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EXHIBIT A

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Execution Version

AGENCY AGREEMENT
This Agency Agreement (Agreement) is made as of July 20, 2016 by and between Hastings
Entertainment, Inc. (Merchant) and a contractual joint venture composed of Hilco Merchant Resources,
LLC and Gordon Brothers Retail Partners, LLC (together, Agent).
Section 1. Recitals.
WHEREAS, Merchant operates retail stores and desires that the Agent act as Merchants
exclusive agent for the limited purposes of: (a) selling all of the Merchandise (as hereinafter defined; and
including any Distribution Center Merchandise (as hereinafter defined)) from Merchants retail store
locations identified on Exhibit 1(a) attached hereto (each individually a Store, and collectively the
Stores) by means of a store closing, sale on everything, going out of business, everything must
go, or similar sale (as further described below, the Sale); and (b) disposing of the Owned FF&E in the
Stores and Merchants Distribution Centers (as defined below).
WHEREAS, on June 13, 2016, Merchant filed a chapter 11 case in the United States
Bankruptcy Court for the District of Delaware (such case, the Bankruptcy Case and such court, or other
court of competent jurisdiction over the Bankruptcy Case, the Bankruptcy Court).
WHEREAS, on June 21, 2016, an official committee of unsecured creditors (the
Committee) was appointed in the Bankruptcy Case.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth
herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Agent and Merchant hereby agrees as follows:
Section 2. Appointment of Agent/Approval Order.
(a)
Subject to entry of an order authorizing Merchant to enter into this Agreement and
authorizing Merchant to conduct the Sale in accordance with the terms of this Agreement (the Approval
Order), Merchant hereby appoints the Agent, and the Agent hereby agrees to serve, as Merchants
exclusive agent for the limited purpose of conducting the Sale in accordance with the terms and
conditions of this Agreement.
(b)
The Approval Order shall provide, in a form reasonably satisfactory to Merchant
and Agent, inter alia, that: (i) this Agreement is in the best interest of the Merchant, Merchants estates,
creditors, and other parties in interest; (ii) this Agreement (and each of the transactions contemplated
hereby) is approved in its entirety; (iii) Merchant and Agent shall be authorized to continue to take any
and all actions as may be necessary or desirable to implement this Agreement and each of the transactions
contemplated hereby; (iv) subject to Section 15 below, upon payment of the Initial Guaranty Payments (as
defined below) and delivery of the Letter of Credit (as defined below), Agent shall be entitled to sell all
Merchandise and Owned FF&E hereunder free and clear of all liens, claims or encumbrances thereon,
with any presently existing liens encumbering all or any portion of the Merchandise or Owned FF&E or
the Proceeds (as defined below) thereof attaching only to the Guaranteed Amounts and other amounts to
be received by Merchant under this Agreement; (v) Agent shall have the right to use the Stores and all
related Store services, furniture, fixtures, equipment and other assets of the Merchant as designated
hereunder for the purpose of conducting the Sale, free of any interference from any entity or person,
subject to compliance with the Sale Guidelines (as defined below) and Approval Order; (vi) Agent, as
agent for Merchant, is authorized to conduct, advertise, post signs, utilize signwalkers, and otherwise
promote the Sale as a store closing, sale on everything, going out of business, everything must

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go, or similar themed sale, in accordance with the Sale Guidelines (as the same may be modified and
approved by the Bankruptcy Court) and without further compliance with the Liquidation Sale Laws (as
defined below), subject to compliance with the Sale Guidelines and Approval Order; (vii) Agent shall be
granted a limited license and right to use until the Sale Termination Date the trade names, logos, e-mail
lists, customer lists, e-commerce sites (including (without limitation) websites and social media sites such
as Facebook, and Twitter) (collectively, the IP) relating to and used in connection with the operation of
the Stores, solely for the purpose of advertising the Sale in accordance with the terms of the Agreement
and solely in accordance with the Merchants policies relating to personally identifiable information;
(viii) all newspapers and other advertising media in which the Sale is advertised shall be directed to
accept the Approval Order as binding and to allow Merchant and Agent to consummate the transactions
provided for in this Agreement, including, without limitation, the conducting and advertising of the Sale
in the manner contemplated by this Agreement; (ix) all utilities, landlords, creditors and other interested
parties and all persons acting for or on their behalf shall not interfere with or otherwise impede the
conduct of the Sale, or institute any action in any court (other than in the Bankruptcy Court) with respect
to Merchandise or the Owned FF&E or before any administrative body which in any way directly or
indirectly interferes with or obstructs or impedes the conduct of the Sale; (x) the Bankruptcy Court shall
retain jurisdiction over the parties to enforce this Agreement; (xi) Agent shall not be liable for any claims
against Merchant other than as expressly provided for in this Agreement; (xii) subject to Agent having
satisfied its payment obligations hereunder, and subject further to Section 15 below, any amounts owed
by Merchant to Agent under this Agreement shall be granted the status of superpriority claims in
Merchants Bankruptcy Case pursuant to section 364(c) of Title 11, United States Code, 11 U.S.C.
101-1532 (the Bankruptcy Code) senior to all other superpriority claims, including (without limitation)
to the superpriority claims of (A) Bank of America, N.A., as administrative agent and collateral agent (the
DIP Agent) under that certain Senior Secured Super-Priority Debtor-in-Possession Credit Agreement
by and among Bank of America, N.A., as administrative agent and collateral agent, the Debtors, as
borrowers (as amended from time to time, the DIP Loan); (B) Bank of America, N.A., as agent (the
ABL Agent) under that certain Amended and Restated Loan and Security Agreement, dated July 22,
2010 (as amended, amended and restated, supplemented or otherwise modified from time to time, the
ABL Credit Agreement) by and among the Merchant and certain other Loan Parties party thereunder,
as borrowers, Bank of America, N.A., as administrative agent, and the lenders party thereto, which
provides up to $115 million in aggregate loans in the form of an asset-based revolving credit facility; and
(C) Pathlight Capital, LLC (the Term Agent) under that certain Term Loan and Security Agreement
dated as of July 15, 2014, by and among the Merchant and certain affiliates that comprised the
Borrowers and Guarantors thereunder, as borrowers, and Pathlight Capital, LLC (the Term
Lender), whereby the Term Lender extended a term loan in the original principal amount of $15 million
(each of (A), (B), and (C) being a Lender, and collectively, the Lenders); (xiii) subject to Section 15
below, Agent shall be granted a valid, binding, enforceable and perfected security interest (without the
necessity of filing financing statements to perfect the security interests); (xiv) the Bankruptcy Court finds
that time is of the essence in effectuating this Agreement and proceeding with the Sale at the Stores
uninterrupted; (xv) the Bankruptcy Court finds that the Merchants decisions to (a) enter into this
Agreement and (b) perform under and make payments required by this Agreement are a reasonable
exercise of the Merchants sound business judgment consistent with its fiduciary duties and are in the best
interests of the Merchant, its estate, its creditors, and other parties in interest; (xvi) the Bankruptcy Court
finds that this Agreement was negotiated in good faith and at arms length between the Merchant and
Agent and that Agent is entitled to the protection of section 363(m) of the Bankruptcy Code; (xvii) the
Bankruptcy Court finds that Agents performance under this Agreement will be, and payment of the
Guaranteed Amounts under this Agreement will be made, in good faith and for valid business purposes
and uses, as a consequence of which Agent is entitled to the protection and benefits of sections 363(m)
and 364(e) of the Bankruptcy Code; (xviii) this Agreement is approved pursuant to Bankruptcy Code
section 363; and (xix) in the event any of the provisions of the Approval Order are modified, amended or
vacated by a subsequent order of the Bankruptcy Court or any other court, Agent shall be entitled to the

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protections provided in Bankruptcy Code sections 363(m) and 364(e) and, no such appeal, modification,
amendment or vacatur shall affect the validity and enforceability of the sale or the liens or priority
authorized or created under this Agreement or the Approval Order.
(c)
Subject to entry of the Approval Order, Agent shall be authorized to advertise the
Sale as a store closing, sale on everything, going out of business, everything must go, or similarthemed sale, and the Approval Order shall provide that Agent shall be required to comply with applicable
federal, state and local laws, regulations and ordinances, including, without limitation, all laws and
regulations relating to advertising, privacy, consumer protection, occupational health and safety and the
environment, together with all applicable statutes, rules, regulations and orders of, and applicable
restrictions imposed by, governmental authorities (collectively, the Applicable General Laws), other than
all applicable laws, rules and regulations in respect of going out of business, store closing or similarthemed sales and permitting (collectively, the Liquidation Sale Laws), provided that such Sale is
conducted in accordance with the terms of this Agreement, the Sale Guidelines and Approval Order; and
provided further that the Approval Order shall provide that so long as the Sale is conducted in accordance
with the Sale Guidelines and the Approval Order and in a safe and professional manner, Agent shall be
deemed to be in compliance with any Applicable General Laws.
Section 3. Consideration to Merchant and Agent.
3.1

Payments to Merchant.

(a)
As a guaranty of Agents performance hereunder, Agent guarantees that
Merchant shall receive seventy-five percent (75.0%) (the Guaranty Percentage) of the aggregate Cost
Value of the Merchandise (the Guaranteed Amount). The Agent shall pay to the DIP Agent, as
Merchant s designee, the Guaranteed Amount and the Sharing Amount due to Merchant (if any) in the
manner and at the times specified in Section 3.3. The Guaranteed Amount will be calculated based upon
the aggregate Cost Value of the Merchandise as determined by (i) the final certified report of the
Inventory Taking Service after verification and reconciliation thereof by Agent and Merchant; (ii) the
aggregate Cost Value of the Merchandise subject to Gross Rings (as calculated pursuant to Section 5.1(b)
below); and (iii) any other adjustments to Cost Value as expressly contemplated by this Agreement.
(b)
The Guaranty Percentage has been fixed based upon the aggregate Cost Value of
the Merchandise included in the Sale being not less than $106,000,000 and not more than $114,000,000
(the Merchandise Threshold) as of the Sale Commencement Date. To the extent that the aggregate Cost
Value of the Merchandise included in the Sale is less than, or greater than, the Merchandise Threshold,
the Guaranty Percentage shall be adjusted in accordance with Exhibit 3.1(b) annexed hereto.
(c)
The Guaranty Percentage has also been fixed based upon the aggregate Cost
Value of the Merchandise (other than Previously Viewed/Rental Merchandise and Used Merchandise)
included in the Sale as a percentage of the aggregate Retail Price of the Merchandise (other than
Previously Viewed/Rental Merchandise and Used Merchandise) included in the Sale, such percentage
being not greater than 58.5% (the Cost Factor Threshold). To the extent that the ratio of the aggregate
Cost Value of the Merchandise (other than Previously Viewed/Rental Merchandise and Used
Merchandise) included in the Sale to the aggregate Retail Price of the Merchandise (other than Previously
Viewed/Rental Merchandise and Used Merchandise) included in the Sale is a percentage greater than the
Cost Factor Threshold, the Guaranty Percentage shall be adjusted in accordance with Exhibit 3.1(c)(1)
annexed hereto. The Guaranty Percentage has also been fixed based upon the aggregate Cost Value of the
Used Merchandise included in the Sale as a percentage of the aggregate Retail Price of the Used
Merchandise included in the Sale, such percentage being not greater than 29.3% (the Used Cost Factor
Threshold). To the extent that the ratio of the aggregate Cost Value of the Used Merchandise included

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in the Sale to the aggregate Retail Price of the Used Merchandise included in the Sale is a percentage
greater than the Used Cost Factor Threshold, the Guaranty Percentage shall be adjusted in accordance
with Exhibit 3.1(c)(2) annexed hereto.
(d)
The adjustments to the Guaranty Percentage contemplated by Sections 3.1(b) and
3.1(c) shall be independent and cumulative.
3.2

Compensation to Agent, Sharing:

