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COLE SCHOTZ P.C.Court Plaza North25 Main StreetP.O. Box 800Hackensack, New Jersey 07602-0800(201) 489-3000(201) 489-1536 FacsimileMichael D. Sirota ([email protected])Felice R. Yudkin ([email protected])Jacob S. Frumkin ([email protected])Matteo Percontino ([email protected])Rebecca W. Hollander ([email protected])

Proposed Attorneys for Debtorsand Debtors in Possession

UNITED STATES BANKRUPTCY COURTDISTRICT OF NEW JERSEY

In re:

CHRISTOPHER & BANKS CORPORATION,et al.,

Debtors.1

Chapter 11

Case No. 21-10269 (ABA)

Jointly Administered

DEBTORS’ MOTION FOR ENTRY OF ORDERS (I)(A) APPROVING BIDDINGPROCEDURES FOR SALE OF SUBSTANTIALLY ALL OF THE DEBTORS’ ASSETS,(B) APPROVING EXPENSE REIMBURSEMENT, (C) SCHEDULING AUCTION FOR,

AND HEARING TO APPROVE, SALE OF SUBSTANTIALLY ALL OF THEDEBTORS’ ASSETS, (D) APPROVING FORM ANDMANNER OF NOTICES OF SALE,

AUCTION, AND SALE HEARING, (E) APPROVING ASSUMPTION ANDASSIGNMENT PROCEDURES, AND (F) GRANTING RELATED RELIEF AND

(II)(A) APPROVING SALE OF SUBSTANTIALLY ALL OF THE DEBTORS’ ASSETSFREE AND CLEAR OF ALL LIENS, CLAIMS, INTERESTS, AND ENCUMBRANCES,(B) APPROVING ASSUMPTION AND ASSIGNMENT OF EXECUTORY CONTRACTS

AND UNEXPIRED LEASES, AND (C) GRANTING RELATED RELIEF

1 The Debtors in these chapter 11 cases and the last four digits of each Debtor’s federal tax identificationnumber, as applicable, are as follows: Christopher & Banks Corporation (5422), Christopher & Banks, Inc. (1237),and Christopher & Banks Company (2506). The Debtors’ corporate headquarters is located at 2400 Xenium LaneNorth, Plymouth, Minnesota 55441.

Case 21-10269-ABA Doc 111 Filed 01/25/21 Entered 01/25/21 11:26:40 Desc MainDocument of 41

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Christopher & Banks Corporation and its subsidiaries (collectively, the “Debtors”)

hereby submit this motion (the “Motion”) for entry of an order, substantially in the form

submitted herewith (the “Bidding Procedures Order”), pursuant to sections 105, 363, 365, 503,

and 507 of title 11 of the United States Code (the “Bankruptcy Code”), rules 2002, 6004, and

6006 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and rules 6004-

1, 6004-2, and 6004-3 of the Local Rules of the United States Bankruptcy Court for the District

of New Jersey (the “Local Rules”), (i) approving the proposed bidding procedures (the “Bidding

Procedures”), attached hereto as Exhibit 1, pursuant to which the Debtors will solicit and, in

consultation with the Consultation Parties (as defined below), select the highest or otherwise best

offer for the sale (the “Sale”) of substantially all of the Debtors’ assets (the “Acquired Assets”);

(ii) approving the bid protections set forth in the Stalking Horse Agreement (as defined below);

(iii) scheduling an auction (the “Auction”), if necessary; (iv) establishing the Assumption and

Assignment Procedures (as defined below) for the assumption and assignment of executory

contracts and unexpired leases in connection with the Sale, including notice of proposed cure

amounts; (v) scheduling a hearing (the “Sale Hearing”) to approve the Sale; and (vi) granting

related relief. The Debtors further request that, at the Sale Hearing, this Court enter an order (the

“Sale Order”), substantially in the form submitted herewith, (i) authorizing the sale of the

Acquired Assets to the ultimate purchaser as determined in accordance with the Bidding

Procedures (the “Successful Bidder”), free and clear of all liens, claims, interests, and

encumbrances, except certain permitted encumbrances as determined by the Debtors and the

Successful Bidder; (ii) authorizing the assumption and assignment of certain executory contracts

and unexpired leases; and (iii) granting related relief.


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In support of the Motion, the Debtors rely upon and incorporate by reference the First

Day Declaration (defined below) and the contemporaneously filed Declaration of Perry

Mandarino (the “Mandarino Declaration”).2 In further support of the Motion, the Debtors

respectfully represent as follows:

I. JURISDICTION AND VENUE

1. This Court has jurisdiction over this Motion pursuant to 28 U.S.C. §§ 157 and

1334 and the Standing Order of Reference to the Bankruptcy Court Under Title 11 of the United

States District Court for the District of New Jersey, entered on July 23, 1984, and amended on

September 18, 2012 (Simandle, C.J.). This matter is a “core” proceeding within the meaning of

28 U.S.C. § 157(b)(2).

2. Venue is proper in this Court pursuant to 28 U.S.C. §§ 1408 and 1409.

3. The statutory and legal predicates for the relief requested herein are sections

105(a), 363, 365, 503, and 507 of the Bankruptcy Code, Bankruptcy Rules 2002, 6004, and 6006

and Local Rules 6004-1, 6004-2, and 6004-3.

II. BACKGROUND

4. On January 13, 2021 (the “Petition Date”), each of the Debtors commenced with

this Court a voluntary case under chapter 11 of the Bankruptcy Code. The Debtors continue to

operate their businesses and manage their properties as debtors in possession pursuant to sections

1107(a) and 1108 of the Bankruptcy Code. No trustee, examiner, or statutory committee of

creditors has been appointed in these chapter 11 cases.

2 Capitalized terms used but not defined herein shall have the meanings ascribed to them in the MandarinoDeclaration, the Bidding Procedures, or the Bidding Procedures Order, as applicable.


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5. The Debtors’ cases are being jointly administered under lead Case No. 21-10269

pursuant to Bankruptcy Rule 1015 [Docket No. 45].

6. Information regarding the Debtors’ business, capital structure, the circumstances

leading to the commencement of these chapter 11 cases is set forth in the Declaration of Keri L.

Jones in Support of Debtors’ Chapter 11 Petitions and First Day Pleadings [Docket No. 18] (the

“First Day Declaration”).

III. RELIEF REQUESTED

7. By this Motion, pursuant to sections 105(a), 363, 365, 503, and 507 of the

Bankruptcy Code, Bankruptcy Rules 2002, 6004, and 6006, and Local Rules 6004-1, 6004-2,

and 6004-3, the Debtors request entry of the following:

(a) the Bidding Procedures Order,

i. authorizing and approving the Bidding Procedures in connectionwith the Sale;

ii. approving the Expense Reimbursement for the Stalking HorseBidder in accordance with the terms and conditions set forth in theStalking Horse Agreement;

iii. if necessary, scheduling an Auction for Acquired Assets;

iv. scheduling the Sale Hearing to consider approval of the proposedSale on or before February 22, 2021;

v. authorizing and approving the (A) notice of the Sale, the BidDeadline (as defined below), the Auction, and the Sale Hearing,substantially in the form attached to the Bidding Procedures Orderas Exhibit 2 (the “Sale Notice”), and (B) notice to each relevantnon-Debtor counterparty (each, a “Counterparty”) to anexecutory contract or unexpired lease related to the AcquiredAssets of the potential assumption and assignment of theirexecutory contract or unexpired lease (the “Contracts” and“Leases”, respectively) and the calculation of the amountnecessary to cure any monetary defaults thereunder (the “CureAmounts”), substantially in the form attached to the BiddingProcedures Order as Exhibit 3 (the “Potential Assumption andAssignment Notice”);


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vi. authorizing and approving procedures for the assumption andassignment of the Contracts and Leases and the determination ofCure Amounts with respect thereto (collectively, the “Assumptionand Assignment Procedures”); and

vii. granting related relief.

(b) the Sale Order, authorizing and approving the following:

i. the sale of the Acquired Assets to the Successful Bidder free andclear of all liens, claims, interests, and encumbrances, exceptcertain permitted encumbrances as determined by the Debtors andthe Successful Bidder;

ii. the assumption and assignment of certain Contracts and Leases inconnection with the proposed Sale; and

iii. granting related relief.

IV. PRE-PETITION MARKETING AND SALE PROCESS

8. As more fully described in the First Day Declaration, the Debtors filed these

chapter 11 cases with the intent to conduct a sale process with respect to the Debtors’

eCommerce business and to liquidate the inventory in their 449 retail stores. A simultaneous

sale and wind-down of the Debtors’ business operations is necessary to conserve liquidity and

maximize the value of the Debtors’ assets in response to the COVID-19 pandemic that forced the

closure of the Debtors’ stores in March of 2020. Although most of the Debtors’ stores have

since reopened, the COVID-19 pandemic has caused significant disruption to the Debtors’

business and has had a significant adverse impact on their financial condition, results of

operations and cash flows, both for the periods of time when the stores were temporarily closed

as well as continued suppressed traffic and customer spending at the Debtors’ stores. In light of

these unanticipated and insurmountable obligations, the Debtors have decided that it is in the

best interests of their estates, creditors, and other parties in interest to pursue an orderly

liquidation of their assets through the chapter 11 process.


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9. To that end, as described in detail in the First Day Declaration and the Mandarino

Declaration, on or about November 4, 2020, the Debtors engaged B. Riley Securities, Inc.

(“B. Riley”) to provide investment banking services with respect to the Debtors’ retail and

eCommerce business assets, including exploring all restructuring, financing and M&A

alternatives with respect thereto. Upon its retention, B. Riley immediately began conducting due

diligence on the E-Commerce business assets and the Debtors’ operations.

10. Immediately upon its engagement, B. Riley began working closely with the

Debtors’ senior management, their board of directors, and the Debtors’ other advisors to evaluate

potential strategic alternatives and financing options. After considering the reasonably available

possible courses of action, the Debtors determined that a sale of all or substantially all of the

Debtors’ assets was in the best interest of the Debtors, their creditors, and all parties in interest

(each a “Potential Transaction”).

11. Beginning in December 2020, B. Riley commenced an extensive process to

market the Debtors’ assets for sale to numerous prospective purchasers. This process included

B. Riley using its industry and restructuring bankers, and its proprietary databases and market

knowledge, to identify a broad group of potential strategic and financial buyers and solicit their

interest, preparing and, sending “teasers” summarizing the Debtors’ assets, preparing and

circulating marketing and diligence materials, including a confidential information

memorandum, and creating a virtual data room containing myriad information about the Debtors,

their assets, their liabilities, and all aspects of their businesses.

12. Since the beginning of the marketing process, B. Riley has contacted at least two

hundred (200) potential purchasers (collectively, the “Interested Parties”), consisting of at least

one hundred and twenty-four (124) potential financial purchasers and at least seventy-six (76)


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potential strategic purchasers. As a result of these efforts, forty-nine (49) parties executed

nondisclosure agreements, indicating an interest to further explore a potential transaction with

the Debtors. Although approximately one hundred and twenty-three (123) entities declined to

further participate in the sale process, B. Riley received indications of interest from three (3)

parties seeking to acquire the Debtors’ eCommerce assets, including the one from the Stalking

Horse Bidder.

13. On January 20, 2021, the Debtors’ board of directors authorized the Debtors to

enter into a letter of intent with ALCC, LLC, on behalf of itself and/or its affiliates or assigns, as

buyer (collectively, the “Stalking Horse Bidder”),3 and on January 22, 2021 the Debtors and the

Stalking Horse Bidder entered into such a letter of intent (the “Stalking Horse LOI”), a copy of

which is attached hereto as Exhibit 4. The Stalking Horse LOI outlines the terms on which the

Stalking Horse Bidder will acquire substantially all of the Debtors’ remaining assets (the

“Stalking Horse Bid”). The Stalking Horse LOI contemplates execution of the an asset purchase

agreement acceptable to the Debtors and the Stalking Horse Bidder (the “Stalking Horse

Agreement”)4 on or before January 27, 2021 (unless such deadline is extended upon the mutual

agreement of the parties), which would supersede the Stalking Horse LOI in all respects.

Additionally, if executed, the Stalking Horse Agreement will provide the Stalking Horse Bidder

3 As noted in the First Day Declaration, ALCC, LLC is (a) the agent and lender under the Debtors’prepetition term loan facility, and (b) a counterparty under the prepetition secured Vendor Program Agreement.Moreover, as noted in the Debtors’ Motion for Entry of Interim and Final Orders (A)(1) Confirming, on an InterimBasis, that the Store Closing Agreement is Operative and Effective and Authorizing, on a Final Basis the Debtors toAssume the Store Closing Agreement, (B) Authorizing and Approving Store Closing Sales Free and Clear of AllLiens, Claims, and Encumbrances, (C) Approving Dispute Resolution Procedures, and (D) Authorizing CustomaryBonuses to Employees of Stores [Docket No. 16] (the “Store Closing Motion”), Hilco Merchant Resources, LLC,the Agent under the Store Closing Agreement (as those terms are defined in the Store Closing Motion) is an affiliatean affiliate of ALCC, LLC.

4 The Debtors will file a copy of the Stalking Horse Agreement on or before January 27, 2021 (unless suchdeadline is extended upon the mutual agreement of the parties), at which time, all references herein to the StalkingHorse LOI shall be deemed to refer instead to the Stalking Horse Agreement.


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with certain customary stalking horse bid protections, in the form of an Expense Reimbursement

(defined below), if the Stalking Horse Bidder is ultimately not the successful purchaser of the

Debtors’ assets.

14. As the Debtors move forward with implementing the procedures outlined in this

Motion, the Debtors will continue to market and solicit offers for the Acquired Assets to a wide

range of potential purchasers and will work diligently with all parties that have expressed an

interest in the Debtors’ assets. In this way, the Debtors intend to maximize the number of

participants in the sale process.

V. NEED FOR A TIMELY SALE PROCESS

15. The Debtors believe that the auction process and time periods set forth in the

Bidding Procedures are reasonable and will provide parties with sufficient time and information

necessary to formulate a bid to purchase the Acquired Assets. Given the Debtors’ extensive pre-

petition marketing efforts (which marketing has continued since the Petition Date), the proposed

timeline is more than sufficient to complete a fair and open sale process that will maximize the

value received for the Acquired Assets. Moreover, the sale timeline outlined below was

extensively negotiated with the Debtors’ pre-petition lenders, who made clear that an expedited

sale process was an essential condition to their agreement to continue to fund the Debtors’

ongoing operations and allow the Debtors access to cash collateral. The Debtors are also

confident that the proposed timeline will provide Interested Parties with sufficient time to

complete due diligence and engage with the Debtors on a possible bid, particularly since the

majority of the Interested Parties have been in contact with B. Riley for several weeks.


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VI. EXPENSE REIMBURSEMENT5

16. By this Motion, the Debtors request authority to, among other things, provide the

Stalking Horse Bidder with standard stalking horse bid protections in the Stalking Horse LOI, in

the form of reimbursement of the Stalking Horse Bidder’s expenses incurred in connection with

the Stalking Horse Agreement, and the due diligence performed by the Stalking Horse Bidder,

which collectively shall not exceed $350,000 (the “Expense Reimbursement”). In addition, the

Bidding Procedures and the Stalking Horse LOI provide for an initial overbid amount of

$650,000 over and above the aggregate of the Stalking Horse Purchase Price (as defined below),

plus the Expense Reimbursement of $350,000 (the “Minimum Initial Overbid Amount”), and

minimum bid increments thereafter of $250,000 (the “Continuing Minimum Overbid

Amount”).

VII. SUMMARY OF STALKING HORSE BID

17. The chart below summarizes the anticipated terms of the Stalking Horse

Agreement, based on the Stalking Horse LOI.6

MATERIAL TERMS OF THE STALKING HORSE AGREEMENT

Acquired Assets Acquired Assets includes, among other things, all or substantially allof the Debtors’ assets, including inventory, accounts receivable,fixtures, furniture, equipment, tools, supplies, and deposits andproceeds of the forgoing, all of the Debtors’ intellectual propertyassets, and purchased Avoidance Actions (defined below).

5 The Debtors reserve the right to replace to Stalking Horse Bidder in the event that the conditions underthe Stalking Horse LOI are not met or a Stalking Horse Agreement is not executed on or before January 27, 2021.

6 Capitalized terms used in this section but not otherwise defined shall have the meanings ascribed to themin the Stalking Horse LOI.


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Excluded Assets The Acquired Assets will not include (the “Excluded Assets”) cash,inclusive of any cash that has been escrowed or segregated for thepayment of sales, taxes, professional fees, or other budgetedexpenses, in an amount equal to the remaining expenses (includinguncashed checks) to be paid under line 24 of the of amended budgetattached to the Stalking Horse LOI (collectively the “Wind DownExpenses”) which expenses shall exclude any liabilities assumed bythe Stalking Horse Bidder pursuant to section 4 of the Stalking HorseLOI (regarding Assumed Liabilities, as that term is defined therein)or to be paid by the Stalking Horse Bidder pursuant to section 7 ofthe Stalking Horse LOI (regarding Transition Services, as that termis defined therein) and any realized expense savings.

Based on the amended budget attached to the Stalking Horse LOI,the estimated value of the Excluded Assets is $12.7 million, plus theamount outstanding checks (the “Estimate”). However, the Estimatecan adjust if budgeted expenses are paid early or late, there isrealized expense savings, and/or budgeted expenses included in the$12.7 million portion of the Estimate are converted to checks thatremain outstanding or are negotiated as of the Closing. To the extentcash on hand at Closing is insufficient to cover the Wind DownExpenses, as may be adjusted, the Stalking Horse Bidder shallcontribute cash in an amount equal to the adjusted Wind DownExpenses, less cash on hand at Closing.

Purchased AvoidanceActions

Purchased Avoidance Actions include any and all claims andremedies under sections 510 and 542 through 553 of the BankruptcyCode, or under similar state law, including fraudulent conveyanceclaims, and other similar causes of action of a trustee and debtor inpossession under the Bankruptcy Code.

Transition ServicesAgreement

The Stalking Horse LOI contemplates that the Debtors and theStalking Horse Bidder will enter into a Transition ServicesAgreement in connection with the Sale. The Debtors will provide asummary of the terms of the Transition Services Agreement uponexecution of the Stalking Horse Agreement.

Purchase Price The aggregate “Purchase Price” is equal to the Assumed Liabilities,which consist of:

(i) The sum of the principal amount of the term loan payable toALCC, LLC, amounts due by the Debtors on account of thevendor program, and all interest, fees, and other amounts due bythe Debtors on account of the term loan and under the vendorprogram, which collectively, as of the closing will beapproximately $8.1 million;

(ii) the Debtors’ obligations for unused and accrued “paid time off”or “PTO” for those E-Commerce Business employees listed on


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a schedule to the Transaction Documents (approximately$73,000);

(iii)the Debtors’ obligations for “IBNR” in an amount not to exceed$950,000;

(iv)C&B’s post-petition obligations to Radial as of the closing date,which are estimated to be approximately $2.4 million.

(v) Agent open purchase orders for Additional Agent Goods to besold through the E-Commerce Business post-closing.

(vi)Cure costs associated with Assumed contracts and leases in anamount to be mutually agreed upon by Buyer and the C&B.

Contract DesignationRights

Within two (2) days of the Closing Date, the Successful Bidder willdesignate all executory contracts and unexpired leases as either“Assumed,” “Rejected,” or “Designated.”

Assumed contracts/leases shall be assumed by the Debtorsand assigned to the Successful Bidder as of the Closing.

Rejected contracts/leases shall be rejected by the Debtors asof the Closing.

Designated contracts shall be maintained by the Debtors for thirty(30) days after the Closing Date (which may be extended with theconsent of the Debtors, which consent will not be withheld orconditioned by the Debtors if such extension is for up to thirty (30)days after the Closing Date, does not increase administrativeexpenses for the Debtors’ estates, and does not extend thedesignation rights period after the date the Bankruptcy Court entersan order confirming a chapter 11 plan or converting the cases toChapter 7) with the Successful Bidder to receive the benefits of suchDesignated contracts/leases and be responsible for the obligationsunder such contracts/leases from the Closing Date until theSuccessful Bidder designates such Designated contracts/leases as“Assumed” or “Rejected,” at which time the Debtors shall use theirbest efforts to effectuate such determination.

Bid Protections toStalking Horse Bidder

Expense Reimbursement: Capped at $350,000.7

Credit Bid The Bidding Procedures do not seek to disallow or affect in anymanner credit bidding pursuant to section 363(k) of the BankruptcyCode.8

7 For the avoidance of doubt, the Stalking Horse Bidder is only entitled to the Expense Reimbursementupon a fully executed asset purchase agreement.

8 Pursuant to Paragraph 36 of the Interim Cash Collateral Order, the right of the Prepetition Credit Parties(inclusive of ALCC, LLC) to credit bid up to the full amount of their Prepetition Obligations (each term as definedin the Interim Cash Collateral Order), as provided for in section 363(k) of the Bankruptcy Code was confirmed


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Good Faith Deposit In light of the fact that the Stalking Horse Bidder’s purchase pricecontemplates an assumption of the prepetition term and vendorprogram debt, the Stalking Horse Bidder shall not make any depositin connection with the Sale.

18. The negotiations between the Debtors and the Stalking Horse Bidder are still

ongoing and, therefore, the above summary may not include all of the terms of the Stalking

Horse Agreement that are to be disclosed in accordance with the Local Rules. Upon execution of

the Stalking Horse Agreement, the Debtors will file a copy of the Stalking Horse Agreement

with the Court and, to the extent applicable, supplement the above summary of the material

terms.

VIII. BIDDING PROCEDURES

A. Overview

19. The Bidding Procedures are designed to promote a competitive, fair, and

expedient sale process that seeks to maximize the value of the Debtors’ estates. If approved, the

Bidding Procedures will allow the Debtors to solicit and identify bids from potential buyers that

constitute the highest or otherwise best offer for the Acquired Assets on a schedule consistent

with the milestones detailed in the Interim Order Pursuant to 11 U.S.C. §§ 105, 361, 362, 363,

364, 507 and 552 (1) Authorizing Use of Cash Collateral; (2) Granting Adequate Protection,

(3) Modifying Automatic Stay; and (4) Scheduling a Final Hearing [Docket No. 56] (the

“Interim Cash Collateral Order”), the Stalking Horse LOI, and the Debtors’ chapter 11

objectives.

without the need for further Court order authorizing the same and whether any such sale is effectuated throughsection 363(k) or 1129(b) of the Bankruptcy Code, by a chapter 7 trustee under section 725 of the Bankruptcy Code,or otherwise.


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20. Certain of the key terms of the Bidding Procedures are highlighted in the chart

below.9

MATERIAL TERMS OF THE BIDDING PROCEDURES AND ORDER

Qualification ofBidders

Prior to the Bid Deadline, each party, other than the Stalking HorseBidder, that wishes to participate in the bidding process (a “PotentialBidder”) must deliver the following to the Notice Parties:

i. a written disclosure of the identity of each entity that will be biddingfor all or certain of the Acquired Assets or otherwise participating inconnection with such bid; and

ii. an executed confidentiality agreement (to be delivered prior to thedistribution of any confidential information by the Debtors to aPotential Bidder) in form and substance satisfactory to the Debtors.

A Potential Bidder that delivers the documents and information above orthat the Debtors determine, in consultation with the official committee ofunsecured creditors, if any, appointed in these chapter 11 cases (the“Consultation Parties”), is likely (based on availability of financing,experience, and other consideration) to be able to consummate the Sale,and whose Qualified Bid is received by Debtors no later than Bid Deadline(as defined below) is deemed qualified (a “Qualified Bidder”).

See Bidding Procedures at pp. 1-2.

The Debtors reserve the right to accept any bid that, based on reasonablebusiness judgment, is in their best interest. The Debtors reserve the right tomodify the Bidding Procedures in their business judgment provided thatsuch modifications do not materially alter the Bidding Procedures.

Qualified Bids Bid Deadline: February 17, 2021 at 4:00 p.m. (ET)

A Bid will be considered a “Qualified Bid” only if it is submitted by aQualified Bidder and the Debtors determine, after consultation with theConsultation Parties, that the bid complies with all of the following:

i. it is received by the Notice Parties prior to the Bid Deadline;

ii. it states that the applicable Qualified Bidder offers to purchase, incash, or, if applicable, through a credit bid, either (i) all of theAcquired Assets upon the terms and conditions that the Debtors

9 To the extent that there is any inconsistency between the terms of the Bidding Procedures and thesummary of such terms in this Motion, the terms of the Bidding Procedures shall control. Capitalized terms used butnot otherwise defined in this summary shall have the meanings ascribed to them in the Bidding Procedures.


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reasonably determine are no less favorable to the Debtors than thoseset forth in the Stalking Horse Agreement or (ii) certain of theAcquired Assets of the Debtors, provided that the Debtors reservethe right to determine that several Qualified Bids in the aggregaterepresent the highest and best offer for the Debtors’ assets;

iii. it includes a signed writing stating that the Qualified Bidder’s offeris irrevocable until the selection of the Successful Bidder, providedthat if such bidder is selected as the Successful Bidder or the Back-Up Bidder its offer shall remain irrevocable until the later of (a) theclosing of the Sale to the Successful Bidder or the Back-Up Bidder,which shall occur no later than February 26, 2020, and (b) the datethat is 45 days after the Sale Hearing;

iv. it includes confirmation that there are no conditions precedent to theQualified Bidder’s ability to enter into a definitive agreement andthat all necessary internal and shareholder approvals have beenobtained prior to the submission of the Bid;

v. it contains no due diligence or financing contingencies of any kind;

vi. it is based on the Stalking Horse Agreement and includes a dulyauthorized and executed copy of an asset purchase agreement, whichspecifies the purchase price for the Acquired Assets expressed inU.S. Dollars (the “Purchase Price”) and any assumed liabilities,together with all exhibits and schedules thereto and a copy marked toshow any amendments and modifications to the Stalking HorseAgreement (an “Asset Purchase Agreement”);

vii. it includes financial statements or other written evidence, including(if applicable) a firm, irrevocable commitment for financing,establishing the ability of the Qualified Bidder to consummate theproposed Sale and pay the Purchase Price in cash, such as will allowthe Debtors to make a reasonable determination as to the QualifiedBidder’s financial and other capabilities to consummate thetransaction contemplated by the Asset Purchase Agreement;

viii. it has a value to the Debtors, determined in the Debtors’ reasonablebusiness judgment after consultation with the Consultation Parties,that is greater than or equal to the sum of the value offered under the


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Stalking Horse Agreement, plus the Expense Reimbursement plus$650,00010;

ix. it identifies with particularity which Contracts and Leases theQualified Bidder wishes to assume and provides details of theQualified Bidder’s proposal for the treatment of related CureAmounts and the provision of adequate assurance of futureperformance to the counterparties to such Contracts and Leases;

x. it includes an acknowledgement and representation that the bidder:(a) has had an opportunity to conduct any and all required duediligence regarding the Acquired Assets prior to making its offer;(b) has relied solely upon its own independent review, investigation,and/or inspection of any documents and/or the Acquired Assets inmaking its bid; (c) did not rely upon any written or oral statements,representations, promises, warranties, or guaranties whatsoever,whether express or implied (by operation of law or otherwise),regarding the Acquired Assets or the completeness of anyinformation provided in connection therewith or with the Auction,except as expressly stated in the Asset Purchase Agreement; and(d) is not entitled to any expense reimbursement, break-up fee, orsimilar type of payment in connection with its bid;

xi. it includes evidence, in form and substance reasonably satisfactory tothe Debtors, of authorization and approval from the QualifiedBidder’s board of directors (or comparable governing body) withrespect to the submission, execution, delivery, and closing of theAsset Purchase Agreement;

xii. it is accompanied by a good faith deposit in the form of a wiretransfer (to a bank account specified by the Debtors), certified check,or such other form acceptable to the Debtors, payable to the order ofthe Debtors (or such other party as the Debtors may determine) in anamount equal to 10% of the Purchase Price (a “Good FaithDeposit”);

(a) All Good Faith Deposits shall be returned to eachbidder not selected by the Debtors as the SuccessfulBidder or the Back-Up Bidder no later than threebusiness days following entry of the Sale Order.

