Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 1 of 24 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: BROOKSTONE HOLDINGS CORP., et al., 1 Debtors. Chapter 11 Case No. 18-11780 (BLS) (Jointly Administered) Ref. Docket No. 507 NOTICE OF TRANSFER OF CERTAIN JV EQUITY INTERESTS PLEASE TAKE NOTICE OF THE FOLLOWING: On August 2, 2018, the above-captioned debtors and debtors in possession (collectively, the Debtors ) each filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code, 11 U.S.C. 101 et seq. (the Bankruptcy Code ) in the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court ). On October 5, 2018, the Bankruptcy Court entered that certain Order (I) Authorizing the Sale of Certain Assets of the Debtors Free and Clear of All Liens, Claims, Liabilities, Rights, Encumbrances and Other Interests, (II) Authorizing the Assumption and Assignment of Certain Executory Contracts in Connection Therewith, and (III) Granting Related Relief [Docket No. 507] (the Sale Order ), thereby approving the sale (the Sale ) of certain of the Debtors assets and the assumption and assignment of certain unexpired leases and assignment of certain equity interests held by the Debtors to Apex Digital, Inc. (the Apex ), pursuant to that certain Asset Purchase Agreement by and among Apex and the Debtors (the Purchase Agreement ). 2 The Sale closed on October 19, 2018. Pursuant to paragraph 35 of the Sale Order and section 2.04(c) of the Purchase Agreement, during the Transition Period, if the Debtors determine that landlord or Governmental Authority consent is required in order to assign a Non-JV Airport Lease or transfer a JV Equity Interest to Apex (and if such consent had not been obtained), the Debtors shall file and serve on the applicable landlord or Governmental Authority a notice describing any such proposed assumption and assignment of Non-JV Airport Leases or transfer of JV Equity Interests (an Assignment/Transfer Notice ), together with any applicable Assignment of Lease or Assignment of Interests and proposed order implementing the same. The Debtors hereby file this Assignment/Transfer Notice related to the Assignment of Interests to Apex of the JV Equity Interests identified on Exhibit 1 hereto. A proposed order implementing the transfer of such JV Equity Interests to Apex is attached hereto as Exhibit 2, with an Assignment of Interests attached as Exhibit A thereto. Pursuant to paragraph 36 of the Sale Order and section 2.04(d) of the Purchase Agreement, objections, if any, must (i) be in writing; (ii) state the name and address of the objecting party and the nature of the claim or interest of such party; (iii) state with particularity the basis and nature of any objection; and (iv) be filed with the 1 The Debtors, along with the last four digits of each Debtor s tax identification number, are: Brookstone Holdings Corp. (4638), Brookstone, Inc. (2895), Brookstone Company, Inc. (3478), Brookstone Retail Puerto Rico, Inc. (5552), Brookstone International Holdings, Inc. (8382), Brookstone Purchasing, Inc. (2514), Brookstone Stores, Inc. (2513), Big Blue Audio LLC (N/A), Brookstone Holdings, Inc. (2515); and, Brookstone Properties, Inc. (2517). The Debtors corporate headquarters and the mailing address for each Debtor is One Innovation Way, Merrimack, NH 03054. 2 Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Sale Order or Purchase Agreement.
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 2 of 24 Bankruptcy Court and served on the following parties so as to be actually received on or before February 19, 2019: (a) counsel to the Debtors, Gibson, Dunn & Crutcher LLP, 200 Park Avenue, New York, New York 10166, Attn: Matthew K. Kelsey, Esq. and Keith R. Martorana, Esq., and Young Conaway Stargatt & Taylor LLP, Rodney Square, 1000 North King Street, Wilmington, Delaware 1980, Attn: Sean M. Beach, Esq. and Andrew L. Magaziner, Esq.; (b) Linda Casey, Esq., Office of the United States Trustee, 844 N. King Street, Room 2207, Lockbox 35, Wilmington, DE 19801; and (c) counsel to Apex, Levene, Neale, Bender, Yoo & Brill