(a)
After Proceeds are used to repay Agent for amounts paid on account of the
Guaranteed Amount and to pay Expenses, all remaining Proceeds shall be allocated in the following order
of priority: FIRST: to the Agent in an amount equal to six and one half percent (6.5%) of the aggregate
Cost Value of the Merchandise (Agents Fee); and THEREAFTER: fifty percent (50%) to Agent and
fifty percent (50%) to Merchant (Sharing Amounts).
(b)
Agent shall exercise commercially reasonable efforts to dispose of all of the
Merchandise and the Additional Agent Goods during the Sale Term. To the extent that there is
Merchandise remaining at the Sale Termination Date (the Remaining Merchandise), such Remaining
Merchandise shall be deemed transferred to Agent (provided that no Event of Default has occurred and
continues to exist on the part of Agent) free and clear of all liens, claims, and encumbrances, and Agent
shall use commercially reasonable efforts to dispose of all such Remaining Merchandise by means of bulk
sale/wholesale or otherwise. Agent and its affiliates shall be authorized to sell or otherwise dispose of the
Remaining Merchandise with all logos, brand names, and other intellectual property on the Merchandise
intact, and shall be authorized to advertise the sale of the Remaining Merchandise using Merchants name
and logo. The proceeds received by Agent from such disposition shall constitute Proceeds hereunder, and
Agent shall be required to account to Merchant and Lenders for Merchants allocable amount of Proceeds
realized upon the sale of Remaining Merchandise not later than five (5) business days after Agents
receipt thereof. Any Remaining Merchandise shall (i) either be destroyed by, or at the direction of, the
Merchant or the Official Committee of Unsecured Creditors (the Committee) (in respect of all
Remaining Merchandise), (ii) donated by, or at the direction of the Merchant and the Committee to an
organization reasonably acceptable to the Merchant and the Committee (only in the case of non-video
Remaining Merchandise), (iii) otherwise sold by the Agent solely to consumers, or (iv) as otherwise
agreed to by the Agent, the Merchant and the Committee. In addition, prior to a decision being made with
respect to this Remaining Merchandise, the Committee should be provided with a list of the Remaining
Merchandise. If during the course of the Sale the Agent desires to sell any Merchandise in bulk to any
non-retail customer, the Agent must seek approval of the Committee. If the Committee does not consent
to such sale of Merchandise, the Agent shall be required to seek Court approval of the sale in advance of
agreeing to such sale.
3.3

Proceeds; Time of Payments; Control of Proceeds.

(a)
For purposes of this Agreement, Proceeds shall mean the aggregate of (a) the
total amount (in dollars) of all sales of Merchandise made under this Agreement and all service revenue at
the Stores, in each case during the Sale Term and exclusive of Sales Taxes; (b) all proceeds of Merchants
insurance for loss or damage to Merchandise arising from events occurring during the Sale Term; and (c)
any and all proceeds received by Agent from the disposition of Remaining Merchandise. For the
avoidance of doubt, proceeds from the sale of Additional Agent Goods or Owned FF&E shall not be
Proceeds.
(b)
On the first business day following the entry of the Approval Order (the
Payment Date), Agent shall pay to the DIP Agent, as Merchants designee, an amount equal to eighty-

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five percent (85%) of the estimated Guaranteed Amount of the Cost Value of Merchandise in the Stores
and Distribution Centers as of the Sale Commencement Date (based upon Merchants books and records
maintained in the ordinary course as of the date immediately preceding the Payment Date) (the Initial
Guaranty Payment), and (ii) all Occupancy Expenses for the balance of the month of July, 2016 through
and including August 15, 2016 (the July and August Occupancy Expenses) by wire transfer to an
account designated in writing by Merchant (Merchants Account). The balance of the Guaranteed
Amount, if any, shall be paid by Agent by wire transfer to the Merchants Account on the earlier of (i) 30
days after the Sale Commencement Date and (ii) the second business day following the issuance of the
final report of the aggregate Cost Value of the Merchandise included in the Sale by the Inventory Taking
Service, after review, reconciliation and mutual written verification thereof by Agent, Merchant, and the
Lenders (the Final Inventory Report with the date of completion of such reconciliation and issuance of
such Final Inventory Report to be referred to as the Inventory Reconciliation Date); provided, however,
that, with respect to romanette one in the sentence to which this proviso attaches, if the Final Inventory
Report has not been reviewed, reconciled, and mutual verified by Agent, Merchant and the Lenders by the
thirtieth day after the Sale Commencement Date, the Agent shall only be obligated to fund an undisputed
amount mutually agreed upon by Merchant, Agent, and Lenders pending the Inventory Reconciliation
Date. To the extent that Merchant is entitled to receive any funds on account of the Sharing Amount due
to Merchant, Agent shall pay such Sharing Amount as part of the Final Reconciliation under Section 8.7.
To the extent that the Guaranteed Amount has not been paid in full by the date of the Final
Reconciliation, Agent shall pay the unpaid portion of the Guaranteed Amount (and any Sharing Amount
allocable to Merchant) to Merchant as part of the Final Reconciliation.
(c)

All Proceeds shall be controlled by Agent in the manner provided for below.

(i)
Agent may (but shall not be required to) establish its own accounts
(including, without limitation, credit card accounts and systems), dedicated solely for the deposit of the
Proceeds and the disbursement of amounts payable to Agent hereunder (the Agency Accounts), and
Merchant shall promptly, upon Agents reasonable request, execute and deliver all necessary documents
to open and maintain the Agency Accounts; provided, however, Agent shall have the right, in its sole and
absolute discretion, to continue to use Merchants Designated Deposit Accounts (as defined below) as the
Agency Accounts in which case Merchants Designated Deposit Accounts shall be deemed to be Agency
Accounts. Agent shall exercise sole signatory authority and control with respect to the Agency Accounts.
The Agency Accounts shall be dedicated solely to the deposit of Proceeds and other amounts
contemplated by this Agreement and the distribution of amounts payable hereunder; provided that, in the
event (a) Agent elects to continue to use Merchants Designated Deposit Accounts (defined below) as the
Agency Accounts, and (b) such accounts have amounts deposited therein by Merchant that do not
constitute Proceeds and/or other amounts contemplated by this Agreement, then Merchant, Agent and
Lenders shall cooperate with each other to establish and implement appropriate steps and procedures to
accomplish a daily reconciliation and remittance to Merchant, Lenders and Agent, as their interests may
appear, of all Proceeds (including credit card Proceeds) and other amounts contemplated by this
Agreement. Upon request, Agent shall deliver to Merchant copies of all bank statements and other
information relating to such accounts. The Merchant shall not be responsible for, and Agent shall pay as
an Expense hereunder, all bank fees and charges, including wire transfer charges, related to the Sale and
the Agency Accounts, whether received during or after the Sale Term. Upon Agents notice to Merchant
of Agents designation of the Agency Accounts (other than Merchants Designated Deposit Accounts), all
Proceeds of the Sale (including credit card Proceeds) shall be deposited into the Agency Accounts.
(ii)
Agent shall have the right to use Merchants credit card facilities,
including Merchants credit card terminals and processor(s), credit card processor coding, Merchants
identification number(s) and existing bank accounts for credit card transactions relating solely to the Sale.
In the event that Agent elects to use Merchants credit card facilities, Merchant shall process credit card

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transactions on behalf of Agent and for Agents account, applying customary practices and procedures.
Without limiting the foregoing, Merchant shall cooperate with Agent to download data from all credit
card terminals each day during the Sale Term to effect settlement with Merchants credit card
processor(s), and shall take such other actions necessary to process credit card transactions on behalf of
Agent under Merchants identification number(s). At Agents request, Merchant shall cooperate with
Agent to establish Merchants identification numbers under Agents name to enable Agent to process all
such credit card Proceeds for Agents account. Merchant shall not be responsible for, and Agent shall pay
as an Expense hereunder, all credit card fees, charges, and chargebacks related to the Sale, whether
received during or after the Sale Term. Agent shall not be responsible for, as an Expense or otherwise,
any credit card fees, charges, or chargebacks that do not relate to the Sale, whether received prior to,
during or after the Sale Term.
(iii)
Unless and until Agent establishes its own Agency Accounts (other than
Merchants Designated Deposit Accounts), all Proceeds and other amounts contemplated by this
Agreement (including credit card Proceeds), shall be collected by Merchant and deposited on a daily basis
into depository accounts designated by, and owned and in the name of, Merchant for the Stores, which
accounts shall be designated solely for the deposit of Proceeds and other amounts contemplated by this
Agreement (including credit card Proceeds), and the disbursement of amounts payable to or by Agent
hereunder (the Designated Deposit Accounts). Subject to Agents satisfaction of the conditions set
forth in Section 15 hereof, the Designated Deposit Accounts shall be cash collateral accounts, with all
cash, credit card payments, checks and similar items of payment, deposits and any other amounts in such
accounts being Proceeds or other amounts contemplated hereunder, and Merchant hereby grants to Agent
a first priority senior security interest solely upon such amounts that constitute Proceeds (or other
amounts contemplated hereunder) deposited in each Designated Deposit Account from and after the Sale
Commencement Date. If, notwithstanding the provisions of this Section 3.3(c), Merchant or Lenders
receives or otherwise has dominion over or control of any Proceeds or other amounts due to Agent,
Merchant and Lenders shall be deemed to hold such Proceeds and other amounts due to Agent (including
Proceeds and other amounts in depository accounts with the Lender) in trust for Agent and shall not
commingle Proceeds or other amounts due to Agent with any of Merchants other funds or deposit such
Proceeds or other amounts due to the Agent in any account except a Designated Deposit Account or as
otherwise instructed by Agent. Lenders shall not commingle Proceeds or other amounts due to Agent
with any of Merchants or Lenders other funds or deposit such Proceeds or other amounts in any account
except a Designated Deposit Account or as otherwise instructed by Agent..
(iv)
Subject to Section 3.3(e) (which, for the avoidance of doubt, only applies
to undisputed amounts), on each business day, Merchant shall promptly pay to Agent by wire funds
transfer all funds in the Designated Deposit Accounts (including, without limitation, Proceeds, Proceeds
from credit card sales, and all other amounts) deposited into the Designated Deposit Accounts for the
prior day(s) without any offset or netting of Expenses or other amounts that may be due to Merchant.
Agent shall notify Merchant and Lenders of any shortfall in such payment, in which case, Merchant (or
Lenders to the extent the Lenders has received such payment) shall promptly pay to Agent funds in the
amount of such shortfall.
(d)
If and to the extent the Agent over-funds any amounts in respect of the
Guaranteed Amount hereunder, and such over-funding cannot be recovered by the Agent from Merchant
under Section 3.3(e) by means of an offset or otherwise, then Merchant agrees (or if Merchant shall be
unable to or otherwise for any reason fails to, and Lenders have received such over-payment, the Lenders
individually agree for their own account (and not jointly and severally, and in each case not to exceed the
allocable portion of the Guaranteed Amount actually received by each such Lender)), to reimburse any
undisputed portion of such overfunded amount in respect of the Guaranteed Amount to Agent (in the
inverse order in which the Guaranteed Amount (or portion thereof) was received by such Lender(s))

