Eddie Bauer LLC, et al. - Chapter 11 APA Summary

Eddie Bauer obtained approval to assume an agency agreement with Hilco Merchant Resources and SB360 Capital Partners to conduct store closing sales at 177 locations (40 initial stores) through April 30, 2026, with the agent earning a 2.0% base fee on merchandise sold plus additional incentive compensation based on gross recovery thresholds and a 17.5% commission on FF&E sales, all free and clear of liens with proceeds subject to existing encumbrances.

Agency Agreement Summary

Parties Involved

Sellers: Eddie Bauer LLC and its affiliates (the Debtors)
Agent: Hilco Merchant Resources, LLC and SB360 Capital Partners, LLC (collectively, the Agent)
The Agency Agreement was negotiated, proposed, and entered into by the Agent and the Debtors without collusion, in good faith and from arm's length bargaining positions.
The Agent's relationship to the Debtors is that of an independent contractor without the capacity to bind the Debtors in any respect. No employer/employee, principal/agent, joint venture or other such relationship is created by the Agency Agreement.
The Agent shall act solely as an agent to the Debtors and shall not be liable for any claims against the Debtors other than as expressly provided in the Agency Agreement (including the Agent's indemnity obligations thereunder) or the Sale Guidelines, with the exception of acts of gross negligence or willful misconduct and, for greater certainty, the Agent shall not be deemed to be an employer, or a joint or successor employer or a related or common employer or payor within the meaning of any legislation governing employment or labor standards or pension benefits or health and safety or other statute, regulation or rule of law or equity for any purpose whatsoever, and shall not incur any successor liability whatsoever.
The Parties expressly acknowledge and agree that the Debtors shall have no liability to the Supervisors for wages, benefits, severance pay, termination pay, vacation pay, pay in lieu of notice of termination or any other liability arising from the Agent's hiring or engagement of the Supervisors, and the Supervisors shall not be considered employees of the Debtors.
The Parties expressly acknowledge and agree that the Agent shall have no liability to the Debtors' employees for wages, benefits, severance pay, termination pay, vacation pay, pay in lieu of notice of termination or any other liability arising from the Debtors' employment, hiring or retention of its employees, and such employees shall not be considered employees of the Agent.

Assets Being Sold

Merchandise: All goods, saleable in the ordinary course, located in the Stores on the Sale Commencement Date or goods that, upon mutual agreement between the Parties, the Debtors ship to the Stores subsequent to the Sale Commencement Date for inclusion in the Sale.
Excluded from Merchandise: (1) goods that belong to sublessees, licensees or concessionaires of the Debtors or are leased or licensed from third-parties by the Debtors; (2) owned furnishings, trade fixtures, equipment and improvements to real property that are located in the Stores (collectively, FF&E) or any FF&E that is leased by the Debtors and located in the Stores; or (3) damaged or defective merchandise that cannot be sold.
FF&E: The Agent shall sell the FF&E in the Stores from the Stores and the Debtors' corporate offices and distribution center(s). The Agent shall have the right to abandon any unsold FF&E. For the avoidance of doubt, the Agent shall be the exclusive agent for FF&E sales from any facilities designated for disposition by the Debtors during the term of the Agency Agreement.
The Agent may also sell existing furniture, fixtures and equipment owned by the Debtors and located in the Stores that are (i) fully owned by the Debtors; (ii) owned jointly by the Debtors and one or more third-party vendors of the Debtors, as directed by the Debtors with the consent of the Information Officer, if any, and agreed to by such third-parties; or (iii) fully owned by a third party if agreed to by such third-party and the Debtors with the consent of the Information Officer, if any, during the Sales and the FF&E Removal Period, if any.
For greater certainty, FF&E does not include any fixtures and affixed equipment that comprise all or any portion of a Store's mechanical, electrical, plumbing, security, HVAC, fire suppression and fire alarm or sprinkler systems.
All entities that are presently in possession of some or all of the Merchandise or FF&E in which the Debtors hold an interest that are or may be subject to the Agency Agreement or the Final Order are directed to surrender possession of such Merchandise or FF&E to the Debtors or the Agent.

Store Closings and Sales

Stores: The Agency Agreement covers 177 stores, including 40 Initial Stores and additional Remaining Stores as designated by the Debtors.
Sale Commencement Date: January 29, 2026 (for the Initial Stores) or such later date as agreed by the Parties.
Sale Termination Date: April 30, 2026 (for the Initial Stores); provided, however, that the Debtors may elect by written notice to the Agent to extend or terminate the Sale at any Store or Initial Store prior to the Sale Termination Date.
For the Remaining Stores, the Parties shall agree to appropriate sale commencement and sale termination dates. As and when the Parties decide on the sale schedule for the Remaining Stores, the Parties shall update the Store list to reflect the sale timing for such Remaining Stores.
The Debtors are authorized to immediately continue the Sales at the Closing Stores in accordance with the Final Order, the Sale Guidelines, and the Agency Agreement, as may be modified by any Side Letters between the Debtors and/or the Agent and the landlords at the Closing Stores.
The Debtors are authorized to discontinue operations at the Closing Stores in accordance with the Final Order and the Sale Guidelines.
Neither the Debtors nor the Agent nor any of their officers, employees, or agents shall be required to obtain the approval of any third party, including (without limitation) any Governmental Unit or landlord, to conduct the Sales and Store Closings and to take the related actions authorized in the Final Order, including pausing or discontinuing a Store Closing in their business judgment.
All sales of Merchandise shall be made on behalf of the Debtors. The Agent does not have, nor shall it have, any right, title or interest in the Merchandise. All sales of Merchandise shall be by cash, gift card, gift certificate, merchandise credit, debit card, or credit card and, at the Debtors' discretion, by check or otherwise in accordance with the Debtors' policies, and shall be "final" with no returns accepted or allowed, unless otherwise directed by the Debtors.
At the conclusion of the Sale, the Agent shall surrender the premises for each Store to the Debtors in broom clean condition and in accordance with the lease requirements for such premises subject to the terms of the Approval Order; provided, however, the Debtors shall bear all costs and expenses associated with surrendering the premises in accordance with the Approval Order according to a budget mutually agreed to in writing between the Agent and the Debtors.
At the conclusion of the Sale at each Store, the Agent shall photographically document the condition of each such Store and provide such photographs to the Debtors within five (5) calendar days of written request (email being sufficient) by the Debtors. Photographs shall reference with specificity each Store by number, name, and/or location.

Sale Free and Clear

Pursuant to section 363(f) of the Bankruptcy Code, the Agent, on behalf of the Debtors, is authorized to sell the Store Closure Assets and all sales of Store Closure Assets, whether by the Agent or the Debtors, shall be free and clear of any and all liens, claims, encumbrances, and other interests; provided, however, that any such liens, claims, encumbrances, and other interests shall attach to the proceeds of the sale of the Store Closure Assets with the same validity, in the amount, with the same priority as, and to the same extent that any such liens, claims, and encumbrances have with respect to the Store Closure Assets, subject to any claims and defenses that the Debtors may possess with respect thereto and the Agent's fees and expenses (as provided in the Agency Agreement).
The Debtors and/or the Agent (as the case may be) are authorized and empowered to transfer Store Closure Assets among, and into, the Closing Stores in accordance with the Sale Guidelines, as applicable.
The Agent is authorized to sell the Debtors' FF&E and abandon the same, in each case, as provided for and in accordance with the terms of the Agency Agreement and the Sale Guidelines. Any abandonment of such FF&E or other property will be in accordance with the Rejection Procedures.
Notwithstanding anything to the contrary in the Final Order, the Debtors and/or the Agent shall not sell or abandon any property that the Debtors know is not owned by the Debtors (except in accordance with the Sale Guidelines); provided that the Debtors will use their best efforts to notify the owners or lessors of such property of the location at which it may be retrieved; provided, further, that the Debtors may abandon property owned by the landlord at the applicable Closing Store.