L.L.P., 10250 Constellation Boulevard, Suite 1700, Los Angeles, CA 90067, Attn: Juliet Y. Oh, Esq. Dated: February 11, 2019 Wilmington, DE /s/ Andrew L. Magaziner YOUNG CONAWAY STARGATT & TAYLOR, LLP Michael R. Nestor (No. 3526) Sean M. Beach (No. 4070) Andrew L. Magaziner (No. 5426) Rodney Square 1000 North King Street Wilmington, Delaware 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 Email: mnestor@ycst.com sbeach@ycst.com amagaziner@ycst.com -and- GIBSON, DUNN & CRUTCHER LLP Matthew J. Williams Matthew K. Kelsey Keith R. Martorana Jason Zachary Goldstein 200 Park Avenue New York, New York 10166 Tel: (212) 351-4000 Fax: (212) 351-4035 Email: mjwilliams@gibsondunn.com mkelsey@gibsondunn.com kmartorana@gibsondunn.com jgoldstein@gibsondunn.com Counsel to the Debtors and Debtors in Possession 2
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 3 of 24 EXHIBIT 1 JV Equity Interests Counterparty JV Party Debtors Interest in JV Party Debtor Lease Location Areas Brookstone Atlanta JV LLC 99% Atlanta Int l Airport Terminal B 433 Areas Brookstone Atlanta JV LLC 99% Atlanta Int l Airport Terminal C 441 City and County of Denver Brookstone DEN T-B, LLC 75% Denver International Airport (including storage lease) City of San Antonio Brookstone Stores SAT, LLC 78% San Antonio Airport Terminal 1 428 Dallas/Fort Worth International Airport Board Hudson Dufry / NCM Brookstone Dallas Forth Worth, LLC National Concessions Management/ Brookstone Stores Georgia, LLC 65% Dallas/Fort Worth Int l Airport Terminal A Store 432 427 49% Atlanta Int l Airport Terminal T 435 Marketplace Brookstone IAD T-B, LLC 75% Washington Dulles Int l Airport Concourse C (including storage lease) OTG Management / United Brookstone IAH T-E, LLC 65% Houston/George Bush Int l Airport Term E OTG Management / United San Francisco Airport Commission Wayne County Airport Authority Brookstone Houston T-B, LLC 65% Houston/George Bush Int'l Airport Term B (including storage lease) Brookstone SFO T-2, LLC 70% San Francisco Terminal 2 418 Brookstone Stores DTW, LLC 464 453 466 74% Detroit McNamara Terminal 457
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 4 of 24 EXHIBIT 2 Proposed Order
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 5 of 24 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: BROOKSTONE HOLDINGS CORP., et al., 1 Debtors. Chapter 11 Case No. 18-11780 (BLS) Jointly Administered Ref Docket No. 507 ORDER APPROVING ASSIGNMENT OF INTERESTS AND GRANTING RELATED RELIEF Upon service of the Notice of Transfer of Certain JV Equity Interests (the Notice ) and in connection with that certain Order (I) Authorizing the Sale of Certain Assets of the Debtors Free and Clear of All Liens, Claims, Liabilities, Rights, Encumbrances and Other Interests, (II) Authorizing the Assumption and Assignment of Certain Executory Contracts in Connection Therewith, and (III) Granting Related Relief [Docket No. 507] (the Sale Order ); and upon consideration of all pleadings related thereto; and notice having been given in accordance with the Sale Order; and it appearing that no other or further notice is required; and it appearing that this Court has jurisdiction to consider the matter pursuant to 28 U.S.C. 157 and 1334 and the Amended Standing Order of Reference dated February 29, 2012, from the United States District Court for the District of Delaware; and it appearing that this is a core proceeding pursuant to 28 U.S.C. 157(b)(2); and it appearing that venue of this proceeding is proper pursuant to 28 1 The Debtors, along with the last four digits of each Debtor s tax identification number, are: Brookstone Holdings Corp. (4638), Brookstone, Inc. (2895), Brookstone Company, Inc. (3478), Brookstone Retail Puerto Rico, Inc. (5552), Brookstone International Holdings, Inc. (8382), Brookstone Purchasing, Inc. (2514), Brookstone Stores, Inc. (2513), Big Blue Audio LLC (N/A), Brookstone Holdings, Inc. (2515), and Brookstone Properties, Inc. (2517). The Debtors corporate headquarters and the mailing address for each Debtor is One Innovation Way, Merrimack, NH 03054.