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within two (2) business days of written demand thereof by Agent. In the event Agent, Merchant and
Lenders (where applicable) cannot agree within five (5) business days of Agents written demand for
reimbursement as to either (i) the amount to be reimbursed, and/or (ii) the party from whom such
reimbursement is required to be made, Agent shall be entitled to file a motion with the Bankruptcy Court
seeking payment of the undisputed portion of the reimbursable amount hereunder, and the Merchant and
Lenders (where applicable) agree that they shall be bound by the final determination of the Bankruptcy
Court as to such matter.
(e)
Merchant and Agent further agree that if at any time during the Sale Term, (i)
Agent holds any amounts due to Merchant under this Agreement, Agent may, in its discretion, after five
(5) business days notice to Merchant, offset such amounts being held by Agent against any undisputed
amounts due and owing by, or required to be paid by, Merchant hereunder, and (ii) Merchant holds any
amounts due to Agent under this Agreement, Merchant may, in its discretion, after five (5) business days
notice to Agent, offset such amounts being held by Merchant against any undisputed amounts due and
owing by, or required to be paid by, Agent hereunder.
(f)
In addition to the Guaranteed Amount, Agent shall purchase all cash in the Stores
on and as of the start of business on the Sale Commencement Date on a dollar for dollar basis and shall
pay the amount of such cash to the Merchant on the Payment Date or as soon thereafter as such amount is
determined.
3.4
Security. In order to secure Agents obligations under this Agreement to pay the
balance of the Guaranteed Amount and Expenses, no later than the Payment Date, Agent shall furnish to
the DIP Agent, as Merchants designee, until the DIP Loan is repaid in full, then the Term Agent, with an
irrevocable standby Letter of Credit (issued by a U.S. national bank selected by Agent and reasonably
acceptable to Merchant and Lenders and for the avoidance of doubt Bank of America, N.A. is acceptable
to the Lenders) naming Merchant and the DIP Agent or Term Agent, as the case may be, as cobeneficiaries in the aggregate original face amount equal to the sum of: (a) fifteen percent (15%) of the
estimated Guaranteed Amount (based upon Merchants books and records maintained in the ordinary
course), plus (b) the parties mutually agreed upon estimate of three weeks of Expenses, which shall be
substantially in the form of Exhibit 3.4 hereof (the Letter of Credit). The Letter of Credit shall have an
expiry date of no earlier than seventy-five (75) days after the Sale Termination Date. Unless the parties
shall have mutually agreed that they have completed the Final Reconciliation under this Agreement, then,
at least ten (10) days prior to the initial or any subsequent expiry date, Merchant and the DIP Agent/Term
Agent shall receive an amendment to the Letter of Credit solely extending (or further extending, as the
case may be) the expiry date by at least thirty (30) days. If Merchant and the DIP Agent/Term Agent fail
to receive such amendment to the Letter of Credit no later than ten (10) days before the expiry date, then
Merchant and/or the DIP Agent/Term Agent shall be permitted to draw the full amount under the Letter
of Credit to hold as security for amounts that may become due and payable to Merchant. In the event that
Agent, after receipt of five (5) business days written notice, fails to pay any undisputed portion of the
Guaranteed Amount or Expenses, Merchant and/or the DIP Agent/Term Agent may draw on the Letter of
Credit in an amount equal to the unpaid, past due amount of the Guaranteed Amount or Expenses that is
not the subject of a reasonable dispute. Subject to the Lenders prior consent (which consent shall not be
unreasonably withheld, denied or delayed), Merchant and Agent agree that, from time to time, the face
amount of the Letter of Credit shall be reduced by the aggregate amount of payments made by Agent on
account of the Guaranteed Amount and other amounts due to Merchant hereunder at the time of each such
request, provided, however, in no event shall the face amount of the Letter of Credit be reduced to an
amount less than the parties mutually agreed upon estimate of three weeks of estimated Expenses.

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Section 4. Expenses of the Sale.

4.1
Expenses. Agent shall be unconditionally responsible for all Expenses, which
expenses shall be paid by Agent in accordance with Section 4.2 below. As used herein, Expenses shall
mean the Store related operating expenses of the Sale which arise during the Sale Term and are
attributable to the Sale, limited to the following:
(a)
actual payroll with respect to all Retained Employees used in connection with
conducting the Sale for actual days/hours worked at a Store during the Sale Term as well as payroll for
any temporary employees engaged for the Sale, including any reimbursable expense obligations of
Retained Employees arising after the Sale Commencement Date that are necessary for the Sale and
requested by Agent or its representatives;
(b)
any amounts payable by Merchant for benefits for Retained Employees
(including FICA, unemployment taxes, workers compensation and healthcare insurance, but excluding
Excluded Payroll Benefits) for Retained Employees used in the Sale, in an amount not to exceed 18.1% of
the base payroll for each Retained Employee in the Stores (the Payroll Benefits Cap);
(c)
the actual Occupancy Expenses for the Stores on a per location and per diem
basis in an amount not to exceed the per Store, per category, per diem amounts, whether due and owing or
accrued during the Sale Term and due and payable after the Sale Term, set forth on Exhibit 4.1(c) hereto;
provided, further, that the Parties hereby acknowledge that the amounts set forth on Exhibit 4.1(c) identify
Merchants percentage rent that may become due and payable under Merchants leases;
(d)
Distribution Center Expenses in an amount not to exceed $165,000 per week,
prorated for partial weeks;
(e)

Retention Bonuses for Retained Employees, as provided for in Section 9.4

below;
(f)
advertising and direct mailings relating to the Sale, Store interior and exterior
signage and banners, and signwalkers, in each case relating to the Sale;
(g)
credit card fees, bank card fees, and chargebacks and credit/bank card discounts
with respect to Merchandise sold in the Sale;
(h)
bank service charges (for Store, corporate accounts, and Agency Accounts),
check guarantee fees, and bad check expenses to the extent attributable to the Sale;
(i)
requested by Agent;

costs for additional Supplies at the Stores necessary to conduct the Sale as

(j)
all fees and charges required to comply with applicable laws in connection with
the Sale as agreed to by Agent;
(k)

Store cash theft and other store cash shortfalls in the registers;

(l)
all costs and expenses associated with Agents on-site supervision of the Stores
and Distribution Centers, including (but not limited to) any and all fees, wages, taxes, third party payroll
costs and expenses, and deferred compensation of Agents field personnel, travel to, from or between the

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Stores and Distribution Centers, and out-of-pocket and commercially reasonable expenses relating thereto
(including reasonable and documented corporate travel to monitor and manage the Sale);
(m)
relating to the Sale;

postage, courier and overnight mail charges requested by Agent to the extent

(n)

fifty percent (50%) of cost of the Inventory Taking Service;

(o)

Agents actual cost of capital (including Letter of Credit fees) and insurance;

(p)
Agents out-of-pocket costs and expenses associated with this Agreement, the
Sale, or the transactions contemplated by this Agreement, including, but not limited to, legal fees and
expenses in an amount not to exceed $150,000 incurred in connection with the review of data,
preparation, negotiation, and execution of this Agreement and any ancillary documents, and the Sale.
(q)

third party sales tax processing and utility processing expenses associated with

the Sale;
(r)
costs of transfers initiated by Agent of Merchandise between and among the
Stores during the Sale Term, including delivery and freight costs, it being understood that Agent shall be
responsible for coordinating such transfer of Merchandise, subject, however, to the provisions of section
8.1(e) and provided, however, that, for the avoidance of doubt, any costs associated with transferring
goods to or from the Merchants Stores located in (i) Pampa, TX; (ii) Los Lunas, NM; and (iii) Las
Vegas, NV (collectively, the Existing Closing Stores) shall not constitute an Expense under the
Agreement nor shall the Agent be responsible for paying any such costs;
(s)

Central Service Expenses in an amount equal to $25,000 per week, prorated for

partial weeks;
(t)
routine repair and maintenance costs (including landscaping), solely to the extent
such costs result from Agents acts or omissions during the Sale Term;
(u)
the actual costs and expenses of Agent providing such additional services as are
reasonable for the Sale.
Notwithstanding anything herein to the contrary, to the extent that any Expense category listed in section
4.1 is also included on Exhibit 4.1(c), Exhibit 4.1(c) shall control and such Expenses shall not be double
counted. There will be no double counting or payment of Expenses to the extent that Expenses appear or
are contained in more than one Expense category.
As used herein, the following terms have the following respective meanings:
(i)
Central Service Expenses means costs and expenses for Merchants
central administrative services necessary for the Sale, including, but not limited to, internal payroll
processing, MIS services, asset protection services, operations, human resources, cash and inventory
reconciliation, data processing and reporting, email preparation and distribution, store level information
technology maintenance, POS systems maintenance, e-commerce site updates and maintenance, and
accounting (collectively, Central Services).
(ii)
Excluded Payroll Benefits means (A) the following benefits arising,
accruing or attributable to the period prior to, during, or after the Sale Term: (w) vacation days or

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vacation pay, (x) sick days or sick leave or any other form of paid time off, (y) maternity leave or other
leaves of absence and (z) ERISA coverage and similar contributions; B) any payments due under the
Worker Adjustment Retraining Notification Act (WARN Act); and (C) any benefits in excess of the
Payroll Benefits Cap.
(iii)
Occupancy Expenses means rent, percentage rent, common-area
maintenance, real estate and use taxes, HVAC, utilities, telecom/telephone/wi-fi charges, point-of-sale
systems maintenance, store security systems, repairs and maintenance, association dues and expenses,
trash and snow removal, housekeeping and cleaning expenses, rental for furniture, fixtures, and
equipment, taxes and licenses, and all other categories of expenses (i) at the Closing Stores, as set forth on
Exhibit 4.1(a)(1) attached hereto, in an amount up to the specific amounts set forth on Exhibit 4.1(a)(1)
attached hereto, plus (ii) any percentage rent obligations incurred by Merchant under applicable leases or
occupancy agreements that are allocable to the Sale of Merchandise and Additional Agent Goods during
the Sale Term. Merchant and Agent agree that Exhibit 4.1(a)(1) shall specify the actual applicable
percentage and any applicable sales thresholds in respect of percentage rent under any applicable Store
lease(s) or other occupancy agreement(s). Merchant and Agent further agree that in the event Exhibit
4.1(a) does not specify the actual applicable percentage and/or the applicable sales thresholds in respect of
percentage rent under any applicable Store lease(s) or other occupancy agreement(s), Agents obligation
to pay percentage rent, if any, shall be limited as provided in Exhibit 4.1(a) only.
(iv)
Third Party means, with reference to any Expenses to be paid to a
Third Party, a party which is not affiliated with or related to the Merchant.
Notwithstanding any other provision of this Agreement to the contrary, Expenses shall not include: (A)
Excluded Payroll Benefits; (B) Central Service Expenses (except for amounts due under section 4.1(s));
(C) Occupancy Expenses or any occupancy-related expenses of any kind or nature in excess of the
respective per Store, per diem occupancy-related categories and amounts expressly provided for as an
Expense under Section 4.1(c) above to the extent actually incurred; (D) any expenses of any kind relating
to or arising from Merchants home office or Distribution Centers (except for amounts due under section
4.1(d) and (s)); and/or (E) any other costs, expenses or liabilities payable by Merchant not provided for
herein, all of which shall be paid solely by Merchant promptly when due, subject to the provisions of the
Bankruptcy Code and the Approval Order.
4.2

Payment of Expenses.

Agent shall be responsible for the payment of all Expenses out of Proceeds (or from
Agents own accounts if and to the extent there are insufficient Proceeds) after the payment of the
Guaranteed Amount. All Expenses incurred during each week of the Sale (i.e. Sunday through Saturday)
shall be paid by Agent to or on behalf of Merchant, or paid by Merchant and thereafter reimbursed by
Agent as provided for herein, immediately following the Weekly Sale Reconciliation; provided, however,
in the event that the actual amount of an Expense is unavailable on the date of the reconciliation (such as
payroll), Merchant and Agent shall agree to an estimate of such amounts, which amounts will be
reconciled once the actual amount of such Expense becomes available. Agent and/or Merchant may
review or audit the Expenses at any time.
4.3

Distribution Center Expenses

Agent shall be responsible for allocating and designating the shipment of Merchandise
from the Merchants Distribution Centers to the Stores. Merchant and Agent shall cooperate with each
other and shall mutually agree upon a schedule to be included as Exhibit 4.3 of the allocation to the Stores
of the Merchandise located at the Distribution Centers and on-order Merchandise; provided, however, that

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the Parties agree that the allocation schedule shall provide that all Merchandise (including any on-order
Merchandise) shall be allocated and shipped to the Stores no later than twenty-one (21) days after the Sale
Commencement Date. Subject to Section 4.1(d), costs and expenses of operating the Distribution
Centers, including, but not limited to, use and Occupancy Expenses for the Distribution Centers,
Distribution Center employee payroll and other obligations, and/or processing, transferring,
consolidating, shipping, and/or delivering goods within or from the Distribution Centers (the
Distribution Center Expenses) from the Sale Commencement Date through and including the date that
is the earlier of (x) three (3) days after Agent provides Merchant with notice that all Merchandise in the
Distribution Centers has been shipped from the Distribution Centers and (y) twenty-one (21) days after
the Sale Commencement Date, shall be Expenses to the extent set forth in Section 4.1(d). Agent shall not
use Merchants Distribution Centers for purposes of receiving or shipping Additional Agent Goods unless
otherwise agreed to by Merchant and Agent.
Section 5. Gross Rings; Merchandise.
5.1

Inventory Taking.