Sale Guidelines

The U.S. Sale Guidelines and the Canadian Sale Guidelines are reasonable and appropriate, and the conduct of the Sales in accordance with the Sale Guidelines will provide an efficient means for the Debtors to dispose of the Store Closure Assets and are in the best interest of the Debtors' estates.
The Sale Guidelines are approved in their entirety on a final basis.
To the extent of any conflict between the Final Order, the Sale Guidelines, and the Agency Agreement, the terms of the Final Order shall control over all other documents and the Sale Guidelines shall control over the Agency Agreement.
The Debtors and Agent are authorized to take such actions as may be necessary and appropriate to implement the Agency Agreement and to conduct the Sales and Store Closings without necessity of further order of the Court as provided in the Agency Agreement and the Sale Guidelines (subject to any Side Letters), including, but not limited to, advertising the sale as a "store closing sale," "sale on everything," "everything must go," "going-out-of-business," or similar-themed sales as contemplated in the Sale Guidelines through the posting of signs (including the use of exterior banners at non-enclosed mall closing locations, and at enclosed mall closing locations to the extent the applicable closing location entrance does not require entry into the enclosed mall common area), use of signwalkers, A-frames, and other street signage, as contemplated in the Sale Guidelines.
Except as expressly provided in the Agency Agreement and the Sale Guidelines, the sale of the Merchandise and FF&E shall be conducted by the Debtors and the Agent notwithstanding any restrictive provision of any lease, sublease, restrictive covenant, or other agreement relative to occupancy affecting or purporting to restrict the conduct of the Store Closings or the Sales (including the sale of the Merchandise and FF&E), abandonment of assets, or "going dark" provisions shall not be enforceable in conjunction with the Store Closings or the Sales. Breach of any such provisions in these chapter 11 cases in conjunction with the Store Closings or the Sales shall not constitute a default under a lease or provide a basis to terminate the lease; provided that the Store Closings and Sales are conducted in accordance with the terms of the Final Order, any Side Letter, and the Sale Guidelines.
The Debtors and/or Agent and landlords of the Closing Stores are authorized to enter into agreements ("Side Letters") between themselves modifying the Sale Guidelines without further order of the Court, and such Side Letters shall be binding as among the Debtors, the Agent, and any such landlords. In the event of any conflict between the Sale Guidelines, the Agency Agreement, any Side Letter, and the Final Order, the terms of such Side Letter shall control. Copies of any Side Letters will be provided by the Debtors to counsel to the Creditors' Committee (attorneys' eyes only) and to the U.S. Trustee as soon as reasonably practicable, but not longer than two (2) business days after execution.
Nothing in the Final Order shall limit the Debtors' right to pause or discontinue a Sale at a Closing Store.
In accordance with and subject to the terms and conditions of the Agency Agreement, the Agent shall have the right to use the Closing Stores and all related Closing Store services, furniture, fixtures, equipment and other assets of the Debtors for the purpose of conducting the Sales, free of any interference from any entity or person, subject to compliance with the Sale Guidelines and the Final Order, as may be modified by any Side Letters.
Except as expressly provided for in the Final Order or in the Sale Guidelines, no person or entity, including, but not limited to, any landlord, licensor, service providers, utilities, or creditors, shall take any action to directly or indirectly prevent, interfere with, or otherwise hinder consummation of the Sales or the sale of Merchandise or FF&E, or the advertising and promotion (including the posting of signs and exterior banners or the use of sign-walkers) of such sales, and all such parties and persons of every nature and description, including, but not limited to, any landlord, licensor, service providers, utilities, and creditors and all those acting for or on behalf of such parties, are prohibited and enjoined from (a) interfering in any way with, obstructing, or otherwise impeding, the conduct of the Store Closings, and/or (b) instituting any action or proceeding in any court (other than in the Court or Canadian Court, as applicable) or administrative body seeking an order or judgment against, among others, the Debtors, the Agent, or the landlords at the closing locations that might in any way directly or indirectly obstruct or otherwise interfere with or adversely affect the conduct of the Sales or sale of the Merchandise or FF&E or other liquidation sales at the closing locations and/or seek to recover damages for breach(es) of covenants or provisions in any lease, sublease, license, or contract based upon any relief authorized in the Final Order.

U.S. Sale Guidelines

The Sales shall be conducted so that the U.S. Closing Stores in which sales are to occur will remain open no longer than during the normal hours of operation or such hours as otherwise provided for in the respective leases for the U.S. Closing Stores.
The Sales shall be conducted in accordance with applicable state and local "Blue Laws", where applicable, so that no Sale shall be conducted on Sunday unless the Debtors had been operating such U.S. Closing Store on a Sunday prior to the commencement of the Sales.
The Agent may advertise the Sales as "store closing," "sale on everything," "everything must go," "everything on sale," "going-out-of-business," or similar-themed sales. The Agent may also have a "countdown to closing" sign prominently displayed in a manner consistent with the U.S. Sale Guidelines. All signs, banners, ads and other advertising material, promotions, and campaigns will be approved by the Debtors, prior to purchase, in accordance with the Agency Agreement and the U.S. Sale Guidelines.
The Agent shall be permitted to utilize sign-walkers, display, hanging signs, and interior banners in connection with the Sales; provided that such sign walkers, display, hanging signs, and interior banners shall be professionally produced and hung in a professional manner. Furthermore, with respect to enclosed mall locations, no exterior signs or signs in common areas of a mall shall be used unless otherwise expressly permitted in the U.S. Sale Guidelines. In addition, the Debtors and Agent shall be permitted to utilize exterior banners at (i) non-enclosed mall U.S. Closing Stores and (ii) enclosed mall U.S. Closing Stores to the extent the entrance to the applicable U.S. Closing Store does not require entry into the enclosed mall common area; provided, however, that such banners shall be located or hung so as to make clear that the Sales are being conducted only at the affected U.S. Closing Store, and shall not be wider than the storefront of the U.S. Closing Store. In addition, the Debtors and Agent shall be permitted to utilize sign walkers in a safe and professional manner and in accordance with the terms of the Order. Nothing contained in the U.S. Sale Guidelines shall be construed to create or impose upon the Agent any additional restrictions not contained in the applicable lease agreement.
Conspicuous signs shall be posted in the cash register areas of each of the affected U.S. Closing Stores to effect that "all sales are final."
Except with respect to the hanging of exterior banners, the Agent shall not make any alterations to the storefront or exterior walls of any U.S. Closing Stores, except as authorized by the applicable lease. The Agent shall not make any alterations to interior or exterior U.S. Closing Store lighting, except as authorized by the applicable lease. No property of the landlord of a U.S. Closing Store shall be removed or sold during the Sales. The hanging of exterior banners or in-U.S. Closing Store signage and banners shall not constitute an alteration to a U.S. Closing Store.
The Agent shall keep U.S. Closing Store premises and surrounding areas clear and orderly consistent with present practices.
The Agent, at the direction of the Debtors, and the landlord of any Store are authorized to enter into Side Letters without further order of the Court, provided that such agreements do not have a material adverse effect on the Debtors or their estates.
Subject to the provisions of the Agency Agreement, the Agent shall have the right to use and sell all FF&E owned by the Debtors (the "Owned FF&E"), as approved by the Debtors. The Agent may advertise the sale of the Owned FF&E in a manner consistent with the U.S. Sale Guidelines and the Agency Agreement. The purchasers of any Owned FF&E sold during the sale shall be permitted to remove the Owned FF&E either through the back or alternative shipping areas at any time, or through other areas after applicable business hours, provided, however, that the foregoing shall not apply to de minimis FF&E sales made whereby the item can be carried out of the Closing Store in a shopping bag. For the avoidance of doubt, as of the Sale Termination Date, the Agent may abandon or leave in place, and without further responsibility, any FF&E.
At the conclusion of the Sales at each U.S. Closing Store, pending assumption or rejection of applicable leases, the landlords of the U.S. Closing Stores shall have reasonable access to the U.S. Closing Stores' premises as set forth in the applicable leases. The Debtors, Agent, and their agents and representatives shall continue to have access to the U.S. Closing Stores as provided for in the Agency Agreement. The rights of landlords against Debtors for any damages to a U.S. Closing Store shall be reserved in accordance with the provisions of the applicable lease.
On "shopping center" property, the Agent shall not distribute handbills, leaflets or other written materials to customers outside of any U.S. Closing Stores' premises, unless permitted by the lease or, if distribution is customary in the "shopping center" in which such U.S. Closing Store is located; provided that the Agent may solicit customers in the Closing Stores themselves. On "shopping center" property, the Agent shall not use any flashing lights or amplified sound to advertise the Sales or solicit customers, except as permitted under the applicable lease or agreed to by the landlord.
The Debtors and the Agent shall have the right to use and sell the Store Closure Assets and the Additional Agent Goods. The Debtors and the Agent may advertise the sale of the Store Closure Assets and the Additional Agent Goods in a manner consistent with the U.S. Sale Guidelines. The purchasers of any of the Store Closure Assets and the Additional Agent Goods sold during the Sales shall be permitted to remove the Store Closure Assets and the Additional Agent Goods either through the back or alternative shipping areas at any time, or through other areas after store business hours; provided, however, that the foregoing shall not apply to the sale of de minimis Store Closure Assets and Additional Agent Goods, whereby the item(s) can be carried out of the store in a shopping bag.
At the conclusion of the Sales, the Agent shall vacate the U.S. Closing Stores; provided that the Agent may leave any owned furniture, fixtures, and equipment (including, but not limited to, machinery, rolling stock, office equipment and personal property, and conveyor systems and racking) (FF&E) not sold in the Sales or otherwise transferred from the premises at the conclusion of the Sales (the "Termination Date") on the U.S. Closing Stores' premises, without cost or liability of any kind to the Agent. The Agent shall notify the Debtors of its intention to leave any FF&E at the U.S. Closing Stores' premises at least two days prior to the Termination Date. The Debtors will have the option to either remove the FF&E, at their own cost prior to the Termination Date or, in consultation with the Agent, abandon the FF&E. Any abandoned FF&E left in a U.S. Closing Store after a lease is rejected pursuant to the Rejection Procedures shall be deemed abandoned to the landlord having a right to dispose of the same as the landlord chooses without any liability whatsoever on the part of the landlord to any party and without waiver of any damage claims against the Merchant. For the avoidance of doubt, as of the Termination Date, the Agent may leave in place, and without further responsibility or liability of any kind, any FF&E.