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 6 of 24 U.S.C. 1408 and 1409; and the Debtors and Apex Digital Inc. ( Apex ) having agreed that each Assigned JV Interest (as defined below) will be transferred, assigned, conveyed, and delivered to Apex pursuant to the terms of the Asset Purchase Agreement, dated as of October 19, 2018, between the Debtors and Apex (the Purchase Agreement ); and the Debtors and Apex having agreed upon terms and conditions for the assignment, transfer, and conveyance (the Transaction ) to Apex of the Assigned JV Interests (as more fully described in the Agreement of Assignment of Membership Interests, dated as of February [ ], 2019, among the Debtors and Apex, attached hereto as Exhibit A (together with any and all related agreements, documents and other instruments, the JV Assignment Agreement )) 2 ; and upon the proceedings had before the Court; and the Court having found and determined that that there is good, sufficient and just cause for the relief granted herein; and after due deliberation and sufficient cause appearing therefor, IT IS HEREBY ORDERED THAT: A. JV Assignment Agreement Approved and Authorized 1. The JV Assignment Agreement, all transactions contemplated therein, and all of the terms and conditions thereof are hereby approved pursuant to sections 105 and 363 of the Bankruptcy Code. Subject to any limitations imposed by this Order, the Debtors are hereby authorized and empowered to enter into and perform under the JV Assignment Agreement, and the JV Assignment Agreement (and each of the transactions contemplated therein) is hereby approved in its entirety and is incorporated herein by reference. The failure to include 2 Capitalized terms not otherwise defined herein are to be given the meanings ascribed to them in the JV Assignment Agreement. 2
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 7 of 24 specifically any particular provision of the JV Assignment Agreement in this Order shall not diminish or impair the effectiveness of such provisions, it being the intent of this Court that, unless expressly provided otherwise in this Order, the JV Assignment Agreement and all of its provisions, payments and transactions, be authorized and approved in their entirety. Likewise, all of the provisions of this Order are nonseverable and mutually dependent. 2. Subject to the provisions of this Order, the Debtors are hereby authorized, pursuant to sections 105(a) and 363 of the Bankruptcy Code, to execute, deliver and perform their obligations under and comply with the terms of the JV Assignment Agreement and consummate the Transaction and the other transactions contemplated by the JV Assignment Agreement and take all actions reasonably related thereto or arising in connection therewith, in each case in accordance with the JV Assignment Agreement and this Order and without further order of this Court. Except as otherwise stated herein, as of the Closing, the Debtors membership interests (collectively, the Assigned JV Interests ) in the limited liability companies specified in the JV Assignment Agreement that are party to a lease, concession agreement, or similar agreement relating to a JV Airport Store (collectively, the JV Airport Leases ) are hereby deemed assumed and assigned to Apex. 3. Pursuant to sections 105(a), 363(b), and 363(f) of the Bankruptcy Code, the Debtors are authorized to assign the Assigned JV Interests to Apex. Subject to the terms of the JV Assignment Agreement, the Assigned JV Interests shall be transferred to Apex and, upon the Closing, such transfer shall (i) be valid, legal, binding and effective, (ii) vest Apex with all right, title, and interest of the Debtors in the Assigned JV Interests, and (iii) be free and clear of 3
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 8 of 24 any charge, lien, claim, right, demand, mortgage, lease, debt, losses, damage, demand, fine, judgment, penalty, Liability, obligation, commitment, assessment, cost, expense, loss, expenditure, charge, fee, penalty, fine, contribution, premium, covenants not to sue, licenses, sublicenses and other similar rights, sublease, hypothecation, deed of trust, pledge, security interest, option, right of use or possession, right of first offer or first refusal, rights of others, easement, restrictive covenant, right of way, preemptive right, conditional sale, servitude, conditional sale agreement or restriction (whether on voting, sale, transfer, defenses, set-off or recoupment rights, disposition or otherwise), encroachment, encumbrance, third party interest or other restriction or limitation of any kind, whether imposed by contract, legal requirement, equity or otherwise, including any interest as that term is used in section 363(f) of the Bankruptcy Code, of any and every kind, nature, and description (other than Permitted Encumbrances) in accordance with section 363(f) of the Bankruptcy Code. 4. Upon the occurrence of the Assignment Date, except as expressly set forth in the JV Assignment Agreement or this Order, each of the Assigned JV Interests shall be assigned to, and remain in full force and effect for the benefit of, Apex, and Apex shall be fully and irrevocably vested with all right, title, and interest of the Debtors in, and shall be deemed to be substituted for the Debtors related to, the Assigned JV Interests, in each case notwithstanding any terms or provisions related to any Assigned JV Interests or any requirement of applicable law that prohibits, restricts, limits or conditions in any way such assignment. Upon the occurrence of the Closing, except as set forth in the JV Assignment Agreement or this Order, the Debtors shall be relieved from any further liability with respect to the Assigned JV Interests and 4