(a)
Commencing on the Sale Commencement Date, Merchant and Agent shall cause
to be taken a SKU level Cost Value and Retail Price physical inventory of the Merchandise located in the
Stores and count the Merchandise in the Distribution Centers and on order/in transit as it arrives in such
Store in accordance with this section 5.1(a) (collectively, the Inventory Taking). The Inventory Taking
shall (x)(i) be completed in each of the Stores as soon as practicable (the date of the Inventory Taking at
each Store being the Inventory Date for each such Store), but in any event no later than twenty-eight
(28) days after the Sale Commencement Date (subject to the availability of the Inventory Taking Service)
and (ii) include Distribution Center Merchandise received at such Store prior to such Stores Inventory
Date, and (y) with respect to Merchandise, including Distribution Center Merchandise or Merchandise
that is on-order or in-transit to a Store, that arrives in such Store after the Inventory Date, such
Merchandise shall be counted by representatives of Agent and Merchant upon receipt at such Store.
Merchant and Agent shall jointly employ RGIS or other mutually agreed upon national inventory taking
service (the Inventory Taking Service) to conduct the Inventory Taking. The Inventory Taking shall be
conducted in accordance with the procedures and instructions set forth on Exhibit 5.1(a) (the Inventory
Taking Instructions). Agent shall be responsible for fifty percent (50%) of cost of the Inventory Taking
Service as an Expense. Merchant shall be responsible for fifty percent (50%) of cost of the Inventory
Taking Service. Except as provided in the immediately preceding two sentences, Merchant and Agent
shall each bear their respective costs and expenses relative to the Inventory Taking; provided that, and
notwithstanding anything to the contrary in section 4.1(a) or 4.1(b), Agent shall be obligated to pay only
fifty percent (50%) of the payroll and related benefit costs (subject to the Benefits Cap) for Store-level
Retained Employees used during the Inventory Taking, and Merchant shall pay all other payroll and
benefit costs for Store-level Retained Employees (and all other employees) used during the Inventory
Taking, in each case calculated on a location-by-location basis. Merchant, Lenders, Committee, and
Agent may each have representatives present during the Inventory Taking, and shall each have the right to
review and verify the listing and tabulation of the Inventory Taking Service. Merchant agrees that during
the conduct of the Inventory Taking, the applicable Store shall be closed to the public, and no sales or
other transactions shall be conducted within the applicable Store. Merchant and Agent further agree that
until the Inventory Taking in a particular Store is completed, neither the Merchant nor Agent shall: (i)
move Merchandise within or about the Store so as to make any such items unavailable for counting as
part of the Inventory Taking, or (ii) remove or add any hang tags, price tickets, inventory control tags
affixed to any Merchandise or any other kind of in-store pricing signage within the Store. Merchant
agrees to cooperate with Agent to conduct the Inventory Taking (including, without limitation, by making
available to Agent information relating to sales, units, costs, Cost Value, and Retail Price, and making
available to Agent Merchants books, records, work papers and personnel to the extent reasonably

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necessary to calculate the Cost Value and Retail Price of the Merchandise). Each Store will be closed
during the Inventory Taking; provided, however, that the parties agree that the Inventory Taking will
commence at a time that will minimize the number of hours that the Stores will be closed for business.
The Inventory Taking, including, but not limited to, the Final Inventory Report, shall be reviewed,
reconciled, and mutually verified by the Merchant , Lenders and Agent in writing as soon as practicable
following the Inventory Taking.
(b)
At each Store, for the period from the Sale Commencement Date until the
Inventory Date for such Store, Agent and Merchant shall jointly keep (i) a strict count of gross register
receipts less applicable Sales Taxes but excluding any prevailing discounts (Gross Rings); (ii) cash
reports of sales within such Store; and (iii) all Returned Merchandise (as defined below). Register
receipts shall show for each item sold the Retail Price for such item and the markdown or discount, if any,
specifically granted by Agent in connection with such Sale. Agent shall pay that portion of the
Guaranteed Amount calculated on the Gross Rings basis, to account for shrinkage, on the basis of 101.7%
of the aggregate Cost Value of Merchandise sold during the Gross Rings Period. All such records and
reports shall be made available to Agent and Merchant during regular business hours upon reasonable
notice. Any Merchandise included in the Sale using the Gross Rings method shall be included as
Merchandise.
5.2

Merchandise Subject to This Agreement.

(a)
For purposes of this Agreement, Merchandise shall mean all (i) new, finished,
first-quality saleable goods in the ordinary course of Merchants business located at the Stores as of the
Sale Commencement Date (including Merchandise subject to Gross Rings), (ii) Used Merchandise, (iii)
Defective Merchandise; (iv) Display Merchandise; (v) Distribution Center Merchandise, In-Transit
Merchandise, and Previously Viewed Rental Merchandise received at the Stores no later than twenty-one
(21) days after the Sale Commencement Date, provided that if such goods are received at the Stores after
such 21st-day period, but on or before thirty-five (35) days after the Sale Commencement Date (the
Receipt Deadline), such goods shall be included in the Sale as Merchandise at the Cost Value and
Retail Price of each good multiplied by the inverse of the prevailing Sale discount for each such good as
of the date on which each such good is received in the applicable Store; (vi) Seasonal Merchandise; and
(vii) Returned Merchandise (defined below) included as Merchandise in accordance with Section 8.5
hereof. Merchandise shall not include: (1) goods which belong to sublessees, licensees, department
lessees, or concessionaires of Merchant; (2) goods held by Merchant on memo, on consignment, or as
bailee (Consignment Goods); (3) Excluded Defective Merchandise; (4) Merchants Designated Goods;
(5) Additional Agent Goods; (6) furniture, furnishings, trade fixtures, machinery, equipment, office
supplies, Supplies, conveyor systems, racking, rolling stock, airplane(s), and other personal property
(collectively, FF&E) or improvements to real property; provided that Agent shall be permitted to sell
Owned FF&E as set forth in Section 7 below; (7) Distribution Center Merchandise, In-Transit
Merchandise, or goods in the Distribution Centers, in-transit or on order received at the Stores after the
Receipt Deadline; (8) out of date magazines and periodicals, greeting cards not owned by Merchant (if
any), stationary, or any caf supplies; (9) Revenue Share Goods.
(b)

As used in this Agreement, the following terms have the respective meanings set

forth below:
Display Merchandise means any item of Merchandise which is not new because it was
used by the Merchant in the ordinary course of business for demonstration purposes or as a display or
floor sample.

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Defective Merchandise means any item of Merchandise which is not finished, firstquality, saleable goods sold in the normal or ordinary course. Examples of Defective Merchandise
include but are not limited to goods that are used (but solely to the extent that the item is not sold by the
Merchant in the ordinary course as Used Merchandise), damaged, defective, scratched, soiled, dented,
shopworn, out of box (if normally sold as new in-the-box); provided, however, that neither Used
Merchandise or Previously Viewed Merchandise shall be deemed Defective Merchandise.
Excluded Defective Merchandise means any item of (i) Defective Merchandise that is
not saleable in the ordinary course because it is so damaged or defective that it cannot reasonably be used
for its intended purpose, (ii) Defective Merchandise or Display Merchandise for which the parties are
unable to agree upon a Cost Value, (iii) goods with an expiration, sell by, or similar date that is prior to or
during the Sale Term, (iii) goods that are missing pieces, mismatched, parts, items typically sold as a set
which are incomplete, or gift with purchase items not ordinarily sold separately. Excluded Defective
Merchandise shall be identified as such during the Inventory Taking.
Distribution Center Merchandise means any item of Merchandise located at Merchants
warehouse/distribution centers identified on Exhibit 1(b) (collectively, the Distribution Centers) and
reflected in the Merchandise File.
In-Transit Merchandise means items of inventory that were ordered by Merchant in the
ordinary course of business as identified on Exhibit 5.2(b)(1) annexed hereto, which inventory was intransit to the Stores or Distribution Center as of the Sale Commencement Date, but which may be
received in the Stores or Distribution Center prior to the Receipt Deadline, as opposed to the In-Transit
Merchandise File which Merchant uses to describe goods in transit from the Distribution Center to the
Stores as identified on Exhibit 5.2(b)(1) annexed hereto, and not the inventory in-transit from third-party
vendors.
Merchandise File means Merchants files listed on Exhibit 5.2(b)(2).
Previously Viewed/Rental Merchandise means goods that, in the ordinary course of
Merchants business (i) were made available by Merchant to customers for rental prior to the Sale
Commencement Date, (ii) are available for (or out on) rental by a customer from Merchant or available
for sale as of the Sale Commencement Date, and (iii) are identified in Exhibit 5.2(b)(3); for the avoidance
of doubt, the forgoing shall not include Revenue Share Goods.
Revenue Share Goods means goods that, in the ordinary course of Merchants business
(i) were made available by Merchant to customers for rental prior to the Sale Commencement Date, (ii)
are available for (or out on) rental by a customer from Merchant as of the Sale Commencement Date, and
(iii) are subject to a revenue sharing agreement by and between the supplier and Merchant.
Seasonal Merchandise means items of inventory that are holiday goods related to a
holiday that does not occur during the Sale Term.
Used Merchandise means used goods that are finished saleable goods which were
purchased used to be sold in the ordinary course of Merchants business.
5.3

Valuation.

(a)
For purposes of this Agreement, except as set forth in section 5.3(c), (d), and (e),
Cost Value shall mean, with respect to each item of Merchandise, the lower of the lowest (i) the
CURRENT_COST as reflected in the Merchandise File and (ii) the Retail Price.

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(b)
For purposes of this Agreement, except as provided in section 5.3(f), Retail
Price shall mean with respect to each item of Merchandise (other than Used Merchandise and Previously
Viewed/Rental Merchandise), the lower of the lowest ticketed, marked, shelf, hang-tag, stickered, hardmarked, SELL_PRC (as such term is reflected in the Merchandise File), or other file price as reflected
in Merchants books and records for such item; provided, however, with respect to each item of Used
Merchandise, Retail Price shall mean the lowest SELL_PRC (as such term is reflected in the
Merchandise File); provided, however, further, that, for Distribution Center Merchandise and In Transit
Merchandise, the "Merchandise File price" for purposes of determine the Retail Price of such
Merchandise is the "Merchandise File price" of the SKU at Store 9604 (Amarillo, TX) multiplied by the
Units of that SKU that are in the Distribution Center or in transit, in each case as of the Sale
Commencement Date.. For purposes of calculating Retail Price, if an item of Merchandise (other than
Previously Viewed/Rental Merchandise and Used Merchandise) of the same SKU in the same Store has
more than one ticketed price, marked price, shelf price, hang-tag price, stickered price, or other hardmarked price, or if multiple items of the same SKU in the same Store have different ticketed prices,
marked prices, shelf prices, hang-tag prices, stickered prices, or other hard-marked prices, the lowest
ticketed price, marked price, shelf price, hang-tag price, stickered price, or other hard-marked price on
any such item shall prevail for such item and for all such items within the same SKU, as the case may be,
that are located within the same Store (as the case may be, the Lowest Store Price). For any item of
Merchandise (other than Previously Viewed/Rental Merchandise and Used Merchandise) within the same
SKU that is in more than one Store, the Lowest Store Price shall apply to the other Stores in the same
district based on the Companys districting, but shall not apply to items within the same SKU in Stores
outside of the district. Notwithstanding the Merchants districting, Stores numbered 9730 and 9770 shall
be a district and Stores numbered 9401 and 9402 shall be another district.
(c)
Notwithstanding Section 5.3(a), for purposes of determining the amount in
section 5.3(a)(i) with respect to each item of Defective Merchandise or Display Merchandise, the parties
shall mutually agree upon the Cost Value (and if Agent and Merchant are unable to mutually agree on
the Cost Value of any one or more items of Defective Merchandise or Display Merchandise, such items
shall be deemed Excluded Defective Merchandise).
(d)
Notwithstanding Section 5.3(a), for purposes of determining the amount in
section 5.3(a)(i) with respect to each item of Previously Viewed/Rental Merchandise, replace the
reference to CURRENT_COST with AVG_COST_AFTER_DEPRECIATION.
(e)
Notwithstanding Section 5.3(a), for purposes of determining the amount in
section 5.3(a)(i) with respect to each item of In-Transit Merchandise, the lower of CURRENT_COST
and STD_COST_AT_TIME_OF_TRANSIT as reflected in the Merchandise File shall be used.
(f)
Notwithstanding Section 5.3(a) or (b), for purposes of determining the Cost
Value and Retail Price of Seasonal Merchandise, the Cost Value and Retail Price shall be fifty
percent (50%) of the otherwise applicable Cost Value and Retail Price of each such item of Seasonal
Merchandise (determined in accordance with Section 5.3(a) and (b) above).
(g)
For purposes of this Agreement, Excluded Price Adjustments shall include (i)
promotions described in the promotional schedule, coupon schedule, and ad checklist (collectively, the
Promotional Calendar) attached hereto as Exhibit 11.1(u); (ii) cashiers overrides that reduce prices to
$0.01 - $0.05 instead of following protocol with coupons and/or promotions; and (iii) video games in the
Previously Viewed/Rental Merchandise category. For the avoidance of doubt, Excluded Price
Adjustments shall not be taken into account in determining the Retail Price of any item of Merchandise.