Additional Agent Goods

If mutually agreed to by the Debtors and Agent, the Agent may, at Agent's sole cost and expense, supplement the Merchandise in the Sale at the Stores with additional goods procured by Agent which (a) are of like kind, (b) in the Debtors' sole discretion maintain the overall merchandising brand image of the Debtors, and (c) are of no lesser quality to the Merchandise in the Sale at the Stores ("Additional Agent Goods"); provided, further, that the cost of Additional Agent Goods shall not exceed 20% of the aggregate Cost Value of Merchandise in the Sale.
The Agent shall purchase the Additional Agent Goods and deliver them to the Stores at Agent's sole expense (including as to labor, freight and insurance relative to shipping such Additional Agent Goods to the Stores).
Sales of Additional Agent Goods shall be run through the Debtors' cash register systems; provided however, that Agent shall mark the Additional Agent Goods using either a "dummy" SKU or department number, or in such other manner so as to distinguish the sale of Additional Agent Goods from the sale of Merchandise. Agent and Debtors shall also cooperate so as to ensure that the Additional Agent Goods are marked in such a way that a reasonable consumer could identify the Additional Agent Goods as non-Debtor goods. Additionally, Agent shall provide signage in the Stores notifying customers that the Additional Agent Goods have been included in the Sale.
Agent shall pay to Debtors an amount equal to six percent (6%) percent of the gross proceeds (excluding Sale Taxes) from the sale of the Additional Agent Goods (the "Additional Agent Goods Fee"), and Agent shall retain all remaining amounts from the sale of the Additional Agent Goods. Agent shall pay Debtors its Additional Agent Goods Fee in connection with each weekly sale reconciliation with respect to sales of Additional Agent Goods sold by Agent during each then prior week (or at such other mutually agreed upon time).
Agent and Debtors intend that the transactions relating to the Additional Agent Goods are, and shall be construed as, a true consignment from Agent to Debtors in all respects and not a consignment for security purposes. Subject solely to Agent's obligations to pay to Debtors the Additional Agent Goods Fee, at all times and for all purposes the Additional Agent Goods and their proceeds shall be the exclusive property of Agent, and no other person or entity shall have any claim against any of the Additional Agent Goods or their proceeds. The Additional Agent Goods shall at all times remain subject to the exclusive control of Agent.
Debtors shall, at Agent's sole cost and expense, insure the Additional Agent Goods and, if required, promptly file any proofs of loss with regard to same with Debtors' insurers. Agent shall be responsible for payment of any deductible under any such insurance in the event of any casualty affecting the Additional Agent Goods.
All transactions relating to the Additional Agent Goods are, shall be construed as, and are acknowledged by the Debtors to be a true consignment from Agent to the Debtors under Article 9 of the Uniform Commercial Code in effect (the "UCC"), and not a consignment for security purposes. At all times and for all purposes, the Additional Agent Goods and their proceeds less Additional Agent Goods Fee, shall be the exclusive property of the Agent, and no other person or entity (including, without limitation, the Debtors, or any third person claiming a security interest in the Debtors' property, including any of the Debtors' secured lenders) shall have any claim against any of the Additional Agent Goods or the proceeds thereof. The Additional Agent Goods shall at all times remain subject to the exclusive control of the Agent.
Agent is hereby granted a first priority security interest in (i) the Additional Agent Goods and (ii) the Additional Consultant Goods proceeds, less the Additional Agent Goods Fee, which security interest shall be deemed perfected on a final basis pursuant to the Final Order without the requirement of filing UCC financing statements or providing notifications to any prior secured parties (provided that Agent is hereby authorized to deliver any notices and file any financing statements and amendments thereof under the applicable UCC identifying Agent's interest in the Additional Agent Goods (and any proceeds from the sale thereof) as consigned goods thereunder and the Debtors as the consignee therefor, and Agent's security interest in such Additional Agent Goods and Additional Agent Goods proceeds).
As part of each weekly reconciliation, the Debtors shall turnover all proceeds from the sale of Additional Agent Goods to the Agent, net of any fee payable to the Debtors pursuant to the Agency Agreement.
Notwithstanding anything in the Agency Agreement to the contrary, "Merchandise" shall not include Additional Agent Goods.

