager with sole delegated authority to explore, negotiate and execute a transaction.

Background and Marketing Process

• The debtors own and operate Yardbird Southern Table & Bar, a polished casual dining concept serving modern Southern American cuisine, known for its fried chicken, weekend brunch, chef-curated bourbon dinners and mixology program. Event dining and catering represent a significant portion of revenue, complementing three operating restaurants in Dallas, Washington, D.C., and Chicago, and two licensed locations in Las Vegas and Singapore.
• Facing increasing debt obligations and worsening liquidity, the debtors began evaluating strategic alternatives in the summer of 2026 and concluded that a Chapter 11 sale was the best route to address the capital structure and maximize the value of the Yardbird brand. They filed Chapter 11 in Delaware on Sept. 21, 2026 and brought this motion the same day; no creditors' committee had been appointed as of the filing.
• Soravine launched the marketing process on Aug. 21, 2026, preparing a teaser, confidential information memorandum and management presentation, and a proforma net working capital supplement, and contacting more than 170 potential buyers across restaurant strategic groups and financial and distressed buyers. Twenty-one parties executed NDAs and received the CIM and working capital supplement; two submitted follow-up information requests and one requested a call with the CRO. Soravine advised each NDA party that the process would be expeditious and driven by limited liquidity.
• NDA parties were invited to submit indications of interest by Sept. 15, 2026. The debtors received three IOIs for all or part of the business, all of which were significantly below the company's first lien debt. During the same period, the debtors continued negotiating with the prepetition secured parties, who indicated they would support a Chapter 11 sale process and consider providing the liquidity needed to preserve going-concern value.
• Accordingly, the prepetition process culminated shortly before the petition date in the stalking horse APA, dated Sept. 20, 2026, under which the buyer agreed to serve as stalking horse, acquire the assets as a going concern, expose its bid to higher or better offers at auction, and provide the DIP financing. Soravine will continue marketing the assets postpetition and engaging the NDA parties with the goal of auction participation; the proposed procedures afford interested parties more than five additional weeks to complete diligence and submit a qualified bid.
• The debtors state that speed and certainty are critical because both the stalking horse bid and access to the DIP facility and cash collateral are conditioned on adherence to strict milestones, and that neither the debtors nor the prepetition secured parties can fund a protracted sale process.

Bid Requirements

• To participate, a prospective bidder must first deliver to Soravine documentation identifying itself and its authorized representatives, an executed confidentiality agreement satisfactory to the debtors, factual support demonstrating a bona fide interest in purchasing some or all of the assets, and preliminary proof of financial capacity to close, each assessed in the debtors' sole judgment. Data room access may be granted, limited, or terminated in the debtors' discretion, and diligence requests are directed to Vineet Batra of Soravine.
• To be a qualified bid, a bid must be in writing and, among other requirements:
  • Disclose the legal identity of every person bidding for, sponsoring, financing or participating in the bid and the terms of that participation, whether the bidder is an insider, and any past or present connections or agreements with the stalking horse bidder, any other known bidder, the DIP secured parties, or their officers and directors;
  • Identify the assets to be purchased, the contracts and leases proposed for assumption and assignment, and the liabilities to be assumed, including any debt;
  • Confirm the bid is all cash or, if not, provide an analysis and supporting documentation valuing the non-cash components;
  • Constitute an irrevocable offer in the form of a duly authorized and executed asset purchase agreement marked against the stalking horse APA, specifying the purchase price in U.S. dollars and including all exhibits and schedules, together with a proposed sale order marked against the debtors' filed form;
  • Include a statement and sufficient evidence of financial capability to consummate the transaction, plus adequate assurance information demonstrating the bidder's or assignee's ability to perform under section 365, in a form permitting immediate dissemination to contract counterparties;
  • Include evidence of board or equivalent authorization, or, if the bidder was formed to effect the transaction, written evidence of equity holder approval acceptable to the debtors;
  • Acknowledge that the assets are conveyed "as is, where is, with all faults," with limited representations and warranties and no indemnification or guarantees from the debtors;
  • Agree to serve as backup bidder if selected as the next highest or best bid, remain irrevocable until selection of the successful bid or, if selected as successful or backup bid, until the backup bid expiration date, and confirm commitment to close as soon as practicable;
  • Waive any substantial contribution administrative expense claim under section 503(b) and, for any bidder other than the stalking horse bidder, acknowledge entitlement to no bidding protections;
  • Contain no financing contingencies of any kind and no further due diligence conditions;
  • State whether the bidder intends to offer employment to any of the debtors' employees and, if so, to whom; and
  • Certify the absence of collusion with other bidders absent the debtors' written consent, and covenant to comply with the bidding procedures and order.
• In evaluating bids the debtors may weigh the purchase price and form of consideration (with a qualifying credit bid valued at par against cash), the assets included or excluded and contracts assumed, the net economic effect on the estates, benefits from any assumption or waiver of liabilities, structure and execution risk including financing availability and required governmental approvals, and the impact on employees, trade creditors, landlords and other parties in interest. A qualified bidder may not modify, amend or withdraw its bid without the debtors' consent except to improve it. The debtors may negotiate with a prospective bidder to cure deficiencies that keep its bid from qualifying and, after consultation, may amend or waive the conditions precedent to qualifying as a qualified bidder outright.