10 A Qualified Bid must incorporate a working capital adjustment for cash on the Debtors’ balance sheetand debt outstanding on the Debtors’ asset based lending facility.


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xiii. it states that the bidder consents to the jurisdiction of the BankruptcyCourt; and

xiv. it contains such other information as may be reasonably requested bythe Debtors, in consultation with the Consultation Parties.

See Bidding Procedures at pp. 2–4.

The Stalking Horse Agreement will be deemed a Qualified Bid. SeeBidding Procedures Order, at ¶ 4.

Credit Bidding The Bidding Procedures do not seek to allow, disallow or affect in anymanner credit bidding pursuant to section 363(k) of the BankruptcyCode.11

No-Shop or No-SolicitationProvisions

The Bidding Procedures Order and Bidding Procedures do not limit theDebtors’ ability or right to solicit higher or otherwise better bids. The Salecontemplated by this Motion, the Bidding Procedures, and the BiddingProcedures Order calls for a fair and open bidding and auction process.

ExpenseReimbursement

The Bidding Procedures Order approves and authorizes the ExpenseReimbursement for the Stalking Horse Bidder pursuant to the amounts andconditions set forth in the Stalking Horse LOI and the Bidding Procedures.See Bidding Procedures Order at ¶ 17.

Initial Overbid andBidding Increments

The Bidding Procedures, as approved and incorporated by the BiddingProcedures Order, provide for a Minimum Initial Overbid Amount of$650,000 over and above the aggregate of the Stalking Horse PurchasePrice plus the Expense Reimbursement. The minimum bid incrementsthereafter shall be $250,000. See Bidding Procedures at pp. 3, 7.

Modification ofBidding andAuction Procedures

The Debtors may employ and announce at the Auction additionalprocedural rules that are reasonable under the circumstances forconducting the Auction, provided that such rules (i) are not materiallyinconsistent with the Bidding Procedures, the Bankruptcy Code, or anyorder of the Court entered in connection herewith; (ii) do not purport toabrogate or modify the Expense Reimbursement; and (iii) are disclosed toeach Qualified Bidder attending the Auction. See Bidding Procedures atp. 6-7.

Closing withAlternative Back-Up Bidders

The Qualified Bidder(s) with the next highest or otherwise best QualifiedBid, as determined by the Debtors, will be required to serve as a back-upbidder (the “Back-Up Bidder” and such Bid, the “Back-Up Bid”) andkeep its bid open and irrevocable until the later to occur of 45 days afterthe Sale Hearing and closing on the Successful Bid with the SuccessfulBidder. If the Successful Bidder fails to consummate the Sale, the Back-Up Bidder will be deemed to be the new Successful Bidder, and theDebtors will be authorized and directed to consummate the Sale with the

11 See Note 8, supra.


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Back-Up Bidder without further order of the Court. See BiddingProcedures at p. 7-8.

B. Key Dates and Deadlines

21. The Debtors propose the below key dates and deadlines for the sale process,

certain of which dates and deadlines may be subject to extension in accordance with the Bidding

Procedures.12 The proposed dates and deadlines adhere to the milestones set forth in the Interim

Cash Collateral Order.

Sale Dates and Deadlines

Bid Deadline February 17, 2021 at 4:00 p.m. (ET)

Deadline to Notify Qualified Bidders February 18, 2021 at 4:00 p.m. (ET)

Auction (if required) February 19, 2021 at 10:00 a.m. (ET)

Target for Notice of Successful Bidder to be Filed February 20, 2021 at 4:00 p.m. (ET)

Sale Hearing February 22, 2021 at 10:00 a.m. (ET)

Target Closing Date February 26, 2021

C. Noticing Procedures

22. The Bidding Procedures provide the following “Noticing Procedures”:

(a) Sale Notice and Publication.Within two (2) business days of the entry ofthe Bidding Procedures Order, or as soon as reasonably practicablethereafter, the Debtors shall serve the Sale Notice by first-class mail upon:(i) the Office of the United States Trustee for the District of New Jersey(the “U.S. Trustee”); (ii) counsel for the official committee of unsecuredcreditors (the “Committee”), if any; (iii) those parties required to beserved with notice of a sale pursuant to the Order Granting ComplexChapter 11 Case Treatment [Docket No. 47] in effect in these chapter 11cases (the “Complex Case Order”); (iv) counsel to the Stalking HorseBidder; (v) Counterparties to the Contracts and Leases; (vi) counsel to theDebtors’ pre-petition secured lenders; (vii) the Internal Revenue Service;

12 The Debtors, in consultation with the Consultation Parties, reserve the right to change the proposed sale-related deadlines at any time prior to the hearing to consider approval of the Bidding Procedures.


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(viii) all applicable state and local taxing authorities; (ix) the FederalTrade Commission; (x) the Securities & Exchange Commission; (xi) theUnited States Attorney’s Office for the District of New Jersey; (xii) theUnited States Attorney General/Antitrust Division of the Department ofJustice; (xiii) the offices of the attorneys general for the states in which theDebtors operate; (xiv) all potential buyers previously identified orsolicited by the Debtors and any additional parties who have previouslyexpressed an interest to the Debtors or their advisors in potentiallyacquiring the Debtors’ assets; and (xv) any party requesting noticepursuant to Bankruptcy Rule 2002 (collectively, the “Sale NoticeParties”). Within five business days of entry of the Bidding ProceduresOrder, or as soon as practicable thereafter, the Debtors will publish theSale Notice, with such modifications as may be appropriate for purposesof publication, once in the National Edition of The New York Times and, tothe extent the Debtors deem appropriate, in any other local or regionalpublications.

(b) Notice of Determination of Qualified Bids. The Debtors, in consultationwith the Consultation Parties, will make a determination regarding whichBids qualify as a Qualified Bid and will notify Potential Bidders whetherthey have been selected as Qualified Bidders by no later than February18, 2021 at 4:00 p.m. (ET).

i. At the outset of the Auction, the Debtors shall announce theQualified Bid that the Debtors, in consultation with theConsultation Parties, believe is the highest or otherwise best offerfor the Acquired Assets.

(c) Notice of Hearing if Auction Not Held. With respect to the AcquiredAssets, if no Qualified Bid other than the Stalking Horse Bid is receivedby the Bid Deadline, the Debtors will not conduct the Auction for theAcquired Assets and will file with the Court, serve on the Sale NoticeParties, and cause to be published on the Debtors’ case informationwebsite (located at https://omniagentsolutions.com/ChristopherBanks) (the“Case Information Website”) a notice (i) indicating that the Auction forthe Acquired Assets has been canceled, (ii) indicating that the StalkingHorse Bidder is the Successful Bidder with respect to the Acquired Assets,and (iii) setting forth the date and time of the Sale Hearing.

(d) Notice of Auction Results. If an Auction is held, promptly following theselection of the Successful Bid(s) and Back-Up Bid(s), if any, the Debtorsshall file a notice of the Successful Bid(s) and Back-Up Bid(s), if any (the“Notice of Auction Results”), with the Court and cause the Notice ofAuction Results to be published on the Case Information Website.


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23. The Noticing Procedures constitute adequate and reasonable notice of the key

dates and deadlines for the sale process including the dates and deadlines identified in paragraph

22 above. Accordingly, the Debtors request that the Court find that the Noticing Procedures are

adequate and appropriate under the circumstances and comply with the requirements of

Bankruptcy Rule 2002 and the Complex Case Order.

IX. ASSUMPTION AND ASSIGNMENT PROCEDURES

24. In connection with the Sale, the Debtors anticipate that they will assume and

assign to the Successful Bidder (or its designated assignee(s)) certain of the Contracts and Leases

set forth on the schedule of assumed contracts (the “Contracts Schedule”), as they may be

modified or supplemented, pursuant to section 365(b) of the Bankruptcy Code. Accordingly, the

Debtors hereby seek approval of the proposed Assumption and Assignment Procedures set forth

below, which are designed to, among other things, (a) outline the process by which the Debtors

will serve notice to all Counterparties regarding the proposed assumption and assignment, related

Cure Amounts, if any, and information regarding the Stalking Horse Bidder’s or such other

Successful Bidder’s adequate assurance of future performance and (b) establish objection and

other relevant deadlines and the manner for resolving disputes relating to assumption and

assignment of the Contracts and Leases. Specifically, the Assumption and Assignment

Procedures are as follows:

(a) Contracts Schedule. As soon as reasonably practicable, the Debtorsshall file with the Court, and cause to be published on the CaseInformation Website, the Potential Assumption and Assignment Noticethat specifies (i) each of the Contracts and Leases that may be assumedand assigned in connection with the Sale, including the name of eachCounterparty and (ii) the proposed Cure Amount with respect to each ofthe Contracts and Leases. The Potential Assumption and AssignmentNotice shall also be served on each Counterparty listed on the ContractsSchedule via first class mail. For any Contract or Lease that is not listedin the Contracts Schedule, the Successful Bidder may decide to (i) rejectthe Contract and Lease or (ii) include the Contract or Lease as designated


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and receive the benefits of same for a period of time until the SuccessfulBidder determines whether such Contract or Lease should be assumed orrejected.

i. Successful Bidder’s Commitment to Cure Amounts. The CureAmount shall be paid by the Successful Bidder, in each case asand when finally determined by the Bankruptcy Court pursuant tothe procedures set forth in the Sale Order and the SuccessfulBidder’s Asset Purchase Agreement.

(b) Assumption and Assignment Objections.

i. Objection Deadlines. Any Counterparty may object to theproposed assumption or assignment of its Contract or Lease, theDebtors’ proposed Cure Amounts, if any, or the ability of theStalking Horse Bidder to provide adequate assurance of futureperformance (an “Assumption and Assignment Objection”). AllAssumption and Assignment Objections must (A) be in writing,(B) comply with the Bankruptcy Code, Bankruptcy Rules, andLocal Rules, (C) state, with specificity, the legal and factual basesthereof, including, if applicable, the Cure Amounts theCounterparty believes are required to cure defaults under therelevant Contracts and Leases, (D) be filed by no later than at 4:00p.m. (ET) fourteen (14) days after filing and service of thePotential Assumption and Assignment Notice and (E) be servedon: (i) proposed co-counsel to the Debtors Cole Schotz P.C., 25Main Street, Hackensack, New Jersey 07601, Attn: Michael D.Sirota and Felice R. Yudkin ([email protected] [email protected]); (ii) counsel for the Stalking HorseBidder, Riemer & Braunstein LLP, Times Square Tower, Suite2506, Seven Times Square, New York, New York 10036, Attn:Steven E. Fox; ([email protected]); (iii) counsel for theDebtors’ prepetition senior secured lenders, Riemer & BraunsteinLLP, Times Square Tower, Suite 2506, Seven Times Square, NewYork, New York 10036, Attn: Steven E. Fox;([email protected]), (v) counsel to any official committee ofunsecured creditors; and (vi) the Office of the United StatesTrustee, One Newark Center, 1085 Raymond Boulevard, Suite2100, Newark, NJ 07102, Attn: Jeffrey Sponder and LaurenBielskie ([email protected] [email protected]) (collectively, the “Assumption andAssignment Objection Notice Parties”).

ii. Resolution of Assumption and Assignment Objections. If aCounterparty files a timely Assumption and Assignment Objection,such objection shall be heard at the Sale Hearing or such later date


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that the Debtors, in consultation with the Successful Bidder, shalldetermine in their discretion (subject to the Court’s calendar).

iii. Failure to File Timely Assumption and Assignment Objection. If aCounterparty fails to file with the Court and serve on theAssumption and Assignment Objection Notice Parties a timelyAssumption and Assignment Objection, the Counterparty shall beforever barred from asserting any such objection with regard to theassumption or assignment of its Contract or Lease, andnotwithstanding anything to the contrary in the Contract or Lease,or any other document, the Cure Amounts set forth in the PotentialAssumption and Assignment Notice or the SupplementalAssumption and Assignment Notice (as defined below) shall becontrolling and will be the only amount necessary to cureoutstanding defaults under the applicable Contract or Lease undersection 365(b) of the Bankruptcy Code arising out of or related tothe Contract or Lease following the assumption and assignmentthereof, whether known or unknown, due or to become due,accrued, absolute, contingent. or otherwise, and the Counterpartyshall be forever barred from asserting any additional cure or otheramounts with respect to such Contract or Lease against theDebtors, the Successful Bidder, or the property of any of them.

(c) Modification of Contracts Schedule.

i. Unless otherwise provided in the Successful Bidder’s AssetPurchase Agreement, at any time prior to two (2) days prior toClosing, the Successful Bidder may elect to amend the ContractsSchedule. Any Contract or Lease that remains on the ContractsSchedule as of such date, shall be assumed by the Debtors andassigned to the Successful Bidder as part of the Sale, subject to theresolution of any Assumption and Assignment Objection withrespect to such Contract or Lease. Subject to the description setforth in paragraph 24(f) below, any Contracts or Leases not listedin the Contracts Schedule will either be listed as rejected or as adesignated contract.

ii. In the event that any Contract or Lease is added to the ContractsSchedule or previously-stated Cure Amounts are modified, inaccordance with the Stalking Horse Agreement, the SuccessfulBidder’s Asset Purchase Agreement or the Assumption andAssignment Procedures set forth in the Bidding Procedures Order,the Debtors will promptly serve a supplemental assumption andassignment notice, by overnight mail and, if known, e-mail, on theapplicable Counterparty (each, a “Supplemental Assumption andAssignment Notice”). Each Supplemental Assumption andAssignment Notice will include the same information with respect


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to the applicable Contract or Lease as is required to be included inthe Potential Assumption and Assignment Notice.

iii. Any Counterparty listed on a Supplemental Assumption andAssignment Notice whose Contract or Lease is proposed to beassumed and assigned and was not included in the PotentialAssumption and Assignment Notice may object to the proposedassumption or assignment of its Contract or Lease, the Debtors’proposed Cure Amounts, if any, or the ability of the SuccessfulBidder to provide adequate assurance of future performance (a“Supplemental Assumption and Assignment Objection”). AllSupplemental Assumption and Assignment Objections must (A) bein writing, (B) comply with the Bankruptcy Code, BankruptcyRules and Local Rules, (C) state, with specificity, the legal andfactual bases thereof, including, if applicable, the Cure Amountsthe Counterparty believes is required to cure defaults under therelevant Contract or Lease, (D) be filed by no later than ten (10)days from the date of service of such SupplementalAssumption and Assignment Notice and (E) be served on theAssumption and Assignment Objection Notice Parties. EachSupplemental Assumption and Assignment Objection, if any, shallbe resolved in the same manner as an Assumption and AssignmentObjection. For the avoidance of doubt, if a Counterparty was listedin the Potential Assumption and Assignment Notice and thepreviously-stated Cure Amount is modified in the SupplementalAssumption and Assignment Notice, such Counterparty may file aSupplemental Assumption and Assignment Objection only if suchobjection is to the modified Cure Amount.

(d) Post-Auction Objection. If, following the Auction, the Stalking HorseBidder is not the Successful Bidder, then the Debtors shall serve theNotice of Auction Results on each Counterparty that received a PotentialAssumption and Assignment Notice and any Supplemental Assumptionand Assignment Notice as soon as practicable following the conclusion ofthe Auction. Objections of any Counterparty related solely to the identityof and adequate assurance of future performance provided by theSuccessful Bidder may be raised at the Sale Hearing .

(e) Reservation of Rights. The inclusion of a Contract or Lease, or CureAmounts with respect thereto on a Potential Assumption and AssignmentNotice, the Contracts Schedule, or a Supplemental Assumption andAssignment Notice shall not constitute or be deemed a determination oradmission by the Debtors, the Successful Bidder(s), or any other party ininterest that such Contract or Lease is an executory contract or unexpiredlease of the Debtors within the meaning of the Bankruptcy Code. TheDebtors reserve all of their rights, claims, and causes of action withrespect to each Contract and Lease listed on the Potential Assumption and


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Assignment Notice, Supplemental Assumption and Assignment Notice,and Contracts Schedule. The Debtors’ inclusion of any Contract or Leaseon the Potential Assumption and Assignment Notice, SupplementalAssumption and Assignment Notice and Contracts Schedule shall not be aguarantee that such Contract or Lease ultimately will be assumed orassumed and assigned.

(f) Post-Closing Designation Rights. The Stalking Horse LOI contemplatesthat the Stalking Horse Bidder will be permitted to designate executorycontracts and unexpired leases as assumed or rejected for a limited periodafter the Closing Date. The Stalking Horse Bidder or the SuccessfulBidder may decide to (i) reject any executory contracts and Leases notincluded in the Contracts Schedule or (ii) designate any of the Contractsand Leases not included in the Contracts Schedule and receive the benefitsof such Contracts and Leases for a period of time until the SuccessfulBidder determines whether such Contract or Lease should be assumed orrejected.

X. APPROVAL OF THE RELIEF REQUESTED IS WARRANTEDAND IN THE BEST INTERESTS OF THE DEBTORS AND

THEIR ESTATES

A. The Proposed Bidding Procedures Are Fair, Appropriate and Should Be Approved

25. The Bidding Procedures are specifically designed to promote what courts have

deemed to be the paramount goal of any proposed sale of property of a debtor’s estate:

maximizing the value of sale proceeds received by the estate. See Burtch v. Ganz (In re

Mushroom Co.), 382 F.3d 325, 339 (3d Cir. 2004) (finding that a debtor had a fiduciary duty to

maximize and protect the value of the estate’s assets); Four B. Corp. v. Food Barn Stores, Inc.

(In re Food Barn Stores, Inc.), 107 F.3d 558, 564-65 (8th Cir. 1997) (recognizing that main goal

of any proposed sale of property of a debtor’s estate is to maximize value). Courts uniformly

recognize that procedures established for the purpose of enhancing competitive bidding are

consistent with the fundamental goal of maximizing the value of a debtor’s estate. See Calpine

Corp. v. O’Brien Env’t. Energy, Inc. (In re O’Brien Env’t. Energy, Inc.), 181 F.3d 527, 537 (3d

Cir. 1999) (noting that bidding procedures that promote competitive bidding provide a benefit to

a debtor’s estate); Official Comm. of Subordinated Bondholders v. Integrated Res. Inc. (In re


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Integrated Res. Inc.), 147 B.R. 650, 659 (S.D.N.Y. 1992) (observing that sale procedures

“encourage bidding and . . . maximize the value of the debtor’s assets”).

26. The Bidding Procedures provide for an orderly, uniform, and appropriately

competitive process through which interested parties may submit offers to purchase the Acquired

Assets. Given the case timeline negotiated with the Prepetition Credit Parties (as defined in the

Interim Cash Collateral Order), and taking into consideration the extensive pre-petition

marketing process, the Debtors have structured the Bidding Procedures to promote active

bidding by interested parties and to confirm the highest or otherwise best offer reasonably

available for the Acquired Assets. Additionally, the Bidding Procedures will allow the Debtors to

conduct the Auction in a fair and transparent manner that will encourage participation by

financially capable bidders with demonstrated ability to consummate a timely Sale. The Bidding

Procedures also allow the Debtors to determine that a single Qualified Bid or several Qualified

Bids in the aggregate represent the highest and best offer for the Debtors’ assets. Indeed, courts

within this district previously approved similar bidding procedures in cases such as these.13

Accordingly, the Bidding Procedures should be approved because, under the circumstances, they

are reasonable, appropriate and in the best interests of the Debtors, their estates, and all parties in

interest.

B. The Expense Reimbursement Has a Sound Business Purposes and Should BeApproved

27. The Stalking Horse Agreement provides for an Expense Reimbursement in an

amount up to $350,000. The Debtors believe that having the ability to provide the Expense

13 See, e.g., In re Congoleum Corporation, Case No. 20-18488 (MBK) (Bankr. D.N.J. Sept. 4, 2020) [Doc.No. 275]; In re SLT Holdco, Inc., Case No. 20-18368 (MBK) (Bankr. D.N.J. July 13, 2020) [Doc. No. 72]; In reAceto Corp., Case No. 19-13448 (VFP) (Bankr. D.N.J. March 15, 2019) [Doc. No. 142]; In re Saint Michael’sMedical Ctr., Case No. 15-24999 (VFP) (Bankr. D.N.J. Aug. 25, 2015) [Doc. No. 121].


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Reimbursement to the Purchaser will ensure the Debtors’ ability to maximize the realizable value

of the Purchased Assets for the benefit of the Debtors’ estates, creditors and other parties-in-

interest. Approval of breakup fees and expense reimbursements and other forms of bidding

protections in connection with the sale of significant assets pursuant to section 363 of the

Bankruptcy Code has become established practice in chapter 11 cases. Such bidding protections

enable a debtor to ensure a sale to a contractually committed bidder at a price the debtor believes

is fair, while providing the debtor with an opportunity to enhance the value received by its estate

through an auction process. Historically bankruptcy courts have approved bidding incentives

similar to the Expense Reimbursement pursuant to the “business judgment rule.” See e.g.,

Official Comm. of Subordinated Bondholders v. Integrated Res., Inc. (In re Integrated Res., Inc.) ,

147 B.R. 650 (S.D.N.Y. 1992); In re 995 Fifth Ave. Assocs., L.P., 96 B.R. 24, 28 (Bankr.

S.D.N.Y. 1989). Here, the Debtors believe that the Expense Reimbursement is an essential

prerequisite for the Stalking Horse Bidder to enter into the Stalking Horse Agreement.

Specifically, the Debtors believe that the presence of the Stalking Horse Bidder will set a floor

for the value of the Acquired Assets and attract other potential buyers to bid for such assets,

thereby maximizing the realizable value of the Acquired Assets for the benefit of the Debtors’

estates, their creditors and all other parties in interest.

28. The United States Court of Appeals for the Third Circuit, however, has

established standards for determining the propriety of bidding incentives in the bankruptcy

context. O’Brien, 181 F.3d 527; see also In re Reliant Energy Channelview LP, 594 F.3d 200

(3d Cir. 2010). The Third Circuit held that even though bidding incentives are measured against

a business judgment standard in non-bankruptcy transactions, the administrative expense

provisions of Bankruptcy Code section 503(b) govern in the bankruptcy context. Accordingly,


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to be approved, bidding incentives must provide some post-petition benefit to the Debtors’

estates. See O’Brien 181 F.3d at 533. The Third Circuit defined at least two instances in which

bidding incentives may benefit the estate. First a breakup fee or expense reimbursement may be

necessary to preserve the value of the estate if the assurance of the fee “promote[s] more

competitive bidding, such as by inducing a bid that otherwise would not have been made and

without which bidding would have been limited.” O’Brien, 181 F.3d at 537. Second, if the

availability of breakup fees and expenses were to induce a bidder to research the value of the

debtors and convert that value to a dollar figure on which other bidders can rely, the bidder may

have provided a benefit to the estate by increasing the likelihood that the price at which the

debtors is sold will reflect their true worth. Id.

29. Here, the Expense Reimbursement is capped at $350,000. This amount is

consistent with the range of bid protections typically paid in sale transactions that have been

approved by courts within this district.14 The Debtors believe that the amount of the Expense

Reimbursement is reasonable and appropriate in light of the size and nature of the transaction

and the significant efforts that have been expended by the Stalking Horse Bidder. The Expense

Reimbursement was necessary to induce the Stalking Horse Bid from the Stalking Horse Bidder,

which Stalking Horse Bid will serve as the floor bid in connection with the proposed competitive

bidding process. The Debtors’ ability to offer the Expense Reimbursement enables them to

promote a sale of the Acquired Assets with the greatest benefit to their estates. Moreover, the

Expense Reimbursement will not diminish the Debtors’ estates. The Debtors do not intend to

14 See, e.g., In re Congoleum Corporation, Case No. 20-18488 (MBK) (Bankr. D.N.J. Sept. 4, 2020) [Doc.No. 275] (authorizing an expense reimbursement capped at $175,000); In re SLT Holdco, Inc., Case No. 20-18368(MBK) (Bankr. D.N.J. July 13, 2020) [Doc. No. 72] (authorizing an expense reimbursement capped at $500,000); Inre Aceto Corp., Case No. 19-13448 (VFP) (Bankr. D.N.J. March 15, 2019) [Doc. No. 142] (authorizing an expensereimbursement capped at $750,000); In re Saint Michael’s Medical Ctr., Case No. 15-24999 (VFP) (Bankr. D.N.J.Aug. 25, 2015) [Doc. No. 121] (authorizing an expense reimbursement capped at $200,000).


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terminate the proposed Sale to the Stalking Horse Bidder if to do so would incur an obligation to

pay the Expense Reimbursement, unless to accept an alternative bid that exceeds the

consideration offered by the Stalking Horse Bidder by an amount sufficient to pay the Expense

Reimbursement. Accordingly, the Debtors request approval of the Expense Reimbursement.

C. The Proposed Sale Satisfies the Requirements of Section 363 of the BankruptcyCode

30. Ample authority exists for approval of the Sale contemplated by this Motion.

Section 363 of the Bankruptcy Code provides, in relevant part, that “[t]he trustee, after notice

and a hearing, may use, sell, or lease, other than in the ordinary course of business, property of

the estate.” 11 U.S.C. § 363(b)(1). Although section 363 of the Bankruptcy Code does not

specify a standard for determining when it is appropriate for a court to authorize the use, sale, or

lease of property of a debtor’s estate, courts have approved the authorization of a sale of a

debtor’s assets if such sale is based upon the sound business judgment of the debtor. See, e.g.,

Meyers v. Martin (In re Martin), 91 F.3d 389, 395 (3d Cir. 1996) (citing Fulton State Bank v.

Schipper (In re Schipper), 933 F.2d 513 (7th Cir. 1991)); In re Chateaugay Corp., 973 F.2d 141,

143 (2d Cir. 1992); Stephen Indus., Inc. v. McClung, 789 F.2d 386 (6th Cir. 1986); Comm. of

Equity Security Holders v. Lionel Corp. (In re Lionel Corp.), 722 F.2d 1063, 1071 (2d Cir.

1983).

31. Courts typically consider the following factors in determining whether a proposed

sale satisfies this standard: (a) whether a sound business justification exists for the sale;

(b) whether adequate and reasonable notice of the sale was provided to interested parties;

(c) whether the sale will produce a fair and reasonable price for the property; and (d) whether the

parties have acted in good faith. See In re Decora Indus., Inc., Case No. 00-4459 (JJF), 2002 WL

32332749, at *2 (D. Del. May 20, 2002) (citing In re Del. & Hudson Ry. Co., 124 B.R. 169, 176


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(D. Del. 1991)). Where a debtor demonstrates a valid business justification for a decision, it is

presumed that “in making a business decision the directors of a corporation acted on an informed

basis, in good faith and in the honest belief that the action taken was in the best interests of the

company.” In re Integrated Res., 147 B.R. at 656 (citations omitted).

1. The Debtors Have Demonstrated a Sound Business Justification forthe Proposed Sale

32. A sound business purpose for the sale of a debtor’s assets outside the ordinary

course of business exists where such sale is necessary to preserve the value of the estate for the

benefit of creditors and interest holders. See, e.g., In re Abbotts Dairies of Pa., Inc., 788 F.2d 143

(3d Cir. 1986); In re Lionel Corp., 722 F.2d at 1063; In re Food Barn Stores, 107 F.3d at 564-65

(recognizing the paramount goal of any proposed sale of property of estate is to maximize value).

33. As set forth above, a strong business justification exists for the sale of the

Acquired Assets as described herein. An orderly and expeditious sale of the Acquired Assets is

critical to maximizing the value of the Debtors’ estates and recoveries for the Debtors’ economic

stakeholders.

2. The Noticing Procedures Are Reasonable and Appropriate

34. The Noticing Procedures described above are reasonably calculated to provide

notice to all parties on the Debtors’ master service list, all parties with an interest in property

potentially subject to sale, as required by the Complex Case Order, all parties that have requested

notice pursuant to Bankruptcy Rule 2002, and all other parties in interest, as set forth in more

detail above, with adequate and timely notice of, among other things, the proposed Sale, the

Bidding Procedures, the Auction, and the Sale Hearing.