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5.4
Excluded Goods. Merchant shall retain all responsibility for any goods not
included as Merchandise hereunder (including for these purposes any Distribution Center Merchandise
or In-Transit Merchandise that does not arrive in the Stores on or prior to the Receipt Deadline. If the
Merchant elects at the beginning of the Sale Term, Agent shall accept goods not included as
Merchandise hereunder for sale at prices and through sales channels mutually agreed upon by Agent
and Merchant (such goods, exclusive of Consignment Goods, Merchants Designated Goods). The
Agent shall retain 20% of the receipts (net of Sales Taxes) for all sales of Merchants Designated Goods,
and Merchant shall receive 80% of the receipts (net of Sales Taxes) in respect of such sales. Merchant
shall receive its share of the receipts of sales of Merchants Designated Goods on a weekly basis,
immediately following the Weekly Sale Reconciliation. If Merchant does not elect to have Agent sell
Merchant Designated Goods, then all such items will be removed by Merchant from the Stores at
Merchants expense as soon as practicable and shall not be shipped to the Stores from the Distribution
Centers absent Agents express written consent. Agent shall have no cost, expense or responsibility in
connection with any goods not included in Merchandise.
5.5
Consignment Goods. Unless otherwise directed by Merchant on two (2) days
notice, the Agent shall sell all Consignment Goods at prices and through channels mutually agreed upon
by Agent and Merchant, and Agent shall be paid by Merchant as part of each Weekly Sale Reconciliation
twenty percent (20.0%) of the receipts (net of Sales Taxes) for all sales of Consignment Goods, and
Merchant shall retain the balance (net of Sales Taxes) in respect of such sales. Merchant and Agent shall
receive its share of the receipts of sales of Consignment Goods on a weekly basis, immediately following
the Weekly Sale Reconciliation. If directed by Merchant, Agent shall cease selling Consignment Goods
and assist Merchant with removing any unsold Consignment Goods from the sales floor; provided,
however, that in no event shall any other person or entity sell any Consignment Goods from the Stores
and the Agent shall have no obligation to ship any Consignment Goods from the Stores
5.6
Revenue Share Goods. Merchant shall use commercially reasonable efforts and
cooperate with Agent to reach agreements with the vendors and studios for the Revenue Share Goods to
allow Agent to purchase and/or sell the Revenue Share Goods in the Sale, and, notwithstanding anything
to the contrary in this Agreement, neither the Merchant nor Lender shall have any right or claim to the
Revenue Share Goods or any proceeds from the sale of Revenue Share Goods.
Section 6. Sale Term.
6.1
Term. Subject to satisfaction of the conditions precedent set forth in Section 10
hereof, the Sale shall commence at each Store on the date that is one (1) day after the Bankruptcy Court
enters the Approval Order (the Sale Commencement Date), but in no event later than July 23, 2016
absent Agents express written consent. Agent shall complete the Sale at each Store no later than October
31, 2016 (the Sale Termination Date, and the period from the Sale Commencement Date to the Sale
Termination Date as to each Store being the Sale Term). Notwithstanding the foregoing, Agent may, in
its discretion, earlier terminate the Sale on a Store-by-Store basis upon not less than seven (7) days prior
written notice (a Vacate Notice) to Merchant (the Vacate Date), provided, that it being understood
that the Agent's obligations to pay all Expenses, including Occupancy Expenses and all accrued and
unpaid Expenses that become due and payable after the Sale Term, for each Store subject to a Vacate
Notice shall continue until the applicable Vacate Date for such Store; provided, however, that, with
respect to Occupancy Expenses, the Agents obligations to pay all Occupancy Expenses for each Store
shall continue until the 15th of a calendar month if the Vacate Notice applicable to each such Store is
provided on or before the 8th day of such calendar month.
6.2
Vacating the Store. At the conclusion of the Sale, Agent agrees to leave each
Store in broom clean condition, ordinary wear and tear excepted, except for unsold items of Owned

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FF&E which may be abandoned by Agent in place in a neat and orderly manner pursuant to Section 7
below. Agent shall vacate each Store on or before the Sale Termination Date as provided for herein, at
which time Agent shall surrender and deliver the Store premises and Store keys to Merchant or as
directed by Merchant in writing, together with photographs of the broom clean condition of the Store.
Agents obligations to pay all Expenses for the Stores shall continue until the applicable Vacate Date for
each Store; provided, however, that, with respect to Occupancy Expenses, the Agents obligations to pay
all Occupancy Expenses for each Store shall continue until the 15th of a calendar month if the Vacate
Notice applicable to each such Store is provided on or before the 8th day of such calendar month.
Section 7. FF&E.
7.1
Owned FF&E. All FF&E owned by Merchant located at the Stores and the
Distribution Centers as set forth on Exhibit 7.1 are Owned FF&E. Merchant shall have the option,
which option shall be exercised within two (2) weeks of the Sale Commencement Date, to have Agent sell
some or all of the Owned FF&E on a commission or guaranteed basis. Merchant hereby represents,
warrants, covenants, and agrees in favor of Agent that: (i) some or all of the Owned FF&E may be sold by
Agent on Merchants behalf, free and clear of all liens, claims, and encumbrances; (ii) Merchant owns all
Owned FF&E and has good and marketable title to and all right, power, and authority to sell the Owned
FF&E; and (iii) all Owned FF&E is devoid of hazardous materials and substances. In the event that
Merchant does not have Agent sell the Owned FF&E (or any other FF&E) on a commission or guaranteed
basis, neither Merchant nor any other person shall advertise, prepare for sale, or sell (or be authorized to
advertise, prepare for sale, or sell) the Owned FF&E (or any other FF&E) from the Stores during the Sale
Term
7.2
FF&E Guaranteed Option. If Merchant elects to have Agent sell the Owned
FF&E on a guaranteed basis, subject to the consent of the Term Agent or further court approval on
appropriate notice to the Term Agent, Merchant and Agent shall use good faith efforts to mutually agree
upon the guaranteed amount (the Additional Guaranteed Amount) on account of the sale of the Owned
FF&E, which Additional Guaranteed Amount shall be paid by Agent on the Payment Date or within two
(2) business days after mutual agreement with respect to such Additional Guaranteed Amount. In
consideration for the payment of the Additional Guaranteed Amount, Agent shall be authorized to sell the
Owned FF&E and retain all proceeds (net of Sales Taxes) from the sale of all Owned FF&E (the FF&E
Proceeds) for Agents sole and exclusive benefit, which FF&E Proceeds shall not constitute Proceeds.
Agent shall be responsible for the payment of all costs and expenses associated with the disposition of
Owned FF&E, other than costs and expenses associated with the Distribution Center Expenses pursuant
to Section 4.3 hereof.
7.2
FF&E Fee Option. If Merchant does not elect to have Agent sell the FF&E on a
guaranteed basis, Merchant may elect to have Agent shall sell some or all of the Owned FF&E in the
Stores on a fee basis and be entitled to receive a commission equal to twenty percent (20%) of the gross
proceeds from the sale of the Owned FF&E (net only of Sales Taxes), and Merchant shall reimburse
Agent for Agents documented costs and expenses associated with selling the Owned FF&E pursuant to a
mutually agreed upon budget, subject to Lenders consent and approval of such budget (which shall not
be unreasonably withheld, denied, or delayed).
7.3
Abandonment of FF&E. Anything in this Agreement to the contrary
notwithstanding, Agent shall be authorized to abandon any and all FF&E, whether owned or not by
Merchant, in place without any cost or liability to Agent. For the avoidance of doubt, Agent shall have no
responsibility whatsoever with respect to FF&E that is not owned by Merchant.

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Section 8. Conduct of the Sale.

8.1
Rights of Agent. In addition to any other rights granted to Agent elsewhere in
this Agreement, Agent shall be permitted to conduct the Sale as a store closing, sale on everything,
going out of business, everything must go, or similar themed sale throughout the Sale Term without
compliance with any Liquidation Sale Laws. The Agent shall conduct the Sale in the name of and on
behalf of the Merchant in a commercially reasonable manner and in compliance with the terms of this
Agreement and subject to the Approval Order. Agent shall conduct the Sale in accordance with the sale
guidelines attached hereto as Exhibit 8.1(the Sale Guidelines). In addition to any other rights granted to
Agent hereunder in conducting the Sale the Agent, in the exercise of its reasonable discretion shall have
the right:
(a)
Subject to the Approval Order and Sale Guidelines, to establish Sale prices and
discounts and Store hours, which store hours are consistent with the terms of applicable leases,
mortgages, or other occupancy agreements and local laws or regulations, including, without limitation,
Sunday closing laws; provided, however, to the extent that Agent extends the hours of operation at one or
more of the Stores beyond the hours historically operated by Merchant, which results in additional
utilities charges and increased Occupancy Expenses in excess of the average utilities charges and
Occupancy Expenses for such Stores over the twelve (12) months preceding the Sale Commencement
Date, Agent shall reimburse Merchant the amounts, if any, of such additional costs and such additional
costs shall constitute Expenses;
(b)
except as otherwise expressly included as an Expense, to use without charge
during the Sale Term all FF&E, computer hardware and software, existing Supplies, intangible assets
(including Merchants name, logo and tax identification numbers), Store keys, case keys, security codes
and safe and lock combinations required to gain access to and operate the Stores, and any other assets of
the Merchant located at the Stores or the Distribution Centers (whether owned, leased, or licensed);
(c)
(i) subject to Agents payment in accordance with Section 4.1(s) in respect of
Central Services, to be provided by Merchant (at no additional cost to Agent) with central office facilities,
central administrative services and personnel to process and perform Central Services and provide other
central office services reasonably necessary for the Sale; (ii) to use reasonably sized offices located at
Merchants central office facility to effect the Sale; and (iii) to use all customer lists, mailing lists, email
lists, and web and social networking sites utilized by Merchant in connection with its business (but solely
in connection with the Sale and pursuant to such reasonable restrictions requested by Merchant in order
for Merchant to comply with its privacy policy and applicable laws governing the use and dissemination
of confidential consumer personal data); provided, however, that, in the event Agent requests Merchant to
provide services other than those normally provided to the Stores and/or Distribution Center and relating
to the sale of Merchandise by Merchant in the ordinary course of business and as expressly contemplated
by this Agreement, Agent shall be responsible to reimburse Merchant for the actual incremental cost of
such additional services incurred by Merchant as an Expense of the Sale hereunder;
(d)
to establish and implement advertising, signage and promotion programs
consistent with the store closing, sale on everything, going out of business, everything must go,
or similar theme, including, without limitation, by means of media advertising, and similar interior and
exterior signs and banners, and the use of sign walkers;
(e)
once the Inventory Taking is complete at the affected location, to transfer
Merchandise between and among the Stores at Agents expense; provided, however, the Agent shall not
transfer Merchandise between and among Stores so as to make the Merchandise unavailable for purposes
of the Inventory Taking; and

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(f)
subject to the provisions of Section 8.10 below, to include Additional Agent
Goods as part of the Sale.
8.2
Terms of Sales to Customers; Final/As Is Sales. All sales of Merchandise will be
final sales and as is, and appropriate signage and sales receipts will reflect the same. Agent shall not
warrant the Merchandise in any manner, but will, to the extent legally permissible, pass on all
manufacturers warranties to customers. Except as provided in Section 8.6 below, all sales will be made
only for cash or nationally recognized bank debit or credit cards. Agent shall clearly mark all receipts for
the Merchandise sold at the Stores during the Sale Term so as to distinguish such Merchandise from the
goods sold prior to the Sale Commencement Date.
8.3

Sales Taxes.