Agent Fees and Expenses

Merchandise Fee: The Agent shall earn a base fee equal to two (2.0%) of the Gross Proceeds of Merchandise sold at the Stores during the Sale Term. For purposes of the Agency Agreement, "Gross Proceeds" means gross receipts calculated using the "gross rings" method, net of applicable taxes.
Wholesale Fee: Should the Debtors designate Merchandise for sale through Agent's wholesale channels, Agent shall earn a base wholesale fee of 7.5% of the Gross Proceeds of Merchandise sold.
Additional Incentive Compensation: In addition to the Merchandise Fee, and not in lieu thereof, the Debtors shall pay to the Agent from Gross Proceeds of such Merchandise (but not Gross Proceeds of Merchandise sold through wholesale channels) (the "Specified Gross Proceeds") an additional fee based upon the Gross Recovery Percentages achieved as follows:
- Gross Recovery Percentage Between 155.5% and 158.0%: An additional 0.25% of Specified Gross Proceeds (total fee equal to 2.25% of Specified Gross Proceeds)
- Gross Recovery Percentage Above 158.0%: An additional 0.25% of Specified Gross Proceeds (total fee equal to 2.50% of Specified Gross Proceeds)
- No Additional Incentive Compensation shall be earned or payable where the Gross Recovery Percentage is less than 155.5%.
Removal Fee: To the extent the Debtors voluntarily eliminate Stores from the Sale prior to their respective Sale Commencement Date, terminate Stores prior to the Sale Termination Date, or decide not to dispose of such Store pursuant to the Agency Agreement, Agent shall be entitled to the Merchandise Fee and any Additional Incentive Compensation accrued to such date that the store is removed from the Sale, plus a flat fee (the "Removal Fee") of $5,000 per store, not to exceed $350,000. For the avoidance of doubt, the Debtors shall also be responsible for Agent's reasonable and documented expenses, as defined in the Expense Budget, accrued in connection with the sale in each removed Store.
FF&E Fee: In consideration for providing services related to the sale of FF&E, Agent shall be entitled to a commission from the sale of the FF&E equal to 17.5% of the Gross Proceeds of the sale of the FF&E. Agent shall remit to the Debtors all Gross Proceeds from the sale of FF&E. During each weekly reconciliation, Agent's FF&E fee shall be calculated, and Agent's calculated FF&E fee and all FF&E costs and expenses then incurred shall paid within seven (7) days after each such weekly reconciliation.
Expenses: The Debtors shall be responsible for all costs and expenses of the Sale, including (without limitation) all Store-level operating expenses, all costs and expenses related to the Debtors' other retail store operations, the Debtors' distribution centers and warehouses, and the Debtors' corporate offices, and Agent's reasonable, documented out of pocket expenses (collectively, "Expenses"); provided that, in no event will Agent's expenses exceed the aggregate budget established by the Debtors and Agent for certain delineated costs and expenses relating to the Sale (the "Expense Budget"), including (without limitation) Agent's actual costs of supervision (including (without limitation) Supervisors' wages, fees, travel, and industry standard deferred compensation) and advertising costs (including (without limitation) signage and the shipping, freight, and sales tax related thereto where applicable). The Expense Budget may only be modified by mutual agreement of Agent and Debtors. The Expense Budget for the Initial Stores is $963,772, comprised of:
- Advertising: $242,850 (Digital & Media: $152,500; Signs: $69,100; Sign Walkers/Drivers: $21,250)
- Supervision Fees/Wages/Expenses: $695,922
- Miscellaneous: $25,000 (Legal and Other Miscellaneous)
Sale Advance: In connection with the Sale, no later than one (1) business day after receipt of an invoice from Agent, the Debtors agree to remit to an account designated by Agent certain advances related to Expense Budget amounts and anticipated fees that may become due to Agent pursuant to the Agency Agreement as follows: (i) $99,131 for the Agent to pay for costs and expenses associated with signage and advertising (the "Signage Advance"); (ii) $132,494 for the Agent to pay for costs and expenses associated with supervision, and (iii) $28,572 for two weeks of the estimated Merchandise Fee that may become due and payable to Agent under the Agency Agreement (the "Estimated Fee Advance", and together with the Signage Advance, collectively, the "Sale Advance"). The Sale Advance (and any subsequent sale advance that may be agreed by the Parties with respect to the addition of the Remaining Stores) may be used by Agent at Agent's discretion to pay or reimburse Agent for amounts due by the Debtors to Agent under the Agency Agreement (including (without limitation) all Fees and Expenses due to Agent and any amounts due to Agent on account of Additional Agent Goods) and otherwise shall be held by Agent until the conclusion of the Sale. Any portion of any Sale Advance not so used shall be returned to the Debtors within three (3) business days following the Final Reconciliation.
Failure to Timely Remit Payment: Notwithstanding the Agent's receipt of the Sale Advance(s), nothing contained in the Agency Agreement shall be deemed to waive, modify or limit the Debtors' obligations to remit timely payment of all Fees and Expenses due to the Agent relating to the Sale and to timely remit payment of the proceeds from the sale of any Additional Agent Goods as part of the Weekly Reconciliations. To the extent the Debtors fail to timely remit payment of any advances, fees, expenses, Fees, reimbursement of Expenses, or Additional Agent Goods Proceeds that are due and owing to the Agent (collectively, if any, the "Past Due Agent Amounts"), the Agent may apply such Past Due Agent Amounts against the Sale Advance(s), in which case, no less than one (1) business day after the Debtors' receipt of notice from the Agent of such application, the Debtors shall replenish the Sale Advance(s) to the full amount previously agreed to by the Parties.
Weekly Reconciliation: All accounting matters (including, without limitation, all fees, expenses, or other amounts reimbursable or payable to Agent or, with respect to the Additional Goods Fee, Debtors) shall be reconciled on every Wednesday for the prior week and shall be paid within seven (7) calendar days after each such weekly reconciliation.
Final Reconciliation: The Parties shall complete a final reconciliation and settlement of all amounts payable and contemplated by the Agency Agreement (including, without limitation, Expense Budget items, and fees earned thereunder) no later than forty-five (45) days following the first day on which the Sale Termination Date has occurred for all Stores.
The Debtors are authorized to assume and perform under the Agency Agreement pursuant to sections 363 and 365 of the Bankruptcy Code, including making payments required by the Agency Agreement to the Agent, including with respect to reasonable and documented costs and expenses incurred by the Agent pursuant to the Agency Agreement and fees due to the Agent on account of services provided from the Petition Date through the date of entry of the Final Order, without further order of the Court and without any need for the Agent to file any request for payment with the Court or to provide notice to any party other than those required by the Agency Agreement. All such payments of fees and reimbursement of expenses shall be free and clear of any and all encumbrances.
The Debtors shall be responsible for all reasonable and documented costs and expenses incurred by Agent in connection with the sale of FF&E, which costs and expenses shall be incurred pursuant to the Budget, as may be modified from time to time by mutual agreement of the Parties.
Within thirty calendar days after the date of completion of all Store Closings and Sales, the Debtors shall (a) file a summary report of the store closing process with the Court that will include: (i) a list of all Store Closings; (ii) the Debtors' gross revenue from all Store Closing Sales; and (iii) the total fees paid and expenses reimbursed to the Agent under the Agency Agreement, and (b) file with the Court and serve on the U.S. Trustee, the Creditors' Committee, and any other party in interest who may so request, a report showing payment of each of the Agent's fees, setting forth detail and information regarding the calculation of such fees paid to the Agent and expenses reimbursed to the Agent.
The U.S. Trustee shall have twenty calendar days after the date on which such report is filed to object solely as to the reasonableness of the compensation paid or expenses reimbursed to the Agent; provided, that the Agent's rights to argue that any compensation and expense reimbursement, if calculated in accordance with the terms of the Agency Agreement, is reasonable shall be and hereby are expressly reserved and preserved. To the extent an objection is filed by the U.S. Trustee and cannot be resolved, the parties shall coordinate to have the objection to the Agent's compensation brought before the Court at the next scheduled omnibus hearing or such other date and time as shall be agreed by the parties.
Notwithstanding this or any other provision of the Final Order, nothing shall prevent or be construed to prevent the Agent (individually, as part of a joint venture, or otherwise) or any of its affiliates from providing additional services to and/or bidding on the Debtors' assets not subject to the Agency Agreement ("Additional Assets") in connection with any other future process that may or may not be undertaken by the Debtors to close stores pursuant to an agency agreement or otherwise. The Agent (individually, as part of a joint venture, or otherwise) or any of its affiliates are hereby authorized to bid on, guarantee, or otherwise acquire such Additional Assets, or offer to provide additional services, notwithstanding anything to the contrary in the Bankruptcy Code or other applicable law, provided that such services guarantee, transaction, or acquisition is approved by separate order of the Court; and provided further, that the rights of the U.S. Trustee and all other parties in interest to object to any request that the Agent or its affiliates be permitted to provide such additional services and/or transactions are fully reserved.
Notwithstanding the relief granted in the Final Order, any payment made by the Debtors pursuant to the authority granted therein shall be subject to any orders approving entry into debtor-in-possession financing and authorizing use of cash collateral; provided, however, that all amounts due to the Agent under the Agency Agreement shall be earmarked and paid by the Debtors from proceeds of the Sales and proceeds of the sale of Additional Agent Goods and shall not be reduced or capped by the terms or conditions of any pre- or post-petition financing facilities, restrictions on the use of cash collateral, or orders related thereto.

Customer Programs Modifications

The Debtors will continue to honor Rewards Points on account of the Debtors' Adventure Rewards Program for thirty days from the date of the Interim Order. After such thirty-day period, the Debtors will discontinue the Adventure Rewards Program with respect to the Closing Stores, so that customers will no longer earn Rewards Points on account of purchases at Closing Stores nor will such Closing Stores honor Adventure Reward Certificates.
The Debtors will continue to accept the Debtors' validly-issued gift cards at Closing Stores for thirty days after the date of the Interim Order. Following such thirty-day period, the Debtors will no longer accept gift cards at such Closing Stores.
Notwithstanding any policy or state law to the contrary, the gift cards and related customer programs shall not be redeemable for cash at any time.
Merchandise sold in the Sales shall be on a "final" basis and refunds and/or returns of such items shall not be accepted at any of the Debtors' retail locations.
The Debtors shall post notice of changes to the customer policies at cash registers and on the website of the Debtors' claims and noticing agent's website at https://cases.stretto.com/EddieBauer.

Privacy and Data Protection

The Debtors have represented that they intend to neither sell nor lease personally identifiable information pursuant to the relief requested in the Motion, although the Agent will be authorized to distribute e-mails and promotional materials to the Debtors' customers consistent with the Debtors' existing policies on the use of consumer information.
The Debtors assert that the Sales are consistent with the Debtors' privacy policies, and, as such, are authorized to conduct the Sales on an interim basis without the appointment of a consumer privacy ombudsman. However, nothing contained in the Final Order shall prejudice parties in interest, including the U.S. Trustee and the Creditors Committee, from seeking the appointment of a consumer privacy ombudsman at a later date in connection with any proposed Sales.
Neither the Sale Guidelines, Agency Agreement, nor the Final Order authorize the Debtors to transfer or sell to the Agent or any other party the personal identifying information (which means information that alone or in conjunction with other information identifies an individual, including but not limited to an individual's first name (or initial) and last name, physical address, electronic address, telephone number, social security number, date of birth, government-issued identification number, account number and credit or debit card number) ("PII") of any customers unless such sale or transfer is permitted by the Debtors' privacy policy and state, provincial or federal privacy and/or identity theft prevention laws and rules. The foregoing shall not limit the Agent's use of the Debtors' customer lists and mailing lists in accordance with the Agency Agreement solely for purposes of advertising and promoting the Sales.
The Debtors shall remove or cause to be removed any confidential information and/or PII in any of the Debtors' hardware, software, computers or cash registers or similar equipment which are to be sold or abandoned so as to render the PII unreadable or undecipherable.
At the conclusion of the Sales, the Agent shall provide the Debtors with written verification that the Agent has not removed, copied, or transferred any customer PII and that any records containing PII were shredded, erased or otherwise modified to render the PII unreadable or undecipherable.
The Debtors are authorized and permitted to transfer to the Agent PII in the Debtors' custody and control solely for the purposes of assisting with and conducting the Sale and only to the extent necessary for such purposes, provided that the Debtors, with the assistance of the Agent, remove such PII from the FF&E prior to any abandonment of the same.