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 9 of 24 the JV Airport Leases for any obligations related to such Assigned JV Interests or JV Airport Leases occurring after the Closing. 5. Any provision in any agreement related to the Assigned JV Interests, including, without limitation, any JV Airport Lease, that purports to declare a breach or default as a result of a change or transfer of control or any interest in respect of the Debtors is unenforceable and all agreements related to the Assigned JV Interests shall remain in full force and effect notwithstanding assignment thereof. 6. After the Closing, the Debtors and their estates shall have no further liabilities or obligations with respect to any Assigned JV Interests and the JV Airport Leases and all holders of such claims are forever barred and estopped from asserting such claims against the Debtors, their successors or assigns, their property or their assets or estates. 7. Notwithstanding anything to the contrary set forth herein, upon the Closing, and to the extent of the Assigned JV Interests, Assignee shall be responsible for and shall pay all obligations and charges that are charged or come due related to each JV and JV Airport Lease where there has been an Assignment of Assigned JV Interests, including, without limitation, with respect to any obligations and charges that are charged or come due on or after the Closing Date which relate, in full or in part, to the pre-closing period including, without limitation, any obligations or charges in respect of any year-end adjustment or reconciliation (including, without limitation, for rents, utilities, taxes, insurance, fees, occupancy, any common area maintenance charges, and per-centage rent) related to the Assignment, the Assigned JV Interests, or the JV Airport Leases (all of the foregoing, collectively, the Reconciliation Charges ). For the 5
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 10 of 24 purposes of this paragraph, the term come due shall refer to the last date which such amount or Reconciliation Charge is due, but is not yet overdue. B. Order Binding 8. This Order shall be binding upon and shall govern the acts of all entities, including, without limitation, all filing agents, filing officers, title agents, title companies, recorders of mortgages, recorders of deeds, registrars of deeds, administrative agencies, governmental departments, secretaries of state, federal, state and local officials, and all other persons and entities who may be required by operation of law, the duties of their office, or contract, to accept, file, register or otherwise record or release any documents or instruments, or who may be required to report or insure any title or state of title in or to the Assigned JV Interests; and each of the foregoing persons or entities is hereby directed to accept for filing any and all of the documents and instruments necessary and appropriate to consummate the Transaction and the other transactions contemplated by the JV Assignment Agreement. C. Other Provisions 9. The JV Assignment Agreement and related agreements, documents or other instruments may be modified, amended or supplemented by the parties thereto in accordance with the terms thereof without further order of this Court. 10. This Court shall retain exclusive jurisdiction with regard to all issues or disputes relating to this Order or the JV Assignment Agreement, including, but not limited to, any disputes related to the Transaction or the other transactions contemplated by the JV Assignment Agreement or the enforcement of the JV Assignment Agreement. 6
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 11 of 24 11. Notwithstanding Bankruptcy Rules 4001 and 6004, any applicable local rules or any other law that would serve to stay or limit the immediate effect of this Order, this Order shall be effective and enforceable immediately upon entry and its provisions shall be self-executing. The fourteen (14) day stay provided in Bankruptcy Rules 6004(h) and 6006(d) is hereby expressly waived and shall not apply. In the absence of any person or entity obtaining a stay pending appeal, the Debtors and Apex are free to perform under the JV Assignment Agreement at any time, subject to the terms of the JV Assignment Agreement. 12. To the extent that anything contained in this Order explicitly conflicts with a provision in the JV Assignment Agreement, this Order shall govern and control. 13. No bulk sales law, bulk sales tax law or similar law of any state or other jurisdiction shall apply in any way to the transactions contemplated by the JV Assignment Agreement or this Order. 14. The terms and provisions of the JV Assignment Agreement and this Order shall be binding in all respects upon, or shall inure to the benefit of, the Debtors, their estates and their creditors, Apex, their respective Affiliates, successors and assigns, and any affected third parties, including all persons or entities asserting claims, notwithstanding any subsequent appointment of any trustee, examiner, or receiver under any chapter of the Bankruptcy Code or any other law, and all such provisions and terms shall likewise be binding on such trustee, examiner, or receiver and shall not be subject to rejection or avoidance by the Debtors, their estates, their creditors or any trustee, examiner or receiver. 7
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 12 of 24 Dated: February, 2019 Wilmington, Delaware BRENDAN L. SHANNON UNITED STATES BANKRUPTCY JUDGE 8
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 13 of 24 EXHIBIT A JV ASSIGNMENT AGREEMENT