Overbid

• Minimum bid: any bid other than the stalking horse bid must have a value at least equal to the value offered under the stalking horse APA plus an overbid amount plus the expense reimbursement. The motion carries the overbid amount as to be determined; the bidding procedures leave the figure as an unfilled blank in both the minimum bid and the minimum overbid.
• Payment requirement: any competing bid must provide consideration sufficient to repay in full in cash all DIP facility obligations and all Brightwood prepetition obligations credit bid by the stalking horse bidder.
• Minimum overbid: bidding opens at the baseline bid; the first overbid must be at least the baseline bid (plus the expense reimbursement if the stalking horse bid is the baseline) plus the overbid amount, which likewise remains blank. The debtors may announce increases or reductions to the minimum overbid at any time during the auction.
• Any subsequent bid by the stalking horse bidder is deemed made in an amount equal to that bid plus the expense reimbursement.
• The debtors may ascribe value to non-cash components of competing bids in their sole discretion so long as the payment requirement is met, and at each round will give effect to additional liabilities assumed and additional costs imposed on the estates.

Good Faith Deposit

• Amount: cash equal to 10% of the proposed purchase price, required of every qualified bid other than the stalking horse bid.
• The deposit must be delivered to the debtors' escrow agent no later than Oct. 27, 2026, at 4 p.m. ET and is held until 10 business days after the auction concludes.
• Deposits of parties that do not qualify as qualified bidders are returned within five business days of the debtors' final determination; deposits of unsuccessful qualified bidders are returned within 10 business days after the auction; the backup bidder's deposit is returned within 10 business days after the backup bid expiration date.
• A deposit is forfeited if the bidder attempts to withdraw its bid while it remains irrevocable, or if a successful or backup bidder fails to close because of a breach entitling the debtors to terminate, in which case the estates retain the deposit as partial compensation for damages. The successful bidder receives a credit against the purchase price for its deposit at closing.