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3. The Proposed Sale Will Produce a Fair and Reasonable PurchasePrice for the Acquired Assets

35. As set forth above, the Debtors believe that the proposed sale process will

produce a fair and reasonable purchase price for the Acquired Assets. The Stalking Horse Bid is

an offer to purchase the Acquired Assets for a price that the Debtors, with the advice of the

Debtors’ advisors, already have determined to be fair and reasonable. Given the extensive pre-

petition marketing process and that the Stalking Horse Bid will serve as a floor for Qualified

Bids for the Acquired Assets, the Debtors are confident that the post-petition sale process will

culminate in the Debtors obtaining the highest or otherwise best offer for such assets. The

Debtors also have reserved the right in the Bidding Procedures to determine either that a single

Qualified Bid for all of the Acquired Assets or several Qualified Bids in the aggregate for

different Assets represent the highest and best offer received by the Debtors.

4. The Successful Bidder Should Be Entitled to the Protections ofSection 363(m) of the Bankruptcy Code

36. Section 363(m) of the Bankruptcy Code protects a good faith purchaser’s interest

in property purchased from a debtor notwithstanding that a sale conducted under section 363(b)

is later reversed or modified on appeal. Specifically, section 363(m) of the Bankruptcy Code

states the following:

The reversal or modification on appeal of an authorization under[section 363(b) of the Bankruptcy Code] . . . does not affect thevalidity of a sale . . . to an entity that purchased . . . such property ingood faith, whether or not such entity knew of the pendency of theappeal, unless such authorization and such sale . . . were stayedpending appeal.

11 U.S.C. § 363(m). Section 363(m) of the Bankruptcy Code fosters the “policy of not only

affording finality to the judgment of the [B]ankruptcy [C]ourt, but particularly to give finality to

those orders and judgments upon which third parties rely.” In re Abbotts Dairies, 788 F.2d at 147


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(citations omitted); see also Allstate Ins. Co. v. Hughes, 174 B.R. 884, 888 (S.D.N.Y. 1994)

(“Section 363(m) . . . provides that good faith transfers of property will not be affected by the

reversal or modification on appeal of an unstayed order, whether or not the transferee knew of

the pendency of the appeal.”).

37. While the Bankruptcy Code does not define “good faith,” the Third Circuit has

held that “the phrase encompasses one who purchases in ‘good faith’ and for ‘value.’” In re

Abbotts Dairies, 788 F.2d at 147 (to constitute lack of good faith, a party’s conduct in connection

with the sale must usually amount to “fraud, collusion between the purchaser and other bidders

or the trustee, or an attempt to take grossly unfair advantage of other bidders”) (citations

omitted); see also In re Bedford Springs Hotel, Inc., 99 B.R. 302, 305 (Bankr. W.D. Pa. 1989);

In re Perona Bros., Inc., 186 B.R. 833, 839 (D.N.J. 1995).

38. In other words, a party would have to show fraud or collusion between the buyer

and the debtor in possession, the trustee, or other bidders to demonstrate a lack of good faith. See

Kabro Assocs. of West Islip, LLC v. Colony Hill Assocs. (In re Colony Hill Assocs.) , 111 F.3d

269, 276 (2d Cir. 1997) (“[t]ypically, the misconduct that would destroy a purchaser’s good faith

status at a judicial sale involves fraud, collusion between the purchaser and other bidders or the

trustee, or an attempt to take grossly unfair advantage of other bidders”) (citations omitted). Due

to the absence of a bright-line test for good faith, the determination is based on the facts of each

case, with a focus on the “integrity of [a bidder’s] conduct in the course of the sale proceedings.”

In re Pisces Leasing Corp., 66 B.R. 671, 673 (E.D.N.Y. 1986) (quoting In re Rock Indus. Mach.

Corp., 572 F.2d 1195, 1998 (7th Cir. 1978)).

39. The Debtors submit that the Stalking Horse Bidder is a “good faith purchaser”

within the meaning of section 363(m) of the Bankruptcy Code. The Debtors and the Stalking


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Horse Bidder have entered into the Stalking Horse LOI and are working toward a signed

Stalking Horse Agreement without collusion, in good faith, and through extensive arm’s-length

negotiations. The Stalking Horse Bidder has engaged separate counsel and other professional

advisors to represent its interests in the negotiation of the Stalking Horse Agreement and in the

sale process generally. To the best of the Debtors’ knowledge, information and belief, no party

has engaged in any conduct that would cause or permit the Stalking Horse Agreement to be set

aside under section 363(m) of the Bankruptcy Code.

40. Further, as set forth above, the Bidding Procedures are designed to produce a fair

and transparent competitive bidding process. Each Qualified Bidder participating in the Auction

must confirm that it has not engaged in any collusion with respect to the bidding or the sale of

any of the Acquired Assets. Any asset purchase agreement with a Successful Bidder executed by

the Debtors will be negotiated at arm’s-length and in good faith. Accordingly, the Debtors seek a

finding that any Successful Bidder (including the Stalking Horse Bidder) is a good faith

purchaser and is entitled to the full protections afforded by section 363(m) of the Bankruptcy

Code.

41. Based on the foregoing, the Debtors submit that they have demonstrated that the

proposed Sale is a sound exercise of the Debtors’ business judgment and should be approved as a

good faith transaction.

D. The Acquired Assets Should Be Sold Sale Free and Clear of Liens, Claims, Interests,and Encumbrances Under Section 363(f) of the Bankruptcy Code

42. In the interest of attracting the best offers, and except as may be provided

otherwise in the Stalking Horse Agreement, the Acquired Assets should be sold free and clear of

any and all liens, claims, interests, and other encumbrances, in accordance with section 363(f) of

the Bankruptcy Code, with any such liens, claims, interests, and encumbrances attaching to the


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proceeds of the applicable sale. Section 363(f) of the Bankruptcy Code authorizes a debtor to sell

assets free and clear of liens, claims, interests, and encumbrances if any one of the following

conditions is satisfied:

(a) applicable non-bankruptcy law permits sale of such property free and clearof such interest;

(b) such entity consents;

(c) such interest is a lien and the price at which such property is to be sold isgreater than the value of all liens on such property;

(d) such interest is in bona fide dispute; or

(e) such entity could be compelled, in legal or equitable proceeding, to accepta money satisfaction of such interest.

11 U.S.C. § 363(f); see also In re Kellstrom Indus., Inc., 282 B.R. 787, 793 (Bankr. D. Del.

2002) (“Section 363(f) is written in the disjunctive, not the conjunctive, and if any of the five

conditions are met, the debtor has the authority to conduct the sale free and clear of all liens.”);

Citicorp Homeowners Servs., Inc. v. Elliot (In re Elliot), 94 B.R. 343, 345 (E.D. Pa. 1988)

(same).

43. Section 363(f) of the Bankruptcy Code is supplemented by section 105(a) of the

Bankruptcy Code, which provides that “[t]he Court may issue any order, process or judgment

that is necessary or appropriate to carry out the provisions of [the Bankruptcy Code].” 11 U.S.C.

§ 105(a); see also Volvo White Truck Corp. v. Chambersburg Beverage, Inc. (In re White Motor

Credit Corp.), 75 B.R. 944, 948 (Bankr. N.D. Ohio 1987) (“Authority to conduct such sales [free

and clear of claims] is within the court’s equitable powers when necessary to carry out the

provisions of [the Bankruptcy Code].”).

44. The Debtors submit, and to the extent necessary will demonstrate at the Sale

Hearing, that the sale of the Acquired Assets free and clear of all liens, claims, interests, and


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encumbrances will satisfy one or more of the requirements under section 363(f) of the

Bankruptcy Code. Moreover, the Debtors will send the Sale Notice to any other purported pre-

petition lienholders. If such lienholders do not object to the proposed Sale, then their consent

should reasonably be presumed. Accordingly, the Debtors request that, unless a party asserting a

pre-petition lien, claim or encumbrance on any of the Acquired Assets timely objects to this

Motion, such party shall be deemed to have consented to any Sale approved at the Sale Hearing.

See Hargave v. Twp. of Pemberton (In re Tabone, Inc.), 175 B.R. 855, 858 (Bankr. D.N.J. 1994)

(by not objecting to a sale motion, a creditor is deemed to consent to the relief requested therein).

Accordingly, the Debtors request that the Court authorize the sale of the Acquired Assets free

and clear of any liens, claims, interests, and encumbrances, in accordance with section 363(f) of

the Bankruptcy Code, subject to such liens, claims, interests, and encumbrances attaching to the

proceed thereof in the same order of relative priority, with the same validity, force and effect as

prior to such.

E. Assumption and Assignment of Executory Contracts and Unexpired Leases ShouldBe Authorized

45. Section 365(a) of the Bankruptcy Code provides that a debtor in possession

“subject to the court’s approval, may assume or reject any executory contract or unexpired lease

of the debtor.” 11 U.S.C. § 365(a). Courts employ the business judgment standard in determining

whether to approve a debtor’s decision to assume or reject an executory contract or unexpired

lease. See, e.g., In re Market Square Inn, Inc., 978 F.2d 116, 121 (3d Cir. 1992) (assumption or

rejection of lease “will be a matter of business judgment by the bankruptcy court”); In re HQ

Global Holdings, Inc., 290 B.R. 507, 511 (Bankr. D. Del. 2003) (finding that a debtor’s decision

to assume or reject executory contract is governed by business judgment standard and may only

be overturned if decision is product of bad faith, whim, or caprice). The “business judgment” test


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in this context only requires that a debtor demonstrate that assumption or rejection of an

executory contract or unexpired lease benefits the estate. See Sharon Steel Corp. v. Nat’l Fuel

Gas Distrib. Corp., 872 F.2d 36, 40 (3d Cir. 1989).

46. Any assumption of the Contracts and Leases is an exercise of the Debtors’ sound

business judgment because the transfer of such Contracts and Leases is necessary to the Debtors’

ability to obtain the best value for the Acquired Assets. Given that consummation of the Sale is

critical to the Debtors’ efforts to maximize value for their estates and stakeholders, the Debtors’

assumption of Contracts and Leases is an exercise of sound business judgment and, therefore,

should be approved.

47. The consummation of any Sale involving the assignment of Contracts and Leases

will be contingent upon the Debtors’ compliance with the applicable requirements of section 365

of the Bankruptcy Code. Section 365(b)(1) of the Bankruptcy Code requires that any outstanding

defaults under the Contracts and Leases to be assumed be cured or that the Debtors provide

adequate assurance that such defaults will be promptly cured. The Debtors’ assumption and

assignment of the Contracts and Leases will be contingent upon payment of the Cure Amounts

and effective only upon the closing of an applicable Sale or any later applicable date of

assumption and assignment of such Contracts and Leases. As set forth above, the Debtors

propose to file with the Court and serve on each Counterparty a Potential Assumption and

Assignment Notice, which will set forth the Debtors’ good faith calculations of Cure Amounts

with respect to each of the Contracts and Leases listed on such Potential Assumption and

Assignment Notice. Counterparties will have a meaningful opportunity to raise any objections to

the proposed assumption of their respective Contracts and Leases in advance of the Sale Hearing.


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48. Pursuant to section 365(f)(2) of the Bankruptcy Code, a debtor may assign an

executory contract if “adequate assurance of future performance by the assignee of such contract

or lease is provided.” 11 U.S.C. § 365(f)(2). The meaning of “adequate assurance of future

performance” depends on the facts and circumstances of each case, but should be given

“practical, pragmatic construction.” See Carlisle Homes, Inc. v. Azzari (In re Carlisle Homes,

Inc.), 103 B.R. 524, 538 (Bankr. D.N.J. 1988) (citation omitted); see also In re Natco Indus.,

Inc., 54 B.R. 436, 440 (Bankr. S.D.N.Y. 1985) (adequate assurance of future performance “does

not mean an absolute assurance that debtor will thrive and pay rent”); In re Bon Ton Rest. &

Pastry Shop, Inc., 53 B.R. 789, 803 (Bankr. N.D. Ill. 1985) (finding that, “[a]lthough no single

solution will satisfy every case, the required assurance will fall considerably short of an absolute

guarantee of performance”). Among other things, adequate assurance may be provided by

evidencing the assignee’s financial health and experience in managing the type of enterprise or

property assigned. See In re Bygaph, Inc., 56 B.R. 596, 605-06 (Bankr. S.D.N.Y. 1986)

(adequate assurance of future performance is present when the prospective assignee of a lease

has financial resources and has expressed willingness to devote sufficient funding to the business

to give it a strong likelihood of succeeding).

49. As set forth above and in the Bidding Procedures, for a bid to qualify as a

Qualified Bid, a Potential Bidder must include with its bid information regarding its ability (and

the ability of its designated assignee, if applicable) to perform under the Contracts and Leases

that it wishes for the Debtors to assume and assign. Each affected Counterparty will have an

opportunity to object to the ability of the Successful Bidder to provide adequate assurance as

provided in the Bidding Procedures Order. To the extent necessary, the Debtors will present facts

at the Sale Hearing to show the financial wherewithal, willingness, and ability of the Successful


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Bidder to perform under the Contracts and Leases that it wishes for the Debtors to assume and

assign.

50. In addition, to facilitate the assumption and assignment of the Contracts and

Leases, the Debtors further request that the Court find that all anti-assignment provisions

contained therein, whether such provisions expressly prohibit or have the effect of restricting or

limiting assignment of such Contracts and Leases, unenforceable and prohibited pursuant to

section 365(f) of the Bankruptcy Code.15

F. The Designation Rights Are Appropriate

51. For any Contracts and Leases that the Successful Bidder has not included in the

Contracts Schedule, the Successful Bidder can decide to designate any such Contract or Leases

as set forth in paragraph 24(f) above. The designation rights allow the Successful Bidder to

receive the benefits of certain Contracts and Leases while it considers whether to have the

Contracts and Leases assumed and assigned or rejected. Under the designation rights, the

counterparties will be compensated pursuant to the terms of their Contracts and Leases. The

Stalking Horse Bidder has required this concept as an essential condition of the Stalking Horse

Agreement but the designation rights under the Sale Order will be available to any Successful

Bidder.

15 Section 365(f)(1) of the Bankruptcy Code provides in part that, “notwithstanding a provision in anexecutory contract or unexpired lease of the debtor, or in applicable law, that prohibits, restricts, or conditions theassignment of such contract or lease, the trustee may assign such contract or lease . . . .” 11 U.S.C. § 365(f)(1).Section 365(f)(3) of the Bankruptcy Code further provides that “[n]otwithstanding a provision in an executorycontract or unexpired lease of the debtor, or in applicable law that terminates or modifies, or permits a party otherthan the debtor to terminate or modify, such contract or lease or a right or obligation under such contract or lease onaccount of an assignment of such contract or lease, such contract, lease, right, or obligation may not be terminated ormodified under such provision because of the assumption or assignment of such contract or lease by the trustee.” 11U.S.C. § 365(f)(3).


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52. The designation rights will provide the Successful Bidder and the counterparties

to Contracts and Leases with an opportunity to negotiate the Contracts and Leases prior to a

decision regarding whether to assume and assign or reject the Contracts and Leases. Ultimately,

this is expected to result in the Successful Bidder continuing business relationships with more

counterparties to Contracts and Leases than if all decisions related to Contracts and Leases were

forced to be made on or before the Closing.

53. Bankruptcy courts in this Circuit have approved similar designation rights. See,

e.g., In re SLT Holdco, Inc., Case No. 20-18368 (MBK) (Bankr. D.N.J. July 13, 2020) [Doc. No.

72] (designation rights period extending for thirty (30) days following the closing of the Sale);

Alpha Entm’t LLC, Case No. 20-10940 (LSS) (Bankr. D. Del. Aug. 7, 2020) (designation rights

period extending through the earlier of (a) plan confirmation occurring no earlier than 70 days

after closing date, or (b) 90 days from and after closing date); In re Brooks Bros. Grp., Inc., Case

No. 20-11785 (CSS) (Bankr. D. Del. Aug. 3, 2020) (designation rights period extending post-

closing until the later of plan confirmation or Dec. 31, 2020); In re PQ New York, Inc., Case No.

20-11266 (JTD) (Bankr. D. Del. June 29, 2020) (post-closing date designation deadline 10 days

following entry of sale order); In re Sugarfina, Inc., Case No. 1911973 (MFW) (Bankr. D. Del.

Oct. 15, 2019) (designation rights period extending 90 days from and after closing date); In re

RM Holdco LLC, Case No. 18-11795 (MFW) (Bankr. D. Del. Sept. 6, 2018) (same).

G. The Sale Will Not Require the Appointment of a Consumer Privacy Ombudsman.

54. The Sale of the Acquired Assets will not necessitate the appointment of a

consumer privacy ombudsman in accordance with section 332 of the Bankruptcy Code. Section

363(b)(1) of the Bankruptcy Code provides that:

[I]if the debtors in connection with offering a product or a service discloses to anindividual a policy prohibiting the transfer of personally identifiable informationabout individuals to persons that are not affiliated with the debtors and if such policy


3861893/0001-40003824v4

is in effect on the date of the commencement of the case, then the trustee may not sellor lease personally identifiable information to any person unless . . . such sale or suchlease is consistent with such policy.

11 U.S.C. § 363(b)(1).

55. Section 101(41A) defines “personally identifiable information” as an individual’s

name, residence address, email address, telephone number, social security number or credit card

number, as well as an individual’s birth date or other information that, if associated with the

information described previously, would permit the identification or contacting of the

individual.” 11 U.S.C. § 101(41A).

56. The Debtors’ privacy policy provides that:

In the event of a sale, merger, bankruptcy, dissolution, liquidation, corporatereorganization, grant of a security interest, or similar transaction involving some orall of our business, We may share with or transfer Your information to the buyer,creditor or successor entity. Because one of the purposes for which Christopher &Banks collects, uses and/or discloses Your information is the operation of itsbusiness, in the event that all or part of the assets of Christopher & Banks are sold toa new owner, all information, or that part of the information associated with the assetsbeing sold, will be transferred (disclosed) to the new owners, subject to applicablelaws. We may also continue to retain a copy of the information that is sold ortransferred for our continued use.

57. Based on the language of the policy itself, section 363(b)(1) is not implicated

because the Debtors did not disclose to an “individual a policy prohibiting the transfer of

personally identifiable information.” See 11 U.S.C. §363(b)(1) (emphasis added).

58. In any event, the buyer of the Acquired Assets will utilize the “personally

identifiable information” in exactly the same fashion as the Debtors. Accordingly, even if

section 363(b)(1) were implicated, the Court may authorize the proposed Sale without appointing

a privacy ombudsman because the transfer of the “personally identifiable information” is

consistent with the Debtors’ privacy policy as provided in 11 U.S.C. § 363(b)(1).


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XI. WAIVER OF BANKRUPTCY RULES 6004(A), 6004(H) AND 6006(D)

59. Bankruptcy Rule 6004(h) provides that an “order authorizing the use, sale, or

lease of property . . . is stayed until the expiration of 14 days after entry of the order, unless the

court orders otherwise.” Fed. R. Bankr. P. 6004(h). Bankruptcy Rule 6006(d) further provides

that an “order authorizing the trustee to assign an executory contract or unexpired lease under §

365(f) is stayed until the expiration of 14 days after the entry of the order, unless the court orders

otherwise.” Fed. R. Bankr. P. 6006(d).

60. The Debtors believe that any Sale should be consummated as soon as practicable

to preserve and maximize value. Among other things, the Interim Cash Collateral Order requires

(i) the Debtors to secure a Court order approving the Bidding Procedures on or before twenty

(20) days of the Petition Date (i.e. on or before February 2, 2021), (ii) bids on the Debtors’ assets

to be due by no later than thirty-five (35) days after the Petition Date (i.e. on or before February

17, 2021), (iii) an auction to be commenced on or before thirty-seven (37) days after the Petition

Date (i.e. on or before February 19, 2021), and (iv) unless the Debtors have not received one or

more binding bids at the auction in form and substance satisfactory to the Debtors’ pre-petition

lenders, on or before forty (40) days after the Petition Date, the Court to have entered an order

approving a sale of the Debtors’ assets, as set forth in more detail therein.

61. Accordingly, the Debtors request that any Sale Order approving the sale of the

Acquired Assets and the assumption and assignment of the Contracts and Leases be effective

immediately upon entry of such order and that the fourteen-day stay under Bankruptcy Rules

6004(h) and 6006(d) be waived.

XII. WAIVER OF MEMORANDUMOF LAW

62. The Debtors respectfully request that the Court waive the requirement to file a

separate memorandum of law pursuant to Local Rule 9013-1(a)(3) because the legal basis upon


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which the Debtors rely is incorporated herein and the Motion does not raise any novel issues of

law.

XIII. NO PREVIOUS REQUEST

63. No previous request for the relief sought herein has been made by the Debtors to

this or any other court.

XIV. NOTICE

64. Notice of this Motion has been given to (i) the Office of the United States Trustee

for Region 3; (ii) the holders of the twenty (20) largest unsecured claims against the Debtors (on

a consolidated basis); (iii) counsel for the Debtors’ prepetition senior secured lenders, Riemer &

Braunstein LLP, Times Square Tower, Suite 2506, Seven Times Square, New York, New York

10036, Attn: Steven E. Fox; (iv) counsel for the Stalking Horse Bidder, Riemer & Braunstein

LLP, Times Square Tower, Suite 2506, Seven Times Square, New York, New York 10036, Attn:

Steven E. Fox; (v) the Internal Revenue Service; (vi) the United States Attorney’s Office for the

District of New Jersey; (vii) the Office of the Attorney General for the State of New Jersey; and

(viii) the United States Securities and Exchange Commission. The Debtors submit that, in view

of the facts and circumstances, such notice is sufficient and no other or further notice need be

provided.

[remainder of page left intentionally blank]


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WHEREFORE the Debtors respectfully request that the Court enter the Bidding

Procedures Order, substantially in the form submitted herewith, and, after the Sale Hearing, the

Sale Order, granting the relief requested herein and such other and further relief as the Court may

deem just and proper.

DATED: January 25, 2021 COLE SCHOTZ P.C.Proposed Attorneys for Debtorsand Debtors in Possession

/s/ Michael D. SirotaMichael D. Sirota ([email protected])Felice R. Yudkin ([email protected])Jacob S. Frumkin ([email protected])Matteo Percontino ([email protected])Rebecca W. Hollander ([email protected])Court Plaza North25 Main StreetP.O. Box 800Hackensack, New Jersey 07602-0800Telephone: (201) 489-3000Facsimile: (201) 489-1536


61893/0001-40003824v4

Exhibit 1

Bidding Procedures

Case 21-10269-ABA Doc 111-1 Filed 01/25/21 Entered 01/25/21 11:26:40 DescExhibit 1 - Bidding Procedures Page 1 of 9

61893/0001-40003824v4

BIDDING PROCEDURES

Set forth below are the bidding procedures (the “Bidding Procedures”) to be employedin connection with the proposed sale of certain assets (collectively, the “Assets”) owned byChristopher & Banks Corporation and its subsidiary debtors and debtors in possession(collectively, the “Debtors”), in connection with the Debtors’ jointly administered chapter 11cases pending in the United States Bankruptcy Court for the District of New Jersey (the“Bankruptcy Court”), lead case number 21-10269 (ABA).

By the Debtors’ Motion for Entry of Orders (I)(A) Approving Bidding Procedures forSale of Substantially All of the Debtors’ Assets, (B) Approving Expense Reimbursement,(C) Scheduling Auction for, and Hearing to Approve, Sale of Substantially All of the Debtors’Assets, (D) Approving Form and Manner of Notices of Sale, Auction, and Sale Hearing, (E)Approving Assumption and Assignment Procedures, and (F) Granting Related Relief and (II)(A)Approving Sale of Substantially All of the Debtors’ Assets Free and Clear of All Liens, Claims,Interests, and Encumbrances, (B) Approving Assumption and Assignment of Executory Contractsand Unexpired Leases, and (C) Granting Related Relief [Docket No. __] (the “Motion”) datedJanuary __, 2021, the Debtors sought, among other things, approval of the Bidding Proceduresfor soliciting bids for, conducting an auction (the “Auction”), and consummating a sale of all orsubstantially all of the Acquired Assets (the “Sale”). Capitalized terms used but not otherwisedefined herein shall have the meanings ascribed to them in the Motion or in that certain AssetPurchase Agreement, dated January __, 2021 (the “Stalking Horse Agreement”), by and amongthe Debtors and ALCC, LLC and/or its affiliates or assigns (collectively, the “Stalking HorseBidder”), as applicable.

THE BIDDING PROCEDURES

In order to ensure that the Debtors receive the maximum value for the Acquired Assets,the Stalking Horse Agreement is subject to higher or better offers, and, as such, the StalkingHorse Agreement has been approved by the Bankruptcy Court as the “stalking-horse” bid for theAcquired Assets set forth therein (the “Stalking Horse Bid”).

Provisions Governing Qualifications of Bidders

Unless otherwise ordered by the Bankruptcy Court, in order to participate in the biddingprocess, prior to the Bid Deadline (defined below), each party, other than the Stalking HorseBidder, that wishes to participate in the bidding process (a “Potential Bidder”) must deliver thefollowing to the Notice Parties (as defined below):

(a) a written disclosure of the identity of each entity that will be bidding for all orcertain of the Acquired Assets or otherwise participating in connection with suchbid; and

(b) an executed confidentiality agreement (to be delivered prior to the distribution ofany confidential information by the Debtors to a Potential Bidder) in form andsubstance satisfactory to the Debtors; without limiting the foregoing, each


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confidentiality agreement executed by a Potential Bidder shall contain standardnon-solicitation provisions.

A Potential Bidder that delivers the documents and information described above or thatthe Debtors determine, in consultation with the official committee of unsecured creditors, if any,appointed in these chapter 11 cases (together, the “Consultation Parties”), is likely (based onavailability of financing, experience, and other considerations) to be able to consummate theSale, and whose Qualified Bid is received by the Debtors no later than the Bid Deadline (asdefined below) is deemed qualified (a “Qualified Bidder”).

Due Diligence

The Debtors will provide any Potential Bidder such due diligence access or additionalinformation as the Debtors deem appropriate, which may include differentiations between thediligence provided to strategic and financial bidders, as appropriate, and contractual obligationsto limit access to certain proprietary information. The due diligence period will extend throughand including the Bid Deadline. Additional due diligence will not be provided after the BidDeadline, unless otherwise deemed reasonably appropriate by the Debtors.

Provisions Governing Qualified Bids

A bid will be considered a “Qualified Bid” only if the bid is submitted by a QualifiedBidder and the Debtors determine, after consultation with the Consultation Parties, that the bidcomplies with all of the following:

(a) it is received by the Notice Parties prior to the Bid Deadline;

(b) it states that the applicable Qualified Bidder offers to purchase, in cash, or, ifapplicable, through a credit bid, either (i) all of the Acquired Assets upon theterms and conditions that the Debtors reasonably determine are no less favorableto the Debtors than those set forth in the Stalking Horse Agreement or (ii) certainof the Acquired Assets of the Debtors, provided that the Debtors reserve the rightto determine that several Qualified Bids in the aggregate represent the highest andbest offer for the Debtors’ assets;

(c) it includes a signed writing stating that the Qualified Bidder’s offer is irrevocableuntil the selection of the Successful Bidder, provided that if such bidder isselected as the Successful Bidder or the Back-Up Bidder its offer shall remainirrevocable until the later of (a) the closing of the Sale to the Successful Bidder orthe Back-Up Bidder, which shall occur no later than February 26, 2020, and (b)the date that is 45 days after the Sale Hearing;

(d) it includes confirmation that there are no conditions precedent to the QualifiedBidder’s ability to enter into a definitive agreement and that all necessary internaland shareholder approvals have been obtained prior to the submission of the Bid;

(e) it contains no due diligence or financing contingencies of any kind;


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(f) it is based on the Stalking Horse Agreement and includes a duly authorized andexecuted copy of an asset purchase agreement, which specifies the purchase pricefor the Acquired Assets expressed in U.S. Dollars (the “Purchase Price”) and anyassumed liabilities, together with all exhibits and schedules thereto and a copymarked to show any amendments and modifications to the Stalking HorseAgreement (an “Asset Purchase Agreement”);

(g) it includes financial statements or other written evidence, including (if applicable)a firm, irrevocable commitment for financing, establishing the ability of theQualified Bidder to consummate the proposed Sale and pay the Purchase Price incash, such as will allow the Debtors to make a reasonable determination as to theQualified Bidder’s financial and other capabilities to consummate the transactioncontemplated by the Asset Purchase Agreement;

(h) it has a value to the Debtors, determined in the Debtors’ reasonable businessjudgment after consultation with the Consultation Parties, that is greater than orequal to the sum of the value offered under the Stalking Horse Agreement, plusthe Expense Reimbursement plus $650,000;1

(i) it identifies with particularity which Contracts and Leases the Qualified Bidderwishes to assume and provides details of the Qualified Bidder’s proposal for thetreatment of related Cure Amounts and the provision of adequate assurance offuture performance to the counterparties to such Contracts and Leases;

(j) it includes an acknowledgement and representation that the bidder: (a) has had anopportunity to conduct any and all required due diligence regarding the AcquiredAssets prior to making its offer; (b) has relied solely upon its own independentreview, investigation, and/or inspection of any documents and/or the AcquiredAssets in making its bid; (c) did not rely upon any written or oral statements,representations, promises, warranties, or guaranties whatsoever, whether expressor implied (by operation of law or otherwise), regarding the Acquired Assets orthe completeness of any information provided in connection therewith or with theAuction, except as expressly stated in the Asset Purchase Agreement; and (d) isnot entitled to any expense reimbursement, break-up fee, or similar type ofpayment in connection with its bid;

(k) it includes evidence, in form and substance reasonably satisfactory to the Debtors,of authorization and approval from the Qualified Bidder’s board of directors (orcomparable governing body) with respect to the submission, execution, delivery,and closing of the Asset Purchase Agreement;

(l) it is accompanied by a good faith deposit in the form of a wire transfer (to a bankaccount specified by the Debtors), certified check, or such other form acceptable

1 A Qualified Bid must incorporate a working capital adjustment for cash on the Debtors’ balance sheet anddebt outstanding on the Debtors’ asset based lending facility.