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 14 of 24 AGREEMENT OF ASSIGNMENT OF MEMBERSHIP INTERESTS THIS ASSIGNMENT AGREEMENT (this Agreement ) is made as of this day of February, 2019, by and between each Assignor listed on Exhibit A (individually, an Assignor and collectively the Assignors ), and Apex Digital Inc., a Delaware corporation (together with any Affiliated Designee (defined below), Assignee and, together with Assignors, the Parties ). I. The Assigned JV Interests Reference is made to that certain Asset Purchase Agreement, dated as of October 18, 2018 (the Purchase Agreement ), by and among Assignee, Brookstone Holdings Corp. ( Holdings ), and the other parties thereto, including each of the Assignors. Capitalized terms used, but not defined, in this Agreement shall be given the meanings ascribed to such terms in the Purchase Agreement. Each Assignor owns membership interests (individually, an Assigned JV Interest and collectively, the Assigned JV Interests ) in one or more limited liability companies (each, a JV and, collectively the JVs ) that is party to a lease, concession agreement, or similar agreement relating to a JV Airport Store (each a JV Airport Lease and, collectively, the JV Airport Leases ), as more specifically set forth in Exhibit A hereto, with respect to all or a portion of certain real property (individually and collectively as the context requires, the Premises ). Each landlord or other counterparty to any JV under each JV Airport Lease shall be referred to individually as a Landlord and collectively, the Landlords. II. Assignors Bankruptcy Cases On August 2, 2018 (the Petition Date ), each Assignor and certain of their affiliates (collectively, the Debtors ) filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. 101-1330 (the Bankruptcy Code ) in the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court ). The Assignors continue to operate their business and manage their properties as debtors-in-possession pursuant to sections 1107 and 1108 of the Bankruptcy Code. No trustee has been appointed in any Debtor s Chapter 11 case. III. Assignors Assignment of the Assigned JV Interests Assignee is desirous of having each Assignor grant, sell, assign, convey, and transfer to Assignee (or its designee), pursuant to section 363 of the Bankruptcy Code and free and clear of any and all Encumbrances of any and every kind, nature and description (other than Permitted Encumbrances), on the terms and conditions set forth herein and in the Purchase Agreement (and subject to any applicable Assignment/Transfer Order), all of Assignor s right, title, and interest of any kind or nature in and to the Assigned JV Interests. NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES AND MUTUAL AGREEMENTS SET FORTH HEREIN AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY 1
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 15 of 24 ACKNOWLEDGED, THE PARTIES HERETO AGREE AS FOLLOWS: Pursuant to the terms and for the consideration set forth below, each Assignor hereby agrees, to the extent authorized by the Bankruptcy Court (if such approval is necessary), and subject to any applicable Assignment/Transfer Order, to sell, transfer, assign, convey, and deliver, or cause to be sold, transferred, assigned, conveyed and delivered, to Assignee, its successors and assigns, free and clear of any and all Encumbrances of any and every kind, nature and description (other than Permitted Encumbrances), all of Assignors right, title, and interest in and to the Assigned JV Interests (the Assignment ) and Assignee hereby agrees to accept the Assignment. Assignee hereby agrees to assume the Assumed Liabilities pertaining to the Assigned JV Interests; provided that Assignee shall not assume, be deemed to assume, or become obligated in any way to pay or perform any Excluded Liabilities; provided further that any loan, advance, expenses, or other provision of capital made by any Assignor, any JV member, any former JV member, or any Debtor to any other JV member or third party prior to the Closing Date shall not be affected in any way by any Assignment pursuant to this Agreement and all rights associated therewith shall remain with such Assignor, JV member, former JV member, or Debtor, as applicable. Notwithstanding anything to the contrary set forth herein or in the Purchase Agreement, upon the Closing, and to the extent of the Assigned JV Interests, Assignee shall be responsible for and shall pay all obligations and charges that are charged or come due related to each JV and JV Airport Lease where there has been an Assignment of Assigned JV Interests, including, without limitation, with respect to any obligations and charges that are charged or come due on or after the Closing Date which relate, in full or in part, to the pre-closing period including, without limitation, any obligations or charges in respect of any year-end adjustment or reconciliation (including, without limitation, for rents, utilities, taxes, insurance, fees, occupancy, any common area maintenance charges, and percentage rent) related to the Assignment, the Assigned JV Interests, or the JV Airport Leases (all of the foregoing, collectively, the Reconciliation Charges ). For the purposes of this paragraph, the term come due shall refer to the last date which such amount or Reconciliation Charge is due, but is not yet overdue. Assignee shall reimburse each Assignor for any amounts due under the foregoing paragraph (including but not limited to Reconciliation Charges) upon either (i) the Assignment Date, to the extent such amounts are known as of the Assignment Date or (ii) to the extent such amounts are not known, 10 days after receipt of notice from the applicable Assignor (or its successor, including any trust created pursuant to a chapter 11 plan) stating charges that an Assignor has paid which have not been previously reimbursed by Assignee. For the avoidance of doubt, any credit, allowance, or other financial accommodation (individually, a Credit and collectively the Credits ) related to each JV and JV Airport Lease shall inure to the benefit of the JV. Further, on and after the Assignment Date, except as expressly set forth herein or in the Purchase Agreement, each Assignor and its estate shall be relieved from any liability related to any JV, Assigned JV Interests, or JV Airport Lease occurring on or after the Closing Date, and Assignee agrees to indemnify and hold Assignor and its estate harmless from any default in the performance of such terms, conditions, and covenants occurring on or after the Closing Date. 2