Auction Details

• The auction will be held Nov. 2, 2026, at 10 a.m. ET at the offices of Potter Anderson & Corroon LLP in Wilmington, at another location designated by the debtors, or virtually, and will be transcribed or video recorded. It proceeds only if more than one qualified bid is received, including a combination of bids that together constitute a qualified bid; if the stalking horse bid is the only qualified bid, the debtors will cancel the auction, file and publish notice of the cancellation and the successful bid, and seek approval at the sale hearing.
• Bids may be submitted for all or part of the business, and partial bids may be combined with other partial bids or evaluated together with the liquidation value of the assets not covered by other partial bids, as reasonably determined by the debtors in good faith, in order to be deemed a qualified bid.
• By no later than Oct. 30, 2026, at 5 p.m. ET, the debtors will notify bidders whether they have qualified and provide all qualified bidders with copies of each qualified bid and notice of which bid is the baseline bid. Bidding opens at the baseline bid, proceeds in open rounds in the presence of all qualified bidders, and each round concludes only after every participant has had an opportunity to bid with full knowledge of the material terms of the leading bid announced by the debtors.
• Only qualified bidders may participate, in person or through a duly authorized representative, and each must confirm in writing and on the record that it has not colluded and that its bids are binding, good-faith offers. The debtors may negotiate with any and all participants, may limit the number of representatives attending, and may reject any bid they deem inadequate, non-conforming, or contrary to the estates' best interests, without liability absent gross negligence or willful misconduct.
• Immediately before the auction closes, the debtors will designate the successful bid and, from among the qualified bids other than any credit bid, the backup bid, and will announce the identity of each bidder and the price and material terms. Within one business day after the auction, the debtors will file, serve and publish a notice of auction results.
• A backup bid remains binding until the earlier of the first business day after the successful sale closes and 30 days after the sale hearing. If the successful transaction is terminated before that date, the backup bidder is deemed the new successful bidder and must consummate its bid, though the debtors may elect not to pursue it after notice to the sale notice parties and consultation.

Consultation Parties

• The consultation parties are any official committee and, solely while they are neither the stalking horse bidder nor otherwise bidding, the DIP secured parties. The debtors will consult with them on selection of the baseline bid, the conduct of the auction, any additional auction procedures, adjournment, and the selection of the successful and backup bidders, and will give them the diligence and other information they request together with running reports on the process covering parties contacted, buyer feedback, copies of all letters of intent, drafts of definitive agreements and updates on proposals. Copies of every bid go to them no later than the day after the bid deadline.
• Any consultation party that submits a bid or credit bid immediately ceases to be a consultation party, and the debtors will not share bids or other confidential information with any consultation party, insider or affiliate that is an active bidder; consultation rights are restored upon written notice of withdrawal as a bidder or confirmation on the record at the auction.
• If a committee member submits a qualified bid, the committee retains its consultation rights provided it excludes the bidding member from related discussions and withholds confidential sale information from that member.
• Consultation rights do not limit the debtors' discretion or confer any veto over the debtors' business judgment, and the proposed order bars the debtors from modifying those rights absent further court order or the affected parties' consent.

Assumption and Assignment

• Within two business days after entry of the bidding procedures order, the debtors will file and serve an assumption and assignment notice on each contract counterparty identifying the applicable contracts, listing the debtors' good-faith cure cost calculation for each, stating that assumption and assignment is not guaranteed and remains subject to court approval, and displaying the objection deadlines.
• The stalking horse bidder may designate additional contracts for assumption and assignment, or remove contracts from the list, at any time until two business days before closing. Counterparties receiving a supplemental notice have until 4 p.m. ET on the seventh day after its filing and service to object to the cure cost.
• The APA runs its own designation clock alongside those notice procedures: the buyer may add or drop contracts and benefit plans until two days before closing, and anything left undesignated becomes an excluded contract or retained plan carrying no cure cost for the buyer. A contract caught in an unresolved cure or assignment dispute stays designable, with the buyer paying its ordinary-course costs in the meantime, until the earliest of resolution, 60 days after closing, the date it may no longer be assumed or is deemed rejected under section 365(d), and any date the sale order fixes; if it is not expressly assumed in writing by then it is deemed excluded. A contract that should have been listed but was not is noticed to its counterparty, which gets seven business days to object, and the buyer may drop it if the court fixes a cure cost the buyer finds unacceptable.
• Cure and assumption objections are due Oct. 26, 2026, at 4 p.m. ET; objections directed solely to a non-stalking-horse successful bidder's adequate assurance of future performance are due Nov. 4, 2026, at 4 p.m. ET. The parties must first confer in good faith, and unresolved disputes are determined by the court at the sale hearing or, by agreement of the debtors and the successful bidder, at a later hearing.
• A contract subject to an adjourned cure objection may be assumed and assigned before the objection is resolved so long as the undisputed cure costs are paid by the closing date and funding for the disputed portion is reserved; an adjourned objection may be resolved after closing. If a cure objection is resolved in a manner not in the estates' best interests, the successful bidder may drop the affected contract.
• A counterparty that fails to object timely is deemed to consent to the assumption and assignment, the stalking horse bidder is deemed to have provided adequate assurance under sections 365(b)(1)(C), 365(f)(2)(B) and, if applicable, 365(b)(3), all defaults and pecuniary losses are deemed cured upon payment of the noticed cure costs, and the counterparty is forever barred from asserting any further claims relating to the contract.
• Assumption and assignment is conditioned on payment of cure costs and effective only upon closing. The debtors ask the court to find any anti-assignment provision restricting or limiting assignment unenforceable under section 365(f), and reserve all rights as to whether any listed contract is in fact executory or unexpired.