Tax and Regulatory Compliance

The Agent shall not be liable for sales taxes except as expressly provided in the Agency Agreement and the payment of any and all sales taxes is the responsibility of the Debtors. The Debtors are directed to remit all taxes arising from the Sales to the applicable Governmental Units as and when due, provided that in the case of a bona fide dispute the Debtors are only directed to pay such taxes upon the resolution of the dispute, if and to the extent that the dispute is decided in favor of the applicable Governmental Unit. For the avoidance of doubt, sales taxes collected and held in trust by the Debtors shall not be used to pay any creditor or any other party, other than the applicable Governmental Unit for which the sales taxes are collected. The Agent shall collect, remit to the Debtors, and account for sales taxes as and to the extent provided in the Agency Agreement. This Final Order does not enjoin, suspend, or restrain the assessment, levy, or collection of any tax under state law, and does not constitute a declaratory judgment with respect to any party's liability for taxes under state law.
During the Sale Term, the Debtors shall (a) be the employer of the Stores' employees, other than the Supervisors or any other representatives of Agent or the Supervisors; (b) pay all taxes, costs, expenses, accounts payable, and other liabilities relating to the Stores, the Stores' employees and other representatives of the Debtors; (c) prepare and process all tax forms and other documentation; (d) collect all sales taxes and pay them to the appropriate taxing authorities for the Stores; (e) use reasonable efforts to cause the Debtors' employees to cooperate with Agent and the Supervisors; (f) execute all agreements determined by the Debtors and Agent to be necessary or desirable for the operation of the Stores during the Sale; (g) arrange for the ordinary maintenance of all point-of-sale equipment required for the Stores; (h) apply for and obtain, with Agent's assistance and support, all applicable permits and authorizations (including landlord approvals and consents) for the Sale; and (i) ensure that Agent has quiet use and enjoyment of the Stores for the Sale Term in order to perform its obligations under the Agency Agreement.
Nothing in the Final Order, the Agency Agreement, the Sale Guidelines, or any Side Letter releases, nullifies, or enjoins the enforcement of any liability to a Governmental Unit under environmental laws or regulations (or any associated liabilities for penalties, damages, cost recovery, or injunctive relief) to which any entity would be subject as the owner, lessor, lessee, or operator of the property after the date of entry of the Final Order. Nothing contained in the Final Order, the Agency Agreement, the Sale Guidelines, or any Side Letter shall in any way diminish the obligation of any entity, including the Debtors, to comply with environmental laws consistent with their rights and obligations as debtors in possession under the Bankruptcy Code.
The Store Closings and the Sales shall not be exempt from laws of general applicability, including, without limitation, public health and safety, criminal, tax, (including, but not limited to, the collection of Sales Taxes), labor, employment, environmental, antitrust, fair competition, traffic and consumer protection laws, including consumer laws regulating deceptive practices and false advertising, consumer protections, express or implied warranties of goods, and "weights and measures" regulation and monitoring (collectively, "General Laws"). Nothing in the Final Order, the Agency Agreement, the Sale Guidelines, or any Side Letter shall alter or affect obligations to comply with all applicable federal safety laws and regulations.
Nothing in the Final Order shall be deemed to bar any Governmental Unit (as such term is defined in section 101(47) of the Bankruptcy Code) from enforcing General Laws in the applicable non-bankruptcy forum, subject to the Debtors' rights to assert in the applicable forum that any such laws are not in fact General Laws or that such enforcement is impermissible under the Bankruptcy Code or the Final Order. Notwithstanding any other provision in the Final Order, no party waives any rights to argue any position with respect to whether the conduct was in compliance with the Final Order and/or any applicable law, or that enforcement of such applicable law is preempted by the Bankruptcy Code or the Companies' Creditors Arrangement Act (the "CCAA"), as applicable. Nothing in the Final Order shall be deemed to have made any rulings on any such issues.
To the extent that the sale of Store Closure Assets is subject to any Liquidation Sale Laws, including any federal, state, provincial, or local statute, ordinance, rule, or licensing requirement directed at regulating "going out of business," "Store closing," or similar inventory liquidation sales, or bulk sale laws, laws restricting safe, professional and non-deceptive, customary advertising such as signs, banners, signage, and use of sign-walkers solely in connection with the sale of the Store Closing Assets, including ordinances establishing license or permit requirements, waiting periods, time limits, or bulk sale restrictions that would otherwise apply solely to the sale of the Store Closure Assets, the dispute resolution procedures set forth in the Final Order shall apply, and the Dispute Resolution Procedures shall control over any Side Letters (provided that, subject to recognition of the Final Order by the Canadian Court, these Dispute Resolution Procedures shall not apply with respect to the sale of the Store Closing Assets in Canadian Closing Stores, and that any such disputes shall be dealt with by the Canadian Court).
Provided that the Sales are conducted in accordance with the Final Order, any Final Order, and the Sale Guidelines, the Debtors, the Agent, and the Debtors' landlords shall be deemed to be in compliance with any requirements of all county, parish, or municipal or other local government and state Liquidation Sale Laws establishing licensing or permitting requirements, waiting periods or time limits, or bulk sale restrictions that would otherwise apply to the Sales and sales of the Store Closure Assets of any state or local Governmental Unit; provided, that the term "Liquidation Sale Laws" shall be deemed not to include any public health or safety laws of any state (collectively, the "Safety Laws"), and the Debtors and the Agent shall continue to be required to comply, as applicable, with such Safety Laws and laws of general applicability, including, without limitation, Safety Laws, criminal, tax (including, but not limited to the collection of Sales Taxes), labor, employment, environmental, antitrust, fair competition, traffic and consumer protection laws, including consumer laws regulating deceptive practices and false advertising, consumer protection, the sale of gift certificates, layaway programs, return of goods, express or implied warranties of goods, and "weights and measure" regulation and monitoring (collectively "General Laws"), subject to any applicable provision of the Bankruptcy Code and federal law, and nothing in the Final Order shall be deemed to bar Governmental Units or public officials from enforcing Safety Laws or General Laws.
Subject to the foregoing, every federal, state, or local agency, departmental, or Governmental Unit with regulatory authority over the Sales and all newspapers and other advertising media in which the Sales are advertised shall consider the Final Order as binding authority that no further approval, license, or permit of any Governmental Unit shall be required, nor shall the Debtors or the Agent be required to post any bond, to conduct the Sales.
Provided that the Sales are conducted in accordance with the terms of the Final Order, the Agency Agreement, and the Sale Guidelines (as may be modified by Side Letters) and in light of the provisions in the laws that exempt court-ordered sales from their provisions, the Debtors and Agent shall be presumed to be in compliance with any Liquidation Sale Laws and are authorized to conduct the Sales in accordance with the terms of the Final Order and the Sale Guidelines (as may be modified by Side Letters) without the necessity of further showing compliance with any such Liquidation Sale Laws, subject to the dispute resolution provisions set forth in the Final Order.
To the extent the Debtors are subject to any state Fast Pay Laws in connection with the Store Closings, the Debtors shall be presumed to be in compliance with such laws to the extent, in applicable states, such payroll payments are made by the Debtors' next regularly scheduled payroll and consistent with, and subject to, any previous orders of the Court regarding payment of the same.
Nothing in the Final Order shall amend, alter, or otherwise modify the terms of the Final Cash Collateral Order as it relates to any tax reserve established as adequate protection for the claims of the City of Allen, Allen Independent School District, Bexar County, Cypress-Fairbanks Independent School District, Hidalgo County, San Marcos CISD, Tarrant County, City of Mercedes, Mercedes Independent School District, Williamson County and Hays County (collectively, the "Texas Tax Authorities").
The Sales shall be conducted in accordance with applicable federal, provincial and municipal laws and regulations, unless otherwise set out in the Canadian Sale Guidelines or otherwise ordered by the Canadian Court in the CCAA Proceedings.