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 16 of 24 A. Transition Services Costs -- Assignee shall be responsible for all amounts required to be paid by Assignee pursuant to the terms of that certain Transition Services Agreement, dated as of October 18, 2018 (the TSA ), by and between Assignee and Holdings, in accordance with the terms of the TSA and the Purchase Agreement, including, without limitation, the TSA Fees set forth in Section 9.1 of the TSA; provided that Holdings shall have the right to set-off the Cash Consideration, TSA Fees, or any other fees owed to Holdings or any other Debtor pursuant to the TSA and the Purchase Agreement pursuant to Section 9.3 of the TSA. Notwithstanding anything to the contrary set forth herein or in the TSA or the Purchase Agreement, Assignee shall be responsible for, and shall pay all other obligations and charges that come due under the TSA from and after the Closing Date, including with respect to any obligations or charges that may relate to the pre-closing period, but come due on or after the Closing Date, including, without limitation, any obligations or charges in respect of any portion of any year-end adjustment (including, without limitation, for rents, utilities, taxes, insurance, fees, occupancy, any common area maintenance charges, and percentage rent) arising under the TSA (all of the foregoing, collectively, the TSA Charges ). For the purposes of this paragraph, the term come due shall refer to the last date which, under the TSA or any agreement or invoice related thereto, such TSA Charge is due, but is not yet overdue. B. Closing and Effective Date of Assignment -- The transactions contemplated hereby shall take place on the same day as the conditions set forth in Section C below are satisfied (such date, the Assignment Date ). C. Conditions to Assignment Date The occurrence of the Assignment Date with respect to each Assigned JV Interest is subject to, and expressly conditioned upon (i) the payment by Assignee of the Reconciliation Charges, the TSA Charges and any other amounts required to be paid as of the Assignment Date in accordance with the terms provided herein and in the TSA and the Purchase Agreement, (ii) if necessary pursuant to the Purchase Agreement or Sale Order, the Bankruptcy Court having entered an Assignment/Transfer Order with respect to the applicable Assigned JV Interests, (iii) delivery of the Assignment Deliverables (as defined below) and (iv) the provision by Assignee of any security deposit, letter of credit, or other device used for securing payment and performance under any JV Airport Lease (each of the foregoing a Security Amount ), as required under the JV Airport Lease or as otherwise provided by the applicable Landlord; provided that any Security Amount presently held by a Landlord on account of any Debtor related to any JV or JV Airport Lease shall be refunded, returned, or otherwise released by the applicable Landlord to the applicable Debtor within 15 business days of the applicable Assignment Date; provided further that, with respect to any Security Amount that is a security deposit, Assignee shall pay the equivalent amount directly to Assignor in cash and Assignee and Assignor shall jointly send a communication to the applicable party related to each JV Airport Lease or related document detailing the amount and that, following such payment, the security deposit shall thereafter be held on account of Assignee. Other than as provided in the foregoing sentence, Assignee shall have no rights to, or interests in, any Security Amount delivered to any Debtor or any JV in accordance with this paragraph. 3
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 17 of 24 D. Assignment Deliverables -- On or prior to the Assignment Date, Assignors shall have delivered to Assignee (i) copies of all Landlords tax, insurance, and common area maintenance statements (and all audits of same, if any) related to any JV Airport Lease in the possession of any Assignor, including the most current statements or invoices from the Landlords, (ii) each Assignor s original file for each of the JV Airport Leases, and (iii) originals or copies of the plans and permits, if available, keys to the Premises, security codes for the Premises or any of the Improvements, and any other item, document, or information in the possession or control of Assignors needed to operate a retail store from the Premises. All documents, instruments and other materials referred to in the preceding sentence are referred to as the Assignment Deliverables. E. Termination -- This Agreement may be terminated by either Assignors or Assignee if any applicable governmental authority shall have enacted, issued, promulgated, enforced or entered any applicable law, rule, regulation, or any applicable court or other adjudicatory body shall have entered any judgment, order or decree, in each case which is in effect and has the effect of making any of the transactions contemplated by this Agreement illegal or otherwise restraining, prohibiting, or conditioning consummation of the transactions contemplated by this Agreement and which is not satisfied, resolved or preempted by an applicable Assignment/Transfer Order; provided, however, that such termination shall be limited to the individual Assigned JV Interest affected by such ruling or determination. This Agreement may be terminated by Assignee in the event of any breach by any Assignor of any representation or warranty set forth in Section I (provided that Assignee is not in material breach of its agreements, covenants, representations or warranties contained herein). This Agreement may be terminated by the Assignors in the event (i) of