(a)
During the Sale Term, all sales, excise, gross receipts, and other taxes attributable
to sales of Merchandise, Consignment Goods, Designated Goods and Additional Agent Goods as
indicated on Merchants point of sale equipment (other than taxes on income, but specifically including,
without limitation, gross receipts taxes) payable to any taxing authority having jurisdiction (collectively,
Sales Taxes) shall be added to the sales price of Merchandise, Consignment Goods, Designated Goods
and Additional Agent Goods and collected by Agent in trust for Merchant at time of sale and paid over to
Merchant. All Sales Taxes shall be deposited into a segregated account designated by Merchant and
Agent solely for the deposit of such Sales Taxes (the Sales Taxes Account). If Agent does not timely
remit Sales Taxes to Merchant, Merchant and/or the DIP Agent or Term Agent, as the case may be, shall
be permitted to immediately draw on the Letter of Credit in the full amount of Sales Taxes collected by
Agent in the preceding week. Provided that Agent has collected all Sales Taxes during the Sale and
remitted the proceeds thereof to Merchant, Merchant shall promptly pay all Sales Taxes and file all
applicable reports and documents required by the applicable taxing authorities. If Agent collects Sale
Taxes by means other than Merchants POS system, Agent shall reimburse Merchant for any additional
Sales Taxes, interest, fines, penalties, and similar amounts payable to any taxing authority as the result of
a Sales Tax audit conducted by or on behalf of such authority which discloses that the Sales Taxes
collected by Agent through means other than Merchants POS system and paid over to Merchant for any
period during the Sale Term were less than those mandated by applicable law for the sale of Merchandise,
Additional Agent Goods and/or Owned FF&E, if any, that is sold by Agent under this Agreement and
collected through means other than Merchants POS system (any such additional Sales Taxes and other
amounts are collectively referred to herein as Additional Taxes and Penalties). Merchant will be given
access to the computation of gross receipts for verification of all such Sales Tax collections. If Agent
collects Sale Taxes by means other than Merchants POS system Agent shall add Sales Tax to the sales
price of all Additional Agent Goods sold and Agent shall collect Sales Taxes attributable to the sales of
Additional Agent Goods and deposit such amounts into existing accounts, trust accounts, or other
accounts designated by Agent, for remittance by Merchant, on behalf of Agent, to the appropriate taxing
authority. If Agent fails to perform its responsibilities in accordance with this Section 8.3, and provided
Merchant complies with its obligations in accordance with this Section 8.3, Agent shall defend, indemnify
and hold harmless Merchant and its Lenders, and their respective officers, directors, employees, agents
and independent contractors (collectively, Merchant Indemnified Parties) from and against any and all
costs, including, but not limited to, reasonable attorneys fees, assessments, fines, or penalties (including
but not limited to all Additional Taxes and Penalties) that any Merchant Indemnified Party sustains or
incurs as a result or consequence of the failure by Agent to perform its responsibilities in accordance with
this section 8.3. Provided that Agent performs its responsibilities in accordance with this Section 8.3,
Agent shall have no further obligation to the Merchant, the Lenders, any taxing authority, or any other
party, and Merchant (or if Merchant shall be unable to or otherwise for any reason fails to, and Lenders
have received any funds on account of Sales Taxes, Lenders) shall defend, indemnify, and hold harmless
Agent and its officers, directors, employees, agents and supervisors (collectively, Agent Indemnified

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Parties) from and against all claims, demands, assessments, penalties, losses, liability or damage,
including, without limitation, reasonable attorneys fees and expenses, directly or indirectly asserted
against, resulting from or related to the failure by Merchant to promptly pay such taxes to the proper
taxing authorities and/or the failure by Merchant to promptly file with such taxing authorities all reports
and other documents required by applicable law to be filed with or delivered to such taxing authorities.
(b)
Without limiting the generality of Section 8.3(a) hereof, it is hereby agreed that,
as Agent is conducting the Sale solely as agent for the Merchant, various payments that this Agreement
contemplates that one party may make to the other party (including the payment by Agent of the
Guaranteed Amount) do not represent the sale of tangible personal property and, accordingly, are not
subject to Sales Taxes.
8.4
Supplies. Agent shall have the right to use, without charge, all existing supplies
located at the Stores, Distribution Centers and corporate office(s), including, without limitation, boxes,
bags, paper, twine and similar sales materials (collectively, Supplies). In the event that additional
Supplies are required in any of the Stores during the Sale, Merchant agrees to promptly provide the same
to Agent, if available, for which Agent shall reimburse the Merchant at Merchants cost therefor.
8.5
Returns of Merchandise. For the first thirty (30) days of the Sale Term, Agent
shall accept returns of goods sold by Merchant in stores or online prior to the Sale Commencement Date
(Returned Merchandise), provided that such return is in compliance with Merchants return policy in
effect immediately prior to the Sale Commencement Date. Merchant and Agent shall jointly maintain and
deliver to the other a detailed Returned Merchandise log, including copies of all relevant merchandise
receipts and credits, and shall mark the Returned Merchandise in such a fashion as to render such
merchandise readily identifiable by Merchant and Agent. If such Returned Merchandise is otherwise
Merchandise it shall be included in the Sale at its applicable Cost Value and Retail Price, multiplied by
the inverse of the then prevailing Sale discount on the date of the return. The aggregate Cost Value of the
Merchandise shall be increased by the adjusted Cost Value of any Returned Merchandise included in
Merchandise (determined in accordance with this Section 8.5). If the Returned Merchandise is not first
quality goods, Merchant and Agent shall negotiate in good faith to determine an appropriate Cost Value
applicable to such Returned Merchandise for purposes of determining the Cost Value attributable thereto.
In addition, Merchant shall promptly reimburse Agent in cash for any refunds Agent is required to issue
to customers in respect of any Returned Merchandise during each Weekly Sale Reconciliation provided
for in Section 8.7. Any increases in payment on account of the Guaranteed Amount as a result of
Returned Merchandise shall be paid by Agent as part of the final Sale reconciliation provided for under
Section 8.7(b) hereof. Except to the extent that Merchant and Agent agree that Merchants POS or other
applicable systems can account for returns of goods, all returns must be noted and described in a mutually
agreeable Returned Merchandise log on a weekly basis during the Sale.
8.6
Gift Certificates; During the first thirty days of the Sale Term, if Agent accepts
Merchants gift certificates, gift cards, return credits, and similar merchandise credits issued by Merchant
(collectively, the Gift Certificates), Merchant shall reimburse Agent in cash for such amounts during
the Weekly Sale Reconciliation provided for in Section 8.7; provided, further, that, during the Sale Term,
(1) Agent may remove all references in the Stores stating that the Merchant stopped accepting Gift
Certificates and Merchant shall cooperate therewith and (2) absent a Bankruptcy Court order to the
contrary, Agent shall not advertise through a press release, on e-commerce sites, or in-Store signage that
Agent is accepting Gift Certificates. Agent shall not sell any Gift Certificates, notwithstanding the
foregoing, the Agent shall not accept coupons or honor any employee or other discounts, and if Merchant
maintains any customer membership or customer loyalty discount programs, Agent shall not honor such
program during the Sale Term.

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Sale Reconciliation.

(a)
On each Wednesday during the Sale Term, Agent and Merchant shall cooperate
to reconcile Expenses of the Sale, make payments/setoffs on account of the Guaranteed Amount, Agents
Fee, Sharing Amounts, sales of Additional Agent Goods, and Owned FF&E, and reconcile such other
Sale-related items as either party shall reasonably request, in each case for the prior week or partial week
(i.e. Sunday through Saturday), all pursuant to procedures agreed upon by Merchant and Agent (the
Weekly Sale Reconciliation). Lenders may, in their discretion, participate in and audit any Weekly
Reconciliation.
(b)
Within thirty (30) days after the end of the Sale Term, or as soon as practicable
thereafter, but in no event later than 60 days after the Sale Termination Date, Agent and Merchant shall
complete a final reconciliation of the Sale (the Final Reconciliation), the written results of which shall
be certified by representatives of each of the Merchant, Lenders, and Agent as a final settlement of
accounts between the Merchant and Agent. Within five (5) days after the completion of the Final
Reconciliation and execution of a settlement letter including an appropriate mutual release, Agent shall
pay to Merchant, or Merchant shall pay to Agent, as the case may be, any and all amounts due the other
pursuant to the Final Reconciliation. Once executed by Merchant and Agent, such settlement and Final
Reconciliation shall be deemed approved without further order of the Bankruptcy Court (other than the
Approval Order). During the Sale Term, and thereafter until all of Merchants and Agents obligations
under this Agreement have been satisfied, Merchant and Agent shall have reasonable access to
Merchants and Agents records with respect to the Sale (including, but not limited to, Cost Value, Retail
Price, Merchandise, Expenses, and Proceeds) to review and audit such records. In the absence of an order
of the Bankruptcy Court to the contrary, no disputed amounts owing hereunder shall be paid until the
dispute has been resolved by agreement of the parties or as determined in the manner prescribed in
Section 8.7(c) hereof. During the Sale Term, and until all of Agents obligations under this Agreement
have been satisfied, Merchant (in consultation with the Lenders), Lenders and Agent shall have
reasonable access to Merchants and Agents records with respect to Proceeds, Sales Taxes, Expenses,
and other Sale-related items to review and audit such records.
(c)
In the event that there is any dispute with respect to either (x) the determination
of the aggregate Cost Value of the Merchandise as reflected in the Final Inventory Report and/or (y) the
Final Reconciliation, such dispute shall be promptly (and in no event later than the fifth (5th) business
day following a request by either Merchant or Agent) submitted to the Bankruptcy Court for resolution.
In the event of a dispute as to (x) or (y) above, Agent shall extend the Letter of Credit in accordance with
the provisions of Section 3.4 hereof. If Agent has for any reason not so extended the expiration date of
the Letter of Credit by the date that is ten (10) business days prior to the applicable expiration date (as
may have been extended previously), Merchant and/or the DIP Agent or Term Agent, as the case may be,
shall have the right to make a draw under the Letter of Credit in an amount or amounts equal to the
amounts Merchant asserts are then owing to Merchant and hold the disputed portion of such amounts in
trust pending resolution of the dispute by the Bankruptcy Court, the mutual agreement of the parties, or
otherwise.
8.8
Force Majeure. If any casualty, act of war or terrorism, or act of God directly
prevents or substantially inhibits the conduct of business in the ordinary course at any of the Stores for
five (5) consecutive days, the Merchandise located at such Store shall, in Agents reasonable discretion
(after consultation with the Merchant), be eliminated from the Sale and considered to be deleted from this
Agreement as of the date of such event, and Agent and Merchant shall have no further rights or
obligations hereunder with respect thereto; provided, however, that (i) the proceeds of any insurance
attributable to such Merchandise shall constitute Proceeds hereunder, and (ii) the Guaranteed Amount
shall be reduced to account for any Merchandise eliminated from the Sale which is not the subject of

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insurance proceeds, and Merchant (or any Lender to the extent it has received any funds on account of the
Guaranteed Amount) shall within five (5) business days following written demand by Agent reimburse
Agent for the amount the Guaranteed Amount is so reduced.
8.9
Right to Monitor. Merchant and Lenders shall have the right to monitor the Sale
and activities attendant thereto and to be present in the Stores and Distribution Centers during the hours
when the Stores and Distribution Centers are open for business; provided that, Merchants or Lenders
presence does not unreasonably disrupt the conduct of the Sale. Merchant shall also have a right of
access to the Stores and Distribution Centers at any time in the event of an emergency situation and shall
promptly notify Agent of such emergency.
8.10

Additional Agent Goods.