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to the Debtors, payable to the order of the Debtors (or such other party as theDebtors may determine) in an amount equal to 10% of the Purchase Price (a“Good Faith Deposit”);

1. All Good Faith Deposits shall be returned to each bidder not selectedby the Debtors as the Successful Bidder or the Back-Up Bidder nolater than three business days following entry of the Sale Order.

(m) it states that the bidder consents to the jurisdiction of the Bankruptcy Court; and

(n) it contains such other information as may be reasonably requested by the Debtors,in consultation with the Consultation Parties.

Notwithstanding the foregoing, the Stalking Horse Bidder is deemed to be a QualifiedBidder and the Stalking Horse Bid is deemed to be a Qualified Bid.

The Debtors shall notify the Consultation Parties and all Qualified Bidders in writing asto whether or not any bids (other than the Stalking Horse Bid) constitute Qualified Bids, and willnotify each Qualified Bidder that has submitted a bid (other than the Stalking Horse Bidder),whether such Qualified Bidder’s bid constitutes a Qualified Bid promptly after suchdetermination has been made; provided such notification shall not be given later than twenty-four (24) hours following the expiration of the Bid Deadline.

Bid Deadline

A Qualified Bidder that desires to make a bid will deliver written copies of its bid to thefollowing parties (collectively, the “Notice Parties”): (i) proposed co-counsel to the DebtorsCole Schotz P.C., 25 Main Street, Hackensack, New Jersey 07601, Attn: Michael D. Sirota andFelice R. Yudkin ([email protected] and [email protected]); (ii) counsel for theStalking Horse Bidder, Riemer & Braunstein LLP, Times Square Tower, Suite 2506, SevenTimes Square, New York, New York 10036, Attn: Steven E. Fox; ([email protected]); (iii)counsel for the Debtors’ prepetition senior secured lenders, Riemer & Braunstein LLP, TimesSquare Tower, Suite 2506, Seven Times Square, New York, New York 10036, Attn: Steven E.Fox; ([email protected]), (v) counsel to any official committee of unsecured creditors; and(vi) the Office of the United States Trustee, One Newark Center, 1085 Raymond Boulevard,Suite 2100, Newark, NJ 07102, Attn: Jeffrey Sponder and Lauren Bielskie([email protected] and [email protected]); so as to be received by theforegoing parties no later than 4:00 p.m. (ET) on February 17, 2021 (the “Bid Deadline”). TheBid Deadline may be extended by the Debtors in consultation with the Consultation Parties.

Evaluation of Competing Bids

A Qualified Bid will be valued by the Debtors based upon several factors including,without limitation, (1) the amount of the Purchase Price provided by such bid, (2) the AcquiredAssets to be acquired and liabilities to be assumed, (3) the nature of the consideration providedby such bid, (4) the risks and timing associated with consummating such bid, (5) any proposedrevisions to the Stalking Horse Agreement, (6) the ability of the Qualified Bidder to obtain


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appropriate regulatory approvals, (7) whether any Qualified Bid contains a sufficient cashcomponent to ensure that the Debtors’ estates are not rendered administratively insolvent, (8) theExpense Reimbursement and (9) any other factors deemed relevant by the Debtors.

The Debtors provide the following analysis of the Stalking Horse Bid value, the ExpenseReimbursement, and the Minimum Initial Overbid Amount to assist Potential Bidders incomposing their Bids:

No Qualified Bids

If the Debtors do not receive any Qualified Bids by the Bid Deadline other than theStalking Horse Bid, the Debtors will not conduct an auction for the Acquired Assets and theStalking Horse Bidder will be named the Successful Bidder upon the expiration of the BidDeadline. The Debtors will file with the Court, serve on the Sale Notice Parties and cause to bepublished on the Debtors’ case information website (located athttps://omniagentsolutions.com/ChristopherBanks) (the “Case Information Website”) a notice(i) indicating that the Auction for the Acquired Assets has been canceled, (ii) indicating that theStalking Horse Bidder is the Successful Bidder with respect to the Acquired Assets and(iii) setting forth the date and time of the Sale Hearing.

Auction Process

If the Debtors receive one or more Qualified Bids in addition to the Stalking Horse Bid,the Debtors will conduct an open Auction, which shall take place on February 19, 2021 at10:00 a.m. (ET), virtually through Zoom, GoToMeeting, WebEx or similar platform that allows


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parties to participate remotely, or such other time and location as shall be timely communicatedto all entities entitled to attend the Auction. All parties in interest will be permitted to attend.The Auction, which shall be documented, recorded, or videotaped, shall run in accordance withthe following procedures:

(a) only the Debtors, the Stalking Horse Bidder, any other Qualified Bidder that hastimely submitted a Qualified Bid, the Consultation Parties, and the advisors toeach of the foregoing may attend and participate in the Auction; provided,however, that any party in interest may attend (but not participate in) the Auction,if any, provided such party in interest provides the Debtors with written notice ofits intention to attend the Auction on or before one (1) business day prior to theAuction, which written notice shall be sent to counsel for the Debtors viaelectronic mail, to Cole Schotz P.C., Attn: Michael D. Sirota and Felice R.Yudkin ([email protected] and [email protected]);

(b) only the Stalking Horse Bidder and such other Qualified Bidders who have timelysubmitted Qualified Bids by the Bid Deadline will be entitled to make subsequentbids at the Auction;

(c) each Qualified Bidder shall be required to confirm that it has not engaged in anycollusion, within the meaning of section 363(n) of the Bankruptcy Code, withrespect to any bids submitted or not submitted in connection with the Sale orotherwise engaged in bad faith or collusion, as governed by Local Rule 6004-2(c),with respect to the bidding or the Sale;

(d) at least one (1) business day prior to the Auction, each Qualified Bidder who hastimely submitted a Qualified Bid must inform the Debtors whether it intends toattend the Auction and all Qualified Bidders wishing to attend the Auction musthave at least one individual representative with authority to bind such QualifiedBidder in attendance at the Auction; provided that in the event a Qualified Bidderelects not to attend the Auction, such Qualified Bidder’s Qualified Bid shallnevertheless remain fully enforceable against such Qualified Bidder until theselection of the Successful Bidder and Back-Up Bidder at the conclusion of theAuction. At the outset of the Auction, the Debtors shall announce the QualifiedBid that the Debtors, in consultation with the Consultation Parties, believe is thehighest or otherwise best offer for the Acquired Assets (the “Starting Bid”) to theStalking Horse Bidder and all other Qualified Bidders who have timely submittedQualified Bids by the Bid Deadline;

(e) all Qualified Bidders who have timely submitted Qualified Bids by the BidDeadline will be entitled to be present for all Subsequent Bids (as defined below)at the Auction and the actual identity of each Qualified Bidder will be disclosedon the record at the Auction;

(f) the Debtors may employ and announce at the Auction additional procedural rulesthat are reasonable under the circumstances for conducting the Auction, provided


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that such rules (i) are not materially inconsistent with the Bidding Procedures, theBankruptcy Code, or any order of the Court entered in connection herewith;(ii) do not purport to abrogate or modify the Expense Reimbursement; and(iii) are disclosed to each Qualified Bidder attending the Auction;

(g) bidding at the Auction will begin with the Starting Bid and continue in biddingincrements (each, a “Subsequent Bid”) providing a net value to the Debtors’estates of at least $250,000 above the immediately prior bid (the “ContinuingMinimum Overbid Amount”). After the first round of bidding and between eachsubsequent round of bidding, the Debtors, after consultation with the ConsultationParties, shall announce the bid (and the value of such bid) that they believe to bethe highest or otherwise best bid (each, the “Leading Bid”);

(h) a round of bidding will conclude after each participating Qualified Bidder has hadthe opportunity to submit a Subsequent Bid with full knowledge of the LeadingBid; and

(i) except as specifically set forth herein, for the purpose of evaluating the value ofthe Purchase Price provided by each Subsequent Bid (including any SubsequentBid by the Stalking Horse Bidder), the Debtors shall give effect to the ExpenseReimbursement as well as any additional liabilities to be assumed by a QualifiedBidder, and any additional costs which may be imposed on the Debtors by aQualified Bidder.

Selection of Successful Bid

At least prior to the conclusion of the Auction, the Debtors will review and evaluate eachQualified Bid submitted at the Auction (including by the Stalking Horse Bidder) in accordancewith the procedures set forth herein and determine which offer is the highest or otherwise bestoffer (one or more such bids, collectively the “Successful Bid” and the bidder(s) making suchbid(s), collectively, the “Successful Bidder”), and communicate to the Stalking Horse Bidder,the other Qualified Bidders and the other Auction participants the identity of the SuccessfulBidder and the details of the Successful Bid. The determination of the Successful Bid by theDebtors, in consultation with the Consultation Parties, at the conclusion of the Auction shall befinal, subject only to approval by the Bankruptcy Court. For the avoidance of doubt, the Debtorsreserve the right to determine either that a single Qualified Bid for all of the Acquired Assets orseveral Qualified Bids in the aggregate for different portions of the Acquired Assets representsthe Successful Bid.

The Qualified Bidder with the next highest or otherwise best Qualified Bid, asdetermined by the Debtors, will be required to serve as a back-up bidder (the “Back-Up Bidder”and such Bid, the “Back-Up Bid”) and keep its bid open and irrevocable until the later to occurof 45 days after the Sale Hearing and closing on the Successful Bid with the Successful Bidder,subject to the rights of the Stalking Horse Bidder, if any, to terminate the Stalking HorseAgreement on the terms therein. If the Successful Bidder fails to consummate the Sale, the Back-Up Bidder will be deemed to be the new Successful Bidder, and the Debtors will be authorized


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and directed to consummate the Sale with the Back-Up Bidder without further order of theBankruptcy Court, subject to the rights of the Stalking Horse Bidder to terminate the StalkingHorse Agreement on the terms therein.

Within one (1) business day after conclusion of the Auction, the Successful Bidder shallcomplete and execute all agreements, contracts, instruments and other documents necessary toconsummate the Successful Bid. Within one (1) business day after conclusion of the Auction, theDebtors shall file a notice with the Bankruptcy Court identifying the Successful Bidder and theBack-Up Bidder.

The Debtors will sell the Acquired Assets to the Successful Bidder pursuant to the termsof the Successful Bid upon the approval of such Successful Bid by the Bankruptcy Court at theSale Hearing.

Return of Deposits

All Good Faith Deposits shall be returned to each bidder not selected by the Debtors asthe Successful Bidder or the Back-Up Bidder (as defined below) no later than three businessdays following the entry of the Sale Order; provided, however, that the Stalking HorseAgreement shall govern the treatment of the deposit of the Stalking Horse Bidder.

THE EXPENSE REIMBURSEMENT

In recognition of its expenditure of time, energy, and resources, the Debtors have agreed,and the Bankruptcy Court has approved, that if the Stalking Horse Bidder is not the SuccessfulBidder, the Debtors will reimburse, subject to the Bidding Procedures Order and the StalkingHorse Agreement, to the Stalking Horse Bidder the Stalking Horse Bidder’s expenses incurred inconnection with the Stalking Horse Agreement and the due diligence performed by the StalkingHorse Bidder, not to exceed $350,000 (the “Expense Reimbursement”). The ExpenseReimbursement shall be payable as provided for pursuant to the terms of the Bidding ProceduresOrder and the Stalking Horse Agreement.

SALE HEARING

The Debtors will seek entry of an order from the Bankruptcy Court at a hearing (the“Sale Hearing”) to begin at February __, 2021, at __:00 _.m. (ET), subject to the availabilityof the Bankruptcy Court, to approve and authorize the Sale to the Successful Bidder. TheDebtors reserve the right to change the date and/or time of the Sale Hearing (or any other datesrelated to the Sale) in order to achieve the maximum value for the Acquired Assets; provided,however, that no such change shall impact the Stalking Horse Bidder’s rights under the StalkingHorse Agreement.


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EXHIBIT 2

Form of Sale Notice

Case 21-10269-ABA Doc 111-2 Filed 01/25/21 Entered 01/25/21 11:26:40 DescExhibit 2 - Form of Sale Notice Page 1 of 5

61893/0001-40003824v4




In re:


Debtors.1

Chapter 11

Case No. 21-10269(ABA)


NOTICE OF SALE, BIDDING PROCEDURES,AUCTION, AND SALE HEARING

PLEASE TAKE NOTICE that the above-captioned debtors (collectively, the“Debtors”) each filed a voluntary petition for relief under chapter 11 of title 11 of the UnitedStates Code in the United States Bankruptcy Court for the District of New Jersey (the “Court”)on January 13, 2021.

PLEASE TAKE FURTHER NOTICE that, on January __, 2021, the Debtors filed theDebtors’ Motion for Entry of Orders (I)(A) Approving Bidding Procedures for Sale ofSubstantially All of the Debtors’ Assets, (B) Approving Expense Reimbursement, (C) SchedulingAuction for, and Hearing to Approve, Sale of Substantially All of the Debtors’ Assets,(D) Approving Form and Manner of Notices of Sale, Auction, and Sale Hearing, (E) Approving



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Assumption and Assignment Procedures, and (F) Granting Related Relief and (II)(A) ApprovingSale of Substantially All of the Debtors’ Assets Free and Clear of All Liens, Claims, Interests,and Encumbrances, (B) Approving Assumption and Assignment of Executory Contracts andUnexpired Leases, and (C) Granting Related Relief [Docket No. __] (the “Bidding ProceduresMotion”)2 with the Court seeking entry of an order, among other things, (a) approving theBidding Procedures pursuant to which the Debtors will solicit and select the highest andotherwise best offer for the sale (the “Sale”) of substantially all of the Debtors’ assets (the“Assets”), (b) scheduling and conducting an auction (the “Auction”), if necessary, (c)establishing procedures for the assumption and assignment of executory contracts and unexpiredleases in connection with the Sale, including notice of proposed cure amounts (the “Assumptionand Assignment Procedures”) and (d) scheduling a hearing (the “Sale Hearing”) to approvethe Sale.

PLEASE TAKE FURTHER NOTICE that, on January __, 2021, the Court entered theOrder (A) Approving Bidding Procedures for Sale of Substantially All of the Debtors’ Assets,(B) Approving Expense Reimbursement, (C) Scheduling Auction for, and Hearing to Approve,Sale of Certain All of the Debtors’ Assets, (D) Approving Form and Manner of Notices of Sale,Auction, and Sale Hearing, (E) Approving Assumption and Assignment Procedures, and (F)Granting Related Relief [Docket No. __] (the “Bidding Procedures Order”) approving, amongother things, the Bidding Procedures, which establish the key dates and times related to the Saleand the Auction. All interested bidders should carefully read the Bidding Procedures Order andthe Bidding Procedures in their entirety.3

Contact Person for Parties Interested in Submitting a Bid

The Bidding Procedures set forth the requirements for becoming a Qualified Bidder andsubmitting a Qualified Bid. Any party interested in making an offer to purchase all or certain ofthe Acquired Assets must comply strictly with the Bidding Procedures. Only Qualified Bids willbe considered by the Debtors, in accordance with the Bidding Procedures.

Any interested bidder should contact, as soon as possible:

B. Riley Securities, Inc.Attn: Perry Mandarino ([email protected]) and Gideon Rosenbaum

([email protected])

Obtaining Additional Information

Copies of the Bidding Procedures Motion, the Bidding Procedures, and the BiddingProcedures Order, as well as all related exhibits, including the Stalking Horse Agreement, and allother documents filed with the Court, are available free of charge on the Debtors’ case

2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in theBidding Procedures Motion.

3 To the extent of any inconsistencies between the Bidding Procedures and the summary descriptions of theBidding Procedures in this notice, the terms of the Bidding Procedures shall control in all respects.


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information website at https://omniagentsolutions.com/ChristopherBanks or can be requested bye-mail at [email protected].

Important Dates and Deadlines

2. Bid Deadline. The deadline to submit a Qualified Bid is February 17, 2021 at 4:00 p.m.(ET).

3. Auction. In the event that the Debtors timely receive a Qualified Bid in addition to theQualified Bid of the Stalking Horse Bidder and subject to the satisfaction of any furtherconditions set forth in the Bidding Procedures, the Debtors intend to conduct an Auctionfor the Acquired Assets. An open Auction, if one is held, will commence on February19, 2021 at 10:00 a.m. (ET) virtually through Zoom, GoToMeeting, WebEx or similarplatform that allows parties to participate remotely, or such other time and location asshall be timely communicated to all parties entitled to attend the Auction. The Auctionshall be documented, recorded, or videotaped.

4. Auction Objection and Sale Objection Deadlines. The deadline to file an objectionwith the Court to the Sale Order, the Stalking Horse Bidder, or the Sale with the StalkingHorse Bidder (collectively, the “Sale Objections”) is February __, 2021 at 4:00 p.m.(ET) (the “Sale Objection Deadline”). If the Auction is held, the deadline to file anobjection with the Court to the conduct of the Auction, the Successful Bidder, or the Saleto the Successful Bidder (collectively, the “Auction Objections”) is at February __,2021 at 4:00 p.m. (ET) (the “Auction Objection Deadline”).

5. Sale Hearing. A hearing (the “Sale Hearing”) to approve and authorize the Sale to theSuccessful Bidder will be held before the Court on or before February __, 2021 at __:00_.m. (ET) or such other date as determined by the Court.

Filing Objections

Sale Objections and Auction Objections, if any, must (a) be in writing, (b) state, withspecificity, the legal and factual bases thereof, (c) be filed with the Court by no later than theSale Objection Deadline or Auction Objection Deadline, as applicable, and (d) be served on(i) proposed co-counsel to the Debtors Cole Schotz P.C., 25 Main Street, Hackensack, NewJersey 07601, Attn: Michael D. Sirota and Felice R. Yudkin ([email protected] [email protected]); (ii) counsel for the Stalking Horse Bidder, Riemer & BraunsteinLLP, Times Square Tower, Suite 2506, Seven Times Square, New York, New York 10036, Attn:Steven E. Fox; ([email protected]); (iii) counsel for the Debtors’ prepetition senior securedlenders, Riemer & Braunstein LLP, Times Square Tower, Suite 2506, Seven Times Square, NewYork, New York 10036, Attn: Steven E. Fox; ([email protected]), (v) counsel to any officialcommittee of unsecured creditors; and (vi) the Office of the United States Trustee, One NewarkCenter, 1085 Raymond Boulevard, Suite 2100, Newark, NJ 07102, Attn: Jeffrey Sponder andLauren Bielskie ([email protected] and [email protected]). AuctionObjections must also be served on counsel for the Successful Bidder.


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CONSEQUENCES OF FAILING TO TIMELY ASSERT AN OBJECTION

Any party who fails to make a timely Sale Objection on or before the Sale ObjectionDeadline in accordance with the Bidding Procedures Order and this Notice shall be foreverbarred from asserting any Sale Objection, including with respect to the transfer of theAcquired Assets free and clear of all liens, claims, encumbrances, and other interests.

Any party who fails to make a timely Auction Objection on or before the AuctionObjection Deadline in accordance with the Bidding Procedures Order and this Notice shall beforever barred from asserting any Auction Objection, including with respect to the transfer ofthe Acquired Assets free and clear of all liens, claims, encumbrances, and other interests.

NO SUCCESSOR LIABILITY

The Sale will be free and clear of, among other things, any claim arising from anyconduct of the Debtors prior to the closing of the Sale, whether known or unknown, whetherdue or to become due, whether accrued, absolute, contingent, or otherwise, so long as suchclaim arises out of or relates to events occurring prior to the closing of the Sale. Accordingly,as a result of the Sale, the Successful Bidder will not be a successor to any of the Debtors byreason of any theory of law or equity, and the Successful Bidder will have no liability, exceptas expressly provided in the Successful Bidder’s Asset Purchase Agreement, for any liens,claims, encumbrances, and other interests against or in any of the Debtors under any theoryof law, including successor liability theories.

DATED: _____________, 2021 COLE SCHOTZ P.C.Proposed Attorneys for Debtorsand Debtors in Possession

Michael D. Sirota ([email protected])Felice R. Yudkin ([email protected])Jacob S. Frumkin ([email protected])Matteo Percontino ([email protected])Rebecca W. Hollander ([email protected])Court Plaza North25 Main StreetP.O. Box 800Hackensack, New Jersey 07602-0800Telephone: (201) 489-3000Facsimile: (201) 489-1536


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EXHIBIT 3

Form of Potential Assumption and Assignment Notice

Case 21-10269-ABA Doc 111-3 Filed 01/25/21 Entered 01/25/21 11:26:40 DescExhibit 3 - Form of Potential Assumption and Assignment Notice Page 1 of 6

61893/0001-40003824v4




In re:


Debtors.1

Chapter 11

Case No. 21-10269 (ABA)


NOTICE OF POTENTIAL ASSUMPTION AND ASSIGNMENT OF EXECUTORYCONTRACTS OR UNEXPIRED LEASES AND CURE AMOUNTS

PLEASE TAKE NOTICE THAT:

1. The above-captioned debtors (collectively, the “Debtors”) each filed a voluntarypetition for relief under chapter 11 of title 11 of the United States Code (the “BankruptcyCode”) in the United States Bankruptcy Court for the District of New Jersey (the “Court”) onJanuary 13, 2021 (the “Petition Date”).



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2. On January __, 2021, the Debtors filed a motion (the “Bidding ProceduresMotion”)2 with the Court seeking entry of the Bidding Procedures Order. On January __, 2021,the Court entered the Bidding Procedures Order that, among other things, approved (a) theBidding Procedures pursuant to which the Debtors will solicit and select the highest andotherwise best offer for the sale (the “Sale”) of all or certain of the Debtors’ assets (the“Acquired Assets”), (b) the form and manner of notice related to the Sale, (c) the procedures forthe assumption and assignment of executory contracts and unexpired leases in connection withthe Sale, including notice of proposed cure amounts (the “Assumption and AssignmentProcedures”) and (d) scheduled the hearing (the “Sale Hearing”) to enter an order approvingthe Sale to the Stalking Horse Bidder or such other Successful Bidder (the “Sale Order”) forFebruary __, 2021, at __:00 _.m. (ET).

3. Upon the closing of the Sale, the Debtors intend to assume and assign to theSuccessful Bidder certain Contracts and Leases. A schedule listing the Contracts and Leases thatmay potentially be assumed and assigned as part of the Sale is attached hereto as Exhibit A (the“Contracts Schedule”) and may also be viewed free of charge on the Debtors’ case informationwebsite, located at https://omniagentsolutions.com/ChristopherBanks (the “Case ManagementWebsite”), or can be requested by e-mail at [email protected]. Inaddition, the Cure Amounts, if any, necessary for the assumption and assignment of suchContracts and Leases are also set forth on the Contracts Schedule. Each Cure Amount listed onthe Contracts Schedule represents the amount necessary to cure all liabilities of any nature ofthe Debtors arising under a Contract or Lease prior to the closing of the Sale or otherapplicable effective date of the assumption and assignment of such Contract or Lease, whetherknown or unknown, whether due or to become due, whether accrued, absolute, contingent orotherwise, so long as such liabilities arise out of or relate to events occurring prior to theclosing of the Sale or other applicable effective date of the assumption and assignment of suchContract or Lease. For any Contract or Lease that is not listed in the Contracts Schedule, theSuccessful Bidder may decide to (i) reject the Contract or Lease or (ii) include the Contract orLease for a period of time until the Successful Bidder determines whether such Contract or Leaseshould be assumed or rejected.

4. YOU ARE RECEIVING THIS NOTICE BECAUSE YOU HAVE BEENIDENTIFIED AS A COUNTERPARTY TO A CONTRACT OR LEASE THATMAY BEASSUMED AND ASSIGNED AS PART OF THE SALE. Under the terms of the Assumptionand Assignment Procedures, unless otherwise provided in the Successful Bidder’s AssetPurchase Agreement (as defined in the Bidding Procedures), at any time prior to the date ofclosing of the Sale, the Debtors may (a) remove a Contract or Lease from the Contracts Scheduleor (b) modify the previously-stated Cure Amount associated with any Contract or Lease. TheSuccessful Bidder may also amend the Contracts Schedule pursuant to Section __ of the AssetPurchase Agreement. The presence of a Contract or Lease listed the Contracts Schedule doesnot constitute an admission that such Contract or Lease is an executory contract or unexpiredlease or that such Contract or Lease will be assumed and assigned as part of the Sale. The

2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in theBidding Procedures Motion.


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Debtors reserve all of their rights, claims and causes of action with respect to the Contractsand Leases listed on the Contracts Schedule. Subject to the description set forth in paragraph24(f) of the Motion, any Contracts or Leases not listed in the Contracts Schedule will either belisted as rejected or as a designated contract.

5. Pursuant to the Assumption and Assignment Procedures, objections to theproposed assumption and assignment of a Contract or Lease (an “Assumption and AssignmentObjection”), including any objection relating to the Cure Amount or adequate assurance of theStalking Horse Bidder’s future ability to perform, must (a) be in writing, (b) comply with theBankruptcy Code, Bankruptcy Rules and Local Rules, (c) state, with specificity, the legal andfactual bases thereof, including, if applicable, the Cure Amount that the Counterparty believes isrequired to cure defaults under the relevant Contract or Lease, (d) be filed by no later than 4:00p.m. (ET) fourteen (14) days after filing and service of the Potential Assumption andAssignment Notice and (e) be served on (i) proposed co-counsel to the Debtors Cole SchotzP.C., 25 Main Street, Hackensack, New Jersey 07601, Attn: Michael D. Sirota and Felice R.Yudkin ([email protected] and [email protected]); (ii) counsel for the StalkingHorse Bidder, Riemer & Braunstein LLP, Times Square Tower, Suite 2506, Seven TimesSquare, New York, New York 10036, Attn: Steven E. Fox; ([email protected]); (iii) counselfor the Debtors’ prepetition senior secured lenders, Riemer & Braunstein LLP, Times SquareTower, Suite 2506, Seven Times Square, New York, New York 10036, Attn: Steven E. Fox;([email protected]), (v) counsel to any official committee of unsecured creditors; and (vi) theOffice of the United States Trustee, One Newark Center, 1085 Raymond Boulevard, Suite 2100,Newark, NJ 07102, Attn: Jeffrey Sponder and Lauren Bielskie ([email protected] [email protected]) (collectively, the “Assumption and Assignment ObjectionNotice Parties”).