Dispute Resolution Procedures

The Dispute Resolution Procedures are fair and reasonable and comply with applicable law.
Within five business days after entry of the Final Order, the Debtors will serve by first-class mail, copies of the Final Order, the Agency Agreement, and the U.S. Sale Guidelines on the following: (a) the Attorney General's office for each state where the Sales are being held; (b) the county consumer protection agency or similar agency for each county where the Sales are being held; (c) the division of consumer protection for each state where the Sales are being held; and (d) the landlords for the Closing Stores (other than Canadian Closing Stores) as of the date of service (collectively, the "Dispute Notice Parties").
To the extent that there is a dispute arising from or relating to the Sales, the Final Order, the Agency Agreement, or the U.S. Sale Guidelines, which dispute relates to any Liquidation Sale Laws (a "Reserved Dispute"), the Court shall retain exclusive jurisdiction to resolve the Reserved Dispute. Any time within ten (10) days following entry of the Final Order, any Governmental Unit may assert that a Reserved Dispute exists by sending a notice (the "Dispute Notice") explaining the nature of the dispute to designated counsel for the Debtors, the Agent, the U.S. Trustee, and affected landlords.
If the Debtors and the Governmental Unit are unable to resolve the Reserved Dispute within fifteen days after service of the notice, the Governmental Unit may file a motion with the Court requesting that the Court resolve the Reserved Dispute (a "Dispute Resolution Motion").
In the event that a Dispute Resolution Motion is filed, nothing in the Interim Order or the Final Order, as applicable, shall preclude the Debtors, a landlord, or any other interested party from asserting (a) that the provisions of any Liquidation Sale Laws are preempted by the Bankruptcy Code, or (b) that neither the terms of the Interim Order or the Final Order nor the conduct of the Debtors pursuant to the Interim Order or the Final Order violates such Liquidation Sale Laws. Filing a Dispute Resolution Motion as set forth herein shall not be deemed to affect the finality of the Interim Order or the Final Order, or to limit or interfere with the Debtors' or the Agent's ability to conduct, or to continue to conduct, the Sales pursuant to the Interim Order or the Final Order, as applicable, absent further order of the Court. Upon the entry of the Interim or the Final Order, the Debtors and the Agent shall be authorized to conduct the Sales pursuant to the terms of the Interim Order or the Final Order, the Agency Agreement, and the U.S. Sale Guidelines (as may be modified by any Side Letters) and to take all actions reasonably related thereto or arising in connection therewith.
Any Governmental Unit will be entitled to assert any jurisdictional, procedural, or substantive arguments it wishes with respect to the requirements of its Liquidation Sale Laws or the lack of any preemption of such Liquidation Sale Laws by the Bankruptcy Code. Nothing in the Interim Order or the Final Order will constitute a ruling with respect to any issues to be raised in any Dispute Resolution Motion.
If, at any time, a dispute arises among the Debtors and/or the Agent, on the one hand, and a Governmental Unit, on the other hand, as to whether a particular law is a Liquidation Sale Law, and subject to any provisions contained in the Interim Order or the Final Order related to the Liquidation Sale Laws, then any party to that dispute may utilize the dispute resolution provisions by serving a notice to the other party and proceeding thereunder in accordance with those paragraphs. Any determination with respect to whether a particular law is a Liquidation Sale Law shall be made de novo.
If and to the extent that the landlord of any U.S. Closing Store affected by the Final Order contends that the Debtors or Agent is in breach of or default under the U.S. Sale Guidelines, such landlord shall e-mail or deliver written notice by overnight delivery on the Debtors and Agent.
The Agent shall designate a party to be contacted by the Landlords should a dispute arise concerning the conduct of the Sales. The initial contact persons for the Agent shall be T. Kellan Grant and Robert Raskin.
If the parties are unable to resolve the dispute between themselves, the applicable Landlord or the Debtors shall have the right to schedule a "status hearing" before the Canadian Court on no less than two days' written notice to the other party or parties and the Information Officer, if any, during which time the Agent shall cease all activity in dispute other than activity expressly permitted in the Canadian Sale Guidelines, pending determination of the matter by the Canadian Court; provided, however, subject to the Canadian Sale Guidelines, if a banner has been hung in accordance with the Canadian Sale Guidelines and is the subject of a dispute, the Agent shall not be required to take any such banner down pending determination of any dispute.

Insurance Requirements

Merchant Insurance Obligations: The Debtors shall maintain throughout the Sale Term, liability insurance policies (including, without limitation, products liability (to the extent currently provided), comprehensive public liability insurance and auto liability insurance) covering injuries to persons and property in or in connection with the Stores, and shall, to the extent reasonably practicable, cause Agent to be named an additional insured with respect to all such policies. At Agent's request, the Debtors shall provide Agent with a certificate or certificates evidencing the insurance coverage required hereunder and, to the extent reasonably practicable, that Agent is named as an additional insured thereunder. In addition, the Debtors shall maintain throughout the Sale Term, in such amounts as it currently has in effect, workers compensation insurance in compliance with all statutory requirements.
Agent Insurance Obligations: As an expense of the Sale, Agent shall maintain throughout the Sale Term, liability insurance policies (including, without limitation, products liability/completed operations, contractual liability, comprehensive public liability and auto liability insurance) on an occurrence basis in an amount of at least Two Million dollars ($2,000,000) and an aggregate basis of at least five million dollars ($5,000,000) covering injuries to persons and property in or in connection with Agent's provision of services at the Stores. Agent, to the extent reasonably practicable, shall name the Debtors as an additional insured and loss payee under such policy, and upon execution of the Agency Agreement provide the Debtors with a certificate or certificates evidencing the insurance coverage required thereunder. In addition, Agent shall maintain throughout the Sale Term, workers compensation insurance in compliance with all statutory requirements. Further, should Agent employ or engage third parties to perform any of Agent's undertakings with regard to the Agency Agreement, Agent will ensure that such third parties are covered by Agent's insurance or maintain all of the same insurance as Agent is required to maintain pursuant to this paragraph and name the Debtors as an additional insured and loss payee under the policy for each such insurance.

Indemnification

Merchant's Indemnification: The Debtors shall indemnify, defend, and hold Agent and its consultants, members, managers, partners, officers, directors, employees, attorneys, advisors, representatives, lenders, potential co-investors, principals, affiliates, and Supervisors (collectively, "Agent Indemnified Parties") harmless from and against all liabilities, claims, demands, damages, costs and expenses (including reasonable attorneys' fees) arising from or related to: (a) the willful or negligent acts or omissions of the Debtors or the Merchant Indemnified Parties; (b) the material breach of any provision of the Agency Agreement by the Debtors; (c) any product liability claims, claims asserted by customers, or claims asserted by any Store employees (under a collective bargaining agreement or otherwise) against Agent or an Agent Indemnified Party, except claims arising from Agent's negligence, willful misconduct or unlawful behavior; (d) any harassment, discrimination or violation of any laws or regulations or any other unlawful, tortious or otherwise actionable treatment of Agent's Indemnified Parties or the Debtors' customers by the Debtors or Merchant's Indemnified Parties; and (e) the Debtors' failure to pay over to the appropriate taxing authority any taxes required to be paid by the Debtors during the Sale Term in accordance with applicable law.
Agent's Indemnification: Agent shall indemnify, defend and hold the Debtors and its consultants, members, managers, partners, officers, directors, employees, attorneys, advisors, representatives, lenders, potential co-investors, principals, and affiliates (other than the Agent or the Agent Indemnified Parties) (collectively, "Merchant Indemnified Parties") harmless from and against all liabilities, claims, demands, damages, costs and expenses (including reasonable attorneys' fees) arising from or related to (a) the willful, negligent, or unlawful acts or omissions of Agent or the Agent Indemnified Parties; (b) the breach of any provision of, or the failure to perform any obligation under, the Agency Agreement by Agent or the Agent Indemnified Parties; (c) any liability or other claims made by Agent's Indemnified Parties or any other person (excluding Merchant Indemnified Parties) against a Merchant Indemnified Party arising out of or related to Agent's conduct of the Sale, except claims arising from the Debtors' negligence, willful misconduct, or unlawful behavior; (d) any harassment, discrimination or violation of any laws or regulations or any other unlawful, tortious or otherwise actionable treatment of Merchant Indemnified Parties, or the Debtors' customers by Agent or any of the Agent Indemnified Parties and (e) any claims made by any party engaged by Agent as an employee, agent, representative or independent contractor arising out of such engagement, including, without limitation, the Supervisors.
Notwithstanding anything to the contrary in the Agency Agreement, the Debtors and their estates shall not indemnify the Agent for any damages arising out of the Agent's unlawful behavior, willful misconduct, or gross negligence.

Representations and Warranties

Merchant Representations: The Debtors warrant, represent, covenant and agree that (a) the Debtors are companies duly organized, validly existing and in good standing under the laws of their state of organization, with full power and authority to execute and deliver the Agency Agreement and to perform its obligations thereunder, and maintain their principal executive office at the address set forth therein, (b) the execution, delivery and performance of the Agency Agreement has been duly authorized by all necessary actions of the Debtors and the Agency Agreement constitutes a valid and binding obligation of the Debtors enforceable against the Debtors in accordance with its terms and conditions, and the consent of no other entity or person is required for the Debtors to fully perform all of its obligations therein, (c) all ticketing of Merchandise at the Stores has been and will be done in accordance with the Debtors' customary ticketing practices; (d) all normal course hard markdowns on the Merchandise have been, and will be, taken consistent with the Debtors' customary practices, and (e) the Stores will be operated in the ordinary course of business in all respects, other than as expressly agreed to by the Debtors and Agent.
Agent Representations: Agent warrants, represents, covenants and agrees that (a) Agent is a company duly organized, validly existing and in good standing under the laws of its state of organization, with full power and authority to execute and deliver the Agency Agreement and to perform the Agent's obligations thereunder, and maintains its principal executive office at the addresses set forth therein, (b) the execution, delivery and performance of the Agency Agreement has been duly authorized by all necessary actions of Agent and the Agency Agreement constitutes a valid and binding obligation of Agent enforceable against Agent in accordance with its terms and conditions, and the consent of no other entity or person is required for Agent to fully perform all of its obligations therein, (c) Agent shall comply with and act in accordance with any and all applicable federal, state, and local laws, rules, and regulations, and other legal obligations of all governmental authorities, (d) no non-emergency repairs or maintenance in the Stores will be conducted without the Debtors' prior written consent, and (e) Agent will not take any disciplinary action against any employee of the Debtors.