Employee Treatment

• Ten days before closing the sellers will provide the buyer a revised employee schedule, and before closing the buyer will deliver a list of employees to whom it intends to offer employment effective at closing. The buyer may offer employment to some, all or none of the employees in its sole and absolute discretion, and on terms in its sole discretion; those who accept become transferred employees.
• The buyer assumes all accrued and unpaid PTO obligations under the sellers' PTO policy for transferred employees as of closing. All other pre-closing employment liabilities, including WARN Act and collective bargaining liabilities, severance, retention and pre-closing COBRA obligations, remain excluded liabilities.
• Where law requires a PTO payout to an employee the buyer declines to hire, or whom the sellers terminate as a result of the buyer's action or inaction, and non-payment would on advice of counsel expose the sellers' directors or officers to personal liability, the excluded cash is increased, funded in cash at closing if the remaining cash falls short, and the sellers pay the employee at closing.
• At closing the sellers deliver a WARN Act list naming every employee who has suffered or will suffer an employment loss or layoff in the 90 days before, on or after the closing date; they remain solely responsible for COBRA continuation for anyone who became an M&A qualified beneficiary at or before closing and must reimburse and indemnify the buyer for COBRA liabilities if they stop maintaining a group health plan. The sellers also assign the buyer their confidentiality, non-solicitation, non-competition and non-disparagement rights against transferred employees, and assist in enforcing any that cannot be assigned.

Sale Free and Clear & Successor Liability

• The debtors seek authority to sell the assets free and clear of all liens, claims, interests and encumbrances to the fullest extent permitted by section 363(f), other than permitted liens and assumed liabilities, with liens attaching to the sale proceeds. They note that the prepetition secured parties, who hold liens on substantially all of the assets, have already consented to the bidding procedures.
• The APA and the proposed sale order provide that the transaction is not a consolidation, merger or de facto merger of the buyer and the debtors or their estates, that there is no substantial continuity or continuity of enterprise, and that the buyer is neither a mere continuation of nor a successor to the debtors, including as a successor employer with respect to employees, contractors or benefit plans.
• The debtors seek a finding that any successful bidder, including the stalking horse bidder, is a good faith purchaser entitled to the full protections of section 363(m), and seek waiver of the 14-day stays under Bankruptcy Rules 6004(h) and 6006(d).
• The proposed sale order also addresses licensing: under section 525 no governmental authority may revoke or suspend a permit or license relating to the acquired assets on account of the bankruptcy or the sale; transferable licenses, permits, approvals and certificates of occupancy are deemed transferred to the buyer at closing to the greatest extent applicable law allows; and the business continues operating under the debtors' existing licenses, local occupational and liquor licenses among them, until they are reissued in the buyer's name.