6. In the event that any Contract or Lease is added to the Contracts Schedule or anypreviously-stated Cure Amounts are modified, the Debtors will promptly serve a SupplementalAssumption and Assignment Notice, by overnight mail and, if known, e-mail, on the applicableCounterparty. Objections, if any, to such Supplemental Assumption and Assignment Notice(s)(each a “Supplemental Assumption and Assignment Objection”) must (a) be in writing,(b) comply with the Bankruptcy Code, Bankruptcy Rules and Local Rules, (c) state, withspecificity, the legal and factual bases thereof, including, if applicable, the Cure Amount that theCounterparty believes is required to cure defaults under the relevant Contract or Lease, (d) befiled by no later than ten (10) days from the date of service of such SupplementalAssumption and Assignment Notice and (E) be served on the Assumption and AssignmentObjection Notice Parties.

7. Adequate assurance of future performance information for the Stalking HorseBidder is available by contacting counsel to the Stalking Horse Bidder using the contactinformation set forth in paragraph 5 above.

8. If, following the Auction, the Stalking Horse Bidder is not the Successful Bidder,then the Debtors will (a) file the Notice of Auction Results, which will, among other things,include the identity of the Successful Bidder, (b) post such notice on the Case ManagementWebsite, and (c) serve such notice on each Counterparty then identified on the Contracts


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Schedule. Each such Counterparty will then have an opportunity to object to the ability of suchSuccessful Bidder to provide adequate assurance of future performance with respect to suchCounterparty’s Contract or Lease (a “Post-Auction Objection”). Any Post-Auction Objectionmay be raised at the Sale Hearing.

9. The Court will hear and determine any Assumption and Assignment Objectionsand Post-Auction Objections at the Sale Hearing or such other date that the Debtors, inconsultation with the Successful Bidder, shall determine in their discretion (subject to the Court’scalendar).

CONSEQUENCES OF FAILING TO TIMELY ASSERT AN OBJECTION

UNLESS YOU FILE AN OBJECTION TO THE CURE AMOUNT AND/OR THEASSUMPTION OR ASSIGNMENT OF YOUR CONTRACT OR LEASE IN ACCORDANCEWITH THE INSTRUCTIONS AND DEADLINES SET FORTH HEREIN, YOU SHALL BE(A) BARRED FROM OBJECTING TO THE CURE AMOUNT SET FORTH ON THECONTRACTS SCHEDULE, (B) ESTOPPED FROM ASSERTING OR CLAIMING ANYCURE AMOUNT AGAINST THE DEBTORS, THE STALKING HORSE BIDDER, ORSUCH OTHER SUCCESSFUL BIDDER THAT IS GREATER THAN THE CUREAMOUNT SET FORTH ON CONTRACTS SCHEDULE, AND (C) DEEMED TO HAVECONSENTED TO THE ASSUMPTION AND/OR ASSIGNMENT OF YOUR CONTRACTOR LEASE.

OBTAINING ADDITIONAL INFORMATION

Copies of the Bidding Procedures Motion, the Bidding Procedures, and the BiddingProcedures Order, as well as all related exhibits, including the Stalking Horse Agreement and allother documents filed with the Court, are available free of charge on the Case ManagementWebsite at https://omniagentsolutions.com/ChristopherBanks or can be requested by [email protected].


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DATED: ______________, 2021Respectfully submitted,

COLE SCHOTZ P.C.Proposed Attorneys for Debtorsand Debtors in Possession

Michael D. Sirota ([email protected])Felice R. Yudkin ([email protected])Jacob S. Frumkin ([email protected])Matteo Percontino ([email protected])Rebecca W. Hollander([email protected])Court Plaza North25 Main StreetP.O. Box 800Hackensack, New Jersey 07602-0800Telephone: (201) 489-3000Facsimile: (201) 489-1536


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EXHIBIT 4

Stalking Horse LOI

Case 21-10269-ABA Doc 111-4 Filed 01/25/21 Entered 01/25/21 11:26:40 DescExhibit 4 - Stalking Horse LOI Page 1 of 15

CONFIDENTIAL

January 22, 2021

Christopher & Banks Corporation

2400 Xenium Lane North

Plymouth, MN 55441

Attn: Keri L. Jones, Chief Executive Officer

Re: Expression of Interest to Acquire Assets of Christopher & Banks Corporation, et al.

Ms. Jones:

This letter of intent (this “Letter of Intent”) and the term sheet attached hereto as Annex A (the

“Term Sheet”), which sets forth the principal terms and conditions pursuant to which ALCC, LLC and/or

its affiliates or assigns (collectively, “Buyer”, “our” or “we”) proposes to acquire substantially all of the

assets and/or interests (collectively, the “Assets”) owned and/or operated by Christopher & Banks

Corporation and its subsidiaries Christopher & Banks, Inc. and Christopher & Banks Company

(collectively, “C&B” and together with the Buyer, the “Parties” and individually each a “Party”), but

leaves adequate cash in the estate to fund the remainder of the budget (the “Transaction”), in

connection with C&B’s cases under chapter 11 of title 11, United States Code, 11 U.S.C. §101, et seq.

(the “Bankruptcy Code”) in the United State Bankruptcy Court for the District of New Jersey (the

“Bankruptcy Court”). Capitalized terms not defined herein shall have the meaning given to them in the

Term Sheet.

1. Due Diligence. From and after the date of this Letter, C&B will authorize its

management, financial advisors and other outside representatives to allow Buyer and its advisors,

including (without limitation) Hilco Streambank and Digital Prophets Networks, LLC, full access to the

facilities, financial statements, tax returns, records, key employees, customers, suppliers and advisors of

the business for the purpose of completing Buyer’s due diligence review. The due diligence review will

include, but is not limited to, a complete review of the business, financial, legal, tax, intellectual

property and labor records and agreements of the business, and any other matters as Buyer’s

operations, financial, tax, legal counsel, and other advisors deem relevant. Upon the execution of the

Transaction Agreements (as defined below), Buyer shall be permitted to continue to conduct due

diligence and prepare for a potential closing.

2. Definitive Transaction Agreements. Subject to the conditions set forth in the applicable

Term Sheet, we will negotiate in good faith to enter into a definitive purchase and sale agreement with

C&B, together with the other agreements necessary to consummate the Transaction described in the

Term Sheet, based substantially on the terms set forth in the applicable Term Sheet (together, such

definitive agreement and other agreements necessary to consummate the Transaction, the “Transaction

Agreements”).

3. Governing Law. This Letter of Intent and the rights and obligations hereunder and all

claims and controversies arising out of the subject matter hereof whether sounding in contract law, tort

law or otherwise shall be governed by, and shall be construed and enforced in accordance with, the laws


Christopher & Banks Corporation, et al.

Attn: Keri L. Jones, Chief Executive Officer

January 22, 2021

Page 2 of 4

2

of the State of New York without regard to conflicts of law provisions that would result in the application

of any other law.

4. Confidentiality. Each of Buyer and C&B agrees that the contents and existence of this

Letter of Intent and the Term Sheet are confidential and they agree that they shall not disclose the

contents or existence of this Letter of Intent or the Term Sheet to any person other than their respective

affiliates and their respective professional advisors, who shall agree to maintain such confidentiality;

provided, that notwithstanding anything to the contrary in the foregoing, C&B shall be permitted to file

this a fully executed version of this Letter of Intent together with the applicable Term Sheet with the

Bankruptcy Court.

5. No Third-Party Beneficiaries. Except as specifically set forth or referred to herein,

nothing herein is intended or shall be construed to confer upon any person or entity other than the

Parties and their successors or assigns, any rights or remedies under or by reason of this Letter of Intent.

6. Expenses. Except as may be provided otherwise in the Transaction Agreements once

executed, the Parties will each pay their own transaction expenses, including the fees and expenses of

investment bankers and other advisors, incurred in connection with the proposed Transaction.

7. No Binding Agreement. This Letter of Intent reflects the intention of the Parties, but, for

the avoidance of doubt, neither this Letter of Intent nor its acceptance shall give rise to any legally

binding or enforceable obligation on any Party, except with regard to paragraphs 5 through 11 hereof.

No contract or agreement providing for any transaction involving the C&B business or the Assets shall be

deemed to exist between C&B and Buyer and/or any of its affiliates unless and until final, definitive

Transaction Agreements have been executed and delivered. Any other obligations (legal or otherwise)

shall only be set forth in the Transaction Agreements as executed and delivered by Buyer and C&B.

Notwithstanding anything herein to the contrary, prior to the parties' execution and delivery of

Transaction Agreements, either party, in its sole and absolute discretion, may discontinue its efforts to

proceed with the transactions contemplated hereunder without liability to the other party, subject to

each party's continuing respective obligations under paragraphs 4 through 11 of this Letter.

8. Assignment. This Letter may be assigned by the Buyer to a related entity, and this Letter

may be executed in counterparts, by facsimile, and by PDF, each of which shall be deemed to be an

original, but all of which together shall constitute one agreement. The headings of the various sections

of this Letter have been inserted for reference only and shall not be deemed to be a part of this Letter.

9. Termination. This Letter will automatically terminate and be of no further force and

effect upon the earlier of (i) execution of definitive Transaction Agreements by Buyer and C&B, as

applicable, (ii) mutual agreement of Buyer and C&B, or (iii) 5:00 p.m. ET on January 27, 2021, if the

Transaction Agreements shall not have been entered into by such date. Notwithstanding anything in

the previous sentence, paragraphs 6, 7, 8, and 9 shall survive the termination of this Letter, and the

termination of this Letter shall not affect any rights any Party has with respect to the breach of this

Letter by another Party prior to such termination.

_____________


61893/0001-40035487v2

Annex A –Term Sheet

Non-Binding Term Sheet for the Acquisition of

All Assets of Christopher & Banks Corporation, et al.1

1. Assets. Buyer, directly and/or through one or more of its affiliates, assignee(s) or

designee(s) (each a “Designee” and collectively the “Designees”), will acquire from C&B all or substantially

all of C&B’s assets used in the conduct of its business (including (without limitation) its retail store (each

a “Store” and collectively, the “Stores’) business, its e-commerce business (the “E-Commerce Business”),

and its other businesses) (the “Business”) as set forth in Schedule A hereto and as shall be more fully

described in the Transaction Agreements (collectively, the “Purchased Assets”). Buyer will not purchase

any of the assets as set forth on Schedule B and as may be supplemented as part of the Transaction

Agreements (collectively, the “Excluded Assets”). At Buyer’s option, and in its exclusive discretion,

designate some or all of the Purchased Assets to be liquidated for Buyer’s benefit in accordance with the

terms of one or more customary inventory liquidation agency and/or consulting agreements. Buyer may

also, from time to time in its exclusive discretion, and without affecting the purchase consideration to be

paid to C&B and or its designee(s), amend or revise the schedules to the Transaction Agreements in order

to add, remove or eliminate any tangible asset or other intangible asset, as applicable as part of the

Purchased Assets, with any such addition/subtraction to be made in writing not later than three (3) days

prior to the closing under the Transaction Agreements. Additionally, the Transaction Agreements and

Bidding Procedures shall provide that C&B shall retain the option, exercisable in connection with any

competitive bid auction conducted pursuant to the Bidding Procedures, to sell (a) those Purchased Assets

to one or more buyers (other than Buyer (or its Designee(s))) for an all-cash purchase price not less than

the following:

Category Release Price

Unsold Additional Agent Goods as of the closing

date

Agent’s fully loaded cost of goods in cash at closing,

which shall be paid at closing to the Agent

Agent open purchase orders for Additional Agent

Goods to be sold through the E-Commerce

Business post-closing

Assumed by the Buyer

Other Purchased Assets $9 million in cash at closing

Assumption of Liabilities All Assumed Liabilities (other than in section 4(i)

below)

Transition Services No worse than as specified in section 7 below.

The Transaction Agreements and any order of the Bankruptcy court approving the sale of the

aforementioned Purchased Assets to an alternative buyer shall provide further that (1) upon

consummation of such sale(s) the net cash proceeds realized at closing shall be paid to Buyer in partial

satisfaction of its secured claims, and (2) a closing of the transactions contemplated by such alternative

sale transaction(s) shall occur not later than February 26, 2021, unless such date is extended by Buyer in

its exclusive discretion.

1 Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Letter

of Intent to which this is attached. With respect to the terms “Additional Agent Goods” and “Agent”, these terms

shall have the meanings ascribed to such terms in the Letter Agreement governing Inventory Disposition dated as of

January 7, 2021 and attached to the interim order approving store closing sales and related relief (D.I. 62).


2 61893/0001-40035487v2

2. Lease/Contract Designation Rights. Not later than 2 days prior to the closing date, Buyer

will designate all executory contracts and unexpired leases as either “Assumed,” “Rejected,” or

“Designated.” Assumed contracts/leases shall be assumed by C&B and assigned to Buyer as of the closing

(or upon such other date as may be provided in an order of the Bankruptcy Court approving applicable

bidding procedures the (“Bidding Procedures” and “Bidding Procedures Order”, respectively)). Rejected

contracts/leases shall be rejected by C&B as of the closing, or as otherwise provided in (i) the Bidding

Procedures Order or (ii) such other order as may be entered by the Bankruptcy Court establishing

procedures for the rejection of executory contracts and unexpired leases. Designated contracts shall be

maintained by C&B for thirty (30) days after the closing date (which designation period may be extended

with the consent of C&B, which consent will not be withheld or conditioned by C&B if such extension is

for a period not to extend beyond sixty (60) days after the closing date, does not increase administrative

expenses for C&B’s bankruptcy estates, and does not extend the designation rights period after the date

the Bankruptcy Court enters an order confirming a chapter 11 plan or conversion of the cases to Chapter

7), with Buyer to receive the benefits of such Designated contracts/leases and be responsible for the

obligations under such contracts/leases from the closing date until Buyer designates such Designated

contracts/leases as “Assumed” or “Rejected,” at which time C&B shall use its best efforts to effectuate

such determination. C&B agrees not to file a motion seeking to covert its cases to chapter 7, if at all, until

a date that is at least thirty (30) days after the closing date.

3. Purchase Consideration. Subject to (a) negotiating acceptable Transaction Agreements

and other definitive transaction documentation, and (b) satisfaction of the conditions precedent to closing

to be set forth therein (including, without limitation, those conditions set forth in paragraph 10 below),

Buyer would purchase the Purchased Assets for an aggregate purchase price equal to the Assumed

Liabilities (the “Purchase Price”). The Purchase Price is based on the following assumptions:

(i) Between now and the closing date, C&B will continue to conduct store closing

sales at all of its remaining locations, and the use and/or distribution of the proceeds of such sales

shall be in accordance with such debtor-in-possession and/or cash collateral financing orders,

including applicable budgets approved thereunder, as may be entered by the Bankruptcy Court

from time to time with the prior consent of Buyer;

(ii) No injunction or other impediment to preventing consummation of the

transactions contemplated by the Transaction Agreements shall have been obtained and be in

effect; and

(iii) The closing of the transactions contemplated by the Transaction Agreements

shall occur not later than February 26, 2021, unless such date is extended by Buyer in its exclusive

discretion.

4. Assumed Liabilities. Buyer hereby agrees to assume the following liabilities (collectively,

the “Assumed Liabilities”):

(i) The sum of the principal amount of the term loan payable to ALCC, LLC, amounts

due by C&B on account of the vendor program, and all interest, fees, and other amounts

due by C&B on account of the term loan and under the vendor program, which

collectively, as of the closing will be approximately $8.1 million;


3 61893/0001-40035487v2

(ii) C&B’s obligations for unused and accrued “paid time off” or “PTO” for those E-

Commerce Business employees listed on a schedule to the Transaction Documents;

approximately 73,000;

(iii) C&B’s obligations for “IBNR” in an amount not to exceed $950,000;

(iv) C&B’s post-petition obligations to Radial as of the closing date, which are

estimated to be approximately $2.4 million.

(v) Agent open purchase orders for Additional Agent Goods to be sold through the

E-Commerce Business post-closing.

(vi) Cure costs associated with Assumed contracts and leases in an amount to be

mutually agreed upon by Buyer and the C&B.

5. No Other Assumed Liabilities. For the avoidance of doubt, and except to the extent

expressly provided in section 4 above and otherwise in the Transaction Agreements, Buyer will not assume

any liabilities of C&B arising from or relating to C&B’s conduct of the Business for any period prior to the

Closing Date, including, but not limited to, the following liabilities (the “Excluded Liabilities”):

(i) Pre-closing and post-closing liabilities of C&B;

(ii) Any liabilities associated with C&B’s employees, including, but not limited to, pre-

closing accrued and unpaid payroll (including service credit and accrued paid time off, whether

earned pre- or post-closing), payroll taxes, severance, accrued vacation, workers’ compensation

and other employee-related claims, and any claim under the United States Workers Adjustment

and Retraining Act or any applicable state or local corollary thereto;

(iii) Any liabilities or obligations under or relating to employee benefit plans

maintained or sponsored by C&B;

(iv) Any tax liabilities of C&B), including, but not limited to, any sales, franchise,

personal property, or other taxes, (a) with respect to the Purchased Assets, for any taxable period

and any taxes imposed with respect to the pre-closing taxable period (or portions thereof), and

(b) any Excluded Asset(s), for any taxable period;

(v) Any costs or expenses incurred by C&B in connection with the administration of

the bankruptcy cases; and

(vi) Any costs or expenses incurred by C&B in connection with the negotiation,

documentation and consummation of the Transaction, including the negotiation and

documentation of the Transaction Agreements.

6. Definitive Agreement. The proposed Transaction is contingent upon the negotiation and

execution of a mutually satisfactory definitive binding acquisition agreement and related ancillary

agreements (collectively, the “Transaction Agreements”) to be filed with the Court no later than January

27, 2021 (unless mutually extended by agreement of the Parties). The Transaction Agreements shall


4 61893/0001-40035487v2

contain the terms set forth herein and such other terms as are normal, customary and appropriate in

transactions of the type proposed herein and as are otherwise mutually acceptable to Buyer and C&B, it

being understood that representations and warranties of the parties will not survive the closing and the

Purchased Assets will be purchased on an “as is” “where is” basis. Specific conditions to Buyer’s

obligation to consummate the Transaction would include (a) satisfactory completion of business, legal

and financial review by Buyer of the Purchased Assets, (b) the absence of any material adverse change

in the Business, Assets, results of operations, financial condition or prospects of C&B that relate to the

Purchased Assets, (c) receipt of all required governmental, regulatory and third party approvals and

consents, (d) to the extent necessary, the Bid Procedures Order shall be in a form acceptable to Buyer

and shall include approval of bid protections that are acceptable to Buyer, including, without limitation,

expense reimbursement provisions described herein, (e) the order by the Bankruptcy court approving

the Transaction, including the Transaction Agreements, shall be in a form acceptable to Buyer, and (f)

other customary conditions for a transaction of this type.

7. Transition Services. C&B agrees to provide the Buyer with the following transition

services mutually agreed upon by the Parties, which shall include the following:

(i) Beginning on March 1, 2021 and continuing on a monthly basis until the End Date

(as defined below), while Buyer continues to use C&B’s corporate office and attached distribution

center (the “Corporate Office”), Buyer agrees to reimburse C&B an amount equal to $250,000 per

month, plus utilities in the amount of approximately $45,000 per month. Buyer’s obligation to

reimburse C&B shall end upon the earlier of (i) the date on which the Buyer takes assignment of

the Corporate Office lease and (ii) the last day the calendar month in which Buyer provides notice

to C&B that Buyer intends to vacate the Corporate Office, which notice shall be provided no later

than 15 days before the end of the calendar month (the earlier date of (i) and (ii), the “End Date”

and the period between March 1, 2021 through and including the End Date, the “Use Period”).

During the Use Period, C&B may occupy the Corporate Office for purposes of administering the

wind down of its bankruptcy estates.

(ii) Buyer intends to offer employment to various employees associated with many

(if not all) of the seventy-seven employees associated with the E-Commerce Business (the “ECB

Employees”). Additionally, to the extent the Buyer is unable to transfer those ECB Employees to

whom the Buyer has offered employment (the “Go Forward Employees”) to new payroll and

benefits effective March 1, 2021, from and after March 1, 2021, (1) C&B shall continue to employ

the ECB Employees and maintain existing benefit plans and (2) Buyer shall (i) pre-fund payroll for

the Go Forward Employees in accordance with C&B’s historical payroll funding practices and (ii)

reimburse C&B the costs and expenses associated with (x) processing payroll for the Go Forward

Employees and (y) existing benefits associated with the Go Forward Employees. C&B estimates

that the costs and expenses in section 7(ii)(2)(ii)(x) and (y) are approximately $50,000 per month.

(iii) C&B shall prepare and file Federal and State income tax returns for the current

year and all prior years and, to the extent such returns reflect a refund (including (without

limitation) any CARES Act tax refunds), the Buyer agrees to pay all reasonable and documented

fees and expenses of C&B’s tax preparers .

8. Bid Protections. Buyer requires that upon C&B’s acceptance of the proposal embodied

in the Letter of Intent and the Term Sheet, it seek approval by the Bankruptcy Court of Buyer’s proposal

as the designated “Stalking Horse” bidder, including, without limitation, approval of Bidding Procedures


5 61893/0001-40035487v2

acceptable to Buyer. The Bidding Procedures Order shall authorize and approve C&B’s payment to Buyer

of bid protections in the form of reimbursement of Buyer’s reasonable, documented out of pocket fees

and expenses incurred by Buyer in connection with the Transaction, including, without limitation,

attorneys’, accountants’, financial advisory, and other advisors’ (including (without limitation) Hilco

Streambank and Digital Prophets Networks, LLC) fees and expenses, in an aggregate amount not to

exceed $350,000 (“Expense Reimbursement”). Buyer’s entitlement to the Expense Reimbursement is

conditioned on a fully executed binding Transaction Agreements.

9. Consumer Privacy Ombudsman. C&B expects that Buyer or any Designee will agree that

any personally identifiable information will be transferred subject to C&B’s current privacy policy, which

authorizes C&B to transfer such information in conjunction with a sale thereof approved under section

363 of the Bankruptcy Code. If Buyer or a Designee seeks a transfer of such property in a manner that

is contrary to such policy or otherwise requires the appointment of a consumer privacy ombudsman,

C&B will seek such relief expeditiously in the Bankruptcy Court, if necessary to comply with applicable

law.

10. Conditions. Each of the parties shall use their commercially reasonable efforts to satisfy

all conditions to closing as shall be set forth in the Transaction Agreements, including the requirement

that all Purchased Assets acquired by Buyer (or any Designee) shall be transferred free and clear of liens,

claims and other encumbrances, including, but not limited to, pre-closing taxes, encumbrances and other

interests, in accordance with section 363(f) of the Bankruptcy Code.

11. Representations and Warranties. The Transaction Agreements shall contain customary

representations and warranties for a transaction of this nature, including, without limitation, due

authorization, no conflict with existing agreements, government consents, status and condition of owned

and leased property, current status of licenses and permits, environmental matters, title to assets and

equipment, regulatory matters, taxes, and FCPA matters.

12. Termination Date. Buyer requires that the closing occur no later than February 26, 2021,

unless extended by Buyer in its exclusive discretion.

13. Executives/Employees. Buyer (or any Designee) may elect to hire certain current and

former C&B executives and/or employees currently associated with the Purchased Assets, but the final

decision about which executives or former employees of C&B to hire or not to hire will be made by Buyer

(or such Designee) in its sole discretion. Neither Buyer nor any Designee is under any obligation to (i)

retain such former employees or executives on terms substantially similar to their present compensation

or (ii) offer or pay any bonus or benefit packages. For any abundance of doubt, neither Buyer nor any

Designee shall have any obligation to any executive or employee of C&B, including, but not limited to, any

roll-over full service credit and accrued paid time off, or any of the C&B’s present policies and practices.

14. Transfer Taxes. All real property transfer, personal property transfer, sales, use, stamp,

documentary, and registration taxes and other similar taxes and charges arising from the transactions

contemplated herein will be paid by Buyer.

15. Further Assurances. The Parties will cooperate to structure the Transaction described

herein consistent with all applicable legal requirements.


61893/0001-40035487v2

Schedule A

Purchased Assets

1. All inventory, accounts receivable, fixtures, furniture, equipment, tools, supplies, and deposits

and proceeds thereof.

2. Excluding the Excluded Assets, all cash and cash equivalents of C&B, including any refunds of any

cash collateral securing any undrawn letters of credit (including (without limitation) the customs

related letter of credit and other types of security for customs obligations in the aggregate

amount of approximately $2.3 million).

3. Subject to designation of same as a Purchased Asset prior to the closing date, (a) all sales orders

or other commitments of C&B to purchasers of goods, services or products produced or sold by

the Business (the “Customer Orders”), and (b) all purchase orders with suppliers open as of the

closing date for delivery of goods under such purchase orders post-closing.

4. Certain executory contracts and/or unexpired leases necessary or incident to the conduct of the

Business, as such contract or lease may be designated from time to time by Buyer prior to closing

of the Transaction.

5. All intellectual property of C&B, including, without limitation, (a) inventions, discoveries,

processes, designs, techniques, developments and related improvements whether or not

patentable; (b) patents, patent applications, industrial design registrations and applications

therefor, divisions, divisionals, continuations, continuations-in-part, reissues, substitutes,

renewals, registrations, confirmations, re-examinations, extensions and any provisional

applications, or any such patents or patent applications, and any foreign or international

equivalent of any of the foregoing; (c) trademarks (whether registered, unregistered or pending),

trade dress, service marks, service names, trade names, brand names, product names, logos,

domain names, internet rights (including IP addresses and AS numbers), corporate names,

fictitious names, other names, symbols (including business symbols), slogans, translations of any

of the foregoing and any foreign or international equivalent of any of the foregoing and all

goodwill associated therewith and (to the extent transferable by law) any applications or

registrations in connection with the foregoing and all advertising and marketing collateral

including any of the foregoing; (d) work specifications, databases, drawings, sketches, and

artwork; (e) technical, scientific and other know-how and information (including promotional

material and tech packs and blocks), trade secrets, confidential information, methods, processes,

practices, formulas, designs, patterns, assembly procedures, specifications; (f) rights associated

with works of authorship including copyrights, moral rights, design rights, rights in databases,

copyright applications, copyright registrations, rights existing under any copyright laws and rights

to prepare derivative works; (g) work for hire; (h) customer lists and databases, websites, social

media sites and accounts (including the content contained therein, user names and passwords),

diagrams, drawings, domain names, and all advertising and marketing materials and collateral

(including all physical, digital, or electronic imagery and design files), samples, product catalogs,

product designs and specifications (including tech specifications) vendor and merchandise

supplier data and information, (i) computer software and firmware, including data files, source

code, object code and software-related specifications and documentation, (j) all books and

records, files, data, reports, computer codes and sourcing data, advertiser and supplier lists, cost


7 61893/0001-40035487v2

and pricing information, business plans, and manuals, blueprints, research and development files,

and other records; (k) financial, marketing and business data, pricing and cost information,

business and marketing plans and other information, files, correspondence, records, data, plans,

reports and recorded knowledge, historical trademark files, prosecution files in whatever media

retained or stored, including computer programs and disks, (l) the right to sue for infringement

and other remedies against infringement of any of the foregoing, and (m) rights to protection of

interests in the foregoing under the laws of all jurisdictions.

6. All books, records, manuals and other materials (in any form or medium and wherever held)

relating to the Business, including all records and materials held by C&B, advertising matter,

catalogues, price lists, correspondence, mailing lists, lists of current and former customers and

suppliers (and all data related thereto including contact information, transaction histories, and

any and all demographic data), SMS, text, and email distribution lists), distribution and other

mailing lists, photographs, production data, computer data, all studies and research, sales and

promotional materials and records, purchasing materials and records, personnel records,

manufacturing and quality control records and procedures, facilities and/or equipment plans and

specifications, blueprints, research and development files, data and laboratory books, intellectual

property disclosures and tangible embodiments of intellectual property, media materials and

plates, accounting records, sales order files and litigation files related to the C&B Business or the

Purchased Assets; provided, however, that the Debtors shall retain access rights to all such

records for a period of time sufficient for the resolution of the Bankruptcy Case.

7. All (i) rights to refunds relating to, and prepaid expenses and deposits attributable to, any

Purchased Asset, and all rights under credit card merchant accounts, (ii) prepaid charges and

deposits in respect of utilities, (iii) prepaid common area maintenance expenses relating to any

store or other lease and security deposits for any such lease assumed and assigned to the Buyer

or a Designee, (iv) business non-employee related insurance policies (to the extent assignable)

and prepaid premiums in respect of the insurance policies to the extent in respect of periods on

or after the closing date, (v) ordinary holdbacks (including ordinary credit card holdback payments

or protection reserves) in connection with or relating to any Purchased Asset, (vi) other deposits,

prepaid charges, prepaid taxes relating to any post-closing tax period and expenses paid by C&B

and other rights of C&B in connection with or relating to any Purchased Asset and (vii) all rights

to receive any tax refunds, including (without limitation) federal and state income tax refunds

(including (without limitation) any refunds under the CARES Act).