Agent Services

During the Sale Term, Agent shall, in accordance with the Expense Budget approved by the Debtors, (a) provide qualified supervisors (the "Supervisors") engaged by Agent to oversee the management of the Stores and the Sale; (b) recommend appropriate point-of-sale and external advertising for the Stores, approved in advance by the Debtors; (c) recommend appropriate discounts of Merchandise, staffing levels for the Stores, approved in advance by the Debtors, and appropriate bonus and incentive programs, if any, for the Stores' employees, approved in advance by the Debtors; (d) make recommendations to the Debtors in connection with appropriate allocation and replenishment of Merchandise, if applicable; (e) make recommendations to the Debtors concerning the display of Merchandise for the Stores; (f) assist the Debtors in connection with planning, execution, and evaluation of marketing, customer retention, and brand enhancement programs; (g) to the extent that information is available, evaluate sales and recovery performance of Merchandise by category and sales reporting and monitor expenses in accordance with an agreed upon forecast; (h) maintain the confidentiality of all proprietary or non-public information regarding the Debtors in accordance with the provisions of the confidentiality agreement signed by the Parties; (i) assist the Debtors in connection with managing and controlling loss prevention and employee relations matters; (j) advise regarding the necessity for obtaining any applicable permits and governmental approvals to conduct the Sale, including working with the Debtors to obtain each in a timely and orderly fashion and preparing or causing to be prepared all forms necessary to assist in the Debtors' securing any applicable permits and governmental approvals necessary to conduct the Sale, the costs and expenses of which shall be paid by the Debtors and shall be in addition to the costs and expenses set forth on the Expense Budget; and (k) provide such other related services deemed necessary or appropriate as may be mutually agreed by the Debtors and Agent.
The Debtors shall provide throughout the Sale Term central administrative services necessary for the Sale, including (without limitation) customary POS administration, sales audit, cash reconciliation, accounting, and payroll processing, all at no cost to Agent.
To the extent the Agent seeks to contract with Additional Consultants, the Agent is authorized to enter into an agreement with Additional Consultants absent further Court approval; provided that, (a) Agent provides notice thereof to the Court and (b) such additional agreement does not require any additional obligations from the Debtors to such Additional Consultants.
To the extent the Agent seeks to contract with other parties as additional consultants (each an "Additional Consultant"), such Additional Consultant shall promptly file a declaration disclosing the information set forth in the Final Order and, upon being contracted with, be subject to the provisions of the Final Order.

Court Orders and Jurisdiction

The Debtors have advanced sound business reasons for assuming the Agency Agreement and adopting the Sale Guidelines, as set forth in the Motion and at the Hearing, and assuming the Agency Agreement is a reasonable exercise of the Debtors' business judgment and in the best interest of the Debtors and their estates.
The assumption of the Agency Agreement is a sound exercise of the Debtors' business judgment.
The Store Closings and Sales are in the best interest of the Debtors' estates.
The entry of the Final Order is in the best interests of the Debtors and their estates, creditors, and interest holders and all other parties in interest therein.
The Motion is GRANTED on a final basis as set forth in the Final Order. Any objections to the entry of the Final Order, to the extent not withdrawn or settled, are overruled.
The Debtors are authorized and empowered to take any and all further actions as may be reasonably necessary or appropriate to give effect to the Final Order.
Subject to the restrictions set forth in the Final Order, the Sale Guidelines, and any Side Letters, the Debtors and the Agent are hereby authorized to take all actions as may be necessary or desirable to implement the Agency Agreement and the Sales, and each of the transactions contemplated by the Agency Agreement, and any actions taken by the Debtors and the Agent necessary or desirable to implement the Agency Agreement and/or the Sales prior to the date of the Final Order, are hereby approved and ratified.
The Agency Agreement and related documents may be modified, amended or supplemented by the parties thereto in accordance with the terms thereof without further order of the Court, so long as any such modifications, amendments, or supplements are not materially adverse to the Debtors or their estates; provided that (a) the Debtors shall provide five calendar days' advance notice of any contemplated material modification(s) (which may be via email) to the U.S. Trustee, counsel to the Official Committee of Unsecured Creditors (the "Creditors' Committee"), and counsel to any party that has requested such notice. If a Party timely objects to a proposed material modification and cannot be consensually resolved, the Agency Agreement shall not proceed with such modification absent a further order of the Court approving such modification.
The Debtors are hereby authorized to enter into additional agreements in connection with any Closing Stores or Sales related thereto on terms materially consistent with the Debtors' historic practices.
The failure to include any provisions of the Agency Agreement in the Final Order shall not diminish or impair the effectiveness of such provisions, it being the intent of the Court that such provisions of the Agency Agreement be, and hereby are, authorized and approved.
All newspapers and other digital and traditional advertising media in which the Sales and Store Closings may be advertised. All landlords and all governmental units are directed to accept the Final Order as binding authority so as to authorize the Debtors and the Agent to conduct the Sales and Store Closings pursuant to the Agency Agreement, including, without limitation, to conduct and advertise the sale of the Merchandise and FF&E in the manner contemplated by and in accordance with the Final Order, the Sale Guidelines, and the Agency Agreement, notwithstanding any restrictions in any applicable leases or applicable laws.
Any amounts contemplated to be paid, and actually paid, by the Final Order, shall be subject to, and paid in accordance with, the Interim Order (I) Authorizing Postpetition Use of Cash Collateral, (II) Granting Adequate Protection to the Secured Parties, (III) Modifying the Automatic Stay, (IV) Scheduling a Final Hearing, and (V) Granting Related Relief (the "Interim Cash Collateral Order"), Final Order (I) Authorizing Postpetition Use of Cash Collateral, (II) Granting Adequate Protection to the Secured Parties, (III) Modifying the Automatic Stay, and (IV) Granting Related Relief (the "Final Cash Collateral Order," and together with the Interim Cash Collateral Order, the "Cash Collateral Order"), and Approved Budget (as defined in the Cash Collateral Order).
Notwithstanding anything set forth to the contrary in the Motion, the Interim Order, the Final Order, or the Agency Agreement, nothing therein shall be deemed to effect an involuntary substitution of the bonded principal under any existing surety bond, and, unless agreed to by, as applicable, Trisura Guarantee Insurance Company ("Trisura"), Liberty Mutual Insurance Company ("Liberty Mutual"), or Zurich American Insurance Company or any of their respective affiliates or subsidiaries (collectively, "Zurich," and together with Trisura and Liberty Mutual, the "Sureties"), such bonded principal shall remain the named principal and obligor under such bonds.
Notwithstanding anything set forth to the contrary in the Motion, the Interim Order, the Final Order, or the Agency Agreement, nothing therein shall be deemed to be or authorize the sale, transfer, assumption, or assumption and assignment of any existing surety bond, or any existing indemnity agreement, or any documents or rights related to any existing surety bond or existing indemnity agreement.
Notwithstanding anything to the contrary in the Final Order, nothing contained in the Motion or any actions taken pursuant to the Interim Order or the Final Order granting the relief requested by the Motion is intended as or should be construed or deemed to be: (a) an implication or admission as to the amount of, basis for, priority of, or validity of any particular claim against a Debtor entity under the Bankruptcy Code or other applicable nonbankruptcy law; (b) a waiver of the Debtors' rights to dispute any claim on any grounds; (c) a promise or requirement to pay any particular claim; (d) an implication or admission that any particular claim is of a type specified or defined in the Motion or any order granting the relief requested by the Motion or a finding that any particular claim is an administrative expense claim or other priority claim; (e) a request or authorization to assume, adopt, or reject any agreement, contract, or lease (with the exception of the Agency Agreement) pursuant to section 365 of the Bankruptcy Code or otherwise affecting the Debtors' rights under section 365 of the Bankruptcy Code; (f) an admission by the Debtors as to the validity, priority, enforceability, or perfection of any lien on, security interest in, or other encumbrance on property of the Debtors' estates; (g) a waiver or limitation of the Debtors' rights under the Bankruptcy Code or any other applicable law; or (h) a waiver of the obligation of any party in interest to file a proof of claim. Nothing contained in the Final Order shall be deemed to increase, reclassify, elevate to an administrative expense status, or otherwise affect any claim on account of such claim not being paid.
On a confidential basis and for "professional's eyes only" and upon the written (including email) request of the U.S. Trustee (which request has been made), the Prepetition Lenders, the Creditors' Committee or the Canadian Court-appointed information officer (if any), the Debtors shall provide such requesting party copies of periodic reports on a monthly basis concerning the Sales and Store Closings that are prepared by the Debtors or their professionals, or the Agent; provided, however, that the foregoing shall not require the Debtors, their professionals, or the Agent to prepare or undertake to prepare any additional or new reporting not otherwise being prepared by the Debtors, their professionals, or the Agent in connection with Sales and Store Closings.
The Debtors are authorized, but not directed, to issue postpetition checks, or to effect postpetition fund transfer requests, in replacement of any checks or fund transfer requests that are dishonored as a consequence of these chapter 11 cases with respect to prepetition amounts owed in connection with the relief granted in the Final Order. The banks and financial institutions on which checks were drawn or electronic payment requests made in payment of the prepetition obligations approved in the Final Order are authorized to receive, process, honor, and pay all such checks and electronic payment requests when presented for payment, and all such banks and financial institutions are authorized to rely on the Debtors' designation of any particular check or electronic payment request as approved by the Final Order.
Nothing in the Final Order directs the Debtors to accelerate any payments not otherwise due.
Notwithstanding Bankruptcy Rule 2002(a)(2), to the extent applicable, the Debtors may limit service of the Motion only to the core service list and affected creditors. Notice of the Motion as provided therein shall be deemed good and sufficient notice of such Motion, and the requirements of the Bankruptcy Rules and the Bankruptcy Local Rules are satisfied by such notice.
Notwithstanding Bankruptcy Rule 6004(h), to the extent applicable, the terms and conditions of the Final Order are immediately effective and enforceable upon its entry.
The Debtors are authorized to take all actions necessary to effectuate the relief granted pursuant to the Final Order in accordance with the Motion.
The Court retains jurisdiction with respect to all matters arising from or related to the implementation, interpretation, and enforcement of the Final Order or the Agency Agreement, including, but not limited to: (a) any claim or issue relating to any efforts by any party or person to prohibit, restrict or in any way limit banner and sign-walker advertising, including with respect to any allegations that such advertising is not being conducted in a safe, professional, and non-deceptive manner; (b) any claim of the Debtors, the landlords and/or the Agent for protection from interference with the Store Closings or Sales; (c) any other disputes related to the Store Closings or Sales; and (d) protecting the Debtors and/or the Agent against any assertions of any liens, claims, encumbrances, and other interests; provided that, notwithstanding the foregoing and subject to the recognition of the Final Order by the Canadian Court in the Canadian Proceedings, the Canadian Court shall retain jurisdiction with regard to all issues or disputes in respect of the Sale at the Canadian Closing Stores. No such parties or person shall take any action against the Debtors, the Agent, the landlords, the Store Closings, or the Sales until the Court or the Canadian Court, as applicable, has resolved such dispute. The Court shall hear the request of such parties or persons with respect to any such disputes on an expedited basis, as may be appropriate under the circumstances.
If the Debtors commence a case under Chapter 11 of title 11, United States Code (the "Bankruptcy Code"), with a bankruptcy court (the "Bankruptcy Court"), the Debtors shall promptly file a motion to assume sections of the Agency Agreement under section 365 and/or 363 of the Bankruptcy Code, and utilize its reasonable best efforts to ensure that such motion is approved by an order that approves, among other things, as follows (the "Approval Order"): (i) the payment of all fees including the Merchandise Fee, the Removal Fee, any Wholesale Fee, any Additional Incentive Compensation, the FF&E Fee and reimbursement of Expenses, the payment of the Sale Advance (collectively, the "Fees and Expenses") under the Agency Agreement is approved without further order of the court; (ii) all such payments and reimbursement of Fees and Expenses shall be (x) made on a weekly basis without further order of the Bankruptcy Court and otherwise in accordance with the Agency Agreement and (y) made out of proceeds as collected; (iii) authorizing Agent to terminate the Consulting Agreement without liability in the event that payments to Agent with respect to undisputed Fees and Expenses are not timely made, (iv) the conduct of the Sale without the necessity of complying with state and local rules, laws, ordinances and regulations, including, without limitation, permitting and licensing requirements, that could otherwise govern the Sale; (v) the conduct of the Sale notwithstanding restrictions in leases, reciprocal easement agreements or other contracts that purport to restrict the Sale or the necessity of obtaining any third party consents; (vi) the Sale through the conduct of "Store Closing" or similar themed sales, in addition to the Sale themes set forth in the Agreement; (vii) the sale of Additional Agent Goods in accordance with the terms and conditions thereof; and (viii) the Debtors in taking all further actions as are necessary or appropriate to carry out the terms and conditions of the Agency Agreement. The Bankruptcy Court shall have exclusive jurisdiction to resolve any issues arising under the Agency Agreement. In such event, any legal action, suit or proceeding arising in connection with the Agency Agreement shall be submitted to the exclusive jurisdiction of the Bankruptcy Court having jurisdiction over the Debtors, and each Party waives any defenses or objections based on lack of jurisdiction, improper venue, and/or forum non conveniens. From and after entry of the Approval Order, Agent shall conduct the Sale in accordance with the terms of the Approval Order in all material respects. If any objections are received prior to entry of the Approval Order, Agent will use commercially reasonable efforts to assist the Debtors in negotiating a consensual resolution of such objection with the objecting party.
Not later than seven days prior to the objection deadline related to entry of an order approving the Motion on a final basis, the Agent shall file a declaration disclosing connections to the Debtors, their creditors, and other parties in interest in these chapter 11 cases, and the Debtors shall serve the same on the U.S. Trustee, counsel to the Creditors' Committee, and all parties who have filed requests for service under Bankruptcy Rule 2002, by e-mail, or if the e-mail address is not available to the Debtors, then by first class mail.