any breach by Assignee of any representation or warranty set forth in Section J (provided that no Assignor is in material breach of its agreements, covenants, representations or warranties contained herein) and (ii) as to each individual Assigned JV Interest only, if the Assignment Date as to any Assigned JV Interest has not occurred on or prior to the date that is one business day prior to the expiration of the Transition Period (such date one business day prior to the expiration of the Transition Period, the Termination Date ). The Transition Period expires, pursuant to the TSA, on February 21, 2019 and may be extended only upon the terms provided in the TSA. If the Assignment Date as to any Assigned JV Interest has not occurred on or prior to the Termination Date solely because Assignee has not met the requirement to provide a Security Amount as required pursuant to Section (C)(iv) herein, Assignee shall be required to pay to the applicable Assignor $2,000 per day for each day that, as of 5:00 p.m. (Eastern Time) on such date, the Assignment Date has not occurred, beginning on the first business day after the Termination Date. F. Bankruptcy Court Matters -- Assignors shall use commercially reasonable efforts to (a) cause the Bankruptcy Court to approve and authorize the transactions contemplated by this Agreement through entry of the Assignment/Transfer Order, if necessary, pursuant to the terms of the Purchase Agreement and the Sale Order and (b) file any necessary notice or pleadings required in connection therewith. Assignee agrees that it will cooperate in obtaining Bankruptcy Court approval of the transactions contemplated by this Agreement, as necessary. To the extent that Bankruptcy Court approval is required in order to assign one or more Assigned JV Interests to Assignee, and such approval is not 4
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 18 of 24 obtained notwithstanding the commercially reasonable efforts of the Assignors, then in such instance the Assignors shall be relieved of any obligation to assign such Assigned JV Interest to Assignee pursuant to the terms hereof. G. Free and Clear of Liens and Encumbrances -- Upon the occurrence of the Assignment Date, the Assigned JV Interests shall be free and clear of any Encumbrances of any and every kind, nature and description (other than Permitted Encumbrances). H. As Is Where Is Transaction -- Assignee hereby acknowledges and agrees that Assignors make no representations or warranties whatsoever, express or implied, with respect to any matter relating to the JVs, the JV Airport Leases, or the Assigned JV Interests except as expressly set forth in this Agreement. Without in any way limiting the foregoing, except as expressly set forth in this Agreement, Assignors hereby disclaim any warranty (express or implied) of merchantability or fitness for any particular purpose as to any portion of the Assigned JV Interests. Accordingly, except as expressly set forth in this Agreement, Assignee will accept the Assigned JV Interests AS IS and WHERE IS. I. Representations and Warranties of Assignors -- Assignors hereby represent and warrant to Assignee that as of the date hereof and as of the Assignment Date, (i) all of the representations and warranties of Assignors set forth in Article 3 of the Purchase Agreement with respect to Assignors and the Assigned JV Interests are true and correct as if made on each such date (except for any representation or warranty made as of a specified date, which shall be true and correct as of such specified date) and (ii) each Assignor has duly performed all obligations of such Assignor under the Purchase Agreement, unless such obligations were previously waived by Assignee. The representations and warranties of Assignors will expire upon the earlier of (a) the Assignment Date or (b) the termination of this Agreement. J. Representations and Warranties of Assignee -- Assignee hereby represents and warrants to each Assignor that as of the date hereof and as of the Assignment Date, (i) all of the representations and warranties of Assignee set forth in Article 4 of the Purchase Agreement with respect to Assignee and the Assigned JV Interests are true and correct as if made on each such date (except for any representation or warranty made as of a specified date, which shall be true and correct as of such specified date) and (ii) Assignee has duly performed all obligations under the Purchase Agreement, unless such obligations were previously waived by the Assignors. The representations and warranties of Assignee will expire upon the earlier of (a) the Assignment Date or (b) the termination of this Agreement. K. Commission -- With the exception of any brokers utilized by Assignee in the normal course of business who shall be compensated, if at all, by Assignee, each of the Assignors and Assignee represents and warrants to the other that it has not entered into any contract to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated hereby for which the other could become liable or obligated to pay. Each of Assignors and Assignee shall indemnify and hold the other harmless from and against any and all claims, causes of action, losses, costs, expenses, damag- 5