8. Those guarantees, warranties, indemnities and similar rights in favor of C&B with respect to any

Purchased Asset, to the extent conveyable.

9. To the extent transferrable under applicable law, all local and state permits required necessary

for operation of C&B’s Business, all of which must be current and in good standing.

10. All rights of recovery, rights of set-off, rights of indemnity, contribution or recoupment,

warranties, guarantees, rights, remedies, counter-claims, cross-claims and defenses, except

expressly related to any Excluded Liability.

11. Any and all claims and remedies of C&B under sections 510 and 542 through 553 of the Bankruptcy

Code or under similar state law, including fraudulent conveyance claims, and all other similar


8 61893/0001-40035487v2

causes of action of a trustee and debtor-in-possession under the Bankruptcy Code (collectively,

“Avoidance Actions”).

12. To the extent that actual the Wind Down Expenses are less than the Remaining Cash, the balance

of such Remaining Cash.

13. All other tangible or intangible assets of C&B primarily used in connection with the ownership,

operation and/or management of the Business.


61893/0001-40035487v2

Schedule B

Excluded Assets

1. Cash, inclusive of any cash that has been escrowed or segregated for the payment of sales taxes,

professional fees, or other budgeted expenses (collectively, the “Remaining Cash”), in an amount

equal to the remaining expenses (including uncashed checks) to be paid under line 24 of the of

the amended cash collateral budget annexed hereto (collectively, the “Wind Down Expenses”),

which expenses shall exclude any liabilities assumed by the Buyer pursuant to section 4 – Assumed

Liabilities -- or to be paid by the Buyer pursuant to Section 7 – Transition Services and any realized

expense savings.

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1Case 21-10269-ABA Doc 111-4 Filed 01/25/21 Entered 01/25/21 11:26:40 DescExhibit 4 - Stalking Horse LOI Page 15 of 15

61893/0001-21998154v2

COLE SCHOTZ P.C. Court Plaza North 25 Main Street P.O. Box 800 Hackensack, New Jersey 07602-0800 (201) 489-3000 (201) 489-1536 Facsimile Michael D. Sirota ([email protected]) Felice R. Yudkin ([email protected]) Jacob S. Frumkin ([email protected]) Matteo Percontino ([email protected]) Rebecca W. Hollander ([email protected])

Proposed Attorneys for Debtors and Debtors in Possession

UNITED STATES BANKRUPTCY COURT DISTRICT OF NEW JERSEY

In re:

CHRISTOPHER & BANKS CORPORATION, et al.,

Debtors.1

Chapter 11

Case No. 21-10269 (ABA)


DECLARATION OF PERRY M. MANDARINO IN SUPPORT OF DEBTORS’ MOTION FOR ENTRY OF ORDERS (I)(A) APPROVING BIDDING PROCEDURES FOR SALE

OF SUBSTANTIALLY ALL OF THE DEBTORS’ ASSETS, (B) APPROVING EXPENSE REIMBURSEMENT, (C) SCHEDULING AUCTION FOR, AND HEARING TO APPROVE, SALE OF SUBSTANTIALLY ALL OF THE DEBTORS’ ASSETS,

(D) APPROVING FORM AND MANNER OF NOTICES OF SALE, AUCTION, AND SALE HEARING, (E) APPROVING ASSUMPTION AND ASSIGNMENT

PROCEDURES, AND (F) GRANTING RELATED RELIEF AND (II)(A) APPROVING SALE OF SUBSTANTIALLY ALL OF THE DEBTORS’ ASSETS FREE AND CLEAR OF ALL LIENS, CLAIMS, INTERESTS, AND ENCUMBRANCES, (B) APPROVING

ASSUMPTION AND ASSIGNMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES, AND (C) GRANTING RELATED RELIEF

1 The Debtors in these chapter 11 cases and the last four digits of each Debtor’s federal tax identification number, as applicable, are as follows: Christopher & Banks Corporation (5422), Christopher & Banks, Inc. (1237), and Christopher & Banks Company (2506). The Debtors’ corporate headquarters is located at 2400 Xenium Lane North, Plymouth, Minnesota 55441.

Case 21-10269-ABA Doc 111-5 Filed 01/25/21 Entered 01/25/21 11:26:40 Desc Declaration of Perry M. Mandarino in Support of Debtors Motion Page 1 of 7

2 61893/0001-21998154v2

I, Perry M. Mandarino, make this declaration under 28 U.S.C. § 1746:

1. I am a Senior Managing Director, Co-Head of Investment Banking and Head of

Restructuring at B. Riley Securities, Inc. (“B. Riley”), resident in its office located at 299 Park

Avenue, New York, New York 10171. I have over 30 years of professional experience, most of

which has involved corporate restructuring transactions. Before joining B. Riley, I was a Partner

and Leader of the Business Recovery Services Practice at Pricewaterhouse Coopers LLC, a

financial advisory and accounting firm with numerous offices throughout the country. Before

then, I was Senior Managing Director at Traxi LLC and a partner at Arthur Anderson LLP. I

received a Bachelor of Science in Accounting from Seton Hall University in 1987. Throughout

my career, I have advised borrowers, lenders and other stakeholders on numerous restructuring

transactions in complex chapter 11 cases.

2. I submit this declaration in support of the Debtors’ Motion for Entry of Orders

(I)(A) Approving Bidding Procedures for Sale of Substantially All of the Debtors’ Assets,

(B) Approving Expense Reimbursement, (C) Scheduling Auction for, and Hearing to Approve,

Sale of Substantially All of the Debtors’ Assets, (D) Approving Form and Manner of Notices of

Sale, Auction, and Sale Hearing, (E) Approving Assumption and Assignment Procedures, and

(F) Granting Related Relief and (II)(A) Approving Sale of Substantially All of the Debtors’

Assets Free and Clear of All Liens, Claims, Interests, and Encumbrances, (B) Approving

Assumption and Assignment of Executory Contracts and Unexpired Leases, and (C) Granting

Related Relief [Docket No. 36] (the “Motion”).2

3. All facts set forth in this Declaration are based upon my personal knowledge, my

review of relevant documents, information provided to me by employees working under my

2 Capitalized terms used, but not otherwise defined, herein have the meanings given to them in the Motion.


3 61893/0001-21998154v2

direction or supervision, my discussions with other members of B. Riley or the Debtors’

directors, management or advisors, my discussions with potential purchasers of the Debtors’

assets and other interested parties, or my opinion based upon experience, knowledge and

information concerning asset sales and financings in distressed situations. If called upon to

testify, I could and would testify competently to the facts set forth in this Declaration.

A. Qualifications

4. B. Riley is one of the leading advisors and investment bankers to debtors,

unsecured and secured creditors, acquirers, and other parties-in-interest involved with financially

troubled companies both in and outside of bankruptcy. B. Riley has been, and is, involved in

some of the leading restructuring cases in the United States, including representing debtors and

official committees in numerous chapter 11 cases in this and other Districts.

5. I have specialized in assisting companies, lenders, creditors, and investors in

distressed situations. My experience includes conducting acquisitions and divestitures of

financially troubled assets, raising various forms of capital and negotiations relating to the

restructuring of private and public securities, both in chapter 11 and in out-of-court situations.

B. The Sale and Marketing Process

6. On or about November 4, 2020, the Debtors engaged B. Riley, to provide

investment banking services with respect to the Debtors’ retail and eCommerce business assets,

including exploring all restructuring, financing and M&A alternatives with respect thereto. Upon

its retention, B. Riley immediately began conducting due diligence on the E-Commerce business

assets and the Debtors’ operations.

7. Immediately upon its engagement, B. Riley began working closely with the

Debtors’ senior management, their board of directors, and the Debtors’ other advisors to evaluate

potential strategic alternatives and financing options. After considering the reasonably available


4 61893/0001-21998154v2

possible courses of action, the Debtors determined that a sale of all or substantially all of the

Debtors’ assets was in the best interest of the Debtors, their creditors, and all parties in interest

(each a “Potential Transaction”).

8. Beginning in December 2020, B. Riley commenced an extensive process to

market the Debtors’ assets for sale to numerous prospective purchasers. This process included

B. Riley using its industry and restructuring bankers, and its proprietary databases and market

knowledge, to identify a broad group of potential strategic and financial buyers and solicit their

interest, preparing and, sending “teasers” summarizing the Debtors’ assets, preparing and

circulating marketing and diligence materials, including a confidential information

memorandum, and creating a virtual data room containing myriad information about the Debtors,

their assets, their liabilities, and all aspects of their businesses.

9. Since the beginning of the marketing process, B. Riley has contacted at least two

hundred (200) potential purchasers (collectively, the “Interested Parties”), consisting of at least

one hundred and twenty-four (124) potential financial purchasers and at least seventy-six (76)

potential strategic purchasers. As a result of these efforts, forty-nine (49) parties executed

nondisclosure agreements, indicating an interest to further explore a potential transaction with

the Debtors. Although approximately one hundred and twenty-three (123) entities declined to

further participate in the sale process, B. Riley received indications of interest from three (3)

parties seeking to acquire the Debtors’ eCommerce assets, including the one from the Stalking

Horse Bidder.

C. The Stalking Horse Purchaser

10. On January 20, 2021, the Debtors’ board of directors authorized the Debtors to

enter into a letter of intent with ALCC, LLC (the “Stalking Horse Bidder”) and on January 22,

2021 the Debtors and the Stalking Horse Bidder entered into such a letter of intent (the “Stalking


5 61893/0001-21998154v2

Horse LOI”). The Stalking Horse LOI outlines the terms on which the Stalking Horse Bidder

will acquire substantially all of the Debtors’ assets (the “Stalking Horse Bid”). The Stalking

Horse LOI contemplates execution of the an asset purchase agreement acceptable to the Debtors

and the Stalking Horse Bidder (the “Stalking Horse Agreement”) by January 27, 2021, which

would supersede the Stalking Horse LOI in all respects. Additionally, if executed, the Stalking

Horse Agreement will provide the Stalking Horse Bidder with certain customary stalking horse

bid protections, in the form of an Expense Reimbursement (defined below), if the Stalking Horse

Bidder is ultimately not the successful purchaser of the Debtors’ assets.

11. The transaction negotiated with the Stalking Horse Bidder is the culmination of a

thorough, fair, arms-length, and fulsome pre-petition marketing process. I believe that, taken as

a whole, the terms of the proposed sale are fair and reasonable, and that the Stalking Horse

Agreement, once executed, represents the highest and best offer for the Debtors’ assets available

to the Debtors at this time, subject to any higher or otherwise better offers that may be received

during the post-petition marketing process contemplated by the Bidding Procedures.

D. Necessity and Reasonableness of Bid Protections

12. I believe the Expense Reimbursement is reasonable and necessary in light of the

circumstances. I understand that approval of expense reimbursements and other forms of bid

protections in order to preserve or maximize value is well-established practice in chapter 11

cases. The Expense Reimbursement is intended to enable the Debtors to ensure a sale to a

contractually committed bidder at a price that is reasonable under the circumstances. Further, in

the event the Expense Reimbursement is triggered, the Debtors will have received a higher or

otherwise better offer for the sale of substantially all of their assets, to the benefit of the Debtors’

creditors. Moreover, the Expense Reimbursement, which covers the amount of reasonable and


6 61893/0001-21998154v2

documented out of pocket expenses and fees incurred by the Buyer in connection with the Sale,

is subject to a cap of $350,000.

13. I believe, based on my experience and discussions between the Debtors and the

Stalking Horse Bidder that, absent approval of the Expense Reimbursement, the Stalking Horse

Bidder would not agree to serve as stalking horse bidder. Indeed, the Stalking Horse Bidder’s

obligations under the Stalking Horse LOI are conditioned upon the approval of the Expense

Reimbursement. I further believe that, given the evidence of the comprehensive prepetition sale

and marketing process, the bid of the Stalking Horse Bidder represents the highest or otherwise

best definitive proposal received to date, and I also believe that the Debtors’ post-petition sale

process would be negatively impacted if the Debtors lost the Stalking Horse Bidder.

E. The Bidding Procedures

14. In my opinion, the Debtors’ proposed timeline is appropriate in light of the

extensive and, frankly, exhaustive marketing to date by R. Riley of the Debtors’ assets and

considering the Debtors’ liquidity position. I have reviewed all expressions of potential interest

in the Debtors’ assets and have been a part of, and continue to be a part of, ongoing discussions

with potential purchasers. The proposed timeline is reasonable and allows parties sufficient time

to conduct diligence and engage in the proposed process while accommodating the constraints

imposed by the Debtors’ liquidity situation. I do not believe that extending the sale process

would result in any materially better offer than the terms of the Stalking Horse LOI.

15. Further, the Debtors’ proposed timeline is prudent under the circumstances. The

Debtors do not have the liquidity to support a protracted sale process and may be unable to

complete a sale on a longer timeline to the detriment of their estates and creditors. Moreover, a

sale on the requested timeline is necessitated by the milestones set forth in the Interim Order

Pursuant to 11 U.S.C. §§ 105, 361, 362, 363, 364, 507 and 552 (1) Authorizing Use of Cash


61893/0001-40018279v1

F, 20UNITED STATES BANKRUPTCY COURT DISTRICT OF NEW JERSEY

Caption in Compliance with D.N.J. LBR 9004-1(b)

COLE SCHOTZ P.C. Court Plaza North 25 Main Street P.O. Box 800 Hackensack, New Jersey 07602-0800 Michael D. Sirota ([email protected]) Felice R. Yudkin ([email protected]) Jacob S. Frumkin ([email protected]) Matteo Percontino ([email protected]) Rebecca W. Hollander ([email protected]) (201) 489-3000 (201) 489-1536 Facsimile Proposed Attorneys for Debtors and Debtors in Possession Chapter 11

Case No. 21-10269 (ABA) Jointly Administered Hearing Date and Time:

In re: CHRISTOPHER & BANKS CORPORATION, et al., Debtors.1

ORDER (A) APPROVING THE ASSET PURCHASE AGREEMENT; (B) AUTHORIZING THE SALE OF SUBSTANTIALLY ALL OF THE DEBTORS’ ASSETS FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES, AND INTERESTS; (C) AUTHORIZING THE ASSUMPTION AND ASSIGNMENT OF

CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES; AND (D) GRANTING RELATED RELIEF

The relief set forth on the following pages, numbered two (2) through fifty-six (56), is hereby ORDERED.

1 The Debtors in these chapter 11 cases and the last four digits of each Debtor’s federal tax identification

number, as applicable, are as follows: Christopher & Banks Corporation (5422), Christopher & Banks, Inc. (1237), and Christopher & Banks Company (2506). The Debtors’ corporate headquarters is located at 2400 Xenium Lane North, Plymouth, Minnesota 55441.

Case 21-10269-ABA Doc 111-6 Filed 01/25/21 Entered 01/25/21 11:26:40 DescProposed Order Page 1 of 59

(Page 2) Debtors: CHRISTOPHER & BANKS CORPORATION, et al. Case No. 21-10269 (ABA) Caption of Order: ORDER (A) APPROVING THE ASSET PURCHASE AGREEMENT;

(B) AUTHORIZING THE SALE OF SUBSTANTIALLY ALL OF THE DEBTORS’ ASSETS FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES, AND INTERESTS; (C) AUTHORIZING THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES; AND (D) GRANTING RELATED RELIEF

61893/0001-40018279v1

Upon the motion (the “Motion”)2 of the above-captioned debtors and debtors in

possession (collectively, the “Debtors”), pursuant to sections 105, 363, and 365 of title 11 of the

Bankruptcy Code, Bankruptcy Rules 2002, 6004, and 6006, and Local Rules 6004-1, 6004-2,

and 6004-3, (a) approving that certain Asset Purchase Agreement dated _________, 2021,

between and among the Debtors and ______________ (the “Buyer”), attached hereto as

Exhibit 1 (the “Asset Purchase Agreement”), and that certain transition services agreement

dated as of January [__], 2021, between the Debtors and Buyer, attached hereto as Exhibit 2 (the

“Transition Services Agreement”); (b) authorizing the sale (the “Sale”) of substantially all of

the Debtors’ assets (the “Acquired Assets”) free and clear of all Liens, Claims, and Interests

(other than the Assumed Liabilities and Permitted Liens (as defined in the Asset Purchase

Agreement)), with such Liens, Claims, and Interests to attach to the proceeds of the Sale to the

same extent, validity, and priority that such Liens, Claims, and Interests had in the Acquired

Assets (subject to any rights, claims, and defenses that the Debtors’ estates and/or the Debtors, as

applicable, may possess with respect thereto); (c) authorizing the assumption and assignment of

certain executory contracts and unexpired leases of the Debtors in connection therewith

2 Capitalized terms used, but not otherwise defined, herein shall have the meanings ascribed to them in the

Motion, the Asset Purchase Agreement, or the Transition Services Agreement, as applicable.




61893/0001-40018279v1

(including pursuant to the contract and lease designation rights set forth in Section [___] of the

Asset Purchase Agreement); and (d) granting related relief; and the Court having considered and

previously entered the Order (A) Approving Bidding Procedures for Sale of Substantially All of

the Debtors’ Assets, (B) Approving Expense Reimbursement, (C) Scheduling Auction for, and

Hearing to Approve, Sale of Substantially All of the Debtors’ Assets, (D) Approving Form and

Manner of Notices of Sale, Auction, and Sale Hearing, (E) Approving Assumption and

Assignment Procedures and (F) Granting Related Relief, dated January __, 2021 [Doc. No. __]

(the “Bidding Procedures Order”), approving bidding procedures for the marketing and sale of

the Acquired Assets (the “Bidding Procedures”) and granting certain related relief; and Buyer

having submitted the highest or otherwise best bid for the Acquired Assets, which was

determined by the Debtors, following consultation with the Consultation Parties (as defined in

the Bidding Procedures), to be the Successful Bid (as defined in the Bidding Procedures); and the

Court having conducted a hearing to consider the Sale on February __, 2021 (the “Sale

Hearing”), at which all interested parties were offered an opportunity to be heard with respect to

the Sale; and the Court having reviewed and considered (a) the Motion and the exhibits thereto,

(b) the Asset Purchase Agreement, by and between the Debtors and Buyer, whereby the Debtors

have agreed, among other things, to sell the Acquired Assets to Buyer, including certain




61893/0001-40018279v1

executory contracts and unexpired leases of the Debtors that will be assumed and assigned to

Buyer (collectively, the “Assumed Contracts and Assumed Leases”), and to which all

objections have been resolved or otherwise overruled other than the Unresolved Objections to

Cure Amounts (defined below), on the terms and conditions set forth in the Asset Purchase

Agreement and any ancillary or supplemental documents executed in connection therewith; (c)

the Declaration of Perry M. Mandarino in Support of Entry of Order (A) Approving the Asset

Purchase Agreement; (B) Authorizing the Sale of Substantially All of the Debtors’ Assets Free

and Clear of All Liens, Claims, Encumbrances, and Interests; (C) Authorizing the Assumption

and Assignment of Certain Executory Contracts and Unexpired Leases; and (D) Granting

Related Relief, dated ____________, 2021 [Doc. No. __] (the “Sale Declaration”); (d) the

Transition Services Agreement between the Debtors and the Buyer; (e) the Debtors’ privacy

policies as of the Petition Date; and (f) the arguments of counsel made, and the evidence

proffered and adduced, at the Sale Hearing; and the Court having jurisdiction to decide the

Motion and grant the relief requested therein in accordance with 28 U.S.C. §§ 157(a)-(b) and

1334(b) and the Standing Order of Reference to the Bankruptcy Court Under Title 11 of the

United States District Court for the District of New Jersey, entered on July 23, 1984, and

amended on September 18, 2012 (Simandle, C.J.); and consideration of the Motion and the relief




61893/0001-40018279v1

requested therein being a core proceeding pursuant to 28 U.S.C. § 157(b); and venue being

proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409; and due notice of the Motion

and the form of this order (this “Sale Order”) having been provided; and it appearing that the

relief granted herein is in the best interests of the Debtors, their estates, creditors, and all parties

in interest in the Debtors’ chapter 11 cases (collectively, the “Bankruptcy Case”); and upon the

record of the Sale Hearing and the Bankruptcy Case; and after due deliberation and sufficient

cause appearing therefor,

IT IS HEREBY FOUND AND DETERMINED THAT:3

A. Jurisdiction and Venue. The Court has jurisdiction to decide the Motion and

approve the Sale pursuant to 28 U.S.C. §§ 157 and 1334, and the Standing Order of Reference to

the Bankruptcy Court Under Title 11 of the United States District Court for the District of New

Jersey, entered on July 23, 1984, and amended on September 18, 2012 (Simandle, C.J.). This

matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). Venue of the Bankruptcy Case

and the Motion in this district is proper under 28 U.S.C. §§ 1408 and 1409.

3 Findings of fact shall be construed as conclusions of law and conclusions of law shall be construed as

findings of fact where appropriate. See Fed. R. Bankr. P. 7052.




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B. Statutory and Rule Predicates. The statutory and other legal predicates for the

relief granted herein are sections 105(a), 363, and 365, 503, and 507 of the Bankruptcy Code,

Bankruptcy Rules 2002, 6004, and 6006, and Local Rules 6004-1, 6004-2, and 6004-3.

C. Opportunity to Object. A fair and reasonable opportunity to object to, and be

heard with respect to, the Motion and the Sale has been given to all parties entitled to notice

pursuant to the Bidding Procedures Order, including, without limitation, the following: (i) the

Office of the United States Trustee for the District of New Jersey; (ii) counsel for the official

committee of unsecured creditors, if any; (iii) those parties required to be served with notice of a

sale pursuant to the Order Granting Complex Chapter 11 Case Treatment [Docket No. 47] in

effect in these chapter 11 cases (the “Complex Case Order”); (iv) counsel to the Buyer; (v)

Counterparties to the Contracts and Leases; (vi) counsel to the Debtors’ pre-petition secured

lenders; (vii) the Internal Revenue Service; (viii) all applicable state and local taxing authorities;

(ix) the Federal Trade Commission; (x) the Securities & Exchange Commission; (xi) the United

States Attorney’s Office for the District of New Jersey; (xii) the United States Attorney

General/Antitrust Division of the Department of Justice; (xiii) the offices of the attorneys general

for the states in which the Debtors operate; (xiv) all potential persons and/or entities previously

identified or solicited by the Debtors and any additional parties who have previously expressed




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an interest to the Debtors or their advisors in potentially acquiring the Debtors’ assets; and

(xv) any party requesting notice pursuant to Bankruptcy Rule 2002. See Doc. No. __.

D. Final Order. This Sale Order constitutes a final order within the meaning of 28

U.S.C. § 158(a).

E. Sound Business Purpose. The Debtors have demonstrated good, sufficient, and

sound business purposes and justifications for approval of the Asset Purchase Agreement, the

Transition Services Agreement, the Sale, and for entering into the Asset Purchase Agreement

and the Transition Services Agreement. The Debtors’ entry into and performance under the Asset

Purchase Agreement and the Transition Services Agreement (i) constitutes a sound and

reasonable exercise of the Debtors’ business judgment; (ii) provides value to and is beneficial to

the Debtors’ estates and is in the best interests of the Debtors and their stakeholders; and (iii) is

reasonable and appropriate under the circumstances. Business justifications for the Sale include,

without limitation, the following: (i) the Asset Purchase Agreement constitutes the highest or

otherwise best offer received for the Acquired Assets; (ii) the Asset Purchase Agreement

presents the best opportunity to maximize the value of the Acquired Assets and to avoid decline

and devaluation of the Acquired Assets; (iii) the Transition Services Agreement is necessary to

implement the Asset Purchase Agreement and, thereby, maximize value for the benefit of the




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Debtors’ estates and creditors; (iv) unless the Sale is concluded expeditiously, as provided for

pursuant to the Asset Purchase Agreement and implemented through the Transition Services

Agreement, certainty of consummating the Sale will be compromised and recoveries to creditors

may be materially diminished; and (v) the value of the Debtors’ estates will be maximized

through the Sale of the Acquired Assets pursuant to the Asset Purchase Agreement, as

implemented by the Transition Services Agreement.

F. Compliance with Bidding Procedures Order. The Debtors and the Buyer

complied with the Bidding Procedures Order and the Bidding Procedures in all respects. Buyer

was the Successful Bidder (as defined in the Bidding Procedures) for the Acquired Assets in

accordance with the Bidding Procedures Order and Bidding Procedures.

G. No Claims by Debtors. Except as set forth herein and under the Asset Purchase

Agreement or Transition Services Agreement, as applicable, the Debtors agree and acknowledge

that they have no liabilities that could be asserted against Buyer.

H. Local Rule. The Motion complies with all aspects of Local Rule 6004-1.

I. Compliance with Bankruptcy Code. The consummation of the transactions

contemplated under the Asset Purchase Agreement is legal, valid, and properly authorized under

all applicable provisions of the Bankruptcy Code, including, without limitation, sections 105(a),




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363(b), 363(f), 363(m), 365(b), and 365(f) thereof, and all of the applicable requirements of such

sections have been complied with in respect of such transactions.

J. Highest or Otherwise Best Value. The Debtors and their advisors engaged in a

robust and extensive marketing and sale process, both prior to the commencement of the

Bankruptcy Case and through the post-petition sale process pursuant to the Bidding Procedures

Order and the Bidding Procedures, and conducted a fair and open sale process. In doing so, the

Debtors afforded Potential Bidders access to confidential due diligence materials to provide any

such Potential Bidders an opportunity to submit a Qualified Bid (as defined in the Bidding

Procedures). The Bidding Procedures Order, the Bidding Procedures, and the process utilized

pursuant thereto were designed to obtain the highest or otherwise best value for the Acquired

Assets for the Debtors and their estates, and any other transaction would not have yielded as

favorable an economic result. The sale process and the Bidding Procedures were non-collusive,

duly noticed, and provided a full, fair, and reasonable opportunity for any entity to make an offer

to purchase the Acquired Assets.

K. No Better Alternative. The Debtors’ determination, in consultation with their

advisors and the Consultation Parties, that the Asset Purchase Agreement constitutes the highest

or otherwise best offer for the Acquired Assets was a reasonable, valid, and sound exercise of the




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Debtors’ business judgment. No other person or entity or group of persons or entities has offered

to purchase the Acquired Assets for an amount that would give an opportunity for equal or

greater value to the Debtors than the value provided by Buyer pursuant to the Asset Purchase

Agreement. Consummation of the Sale is the best alternative available to the Debtors to

maximize the return to their creditors and limit the losses to counterparties to the Assumed

Contracts and Assumed Leases. No alternative to the Sale exists that would provide a greater

value to the Debtors and their estates.

L. No Sub Rosa Plan. The sale and assignment of the Acquired Assets outside of a

chapter 11 plan pursuant to the Asset Purchase Agreement neither impermissibly restructures the

rights of the Debtors’ creditors nor impermissibly dictates the terms of any chapter 11 plan of the

Debtors. Neither the Asset Purchase Agreement nor the Sale contemplated thereby constitutes a

de facto or sub rosa chapter 11 plan.

M. Fair Consideration. Based on the implementation of the robust sale process, the

Debtors have determined, following consultation with the Consultation Parties, that the

consideration to be paid by Buyer under the Asset Purchase Agreement constitutes fair and

reasonable consideration for the Acquired Assets given the circumstances.




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N. Good Faith. The Asset Purchase Agreement and each of the transactions

contemplated therein, were negotiated, proposed, and entered into by the Debtors and Buyer in

good faith, without collusion, and from arm’s-length bargaining positions. Neither the Debtors

nor Buyer have engaged in any conduct that would cause or permit the Asset Purchase

Agreement to be avoided or costs and damages to be imposed under section 363(n) of the

Bankruptcy Code. The Asset Purchase Agreement was not entered into for the purpose of

hindering, delaying, or defrauding present or future creditors of the Debtors. Neither the Debtors

nor Buyer is entering into the Asset Purchase Agreement, or proposing to consummate the Sale,

fraudulently, for the purpose of statutory and common law fraudulent conveyance and fraudulent

transfer claims whether under the Bankruptcy Code or under the laws of the United States, any

state, territory, possession thereof, or the District of Columbia. In view of the foregoing, Buyer

is a “good faith” purchaser within the meaning of section 363(m) of the Bankruptcy Code and, as

such, is entitled to all the protections afforded thereby.