Post-Closing Arrangements

• Wind-down funding: the wind-down amount is $250,000 in cash, funded into the account holding the excluded cash at closing or, if later, once the parties agree on a wind-down budget. At least 10 business days before the sale hearing, or earlier if a revised budget is delivered in connection with a second DIP draw, the sellers will provide the DIP lenders a detailed budget of wind-down expenses, including professional fees, negotiated in good faith and in no case exceeding the wind-down amount.
• Transition services: at the buyer's request, the sellers will provide transition services for no more than 60 days after closing, potentially covering payroll and administration of any assumed plan, accounting, information technology, facilities management and other administrative services, with the buyer funding the amounts required for the sellers to perform. The parties will use commercially reasonable efforts to execute the agreement no later than five business days before closing.
• Name change: the sellers will amend their formation documents to adopt names sufficiently dissimilar to avoid confusion and will not use the name "Yardbird" or any confusingly similar name for any business purpose.
• Records: each party will retain books and records relating to the business, acquired assets and assumed liabilities for two years after closing (or longer if required by law or a governmental authority) and afford the other reasonable access during normal business hours for tax, litigation, compliance, financial statement or other reasonable business purposes. A party may destroy such records within that period only after 30 days' prior written notice, during which the other party may take possession at its own expense.

Interim Operating Covenants

• Between signing and closing the sellers must use commercially reasonable efforts to run the business in the ordinary course, meet postpetition obligations as they come due, preserve the acquired assets, comply with applicable law and material contracts, and preserve their relationships with employees, licensors, regulators, customers and suppliers.
• Without the buyer's written consent or court approval the sellers may not, among other things, sell, license or dispose of acquired assets outside ordinary-course inventory and service sales; incur borrowed-money indebtedness outside the ordinary course; assume, reject, amend or terminate a material contract, material transferable permit or unexpired lease other than through the designation mechanics; settle an action outside the ordinary course; transact with executive officers or directors beyond ordinary-course compensation; grant compensation or benefit increases or accelerate vesting; hire, terminate other than for cause, or furlough anyone whose base compensation exceeds $150,000 a year; enter into, amend, extend or terminate a collective bargaining agreement or recognize a union; conduct a plant closing or mass layoff triggering WARN notice; or sell, abandon or allow material intellectual property to lapse. Through the end of the extended contract period the sellers also may not reject, repudiate or disclaim any contract used in the business, or compromise cure costs or other material contract terms, without the buyer's written consent.
• There is no no-shop: the sellers and their representatives are expressly unrestricted in soliciting or encouraging alternative restructuring proposals in accordance with the bidding procedures, but must advise the buyer in writing within 48 hours of anything that may reasonably lead to one, keep it currently informed of status and terms, and provide copies of the material documentation exchanged. Pleadings and proposed orders relating to the transaction go to the buyer at least two business days before filing and, to the extent they affect the buyer, must be in form and substance acceptable to it.