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 19 of 24 es or liabilities, including reasonable attorneys fees and disbursements, that such Party or any of its Affiliates may sustain, incur or be exposed to, by reason of any claim or claims against such Party or Affiliate by any broker, finder or other person or entity retained by the other party for fees, commissions or other compensation arising out of the transactions contemplated herein if such claim or claims are based, in whole or in part, on dealings or agreements with the other. L. Membership in JV -- Upon the occurrence of the Assignment Date, (i) Assignee shall automatically be admitted as a member of each JV under each applicable limited liability or operating agreement without the need for further action on the part of Assignee or any other party and will have any and all attendant rights as a member of each JV, including, without limitation, the right to designate a manager, managing person, or management committee member, as applicable, pursuant to each JV limited liability or operating agreement and (ii) the manager, managing person, or management committee member, as applicable, previously designated by Assignor pursuant to each JV limited liability or operating agreement shall be deemed to have resigned, effective as of the Assignment Date. For the avoidance of doubt, upon the occurrence of the Assignment Date, Assignor shall no longer be a member of any JV. M. Miscellaneous (1) This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware and to the extent permissible and not inconsistent with the laws of the State of Delaware, under the laws of the state where the Premises is located. The parties agree that the Bankruptcy Court shall have exclusive jurisdiction over any disputes hereunder, and they each hereby consent to such jurisdiction. (2) This Agreement, the Assignment Deliverables, the Purchase Agreement, the Sale Order and the TSA set forth the entire agreement and understanding of the parties with respect to the transactions contemplated hereby and supersedes any prior instruments, arrangements and understandings relating to the subject matter hereof. (3) This Agreement, and the rights, interests and obligations hereunder, shall not be assigned by any Party by operation of law or otherwise without the express written consent of the other Parties (which consent maybe granted or withheld in the sole discretion of such other Party); provided that Assignee may assign its rights under this Agreement to an Affiliate designated by it in writing to Assignors prior to the consummation of the Assignment (an Affiliated Designee ); provided, further, that no such assignment to an Affiliated Designee shall relieve Assignee of any of its obligations hereunder. (4) This Agreement may be executed with counterpart signature pages or in more than one counterpart, all of which shall be deemed one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties and delivered to all the parties. 6
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 20 of 24 (5) If any term, covenant or condition of this Agreement or its application to any person or circumstances shall be invalid or unenforceable, the remainder of those to which it is held invalid or unenforceable shall not be affected, and each term shall be valid and enforceable to the fullest extent permitted by law. (6) Any notice, demand, request or other communication that any party hereto may be required or may desire to give hereunder ( Notice or Notices ) shall be in writing and shall be given as follows: (a) by hand delivery; or (b) by overnight mail via Federal Express or other reputable express courier service: If to Assignors: c/o Brookstone 1 Innovation Way Merrimack, NH 03054 Attn: Stephen Gould and Greg Tribou Email: SGould@brookstone.com; GTribou@brookstone.com With a copy to: Gibson, Dunn & Crutcher LLP 200 Park Avenue New York, New York 10166 Attention: Matthew Kelsey, Keith Martorana, and Jason Zachary Goldstein Email: MKelsey@gibsondunn.com; KMartorana@gibsondunn.com; JGoldstein@gibsondunn.com If to Assignee: Apex Digital Inc. 4401 Eucalyptus Avenue, Suite 100 Chino, California 91710 Attn: Ashley Xue, Corporate Counsel Fax: (909) 635-6113 Email: axue@apexdigitalinc.com with a copy to: Levene, Neale, Bender, Yoo & Brill L.L.P. 10250 Constellation Boulevard, Suite 1700 Los Angeles, California 90067 Attn: Juliet Y. Oh Fax: (310) 229-1244 Email: JYO@LNBYB.com or at such other address or to such other addressee as the party to be served with Notice shall have furnished in writing to the party seeking or desiring to serve Notice as a place 7
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 21 of 24 for the service of Notice. Notices shall be deemed to have been received on the next business day if given by overnight mail. 8
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 22 of 24 IN WITNESS WHEREOF, this Assignment has been duly executed this day of February, 2019. BROOKSTONE HOLDINGS CORP. By: Name: Title: BROOKSTONE COMPANY, INC. By: Name: Title: BROOKSTONE STORES, INC. By: Name: Title: [Signature Page to Agreement of Assignment]
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 23 of 24 APEX DIGITAL INC. By: Name: David Ji Title: President and Chief Executive Officer [Signature Page to Agreement of Assignment]
Case 18-11780-BLS Doc 1050 Filed 02/11/19 Page 24 of 24 Exhibit A Assigned JV Interests Counterparty JV Party Debtors Interest in JV Party Debtor Lease Location Areas Brookstone Atlanta JV LLC 99% Atlanta Int l Airport Terminal B 433 Areas Brookstone Atlanta JV LLC 99% Atlanta Int l Airport Terminal C 441 City and County of Denver Brookstone DEN T-B, LLC 75% Denver International Airport (including storage lease) City of San Antonio Brookstone Stores SAT, LLC 78% San Antonio Airport Terminal 1 428 Dallas/Fort Worth International Airport Board Hudson Dufry / NCM Brookstone Dallas Forth Worth, LLC National Concessions Management/ Brookstone Stores Georgia, LLC 65% Dallas/Fort Worth Int l Airport Terminal A Store 432 427 49% Atlanta Int l Airport Terminal T 435 Marketplace Brookstone IAD T-B, LLC 75% Washington Dulles Int l Airport Concourse C (including storage lease) OTG Management / United Brookstone IAH T-E, LLC 65% Houston/George Bush Int l Airport Term E OTG Management / United San Francisco Airport Commission Wayne County Airport Authority Brookstone Houston T-B, LLC 65% Houston/George Bush Int'l Airport Term B (including storage lease) Brookstone SFO T-2, LLC 70% San Francisco Terminal 2 418 Brookstone Stores DTW, LLC 464 453 466 74% Detroit McNamara Terminal 457