O. Privacy. The Sale is consistent with the Debtors’ policy concerning the transfer

of personally identifiable information and the Debtors have, to the extent necessary, satisfied

section 363(b)(1) of the Bankruptcy Code. Accordingly, appointment of a consumer ombudsman




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pursuant to section 363(b)(1) or section 332 of the Bankruptcy Code is not required with respect

to the relief requested in the Motion.

P. Notice. As evidenced by the affidavit(s) of service filed with the Court: (i) proper,

timely, adequate, and sufficient notice of the Motion, the Bidding Procedures Order, the Bidding

Procedures, the sale process (including, without limitation, the Bid Deadline (as defined in the

Bidding Procedures)), the Sale Hearing, the Sale, and the proposed Sale Order was provided by

the Debtors to all interested parties; (ii) such notice was good, sufficient, and appropriate under

the particular circumstances and complied with the Bidding Procedures Order, sections 102(1)

and 363(b) of the Bankruptcy Code, Bankruptcy Rules 2002, 6004, 6006, 9006, 9007, 9008, and

9014, Local Rules 6004-1, and the Complex Case Order, and the procedural due process

requirements of the United States Constitution; and (iii) no other or further notice of the Motion,

the Bidding Procedures Order, the Bidding Procedures, the Sale, the Sale Hearing, or this Sale

Order is required. See Doc. No. __. With respect to persons or entities whose identities were not

reasonably ascertainable by the Debtors, publication of the notice in the National Edition of The

New York Times, on ________, 2021, was sufficient and reasonably calculated under the

circumstances to reach such persons or entities. See Doc. No. __.




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Q. Cure Notice. As evidenced by the affidavit(s) of service filed with the Court, and

in accordance with the provisions of the Bidding Procedures Order, the Debtors have served the

Potential Assumption and Assignment Notice (as amended or modified) and the Supplemental

Assumption and Assignment Notice, if any, (as such terms are defined in the Bidding Procedures

Order) and provided notice of the potential assumption and assignment of the executory

Contracts and unexpired Leases and of the related proposed Cure Amounts (as defined below)

upon each non-Debtor party to the executory Contracts and unexpired Leases. See Doc. No. __.

The service of the Potential Assumption and Assignment Notice and the Supplemental

Assumption and Assignment Notice on the non-Debtor counterparties was good, sufficient, and

appropriate under the circumstances and no further notice need be given with respect to the

proposed Cure Amounts for the assumption and assignment of the executory Contracts and

unexpired Leases. All non-Debtor counterparties to the executory Contracts and unexpired

Leases have had a reasonable opportunity to object to (i) the assumption by the Debtors of the

executory Contracts and unexpired Leases and (ii) the assignment of the Assumed Contracts and

Assumed Leases to Buyer and the proposed Cure Amounts listed on the Potential Assumption

and Assignment Notice and the Supplemental Assumption and Assignment Notice, as applicable.

No defaults exist in the Debtors’ performance under the Assumed Contracts and Assumed




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Leases (provided, however, that nothing in this Sale Order is making a determination as to any

defaults or alleged defaults contained in any timely-filed objection as to Contracts or Leases if

such objections have been continued for future adjudication) as of the date of this Sale Order

other than the failure to pay amounts equal to the Cure Amounts in the manner required by this

Sale Order or defaults that are not required to be cured as contemplated in section 365(b)(1)(A)

of the Bankruptcy Code.

R. Satisfaction of Section 363(f) Standards. Except as expressly set forth in the

Asset Purchase Agreement or this Sale Order, the Debtors may sell the Acquired Assets free and

clear of all liens (other than Permitted Liens), claims (including, without limitation, those that

constitute a “claim” as defined in section 101(5) of the Bankruptcy Code), rights, liabilities,

encumbrances and other interests of any kind or nature whatsoever against the Debtors or against

such assets (including, without limitation, all Liens, Claims, Encumbrances, and Interests as

those terms are defined in the Asset Purchase Agreement) arising prior to the Closing of the Sale

(collectively, “Liens-Claims-Encumbrances-Interests”), including, without limitation, any

debts arising under or out of, in connection with, or in any way relating to, any acts or omissions,

obligations, demands, guaranties, rights, contractual commitments, restrictions, product liability

claims, any and all claims arising under state or federal antitrust laws, environmental liabilities




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(to the greatest extent allowed by applicable law), employee benefit plan claims, workers’

compensation claims, retiree healthcare or life insurance claims or claims for taxes of or against

the Debtors, and any derivative, vicarious, transferee, or successor liability claims, rights or

causes of action (whether in law or in equity, under any law, statute, rule or regulation of the

United States, any state, territory, or possession thereof or the District of Columbia), whether

arising prior to or subsequent to the commencement of the Bankruptcy Case, whether known or

unknown, and whether imposed by agreement, understanding, law, equity or otherwise arising

under or out of, in connection with, or in any way related to the Debtors, the Debtors’ interests in

the Acquired Assets, the operation of the Debtors’ business before the Closing (as defined

below), or the transfer of the Debtors’ interests in the Acquired Assets to Buyer, and all

Excluded Liabilities (as defined in the Asset Purchase Agreement), but excluding any Assumed

Liabilities (as defined in the Asset Purchase Agreement), because, in each case, one or more of

the standards set forth in section 363(f)(1)-(5) of the Bankruptcy Code have been satisfied. Those

holders of Liens-Claims-Encumbrances-Interests who did not object (or who ultimately

withdrew their objections, if any) to the Sale or the Motion are deemed to have consented

pursuant to section 363(f)(2) of the Bankruptcy Code. Those holders of Liens-Claims-

Encumbrances-Interests who did object that have an interest in the Acquired Assets fall within




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one or more of the other subsections of section 363(f) of the Bankruptcy Code and are therefore

adequately protected by having their Liens-Claims-Encumbrances-Interests that constitute

interests in the Acquired Assets attach solely to the proceeds of the Sale ultimately attributable to

the property in which they have an interest, in the same order of priority and with the same

extent, validity, force, and effect that such holders had prior to consummation of the Sale, subject

to any rights, claims, and defenses that the Debtors’ estates and/or the Debtors, as applicable,

may possess with respect thereto. All people or entities (“Persons”) having Liens-Claims-

Encumbrances-Interests of any kind or nature whatsoever against the Debtors or the Acquired

Assets shall be forever barred, estopped, and permanently enjoined from pursuing or asserting

such Liens-Claims-Encumbrances-Interests against Buyer or any of its assets, property, Affiliates

(as defined in the Asset Purchase Agreement), successors, assigns, or the Acquired Assets.

S. No Obligation Regarding Excluded Liabilities. Buyer has not agreed to assume

and shall have no obligation with respect to any Liens-Claims-Encumbrances-Interests, other

than as expressly set forth in the Asset Purchase Agreement or the Transition Services

Agreement. Other than the Assumed Liabilities and Permitted Liens, and except as expressly

provided for by the terms of the Asset Purchase Agreement or the Transition Services

Agreement, Buyer (i) shall have no obligations with respect to any Excluded Liabilities, (ii) shall




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acquire all of the Acquired Assets free and clear of the Liens-Claims-Encumbrances-Interests,

and (iii) is released by the Debtors and all other Persons with respect to such Excluded

Liabilities.

T. Consideration. Buyer would not have entered into the Asset Purchase Agreement

or the Transition Services Agreement and would not consummate the transactions contemplated

thereby, thus adversely affecting the Debtors and their estates and their creditors, if the sale of

the Acquired Assets was not free and clear of all Liens-Claims-Encumbrances-Interests, or if

Buyer would, or in the future could, be liable for any such Liens-Claims-Encumbrances-Interests

or any Excluded Liabilities. The total consideration to be provided under the Asset Purchase

Agreement and the Transition Services Agreement reflects Buyer’s reliance on this Sale Order to

provide it with title to and possession of the Acquired Assets free and clear of all Liens-Claims-

Encumbrances-Interests and any Excluded Liabilities.

U. Assumption and Assignment of Assumed Contracts and Assumed Leases.

Buyer’s assumption and assignment of the Assumed Contracts and Assumed Leases, and

designation rights with respect to retained contracts (the “Retained Contracts”), are integral to

the Asset Purchase Agreement, are in the best interests of the Debtors and their estates, and

represent the valid and reasonable exercise of the Debtors’ sound business judgment.




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Specifically, the designation rights and the assumption and assignment of the Assumed Contracts

and Assumed Leases (i) are necessary to sell the Acquired Assets to Buyer; (ii) allow the Debtors

to sell the Acquired Assets to Buyer in part as a going concern; (iii) limit the losses suffered by

non-Debtor parties to the Assumed Contracts and Assumed Leases; and (iv) maximize the

recoveries to other creditors of the Debtors by limiting the number and total asserted amount of

claims against the Debtors’ estates to the extent the Debtors are able to avoid the rejection of the

Assumed Contracts and Assumed Leases.

V. Cure Amounts. With respect to each of the Assumed Contracts and Assumed

Leases, including, without limitation, the Retained Contracts that are later designated as

Assumed Contracts or Assumed Leases, the Debtors have met all of the requirements of section

365(b) of the Bankruptcy Code. The amounts payable to cure all defaults (as that concept is

contemplated by section 365 of the Bankruptcy Code) under any applicable Assumed Contracts

or Assumed Leases listed on the Contracts Schedule, including, without limitation, any Retained

Contracts that are later designated as Assumed Contracts or Assumed Leases, to effectuate the

assumption by the Debtors and the assignment to Buyer of such Assumed Contracts or Assumed

Leases in accordance with section 365 of the Bankruptcy Code at Closing or prior to the

designation of a Contract or Lease as “Assumed,” “Rejected,” or “Designated” (the “Retained




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Contracts Period”), either in an amount mutually agreed upon between Buyer and the

applicable non-Debtor counterparties or otherwise judicially resolved (collectively, the “Cure

Amounts”), are deemed to be the entire cure obligation due and owing under such Assumed

Contracts and Assumed Leases (as that concept is contemplated by section 365 of the

Bankruptcy Code). Further, Buyer has provided adequate assurance of future performance under

the Assumed Contracts and Assumed Leases in satisfaction of sections 365(b) and 365(f) of the

Bankruptcy Code. Accordingly, the Assumed Contracts and Assumed Leases may be assumed

by the Debtors and assigned to Buyer either at Closing or during the Retained Contracts Period,

as provided for in the Asset Purchase Agreement and this Sale Order.

W. Payment of Cure Amounts. The responsibility for the payment of all Cure

Amounts shall be subject to, and governed by, the respective obligations of Seller and Buyer to

make such payments in accordance with the Asset Purchase Agreement.

X. Validity of Transfer. The transfer of the Acquired Assets to Buyer in accordance

with the Asset Purchase Agreement will be a legal, valid, and effective transfer of the Acquired

Assets, and will vest Buyer with all right, title, and interest of the Debtors in respect of the

Acquired Assets, free and clear of all Liens-Claims-Encumbrances-Interests and Excluded

Liabilities (except as otherwise set forth in the Asset Purchase Agreement with respect to the




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Assumed Liabilities and Permitted Liens). The consummation of the Sale is legal, valid, and

properly authorized under all applicable provisions of the Bankruptcy Code, including, without

limitation, sections 105(a), 363(b), 363(f), 363(m), 365(b), and 365(f) of the Bankruptcy Code

and all of the applicable requirements of such sections have been complied with in respect of the

Sale.

Y. Corporate Authorization. The Debtors (i) have full corporate power and

authority to execute the Asset Purchase Agreement, the Transition Services Agreement, and all

other documents contemplated and required thereby, and the Sale has been duly and validly

authorized by all necessary corporate action of the Debtors; (ii) have all of the corporate power

and authority necessary to consummate the transactions contemplated and required by the Asset

Purchase Agreement and the Transition Services Agreement; and (iii) upon entry of this Sale

Order, other than any consents identified in the Asset Purchase Agreement and the Transition

Services Agreement (including, without limitation, with respect to antitrust or other regulatory

matters), need no consent or approval from any other Person to consummate the Sale other than

the Prepetition Credit Parties.




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Z. Good Title. The Acquired Assets constitute property of the Debtors’ estates and

good title is vested in the Debtors’ estates within the meaning of section 541(a) of the

Bankruptcy Code.

AA. Binding Effect. The Asset Purchase Agreement and the Transition Services

Agreement are valid and lawful contracts binding upon each of the signatories thereto and shall

be enforceable pursuant to their terms. This Sale Order, the Asset Purchase Agreement, the

Transition Services Agreement, and, upon Closing, the Sale, and the consummation thereof, shall

be specifically enforceable against and binding upon (without posting any bond) Buyer, the

Debtors, any chapter 7 or chapter 11 trustee appointed in the Bankruptcy Case, and shall not be

subject to rejection or avoidance by the foregoing parties or any other Person.

BB. Waiver of Bankruptcy Rules 6004(h) and 6006(d). The sale of the Acquired

Assets must be approved and consummated promptly to preserve the value of the Acquired

Assets. Therefore, time is of the essence in consummating the Sale, and the Debtors and Buyer

intend to close the Sale as soon as reasonably practicable. The Debtors have demonstrated

compelling circumstances and a good, sufficient, and sound business purpose and justification

for the immediate approval and consummation of the Sale as contemplated by the Asset Purchase




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Agreement. Accordingly, there is sufficient cause to lift the stay contemplated by Bankruptcy

Rules 6004(h) and 6006(d) with regards to the transactions contemplated by this Sale Order.

CC. Legal and Factual Bases. The legal and factual bases set forth in the Motion, the

Sale Declaration, and at the Sale Hearing establish just cause for the relief granted herein.

IT IS HEREBY ORDERED THAT:

1. Motion Granted. The Motion GRANTED as set forth herein.

2. Objections Overruled. All objections to the Motion or the relief requested

therein that have not been withdrawn, waived, settled, or otherwise resolved are hereby overruled

on the merits and with prejudice; provided, however, that the objections that are listed on

Exhibit 3 hereto (the “Unresolved Objections to Cure Amounts”) that were filed with respect

to the Contracts and Leases listed in such exhibit are preserved for later adjudication as set forth

in such exhibit solely with respect to the Cure Amounts proposed by the Debtors in the Potential

Assumption and Assignment Notice and, as applicable, the Supplemental Assumption and

Assignment Notice listing such Contracts and Leases, and all other objections in such

Unresolved Objections to Cure Amounts that have not been withdrawn, waived, settled, or

otherwise resolved are hereby overruled on the merits and with prejudice.




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3. Prior Findings and Conclusions Incorporated. The Court’s findings of fact and

conclusions of law set forth in the Bidding Procedures Order are incorporated herein by

reference.

4. Notice. Notice of the Sale Hearing was fair and equitable under the circumstances

and complied in all respects with section 102(1) of the Bankruptcy Code and Bankruptcy Rules

2002, 6004, and 6006.

5. Power to Transfer Acquired Assets. The Debtors, in transferring the Acquired

Assets pursuant to this Sale Order and section 363 of the Bankruptcy Code, are deemed, under

section 1107(a) of the Bankruptcy Code, to have all rights and powers to perform all the

functions and duties of a trustee serving in a case under chapter 11 and will transfer the property

pursuant to this Sale Order. The Debtors have full corporate power and authority to execute and

deliver the Asset Purchase Agreement, the Transition Services Agreement, and all other

documents contemplated thereby, and no further consents or approvals are required for the

Debtors to consummate the transactions contemplated by the Asset Purchase Agreement and the

Transition Services Agreement.

6. Fair Purchase Price. The consideration provided by Buyer under the Asset

Purchase Agreement and the Transition Services Agreement is fair and reasonable and




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constitutes (a) reasonably equivalent value under the Bankruptcy Code, the Uniform Fraudulent

Transfer Act, and the Uniform Voidable Transactions Act; (b) fair consideration under the

Uniform Fraudulent Conveyance Act; and (c) reasonably equivalent value, fair consideration and

fair value under any other applicable laws of the United States, any state, territory or possession

or the District of Columbia.

7. Highest or Otherwise Best Offer. The Sale of the Acquired Assets, the bid by

Buyer in accordance with the Bidding Procedures, the terms and conditions of the Asset

Purchase Agreement, and the transactions contemplated thereby and all of the terms and

conditions thereof, are the highest or otherwise best offer for the Acquired Assets and hereby are

authorized and approved in all respects.

8. Approval of the Agreements. The Asset Purchase Agreement and the Transition

Services Agreement, including, without limitation, all transactions contemplated thereby and all

of the terms and conditions thereof, are hereby approved in their entirety. The failure to

specifically include or reference in this Sale Order any particular provisions of the Asset

Purchase Agreement or the Transition Services Agreement, or any of the documents,

agreements, or instruments related thereto and executed in connection therewith, shall not

diminish or impair the effectiveness of such provisions, documents, agreements, or instruments,




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it being the intent of the Court, the Debtors and Buyer that the Asset Purchase Agreement, the

Transition Services Agreement, and any related agreements are authorized and approved in their

entirety with such amendments thereto as may be made by the parties in accordance with this

Sale Order prior to Closing.

9. Consummation of Sale. Pursuant to sections 105, 363, and 365 of the

Bankruptcy Code, the Debtors, as well as their officers, employees, and agents, are authorized to

execute, deliver, and perform their obligations under and comply with the terms of the Asset

Purchase Agreement, and to consummate the Sale, including, without limitation, by taking any

and all actions as may be reasonably necessary or desirable to implement the terms of the Asset

Purchase Agreement and each of the transactions contemplated thereby or to otherwise effectuate

the relief granted pursuant to this Sale Order.

10. Authorization. The Debtors, their Affiliates, and their respective officers,

employees, and agents, are authorized to execute and deliver, and authorized to perform under,

consummate, and implement all additional instruments and documents that may be reasonably

necessary or desirable to implement the Asset Purchase Agreement and the Transition Services

Agreement and to take all further actions as may be reasonably (a) requested by Buyer for the

purpose of assigning, transferring, granting, conveying, and/or conferring to Buyer the Acquired




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Assets or (b) necessary or appropriate to the performance of the obligations contemplated by the

Asset Purchase Agreement and the Transition Services Agreement, all without further order of

the Court.

11. Transfer of Acquired Assets Free and Clear. Pursuant to sections 105, 363(b),

and 363(f) of the Bankruptcy Code, the Debtors are authorized to transfer the Acquired Assets to

Buyer in accordance with the terms of the Asset Purchase Agreement. Subject to the provisions

of the Asset Purchase Agreement (including with respect to the Assumed Liabilities and the

Permitted Liens), and this Sale Order, the Acquired Assets shall be transferred to Buyer and such

transfer shall (a) be valid, legal, binding, and effective, (b) vest Buyer with all right, title, and

interest of any of the Debtors in the Acquired Assets, and (c) upon the Debtors’ receipt of the

Purchase Price, be free and clear of any Liens-Claims-Encumbrances-Interests and Excluded

Liabilities in accordance with section 363(f) of the Bankruptcy Code (other than Permitted Liens

and Assumed Liabilities). Any such Liens-Claims-Encumbrances-Interests shall attach to the

proceeds of the Sale of the Acquired Assets in the same order of priority, and with the same

extent, validity, force, and effect as existed with respect to the Acquired Assets prior to the Sale

and subject to any rights, claims, defenses, and counterclaims of the Debtors’ estates and/or the

Debtors to such Liens-Claims-Encumbrances-Interests. Upon the Closing, the Buyer shall take




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title to and possession of the Acquired Assets, subject only to the Assumed Liabilities and

Permitted Liens, and the Acquired Assets shall thereafter be the sole and exclusive property of

the Buyer and not be deemed property of the Debtors or their estates for any purpose after the

Closing.

12. Claims After Closing. Except as set forth in the Asset Purchase Agreement

(including with respect to the Assumed Liabilities) and the Transition Services Agreement, all

Persons (and their respective successors and assigns) holding Liens-Claims-Encumbrances-

Interests and/or Excluded Liabilities against, on, or in any of the Debtors or all or any portion of

the Acquired Assets (whether legal or equitable, secured or unsecured, matured or unmatured,

contingent or non-contingent, senior or subordinated), including, without limitation, debt

holders, equity security holders, governmental, tax and regulatory authorities, governmental

units, lenders, employees, former employees, and trade creditors are hereby forever barred,

estopped, and permanently enjoined from asserting or pursuing such Liens-Claims-

Encumbrances-Interests against Buyer, its Affiliates, successors or assigns, its property, or the

Acquired Assets, including, without limitation, by taking any of the following actions:

(a) commencing or continuing in any manner any action or other proceeding against Buyer, its

Affiliates, successors or assigns, its assets, or its properties; (b) enforcing, attaching, collecting,




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or recovering in any manner any judgment, award, decree, or order against Buyer, its Affiliates,

successors or assigns, its assets, or its properties; (c) creating, perfecting, or enforcing any Claim

against Buyer, its Affiliates, successors or assigns, its assets, or its properties; (d) asserting a

Claim as a setoff (except for setoffs exercised prior to the Petition Date) or right of subrogation

of any kind against any obligation due Buyer or its successors or assigns; or (e) commencing or

continuing any action in any manner or place that does not comply, or is inconsistent, with the

provisions of this Sale Order or the agreements or actions approved, contemplated, or taken in

respect thereof; provided that the foregoing shall not release any obligations assumed or

established by the Buyer under the Asset Purchase Agreement, the Transition Services

Agreement, or this Sale Order, including Buyer’s performance obligations under the Asset

Purchase Agreement, the Transition Services Agreement, and any and all post-Closing

obligations.

13. No Interference with Acquired Assets. All Persons are hereby forever

prohibited and enjoined from taking any action that would interfere with or adversely affect the

ability of the Debtors to transfer the Acquired Assets in accordance with the terms of the Asset

Purchase Agreement and this Sale Order. Except as otherwise provided in this Sale Order,

following the Closing, no holder of any Lien-Claim-Encumbrance-Interest or Excluded Liability




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shall interfere with Buyer’s title to or use and enjoyment of the Acquired Assets or assert any

claims against Buyer based on or related to any such Lien-Claim-Encumbrance-Interest or

Excluded Liability or based on any actions that the Debtors have taken or may take, or failed to

take or may fail to take, in the Bankruptcy Case. Except as expressly set forth in the Asset

Purchase Agreement (including with respect to the Assumed Liabilities and Permitted Liens) and

the Transition Services Agreement, Buyer and its Affiliates and successors and assigns shall

have no liability for any Liens-Claims-Encumbrances-Interests, any Excluded Liability, causes

of action, obligations, demands, losses, claims, taxes, costs, and expenses of any kind, character,

or nature whatsoever, whether known or unknown as of the Closing, now existing or hereafter

arising, whether fixed or contingent, whether derivatively, vicariously, as a transferee or

successor or otherwise, of any kind, nature or character whatsoever relating to or arising from the

Debtors, their estates, the Acquired Assets, or the Sale, including, without limitation, with

respect to: (a) any employment or labor agreements; (b) any welfare, compensation or other

employee benefit plans, agreements, practices, and programs, including, without limitation, the

Company Benefit Plans (as defined in the Asset Purchase Agreement) and any participation or

other agreements related to the Company Benefit Plans, or the termination of any of the

foregoing; (c) the Debtors’ business operations or the cessation thereof; (d) any litigation




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involving one or more of the Debtors; (e) any employee, workers’ compensation, occupational

disease, or unemployment or temporary disability related law, including, without limitation,

claims that might otherwise arise under or pursuant to (i) the Employee Retirement Income

Security Act of 1974, as amended, (ii) the Fair Labor Standards Act, (iii) Title VII of the Civil

Rights Act of 1964, (iv) the Federal Rehabilitation Act of 1973, (v) the National Labor Relations

Act, (vi) the Worker Adjustment and Retraining Notification Act of 1988, (vii) the Age

Discrimination and Employee Act of 1967 and Age Discrimination in Employment Act, as

amended, (viii) the Americans with Disabilities Act of 1990, (ix) the Consolidated Omnibus

Budget Reconciliation Act of 1985 (“COBRA”), (x) state and local discrimination laws, (xi)

state and local unemployment compensation laws or any other similar state and local laws, (xii)

state workers’ compensation laws, or (xiii) any other state, local, or federal employee benefit

laws, regulations or rules or other state, local or federal laws, regulations or rules relating to,

wages, benefits, employment or termination of employment with any or all Debtors or any

predecessors; (f) any antitrust laws; (g) any product liability or similar laws, whether state or

federal or otherwise; (h) to the greatest extent allowed by applicable law, any environmental

laws, rules, or regulations, including, without limitation, under the Comprehensive

Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§ 9601, et seq., or similar




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state statutes; (i) any bulk sales or similar laws; (j) any federal, state, or local tax statutes,

regulations, or ordinances, including, without limitation, the Internal Revenue Code of 1986, as

amended; (k) the Coronavirus Aid, Relief, and Economic Security Act of 2020; and (l) any

statute or theory of or related to successor liability, including, without limitation, the common

law doctrine of de facto merger or successor or transferee liability, or successor-in-interest

liability theory. Entry of this Sale Order shall not effect any release of (x) any future or ongoing

obligation(s) under the Asset Purchase Agreement, the Transition Services Agreement, or this

Sale Order or (y) any Person’s rights, claims, causes of action, or remedies relating to the

foregoing.

14. Liability Regarding Employees. Buyer shall not be deemed to be a joint

employer, single employer, co-employer, or successor employer with the Debtors for any

purpose or under the laws of the United States, any state, territory, or possession thereof, and

except as may be provided otherwise in the Asset Purchase Agreement, Buyer shall not have any

obligation to pay any past wages, benefits, or severance pay or extend or make any benefits or

benefit programs, including, without limitation, COBRA or any similar laws or regulations, to

any of the Debtors’ employees or former employees (or any of their respective spouses,




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dependents, or beneficiaries), including, without limitation, any such employees who may

become employees of Buyer.

15. Self-Executing Order. The provisions of this Sale Order authorizing the Sale of

the Acquired Assets free and clear of Liens-Claims-Encumbrances-Interests and Excluded

Liabilities shall be self-executing, and neither the Debtors nor Buyer shall be required to execute

or file releases, termination statements, assignments, consents, or other instruments to effectuate,

consummate, or implement the foregoing provisions of this Sale Order; provided, however, that

this paragraph shall not excuse such Persons from performing any and all of their respective

obligations under this Sale Order, the Asset Purchase Agreement, or the Transition Services

Agreement, and the Debtors and Buyer, and each of their respective directors, officers,

employees, authorized signatories, members, agents, representatives, and attorneys are hereby

authorized and empowered to take all actions and execute and deliver any and all documents and

instruments that either the Debtors or Buyer deem necessary or appropriate to implement and

effectuate the terms of the Asset Purchase Agreement, the Transition Services Agreement, and

this Sale Order.

16. General Assignment. This Sale Order (a) shall be effective as a determination

that, as of the Closing, the conveyances and transfers described herein and the Asset Purchase




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Agreement have been effected and (b) is and shall be binding upon and govern the acts of all

Persons, 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 and local officials, and all other

Persons 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 that reflect that

Buyer is the assignee and owner of the Acquired Assets free and clear of all Liens-Claims-

Encumbrances-Interests and Excluded Liabilities, or who may be required to report or insure any

title or state of title in or to any lease; and each of the foregoing Persons is hereby authorized and

directed to accept for filing any and all of the documents and instruments reasonably necessary

or appropriate to consummate the transactions contemplated by the Asset Purchase Agreement.

This Sale Order shall be construed and shall constitute for any and all purposes a full and

complete general assignment, conveyance, and transfer of the Acquired Assets and/or a bill of

sale or assignment transferring indefeasible title and interest in the Acquired Assets, including,

without limitation, the Assumed Contracts and Assumed Leases, to Buyer on the terms set forth

in the Asset Purchase Agreement.




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17. Release of Liens-Claims-Encumbrances-Interests.