Termination Provisions

The following shall constitute "Termination Events" under the Agency Agreement: (a) the Debtors' or Agent's failure to perform any of their respective material obligations thereunder, which failure shall continue uncured seven (7) days after receipt of written notice thereof to the defaulting Party; (b) breach by the Debtors or Agent; (c) the Sale is terminated or materially interrupted or impaired for any reason other than in the event of default by Agent or the Debtors.
If a Termination Event occurs, the non-defaulting Party (in the case of an event of default) or either Party (if the Sale is otherwise terminated or materially interrupted or impaired) may, in its discretion, either: (a) terminate the Agency Agreement by providing written notice, (b) notwithstanding the termination of the Agreement, pursue any and all rights and remedies and damages resulting from such default.
If the Agency Agreement is terminated, the Debtors shall be obligated to pay Agent all undisputed amounts due and owing by the Debtors to Agent under the Agency Agreement through and including the termination date.

Miscellaneous Provisions

Neither the Agency Agreement nor any of the rights thereunder may be transferred or assigned by either Party without the prior written consent of the other Party. No modification, amendment or waiver of any of the provisions contained in the Agency Agreement, or any future representation, promise or condition in connection with the subject matter of the Agency Agreement, shall be binding upon any Party to the Agency Agreement unless made in writing and signed by a duly authorized representative or agent of such Party. Notwithstanding the foregoing, Agent shall have the right to syndicate the transaction contemplated by the Agency Agreement by providing the Debtors with written notice of such syndication. The Agency Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, legal representatives, successors and permitted assigns.
If any term or provision of the Agency Agreement, as applied to either Party or any circumstance, for any reason shall be declared by a court of competent jurisdiction to be invalid, illegal, unenforceable, inoperative or otherwise ineffective, that provision shall be limited or eliminated to the minimum extent necessary so that the Agency Agreement shall otherwise remain in full force and effect and enforceable. If the surviving portions of the Agreement fail to retain the essential understanding of the Parties, the Agreement may be terminated by mutual consent of the Parties.
The Agency Agreement, and its validity, construction and effect, shall be governed by and enforced in accordance with the internal laws of the State of Delaware (without reference to the conflicts of laws provisions therein). The Debtors and Agent waive their respective rights to trial by jury of any cause of action, claim, counterclaim or cross-complaint in any action, proceeding and/or hearing brought by either Agent against the Debtors or the Debtors against Agent on any matter whatsoever arising out of, or in any way connected with, the Agency Agreement, the relationship between the Debtors and Agent, any claim of injury or damage or the enforcement of any remedy under any law, statute or regulation, emergency or otherwise, now or hereafter in effect.
The Agency Agreement, together with all additional schedules and exhibits attached thereto, constitutes a single, integrated written contract expressing the entire agreement of the Parties concerning the subject matter thereof. No covenants, agreements, representations or warranties of any kind whatsoever have been made by any Party except as specifically set forth in the Agency Agreement. All prior agreements, discussions and negotiations are entirely superseded by the Agency Agreement.
The Agency Agreement may be executed simultaneously in counterparts (including by means of electronic mail, facsimile or portable document format (pdf) signature pages), any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same instrument. The Agency Agreement, and any amendments thereto, to the extent signed and delivered by means of electronic mail, a facsimile machine or electronic transmission in portable document format (pdf), shall be treated in all manner and respects as an original thereof and shall be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person.
All notices, certificates, approvals, and payments provided for in the Agency Agreement shall be sent by email or by recognized overnight delivery service as set forth in the Agency Agreement, or to such other address as may be designated in writing by the Debtors or Agent.
The Debtors shall have no control over the hours that Agent or its employees or assistants or the Supervisors work or the means or manner in which the services that will be provided are performed and Agent is not authorized to enter into any contracts or agreements on behalf of the Debtors or to otherwise create any obligations of the Debtors to third parties, unless authorized in writing to do so by the Debtors.
The Canadian Sale Guidelines may be amended on a Store-by-Store basis by written agreement between the Agent, the Debtors and the applicable Landlord, in consultation with the Information Officer, if any; provided, however, that such amended Canadian Sale Guidelines shall not affect or bind any other Landlord not privy thereto without further Order of the Bankruptcy Court or Canadian Court approving such amended Canadian Sale Guidelines.