Closing Conditions and Termination

• Closing occurs remotely at 10 a.m. ET no later than the second business day after the closing conditions are satisfied or waived, and is deemed effective as of 12:01 a.m. New York time on the closing date.
• Three conditions run to both sides: entry of the bidding procedures order and the sale order, each as a final order and each reasonably acceptable to the buyer and the required DIP lenders; expiration or termination of any waiting period under the HSR Act or other antitrust laws, with any required clearance obtained and free of conditions; and the absence of any law or order enjoining, prohibiting or unwinding the transaction, and of any pending action seeking one.
• Buyer-side conditions include that aggregate cure costs not exceed the cure costs cap; that no unwaived event of default has occurred under the DIP facility or DIP order; that the court have approved the buyer's ability to credit bid at least the credit bid amount under section 363(k), with no action challenging the credit bid rights of the buyer, DIP lenders or prepetition lenders, and with the DIP order challenge period expired without any challenge asserted against the DIP lenders, prepetition lenders or prepetition senior secured parties; that no action be pending or threatened in any jurisdiction with respect to any pre-closing transaction; that the buyer have received the consents on its schedule; and that the sellers have delivered final disclosure schedules the buyer has not rejected on or before Nov. 12, 2026.
• Termination rights run to both sides for failure to close by the outside date of Nov. 12, 2026, which the buyer may extend in its sole discretion, and upon court approval of the sellers' entry into or pursuit of an alternative restructuring proposal, meaning any competing sale, investment, restructuring, merger, financing, plan or similar transaction inconsistent with or alternative to the contemplated transaction. The APA terminates automatically if the buyer is neither the successful nor the backup bidder at the auction.
• The buyer may also terminate if it is for any reason unable to credit bid any amount it deems fit up to the full DIP and prepetition obligations; if the bidding procedures order or sale order is modified, amended, reversed, stayed or vacated in any respect without its consent; if the bidding procedures order is not entered within 18 days after the petition date; or if the sale order is not entered within 50 days after the petition date. The sellers are obligated to obtain entry of the bidding procedures order no later than 18 days after the petition date and to use commercially reasonable efforts to obtain the sale order no later than Nov. 12, 2026.
• The buyer's remaining triggers are a seller breach or untrue representation that would fail the closing conditions, uncured by the earlier of the outside date and 20 business days after notice; conversion of the cases to Chapter 7, appointment of a trustee or of an examiner with expanded powers, or stay relief as to a material portion of the acquired assets; a continuing uncured event of default or termination under the DIP facility, or modification, amendment, reversal, stay or vacatur of the DIP order or DIP facility in any material respect without its consent; and failure to deliver final seller disclosure schedules, or the buyer's own rejection of them by Nov. 12, 2026. The sellers' side is narrower: mutual written consent, a final non-appealable legal restraint, and a buyer breach or untrue representation on the same cure construct, with neither party able to invoke the outside-date or restraint triggers where its own breach caused the failure.

Reservation of Rights

• The debtors may modify the bidding procedures in their reasonable business judgment after consultation, including to extend or waive deadlines, adopt new bidding and auction rules disclosed to all prospective and qualified bidders, or otherwise promote competitive bidding, provided the modifications are not materially inconsistent with the procedures or the order and do not alter consultation rights absent further order or consent.
• The debtors may change the proposed sale-related deadlines before the bidding procedures hearing in consultation with the stalking horse bidder, provided no party receives less notice than the entered order affords, and nothing in the order prevents the debtors from pursuing or consummating an alternative transaction in the exercise of their fiduciary duties.
• Presentation of a selected bid for approval does not bind the debtors; they become bound only when the court approves the successful bid at the sale hearing. Nothing in the bidding procedures order alters, amends or modifies the DIP orders or impairs any right granted to the DIP secured parties, and to the extent of any inconsistency the DIP orders govern.

Key Dates

• Deadline for entry of the Bidding Procedures Order: Oct. 8, 2026
• Sale Notice and Assumption and Assignment Notice: two business days after entry of the Bidding Procedures Order
• Sale Objection, Cure Objection, and Contract Objection Deadline: Oct. 26, 2026, at 4 p.m. ET
• Bid Deadline and Good Faith Deposit Deadline: Oct. 27, 2026, at 4 p.m. ET
• Qualified Bid Determination and Baseline Bid Notice: Oct. 30, 2026, at 5 p.m. ET
• Auction (if necessary): Nov. 2, 2026, at 10 a.m. ET
• Notice of Auction Results: one business day after the auction concludes
• Supplemental Sale Objection and Adequate Assurance Objection Deadline: Nov. 4, 2026, at 4 p.m. ET
• Reply Deadline: Nov. 5, 2026, at 12 p.m. ET
• Proposed Sale Hearing: Nov. 9, 2026 (time left blank in the proposed order)
• Outside Date and deadline for entry of the Sale Order: Nov. 12, 2026