(a) Subject to subparagraph (b) of this Paragraph, if any Person that has filed financing statements, mortgages, mechanic’s liens, lis pendens, or other documents or agreements evidencing Liens-Claims-Encumbrances-Interests on, against, or in the Acquired Assets shall not have delivered to the Debtors by the Closing, in proper form for filing and executed by the appropriate parties, termination statements, instruments of satisfaction, or releases of all interests that the Person has with respect to the Acquired Assets, then with regard to the Acquired Assets that are purchased by Buyer pursuant to the Asset Purchase Agreement and this Sale Order (a) the Debtors or their designee are hereby authorized to execute and file such statements, instruments, or releases on behalf of the Person with respect to the Acquired Assets and (b) Buyer or its designee is hereby authorized to file, register or otherwise record a certified copy of this Sale Order, which, once filed, registered or otherwise recorded, shall constitute conclusive evidence of the release of all Liens-Claims-Encumbrances-Interests against the Acquired Assets.

(b) As provided in the Asset Purchase Agreement, the Prepetition Liens on, against, and in the Acquired Assets shall deemed Permitted Liens and assumed by Buyer upon Closing; provided, further, the Debtors are authorized to execute and file such statements, instruments, or releases on behalf of the Prepetition Credit Parties with respect to the Acquired Assets upon payment in full of Prepetition Obligations. Capitalized terms used in this subparagraph but not otherwise defined herein shall have the meanings ascribed to them in the Final Order Pursuant to 11 U.S.C. §§ 105, 361, 362, 363, 364, 507 and 552 (1) Authorizing Use of Cash Collateral, (2) Granting Adequate Protection, and (3) Modifying Automatic Stay, entered February __, 2021 [Doc. No. __] (the “Final Cash Collateral Order”).

(c) This Sale Order is deemed to be in recordable form sufficient to be placed in the filing or recording system of each and every federal, state, or local government agency, department, or office.




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18. Permits and Licenses. To the maximum extent available under applicable law

and to the extent provided for under the Asset Purchase Agreement, Buyer shall be authorized, as

of the Closing, to operate under any license, permit, registration, and governmental authorization

or approval of the Debtors with respect to the Acquired Assets and, to the maximum extent

available under applicable law and to the extent provided for under the Asset Purchase

Agreement, all such licenses, permits, registrations, and governmental authorizations and

approvals are deemed to have been transferred to Buyer as of the Closing; provided, however,

that, for the avoidance of doubt, nothing in this Sale Order or the Asset Purchase Agreement

shall authorize the transfer to Buyer of any government-issued license, permit, or registration, or

governmental authorization or approval, or the discontinuation of any obligation thereunder,

without Buyer’s compliance with all applicable legal requirements and approvals under non-

bankruptcy law governing such transfer. To the maximum extent available under applicable law,

all existing licenses or permits applicable to the Debtors’ business shall remain in place for

Buyer’s benefit until either new licenses and permits are obtained or existing licenses and

permits are transferred in accordance with applicable administrative procedures and, to the

maximum extent permitted by section 525 of the Bankruptcy Code, no governmental unit may

revoke or suspend any permit or license relating to the operation of the Acquired Assets sold,




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transferred, or conveyed to Buyer on account of the filing or pendency of the Bankruptcy Case or

the consummation of the Sale. Nothing in this Sale Order divests any tribunal of any jurisdiction

it may have under police or regulatory law.

19. No Successor or Other Derivative Liability. Except as set forth in the Asset

Purchase Agreement with respect to the Assumed Liabilities and the Transition Services

Agreement, to the fullest extent permitted by applicable law, neither Buyer nor its Affiliates, or

their successors or assigns, shall, as a result of the consummation of the transactions set forth in

the Asset Purchase Agreement or the Transition Services Agreement: (a) be an alter ego, mere

continuation, or a successor in interest to the Debtors or the Debtors’ estates; (b) have, de facto

or otherwise, merged or consolidated with or into the Debtors or the Debtors’ estates; (c) be a

continuation or substantial continuation of the Debtors or any enterprise of the Debtors; or (d) be

a joint employer or co-employer with, or successor employer of, the Debtors. Except as

specifically provided by the Asset Purchase Agreement with respect to the Assumed Liabilities

and Permitted Liens or the Transition Services Agreement, Buyer shall not assume, be deemed to

assume, or in any way be responsible for any Liens-Claims-Encumbrances-Interests of the

Debtors and/or their estates, including, without limitation, pursuant to any successor liability or

other theory of liability or responsibility for any Liens-Claims-Encumbrances-Interests against




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the Debtors, against an insider of the Debtors, against the Acquired Assets, the Debtors’ assets,

or similar liability. Buyer is not an “insider” or “affiliate” of the Debtors, as those terms are

defined in the Bankruptcy Code.

20. Assumption and Assignment or Rejection of Assumed Contracts and

Assumed Leases. The Debtors are hereby authorized in accordance with sections 105(a) and 365

of the Bankruptcy Code to assume and assign the Assumed Contracts and Assumed Leases to

Buyer free and clear of all Liens-Claims-Encumbrances-Interests, and to execute and deliver to

Buyer such documents or other instruments as may be reasonably necessary to assign and

transfer the Assumed Contracts and Assumed Leases to Buyer, as provided in the Asset Purchase

Agreement. Upon the assumption and assignment to Buyer of any Assumed Contract or

Assumed Lease at Closing or during the Retained Contracts Period in accordance with this Sale

Order, and the payment of any applicable Cure Amounts in accordance with this Sale Order,

Buyer shall succeed to the entirety of the Debtors’ rights and obligations in respect of each

Assumed Contract and Assumed Lease so assumed and assigned at Closing or during the

Retained Contracts Period. Except as otherwise provided in this Sale Order or the Asset Purchase

Agreement, pursuant to section 365(k) of the Bankruptcy Code, the Debtors shall be relieved

from any further liability with respect to such Assumed Contract or Assumed Lease. From and




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after the assumption and assignment to Buyer of such Assumed Contract or Assumed Lease after

the Closing or during the Retained Contracts Period in accordance with this Sale Order, Buyer

shall comply with the terms of each Assumed Contract and Assumed Lease in its entirety (as

may be modified in any agreement with the applicable non-Debtor counterparty to such

Assumed Contract or Assumed Lease), including, without limitation, in the case of each

Assumed Contract or Assumed Lease, any indemnification obligations expressly contained in

such Assumed Contract or Assumed Lease (including with respect to third party claims asserted

in connection with the Debtors’ use and occupancy of the premises subject to such Assumed

Lease with regard to events that occurred before the Closing or such later assumption and

assignment to Buyer but that were not known to the applicable non-Debtor counterparty as of

such date) and any accrued rent, common area maintenance, insurance, taxes, or similar charges

billed expressly contained in such Assumed Lease that will come due after the Closing or the

later assumption and assignment to Buyer of such Assumed Lease, as applicable, regardless of

when accrued. Nothing in the foregoing sentence or other provisions of this Sale Order shall

limit the Debtors’ obligations to Buyer under the Asset Purchase Agreement with respect to rent

or other charges that accrue prior to the Closing.




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21. Consent to Assumption and Assignment. All non-Debtor counterparties to each

Assumed Contract or Assumed Lease shall be deemed to have consented to such assignment

under section 365(c)(1)(B) of the Bankruptcy Code, section 365(e)(2)(A)(ii) of the Bankruptcy

Code, or otherwise, and Buyer shall enjoy all of the rights and benefits under each such Assumed

Contract or Assumed Lease as of the applicable effective date of assumption and assignment

without the necessity of obtaining such Person’s written consent to the assumption or assignment

of such Assumed Contract or Assumed Lease. Any non-Debtor counterparty to an Assumed

Contract that is a personal services contract that has not objected to the assignment thereof is

deemed to consent to such assignment pursuant to section 365(c) of the Bankruptcy Code. Any

non-Debtor counterparty to an Assumed Lease that is a shopping center lease that has not

objected to the assignment thereof is deemed to consent to such assignment pursuant to section

365(c) of the Bankruptcy Code

22. Notice of Assumption and Assignment. At the Closing, the Debtors shall

assume and assign to Buyer any Assumed Contract or Assumed Lease designated by Buyer for

assumption at the Closing pursuant to Section [___] of the Asset Purchase Agreement. Upon the

Closing, the Debtors shall file a notice of sale closing indicating which Assumed Contracts and

Assumed Leases shall be assumed and assigned to Buyer at the Closing and shall serve the same




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on the non-Debtor counterparty to each such Assumed Contract or Assumed Lease. Such notice

shall serve as notice that such Assumed Contracts and Assumed Leases have actually been

assumed and assigned, and such assumption and assignment shall be effective as of the Closing

without further order of the Court.

23. Retained Contracts Period. During the Retained Contracts Period, Buyer may,

in its sole discretion, designate a Retained Contract, that has not previously been assumed and

assigned or rejected, for assumption and assignment to Buyer or its designee by providing

written notice to Sellers pursuant to Section [___] of the Asset Purchase Agreement. For the

avoidance of doubt, the Debtors may continue to serve Supplemental Assumption and

Assignment Notices with respect to Retained Contracts in accordance with the Bidding

Procedures and the Asset Purchase Agreement. For any Retained Contract that Buyer directs the

Debtors to assume and assign to Buyer pursuant to the terms of this paragraph, the Debtors shall

file a notice on the docket (the “Assumption Notice”), and, if the applicable Counterparty to a

Retained Contract (a “Retained Contract Counterparty”) requests a supplemental order

approving such assumption and assignment, a proposed order, identifying the Retained Contract

Counterparty, the Retained Contract, and the proposed assignee. Except where the Retained

Contract Counterparty has requested a supplemental order approving such assumption and




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assignment, the Assumption Notice shall serve as notice that such Assumed Contracts have

actually been assumed and assigned, and such assumption and assignment shall be effective as of

the date of such filing without further order of the Court. Nothing in this Sale Order shall extend

or be deemed to extend the Retained Contracts Period beyond any applicable deadline to assume

or reject Contracts and Leases set forth in section 365(d)(4) of the Bankruptcy Code.

24. Rejection of Contracts. During the Retained Contracts Period, Buyer may, in its

sole discretion, designate a Retained Contract, that has not previously been assumed and

assigned or rejected, for rejection by providing written notice to Sellers pursuant to Section [___]

of the Asset Purchase Agreement. For any such Retained Contract to be rejected, the Debtors

shall reject such contract pursuant to the terms of the Order Authorizing and Approving

Procedures for the Rejection of Executory Contracts and Unexpired Leases [Docket No. 61] (the

“Rejection Procedures Order”).

25. Abandonment. Any property remaining in any premises subject to a Lease on the

Rejection Date (as defined in the Rejection Procedures Order) of such Lease shall be deemed

abandoned and may be used or disposed of by the applicable landlord without notice or liability

to any Person claiming an interest in such abandoned property.




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26. Payment of Cure Amounts. All Cure Amounts that have not been waived shall

be determined in accordance with the Bidding Procedures Order and this Sale Order and paid in

accordance with the terms of the Asset Purchase Agreement, subject to the terms of this Sale

Order, and any other applicable order of the Court. With respect to any Assumed Contract and

Assumed Lease that is assumed and assigned to Buyer at Closing or during the Retained

Contracts Period, Buyer, in its sole discretion, may pay to the applicable non-Debtor

counterparty (a) the proposed Cure Amount listed in the Potential Assumption and Assignment

Notice or as set forth or modified in a Supplemental Assumption and Assignment Notice (as

applicable) or (b) an amount mutually agreed upon between Buyer and the non-Debtor

counterparty or otherwise judicially resolved. The payment of the Cure Amounts shall be

deemed to be in full satisfaction of and cure all defaults (as that concept is contemplated by

section 365 of the Bankruptcy Code) under the Assumed Contracts and Assumed Leases

necessary to effectuate the assumption by the Debtors and the assignment to Buyer of such

Assumed Contracts or Assumed Leases pursuant to section 365 of the Bankruptcy Code, and,

upon payment in accordance with the preceding sentence, such Assumed Contracts and Assumed

Leases shall be deemed to be in full force and effect, free of default for such purposes. To the

extent a non-Debtor counterparty to an Assumed Contract or Assumed Lease failed to timely




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object to any proposed Cure Amounts listed in the Potential Assumption and Assignment Notice

or as set forth or modified in a Supplemental Assumption and Assignment Notice, the Cure

Amounts listed therein have been and shall be deemed to be finally determined and any such

non-Debtor counterparty shall be prohibited from challenging, objecting to, or denying the

validity and finality of the Cure Amount at any time. Each non-Debtor counterparty to an

Assumed Contract or Assumed Lease is forever barred, estopped, and permanently enjoined

from asserting against the Debtors or Buyer, their Affiliates, successors or assigns, or the

property of any of them, any default existing as of the date of the Sale Hearing if such default

was not raised or asserted prior to or at the Sale Hearing or in a timely-filed objection, as

applicable.

27. No Assumption and Assignment if Sale Does Not Close. In the event that the

Closing does not occur, none of the Contracts or the Leases shall be assumed or rejected by

virtue of this Sale Order, and all of the Contracts and Leases shall remain subject to further

administration in the Bankruptcy Case. Except as explicitly provided in the Asset Purchase

Agreement or this Sale Order, unless and until a Contract or Lease becomes an Assumed

Contract or an Assumed Lease pursuant to the terms of this Sale Order, Buyer shall have no

liability under such Contract or Lease.




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28. Ipso Facto Clauses Ineffective. The Assumed Contracts and Assumed Leases

shall be transferred to, and remain in full force and effect for the benefit of, Buyer in accordance

with their respective terms, including, without limitation, all obligations of Buyer as the assignee

of the Assumed Contracts and Assumed Leases, notwithstanding any provision in any such

Assumed Contracts and Assumed Leases (including, without limitation, those of the type

described in sections 365(e)(1) and (f) of the Bankruptcy Code) that prohibits, restricts, or

conditions such assignment or transfer. There shall be no, and all non-Debtor counterparties to

any Assumed Contract or Assumed Lease are forever barred and permanently enjoined from

raising or asserting against the Debtors or Buyer any, defaults, breach, claim, pecuniary loss, rent

accelerations, escalations, assignment fees, increases, or any fees charged to Buyer or the

Debtors as a result of the assumption or assignment of the Assumed Contracts and Assumed

Leases.

29. No Other Defaults. Upon the Debtors’ assumption and assignment of the

Assumed Contracts and Assumed Leases to Buyer and payment of all Cure Amounts in

accordance with this Sale Order, and subject to the resolution or adjudication of any disputed

Cure Amounts, no default shall exist under any Assumed Contracts or Assumed Leases, and no

non-Debtor counterparty to any Assumed Contracts or Assumed Leases shall be permitted to




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declare a default by any Debtor or Buyer, or otherwise take action against Buyer, as a result of

any Debtor’s financial condition, bankruptcy, or failure to perform any of its obligations under

the relevant Assumed Contracts or Assumed Leases prior to the Closing Date or effective date of

assignment and assumption. To the greatest extent permitted under applicable Law, any

provision in an Assumed Contract or Assumed Lease that prohibits or conditions the assignment

or sublease of such Assumed Contract or Assumed Lease (including, without limitation, the

granting of a lien therein) or allows the non-Debtor counterparty thereto to terminate, recapture,

impose any penalty, condition on renewal, or extension, or modify any term or condition upon

such assignment or sublease, constitutes an unenforceable anti-assignment provision that is void

and of no force and effect with respect to assignment of the Assumed Contracts and Assumed

Leases in the Sale. The failure of the Debtors or Buyer to enforce at any time one or more terms

or conditions of any Assumed Contract or Assumed Lease shall not be a waiver of such terms or

conditions, or of the Debtors’ and Buyer’s rights to enforce every term and condition of the

Assumed Contract or Assumed Lease.

30. Good Faith Purchaser. Buyer is a good faith purchaser and is hereby granted

and is entitled to all of the benefits and protections afforded by section 363(m) of the Bankruptcy

Code to a “good faith” purchaser, including, without limitation, with respect to the transfer of the




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Assumed Contracts and Assumed Leases as part of the Sale of the Acquired Assets pursuant to

section 365 of the Bankruptcy Code.

31. Validity and Enforceability. Pursuant to section 363(m) of the Bankruptcy

Code, if any or all of the provisions of this Sale Order are hereafter reversed, modified, or

vacated by a subsequent order of the Court or any other court, such reversal, modification, or

vacatur shall not affect the validity and enforceability of any transfer under the Asset Purchase

Agreement or obligation or right granted pursuant to the terms of this Sale Order (unless stayed

pending appeal), and, notwithstanding any reversal, modification, or vacatur, the validity and

enforceability of any transfer under the Asset Purchase Agreement or obligation or right granted

pursuant to the terms of this Sale Order, shall be governed in all respects by the original

provisions of this Sale Order or the Asset Purchase Agreement, as applicable.

32. Buyer’s Use and Enjoyment. All Persons presently, or on or after the Closing

Date, in possession of some of the Acquired Assets are directed to surrender possession of the

Acquired Assets directly to Buyer or its designee on the Closing Date or at such time thereafter

as Buyer may request. Following the Closing under the Asset Purchase Agreement, no holder of

any Liens-Claims-Encumbrances-Interests against the Acquired Assets shall have any basis to

interfere with Buyer’s or its designee’s use and enjoyment of the Acquired Assets based on or




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related to such Liens-Claims-Encumbrances-Interests, or any actions that the Debtors may take

in the Bankruptcy Case, and no Person may take any action to prevent, interfere with, or

otherwise impair consummation of the transactions contemplated in or by the Asset Purchase

Agreement or this Sale Order.

33. Authority to Assign, Lease, Sublease, License, Sublicense, Transfer,

Otherwise Dispose. In connection with the transactions under the Asset Purchase Agreement, in

its sole and absolute discretion, Buyer is authorized to allocate or assign, lease, sublease, license,

sublicense, transfer, or otherwise dispose of the Acquired Assets, the Assumed Liabilities, and

the Assumed Contracts and Assumed Leases to any or multiple Persons (affiliated or

unaffiliated) all or a portion of its rights, interests, or obligations under the Asset Purchase

Agreement. Upon any such assignment, the references in this Sale Order or the Asset Purchase

Agreement to Buyer shall also apply to any such assignee.

34. Enforcement of Sale Order. Except for the Assumed Liabilities and Permitted

Liens, pursuant to section 105 of the Bankruptcy Code, creditors of the Debtors are prohibited

from taking any actions against Buyer or the Acquired Assets on account of Liens-Claims-

Encumbrances-Interests against or in the Debtors.




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35. No Avoidance of Agreements. Neither the Debtors nor Buyer has engaged in any

conduct that would cause or permit the Asset Purchase Agreement to be avoided or costs and

damages to be imposed under section 363(n) of the Bankruptcy Code.

36. Waiver of Bankruptcy Rules 6004(h) and 6006(d). Notwithstanding the

provisions of Bankruptcy Rules 6004(h) and 6006(d) or any applicable provisions of the Local

Rules, this Sale Order shall be effective and enforceable immediately upon entry, and the

fourteen (14)-day stay provided in Bankruptcy Rules 6004(h) and 6006(d) is hereby expressly

waived and shall not apply. Time is of the essence in closing the Sale and the Debtors and Buyer

intend to close the Sale as soon as practicable.

37. Order Binds Successors. The terms of this Sale Order, the Asset Purchase

Agreement, and the Transition Services Agreement shall be binding in all respects upon: (a)

Buyer and its successors and assigns; (b) the Debtors and their Affiliates; (c) successors of the

Debtors, including, without limitation, any trustee or examiner appointed in the Bankruptcy Case

or upon a conversion of the Bankruptcy Case to proceedings under chapter 7 of the Bankruptcy

Code; (d) all known and unknown creditors of, and holders of equity interests in, the Debtors,

including, without limitation, any holders of Liens-Claims-Encumbrances-Interests; (e) all non-

Debtor counterparties to the Assumed Contracts or the Assumed Leases; and (f) all other parties




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in interest in the Bankruptcy Case and their successors and assigns (collectively, the “Bound

Parties”). This Sale Order shall survive any dismissal of the Bankruptcy Case. The provisions of

this Sale Order and the terms and provisions of the Asset Purchase Agreement and the Transition

Services Agreement, and any actions taken pursuant hereto or thereto as of the date of entry of

such order shall survive the entry of any order that may be entered confirming or consummating

any chapter 11 plan of the Debtors or converting the Bankruptcy Case to chapter 7, and the terms

and provisions of the Asset Purchase Agreement and the Transition Services Agreement, as well

as the rights and interests granted pursuant to this Sale Order, the Asset Purchase Agreement,

and the Transition Services Agreement shall continue in this or any superseding case and shall be

binding upon the Bound Parties and their respective successors and permitted assigns, including,

without limitation, any trustee or other fiduciary hereafter appointed as a legal representative of

the Debtor under chapter 7 or chapter 11 of the Bankruptcy Code. Any trustee appointed in the

Bankruptcy Case or any cases under chapter 7 after any conversion of the Bankruptcy Case shall

be and hereby is authorized to operate the business of the Debtors to the fullest extent necessary

to permit compliance with the terms of this Sale Order, the Asset Purchase Agreement, and the

Transition Services Agreement and Buyer and any such trustee shall be and hereby are




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authorized to perform under the Asset Purchase Agreement and the Transition Services

Agreement upon the appointment of such trustee without the need for further order of the Court.

38. Order Binds Government Authorities. This Sale Order, the Asset Purchase

Agreement, and the Transition Services Agreement shall be binding upon and govern all acts of

all Persons, governmental units (as defined in sections 101(27) and 101(41) of the Bankruptcy

Code), and all holders of Liens-Claims-Encumbrances-Interests, including, without limitation,

federal, state, and governmental agencies and departments, licensing authorities, 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 and

local officials, and all other Persons 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, insure any title or state of title in or to any lease,

and each of the foregoing Persons, is hereby directed to accept for filing any and all of the

documents and instruments necessary and appropriate to consummate the transactions

contemplated by the Asset Purchase Agreement.




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39. Conflict. In the event that there is a direct conflict between the terms of this Sale

Order and the terms of the Asset Purchase Agreement or the Transition Services Agreement, the

terms of this Sale Order shall control.

40. Modification of Asset Purchase Agreement or Transition Services

Agreement. The Asset Purchase Agreement or the Transition Services Agreement, and any

related agreements, documents, or other instruments, may, with the consent of the Prepetition

Credit Parties (as such term is defined in the Final Cash Collateral Order), be modified,

amended, or supplemented by the parties thereto, in consultation with the Consultation Parties, in

a writing signed by the party against whom enforcement of any such modification, amendment,

or supplement is sought, and in accordance with the terms thereof, without further order of the

Court; provided that any modification, amendment, or supplement that materially changes the

terms of the Asset Purchase Agreement or the Transition Services Agreement or any related

agreements, documents, or other instruments shall be subject to further Court approval.

41. Bulk Sales. No bulk sales law, bulk transfer law, or similar law of any state or

other jurisdiction shall apply in any way to the Sale. The Debtors and Buyer waive, and hereby

shall be deemed to have waived, any requirement of compliance with, and any claims related to




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non-compliance with, the provisions of any bulk sales, bulk transfer, or similar law of any

jurisdiction that may be applicable.

42. Privacy Policy. Buyer of the Acquired Assets shall continue the Debtors’ existing

policy concerning the transfer of personally identifiable information upon Closing, as may be

modified in accordance with the terms of such policy.

43. Conditions Precedent. Notwithstanding anything to the contrary herein, none of

the parties to the Asset Purchase Agreement shall have an obligation to close the Sale until all

conditions precedent in the Asset Purchase Agreement to the parties’ respective obligations to

close the Sale have been met, satisfied, or waived in accordance with the terms of the Asset

Purchase Agreement; provided, however, that the Parties may not waive any condition precedent

that adversely impacts the Prepetition Credit Parties without their consent.

44. Excluded Assets. Notwithstanding anything in the Asset Purchase Agreement or

this Sale Order to the contrary and for the avoidance of doubt, the Acquired Assets shall not

include any of the Excluded Assets as set forth in Section [___] of the Asset Purchase

Agreement.

45. Assumed Liabilities. The Buyer shall be responsible for the satisfaction of the

Assumed Liabilities under the Asset Purchase Agreement, including, without limitation, the Cure




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Amounts. Except as provided in the Asset Purchase Agreement or this Sale Order, after the

Closing, the Debtors and their estates shall have no further liability or obligations with respect to

any Assumed Liability, including those arising under the Assumed Contracts or the Assumed

Leases, and all holders of such claims are forever barred and estopped from asserting any claims

under any Assumed Liability (including those arising under the Assumed Contracts or the

Assumed Leases) against the Debtors, their successors or assigns, and their estates.

46. Determination of Released Liens. Except as otherwise set forth in the Asset

Purchase Agreement with respect to Assumed Liabilities and Permitted Liens, this Sale Order

shall be effective as a determination that, on the Closing Date, all Liens-Claims-Encumbrances-

Interests of any kind or nature whatsoever existing as to the Acquired Assets prior to the Closing

have been unconditionally released, discharged, and terminated as to the Acquired Assets (other

than the Permitted Liens), with such Liens-Claims-Encumbrances-Interests to attach to the

proceeds of the Sale in the same order of priority and with the same extent, validity, force, and

effect as such Liens-Claims-Encumbrances-Interests in the Acquired Assets, subject to any

claims and defenses the Debtors may possess with respect thereto.

47. Calculation of Time. All time periods set forth in this Sale Order shall be

calculated in accordance with Bankruptcy Rule 9006(a).




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48. Non-Severability. The provisions of this Sale Order are non-severable and

mutually dependent.

49. Automatic Stay. Buyer shall not be required to seek or obtain relief from the

automatic stay under section 362 of the Bankruptcy Code to deliver any notice provided for in

the Asset Purchase Agreement, the Transition Services Agreement, or any other Sale-related

document or take any and all actions permitted under the Asset Purchase Agreement, the

Transition Services Agreement, or any other Sale-related document in accordance with the terms

and conditions thereof. The automatic stay imposed by section 362 of the Bankruptcy Code is

hereby modified to the extent necessary to implement the preceding sentence.

50. Sale Order Survives Dismissal. In the event of the dismissal of one or more of

the Bankruptcy Case, the terms of this Sale Order shall remain in effect notwithstanding section

349 of the Bankruptcy Code.

51. Insurance. Nothing in the Asset Purchase Agreement or in this Sale Order shall

have the effect of transferring, impairing, reducing, or otherwise limiting any of the Debtors’

rights in any insurance policies covering Excluded Liabilities or the proceeds of such policies.

For the avoidance of doubt, the Debtors reserve control over the privilege concerning any




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retained documents and nothing in this Sale Order relieves the Debtors of any document

retention obligations.

52. Brokers. No brokers for the Buyer were involved in the consummation of the

Sale, and no brokers’ commissions are due by the Debtors to any person in connection with the

Sale; provided, however, that this provision does not impact any transaction or other fees due to

investment bankers or financial advisors employed by the Debtors, including, without limitation,

B. Riley Securities, Inc.

53. Buyer Is Party in Interest. Buyer is a party in interest and shall have the ability

to appear and be heard on all issues related to or otherwise connected to this Sale Order, the Sale,

and any issues related to or otherwise connected to the Asset Purchase Agreement, the Transition

Services Agreement, and the Sale.

54. Retention of Jurisdiction. The Court shall retain exclusive jurisdiction to, among

other things, (a) interpret, enforce, and implement the terms and provisions of this Sale Order

and the Asset Purchase Agreement and the Transition Services Agreement (including, without

limitation, all amendments thereto, any waivers and consents thereunder, and of each of the

agreements executed in connection therewith) and (b) adjudicate disputes related to this Sale

Order, the Asset Purchase Agreement, and the Transition Services Agreement (including,




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without limitation, all amendments thereto, any waivers and consents thereunder, and of each of

the agreements executed in connection therewith).

55. Transition Services Agreement. All amounts payable under the Transition

Services Agreement shall be payable in accordance with the terms of the Transition Services

Agreement without the need for any application or further order of the Court.

56. Headings. The headings of paragraphs in this Sale Order are for reference

purposes only and shall not affect the meaning or interpretation of this Sale Order.


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EXHIBIT 1

Asset Purchase Agreement


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EXHIBIT 2

Transition Services Agreement


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EXHIBIT 3

Unresolved Objections to Cure Amounts