(a)
Agent shall have the right to supplement the Merchandise in the Sale with
additional goods procured by Agent which are of like kind, and no lesser quality to the Merchandise in
the Sale (Additional Agent Goods). The Additional Agent Goods shall be purchased by Agent as part
the Sale at Agents sole expense (and such purchase price shall not constitute an Expense) and Agent
shall be responsible for all actual and documented costs and expenses incurred in connection with the
receipt, shipping, delivery, processing and transfer of any Additional Agent Goods. Sales of Additional
Agent Goods shall be run through Merchants cash register systems, provided however, Agent shall mark
the Additional Agent Goods using either a dummy SKU or department number, or in such other manner
so as to distinguish the sale of Additional Agent Goods from the sale of Merchandise. Agent and
Merchant shall also cooperate so as to ensure that the Additional Agent Goods are marked in such a way
that a reasonable consumer could identify the Additional Agent Goods as non-Merchant goods.
Additionally, Agent shall provide signage in the Stores notifying customers that the Additional Agent
Goods have been included in the Sale.
(b)
In addition to all other compensation due to Merchant under this Agreement,
Agent shall pay to Merchant an amount equal to five percent (5.0%) percent of the gross proceeds
(excluding Sale Taxes) from the sale of the Additional Agent Goods (the Additional Agent Goods Fee).
Agent shall retain all remaining amounts from the sale of the Additional Agent Goods. Agent shall pay
Merchant its Additional Agent Goods Fee in connection with each Weekly Sale Reconciliation with
respect to sales of Additional Agent Goods sold by Agent during each then prior week (or at such other
mutually agreed upon time in the case of Additional Agent Goods sold pursuant to Section 3.2(b) above).
(c)
Agent and Merchant intend that the transactions relating to the Additional Agent
Goods are, and shall be construed as, a true consignment from Agent to Merchant in all respects and not a
consignment for security purposes. Subject solely to Agents obligation to pay to Merchant the
Additional Agent Goods Fee, at all times and for all purposes the Additional Agent Goods and their
proceeds shall be the exclusive property of Agent, and no other person or entity shall have any claim
against any of the Additional Agent Goods or their proceeds. The Additional Agent Goods shall at all
times remain subject to the exclusive control of Agent.
(d)
Merchant shall, at Agents sole expense (and not as an Expense), insure the
Additional Agent Goods and, if required, promptly file any proofs of loss with regard to same with
Merchants insurers. Agent shall be responsible for payment of any deductible under any such insurance
in the event of any casualty affecting the Additional Agent Goods, which amount shall be deemed an
Additional Agent Goods expense.
(e)
Merchant acknowledges, and the Approval Order shall provide, that the
Additional Agent Goods shall be consigned to Merchant as a true consignment under Article 9 of the

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Code. Agent is hereby granted a first priority security interest in and lien upon (i) the Additional Agent
Goods and (ii) the Additional Agent Goods proceeds, which security interest shall be deemed perfected
pursuant to the Approval Order without the requirement of filing UCC financing statements or providing
notifications to any prior secured parties (provided that Agent is hereby authorized to deliver all required
notices and file all necessary financing statements and amendments thereof under the applicable UCC
identifying Agents interest in the Additional Agent Goods as consigned goods thereunder and the
Merchant as the consignee therefor, and Agents security interest in and lien upon such Additional Agent
Goods and Additional Agent Goods proceeds). Merchant and Lenders shall cooperate with Agent with
respect to all filings (including, without limitation, UCC-1 financing statements) and other actions to the
extent reasonably requested by Agent in connection with the Additional Agent Goods
(f)
Lenders hereby acknowledges receipt of notice of the consignment of the
Additional Agent Goods and consents to the payments to Agent of Additional Agent Goods proceeds.
Section 9. Employee Matters.
9.1
Merchants Employees. Agent may use Merchants employees and may employ
temporary employees in the conduct of the Sale to the extent Agent deems necessary for the Sale, and
Agent may select and schedule the number and type of Merchants employees required for the Sale.
Agent shall identify any such employees to be used in connection with the Sale (each such employee, a
Retained Employee). Notwithstanding the foregoing, Merchants employees shall at all times remain
employees of the Merchant. Agents activities with respect to Merchants employees, including, without
limitation, selection and scheduling, shall at all times comply with all applicable laws and regulations.
Merchant and Agent agree that, except to the extent that wages and benefits of Retained Employees and
temporary employees constitute Expenses hereunder, nothing contained in this Agreement and none of
Agents actions taken in respect of the Sale shall be deemed to constitute an assumption by Agent of any
of Merchants obligations relating to any of Merchants employees including, without limitation,
Excluded Payroll Benefits, WARN Act claims and other termination type claims and obligations, or any
other amounts required to be paid by statute or law; nor shall Agent become liable under any employment
agreement, collective bargaining agreement, or be deemed a joint or successor employer with respect to
such employees. Merchant shall not, without the prior consent of Agent, raise the salary or wages or
increase the benefits for, or pay any bonuses or other extraordinary payments to, any Store employees
prior to the Sale Termination Date. Merchant shall not transfer any employee in anticipation of the Sale
nor any Retained Employee during the Sale Term, in each case without Agents prior consent.
9.2
Termination of Employees. Agent may in its discretion stop using any Retained
Employee at any time during the Sale, subject to the conditions provided for herein. In the event that
Agent desires to cease using any Retained Employee, Agent shall notify Merchant at least seven (7) days
prior thereto; provided, however, that in the event that Agent determines to cease using an employee for
cause (such as dishonesty, fraud or breach of employee duties), the seven (7) day notice period shall not
apply; provided, further, however, that Agent shall immediately notify Merchant of the basis for such
cause. Notwithstanding the foregoing, Agent shall not have the right to terminate the actual
employment of any employee, but rather may only cease using such employee in the Sale and paying any
Expenses with respect to such employee (and all decisions relating to the termination or non-termination
of such employees shall at all times rest solely with Merchant). From and after the date of this Agreement
and until the Sale Termination Date, Merchant shall not transfer or terminate any employee of the Stores
except for cause without Agents prior consent; provided, however, that Merchant shall have the right
to terminate any Retained Employees that Agent stops using in accordance with this Section 9.2 without
Agents prior consent.

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9.3
Payroll Matters. During the Sale Term, Merchant shall process the payroll for all
Retained Employees and any former employees and temporary labor engaged for the Sale. Each
Wednesday (or such other date as may be reasonably requested by Merchant to permit the funding of the
payroll accounts before such payroll is due and payable) during the Sale Term, Agent shall transfer to
Merchants payroll accounts an amount equal to the base payroll for Retained Employees plus related
payroll taxes, workers compensation and benefits for such week, to the extent such amount constitutes
Expenses hereunder.
9.4
Employee Retention Bonuses. Subject to approval by the Bankruptcy Court,
Agent may pay, as an Expense, retention bonuses (Retention Bonuses) (which bonuses shall be
inclusive of payroll taxes, but as to which no benefits shall be payable), up to a maximum of ten percent
(10%) of base payroll for all Retained Employees, to such Retained Employees who do not voluntarily
leave employment and are not terminated for cause, as Agent may determine in its discretion. Subject
to approval by the Bankruptcy Court, the amount of such Retention Bonuses shall be in an amount to be
determined by Agent, in its discretion, and shall be payable within thirty (30) days after the Sale
Termination Date, and shall be processed through Merchants payroll system.
Section 10. Conditions Precedent and Subsequent.
(a)
The willingness of Agent to enter into the transactions contemplated under this
Agreement is directly conditioned upon the satisfaction of the following conditions at the time or during
the time periods indicated, unless specifically waived in writing by Agent:
(i)
All representations and warranties of the Merchant hereunder shall be
true and correct in all material respects and no Event of Default shall have occurred at and as of the date
hereof and on the Sale Commencement Date.
(ii)
Lenders have executed this Agreement (with all Exhibits attached
hereto), subject to the Approval Order.
(iii)
The Bankruptcy Court shall have entered the Approval Order by July 22,
2016, or such later date as mutually agreed upon by the Merchant and the Agent (the Approval Order
Deadline).
(b)
The willingness of Merchant to enter into the transactions contemplated under
this Agreement is directly conditioned upon the satisfaction of the following conditions at the time or
during the time periods indicated, unless specifically waived in writing by Merchant:
(i)
All representations and warranties of Agent hereunder shall be true and
correct in all material respects and no Event of Default shall have occurred at and as of the date hereof
and on the Sale Commencement Date.
(ii)
Lenders have executed this Agreement (with all Exhibits attached
hereto), subject to the Approval Order.
Section 11. Representations, Warranties and Covenants.
11.1
Merchants Representations, Warranties and Covenants. Merchant hereby
represents, warrants and covenants in favor of Agent as follows:

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(a)
Each entity comprising Merchant (i) is an entity duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation; (ii) has all requisite corporate
power and authority to own, lease and operate its assets and properties and to carry on its business as
presently conducted; and (iii) is, and during the Sale Term will continue to be, duly authorized and
qualified to do business and in good standing in each jurisdiction where the nature of its business or
properties requires such qualification, including all jurisdictions in which the Stores are located, except, in
each case, to the extent that the failure to be in good standing or so qualified could not reasonably be
expected to have a material adverse effect on the ability of the Merchant to execute and deliver this
Agreement and perform fully its obligations hereunder.
(b)
Subject to entry of the Approval Order, the Merchant has the right, power and
authority to execute and deliver this Agreement and each other document and agreement contemplated
hereby (collectively, together with this Agreement, the Agency Documents) and to perform fully its
obligations thereunder. Subject to entry of the Approval Order, Merchant has taken all necessary actions
required to authorize the execution, delivery and performance of the Agency Documents, and no further
consent or approval is required for Merchant to enter into and deliver the Agency Documents, to perform
its obligations thereunder and to consummate the Sale, except for any such consent the failure of which to
be obtained could not reasonably be expected to have a material adverse effect on the ability of Merchant
to execute and deliver this Agreement and perform fully its obligations hereunder. Subject to entry of the
Approval Order, each of the Agency Documents has been duly executed and delivered by the Merchant
and constitutes the legal, valid and binding obligation of the Merchant enforceable in accordance with its
terms.
(c)
Merchant owns, and will own at all times during the Sale Term, good and
marketable title to all of the Merchandise and Owned FF&E to be included in the Sale, free and clear of
all security interests, liens, claims and encumbrances of any nature (other than the security interests and
liens of the Agent hereunder and Lender). Merchant shall not create, incur, assume or suffer to exist any
security interest, lien or other charge or encumbrance upon or with respect to any of the Merchandise or
the Proceeds (or the Owned FF&E and its proceeds).
(d)
Merchant has maintained its pricing files (including (without limitation) the
Merchandise File) in the ordinary course of business, and prices charged to the public for goods are the
same in all material respects as set forth in such pricing files for the periods indicated therein, and all
pricing files and records are true and accurate in all material respects as to the actual cost to Merchant for
purchasing the goods referred to therein and as to the selling price to the public for such goods without
consideration of any Excluded Price Adjustments, as of the dates and for the periods indicated therein.
Merchant represents that (i) the ticketed prices of all items of Merchandise do not and shall not include
any Sales Taxes and (ii) all registers located at the Stores are programmed to correctly compute all Sales
Taxes required to be paid by the customer under applicable law, as such calculations have been identified
to Merchant by its retained service provider.
(e)
Through the Sale Commencement Date, Merchant has ticketed or marked, and
shall continue to ticket or mark, all items of inventory received at the Stores in a manner consistent with
similar Merchandise located at the Stores, and in accordance with Merchants ordinary course past
practices and policies relative to pricing and marking inventory. Other than in the ordinary course of
business and consistent with Merchants historic practices, policies, and procedures, Merchant has not
removed any POS promotions, sale stickers, or other markings indicating items are on sale or on
clearance from the Merchandise prior to the Sale Commencement Date, and have not raised, and will not
raise, prices of any Merchandise in contemplation of the Sale.

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(f)
With the exception of merchandise and goods that may have been transferred to
or from the Existing Closing Stores on or prior to July 16, 2016, since May 31, 2016, Merchant has not,
and through the Sale Commencement Date Merchant shall not, purchase for or transfer to or from the
Stores any merchandise or goods outside the ordinary course, neither Merchant nor any other person or
entity has transferred, nor shall Merchant or any other person or entity transfer goods from the Existing
Closing Stores to the Stores or the Distribution Centers or transfer goods from the Stores or the
Distribution Centers to the Existing Closing Stores; provided, however, that nothing in this subsection (f)
shall apply to any transfers of Merchandise from the Distribution Center to the Stores.
(g)
To Merchants knowledge after reasonable inquiry, all Merchandise is in
compliance with all applicable federal, state and local product safety laws, rules and standards. Merchant
shall provide Agent with its historic policies and practices, if any, regarding product recalls prior to the
Sale Commencement Date.
(h)
Subject to the provisions of the Approval Order, Agent shall have the right to the
unencumbered use and occupancy of, and peaceful and quiet possession of, the Stores, the assets currently
located at the Stores, and the utilities and other services provided at the Stores. Merchant shall,
throughout the Sale Term, maintain in good working order, condition and repair all cash registers, heating
systems, air conditioning systems, elevators, escalators and all other mechanical devices necessary or
appropriate for the conduct of the Sale at the Stores. Except as otherwise restricted by the Bankruptcy
Code or as provided herein and absent a bona fide dispute, throughout the Sale Term, Merchant shall
remain current on all expenses and payables necessary or appropriate for the conduct of the Sale.
(i)
Subject to approval by the Bankruptcy Court, Merchant has paid, and will
continue to pay throughout the Sale Term, all self-insured or Merchant-funded employee benefit
programs for Store employees, including health and medical benefits and insurance and all proper claims
made or to be made in accordance with such programs with respect to employees that are employed by
Merchant.
(j)
Since May 31, 2016, Merchant has not taken, and shall not throughout the Sale
Term take, any actions with the intent of increasing the Expenses of the Sale, including without limitation
increasing salaries or other amounts payable to employees; except to the extent an employee was due an
annual raise in the ordinary course or to the extent necessary to replace employees that are voluntarily or
involuntarily terminated from Merchant.
(k)
Since May 31, 2016, Merchant has operated, and, except as otherwise restricted
by the Bankruptcy Code or as provided herein and absent a bona fide dispute, through the Sale
Commencement Date Merchant covenants to continue to operate, the Stores in all material respects in the
ordinary course of business including without limitation by: (i) selling inventory during such period at
customary prices consistent with the ordinary course of business; (ii) not promoting or advertising any
sales or in-store promotions (including POS promotions) to the public outside of the Merchants ordinary
course of business; (iii) except as may occur in the ordinary course of business and excluding any
transfers of Merchandise from the Distribution Center to the Stores, not returning inventory to vendors
and not transferring inventory or supplies out of or to the Stores; and (iv) except as may occur in the
ordinary course of business, not making any management personnel moves or changes at the Stores
(l)
To the Merchants knowledge after reasonable inquiry, prior to the execution of
this Agreement, Merchant has provided Agent reasonable access to all pricing and cost files, computer
hardware, software and data files, inter-Stores transfer logs, markdown schedules, invoices, style runs and
all other documents relative to the price, mix and quantities of inventory located at the Stores and the
Distribution Centers or on order or in transit.

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(m)
To Merchants knowledge after reasonable inquiry, all documents, information
and supplements provided by Merchant to Agent in connection with Agents due diligence and the
negotiation of this Agreement were true and accurate in all material respects at the time provided.
(n)
For the avoidance of doubt, the Merchants representations in this Section 11.1
are made with respect to only those Stores listed on Exhibit 1(a) and not to any of the Existing Closing
Stores.
(o)
Merchant is not subject to any collective bargaining agreement pertaining to
Merchants employees.
(p)
Merchant has not and shall not purchase or transfer to or from the Stores any
merchandise or goods outside the ordinary course in anticipation of the Sale or of the Inventory Taking.
(q)
Merchant has not since May 31, 2016 intentionally shipped any Excluded
Defective Merchandise from the Existing Closing Stores or Distribution Centers to the Stores. Merchant
will not intentionally ship any Excluded Defective Merchandise from the date of this Agreement from the
Distribution Centers to the Stores.
(r)
Merchant (i) at the Sale Commencement Date will have, sufficient internal funds
(without giving effect to any unfunded financing regardless of whether any such financing is committed)
to consummate the transactions contemplated by this Agreement and the other Agency Documents, (ii) at
the Sale Commencement Date will have, the resources and capabilities (financial or otherwise) to perform
its obligations hereunder and under the other Agency Documents, and (iii) at the Sale Commencement
Date, will not have incurred any obligation, commitment, restriction or liability of any kind which would
impair or adversely affect such funds, resources and capabilities.
(s)
Other than filing the Bankruptcy Case, no action, arbitration, suit, notice, or
legal, administrative or other proceeding before any court or governmental body has been instituted by or
against the Merchant, or has been settled or resolved, or to Merchant's knowledge, is threatened against or
affects Merchant, relative to Merchant's business or properties, or which questions the validity of this
Agreement, or that if adversely determined, would materially adversely affect the conduct of the Sale.
(t)
Merchant shall use Merchants commercially reasonable efforts to promptly and
timely obtain entry of an order extending the deadline to assume or reject unexpired leases of real
property through and including the Sale Termination Date.
(u)
Merchant shall not, prior to the Sale Termination Date, offer any promotions or
discounts at the Stores, e-commerce platform, any other retail store location, or any other retail sales
channel, except as detailed on the Promotional Calendar attached hereto as Exhibit 11.1(u).
(v)
On and as of the Sale Commencement Date, the Cost Value of Used Merchandise
shall not be more than 11.9% of the aggregate Cost Value of all Merchandise, and the Cost Value of
Previously Viewed/Rental Merchandise shall not be more than 6.8% of the aggregate Cost Value of all
Merchandise.
11.2
Agents Representations, Warranties and Covenants. Agent hereby represents,
warrants and covenants in favor of Merchant as follows:
(a)
Each entity comprising Agent: (i) is a limited liability company duly and validly
existing and in good standing under the laws of the State of Delaware; (ii) has all requisite power and

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authority to carry on its business as presently conducted and to consummate the transactions contemplated
hereby; (iii) is, and during the Sale Term will continue to be, duly authorized and qualified to do business
and in good standing in each jurisdiction where the nature of its business or properties requires such
qualification, including all jurisdictions in which the Stores are located, except, in each case, to the extent
that the failure to be in good standing or so qualified could not reasonably be expected to have a material
adverse effect on the ability of Agent to execute and deliver this Agreement and perform fully its
obligations hereunder.
(b)
Agent has the right, power and authority to execute and deliver each of the
Agency Documents to which it is a party and to perform fully its obligations thereunder. Agent has taken
all necessary actions required to authorize the execution, delivery and performance of the Agency
Documents, and no further consent or approval is required on the part of Agent for Agent to enter into and
deliver the Agency Documents, to perform its obligations thereunder and to consummate the Sale. Each
of the Agency Documents has been duly executed and delivered by the Agent and constitutes the legal,
valid and binding obligation of Agent enforceable in accordance with its terms. No court order or decree
of any federal, state or local governmental authority or regulatory body is in effect that would prevent or
impair, or is required for, Agents consummation of the transactions contemplated by this Agreement, and
no consent of any third party which has not been obtained is required therefor, other than as provided
herein. No contract or other agreement to which Agent is a party or by which Agent is otherwise bound
will prevent or impair the consummation of the transactions contemplated by this Agreement.
(c)
No action, arbitration, suit, notice or legal administrative or other proceeding
before any court or governmental body has been instituted by or against Agent, or has been settled or
resolved or, to Agents knowledge, has been threatened against or affects Agent, which questions the
validity of this Agreement or any action taken or to be taken by Agent in connection with this Agreement
or which, if adversely determined, would have a material adverse effect upon Agents ability to perform
its obligations under this Agreement.
(d)
The Sale shall be conducted in compliance with all applicable state and local
laws, rules and regulations and Merchants leases and other agreements, except as otherwise provided for
in the Sale Guidelines and Approval Order.
(e)
Absent prior consent by the Merchant, Agent will not cause any non-emergency
repairs or maintenance (emergency repairs are repairs necessary to preserve the security of a Store
premise or to ensure customer safety) to be conducted at the Stores.
(f)
To the best of Agent's knowledge, all Additional Agent Goods are in compliance
with all applicable federal, state or local product safety laws, rules and standards. All Additional Agent
Goods shall be of like kind and no lesser quality to the Merchandise located in the Stores.
Section 12. Insurance.
12.1
Merchants Liability Insurance. Subject to approval by the Bankruptcy Court,
Merchant shall continue at its cost and expense until the Sale Termination Date, in such amounts as it
currently has in effect, all of its liability insurance policies, including, but not limited to, commercial
general liability, products liability, comprehensive public liability, auto liability and umbrella liability
insurance, covering injuries to persons and property in, or in connection with, Merchants operation of the
Stores; and Merchant shall use commercially reasonable efforts to cause Agent to be named as an
additional insured (as its interest may appear) with respect to all such policies. Merchant shall use
commercially reasonable efforts to deliver to Agent certificates evidencing such insurance setting forth
the duration thereof and naming Agent as an additional insured, in form reasonably satisfactory to Agent.

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Merchant shall use commercially reasonable efforts to ensure that all such policies require at least thirty
(30) days prior notice to Agent of cancellation, non-renewal or material change during the Sale Term. In
the event of a claim under any such policies, Merchant shall be responsible for the payment of all
deductibles, retentions or self-insured amounts thereunder, unless it is determined that liability arose by
reason of the willful misconduct or grossly negligent acts or omissions of Agent, or Agents employees,
independent contractors or agents. Merchant shall not make any change in the amount of any deductibles
or self-insurance amounts prior to the Sale Termination Date without Agents prior written consent.
12.2
Merchants Casualty Insurance. Subject to approval by the Bankruptcy Court,
Merchant shall provide, as an Occupancy Expense, throughout the Sale Term fire, flood, theft and
extended coverage casualty insurance covering the Merchandise in a total amount equal to no less than
the Cost Value thereof. Merchant shall use commercially reasonable efforts to ensure that, from and after
the date of this Agreement until the Sale Termination Date, all such policies will also name Agent as an
additional named insured or loss payee, as applicable (as its interest may appear). In the event of a loss to
the Merchandise on or after the date of this Agreement, the Proceeds of such insurance attributable to the
Merchandise, shall constitute Proceeds hereunder. Merchant shall use commercially reasonable efforts to
deliver to Agent certificates evidencing such insurance, setting forth the duration thereof and naming the
Agent as an additional insured or loss payee, as applicable, in form and substance reasonably satisfactory
to Agent. Merchant shall use commercially reasonable efforts to ensure that all such policies shall require
at least thirty (30) days prior notice to the Agent of cancellation, non-renewal or material change during
the Sale Term. Merchant shall not make any change in the amount of any deductibles or self-insurance
amounts prior to the Sale Termination Date without Agents prior written consent.
12.3
Agents Insurance. Agent shall maintain at Agents cost as an Expense
hereunder throughout the Sale Term, in such amounts as it currently has in effect, commercial general
liability policies covering injuries to persons and property in or in connection with Agents agency at the
Store, and shall cause Merchant to be named as an additional insured with respect to such policies. Agent
shall deliver to Merchant certificates evidencing such insurance policies setting forth the duration thereof
and naming Merchant as an additional insured, in form and substance reasonably satisfactory to
Merchant. In the event of a claim under any such policies, Agent shall be responsible for the payment of
all deductibles, retentions or self-insured amounts thereunder, unless it is determined that liability arose
by reason of the willful misconduct or grossly negligent acts or omissions of Merchant or Merchants
employees, independent contractors or agents (other than Agent or Agents employees, agents or
independent contractors). Agent shall not make any change in the amount of any deductibles or self
insurance amounts prior to the Sale Termination Date without Merchants prior written consent.
12.4
Workers Compensation Insurance. Subject to approval by the Bankruptcy Court,
Merchant shall at all times during the Sale Term maintain in full force and effect workers compensation
insurance (including employer liability insurance) covering all Retained Employees in compliance with
all statutory requirements.
Section 13. Indemnification.
13.1
Merchants Indemnification. Merchant shall indemnify and hold Agent and its
officers, directors, employees, agents, representatives, and independent contractors (collectively, Agent
Indemnified Parties) harmless from and against all claims, causes of action, demands, penalties, losses,
liability, damage, or other obligations, including, without limitation, reasonable attorneys fees and
expenses, directly or indirectly asserted against, resulting from or related to: (i) Merchants material
breach of or failure to comply with any of its agreements, covenants, representations or warranties
contained in any Agency Document; (ii) subject to Agents compliance with its obligations under Section
8.3 hereof, any failure by Merchant to pay any Sales Taxes to the proper taxing authorities or to properly

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file with any taxing authorities any reports or documents required by applicable law to be filed in respect
thereof; (iii) subject to Agents compliance with its obligations under Section 9 hereof, any failure of
Merchant to pay to its employees any wages, salaries or benefits due to such employees during the Sale
Term; (iv) any consumer warranty or products liability claims relating to Merchandise; (v) any liability or
other claims asserted by customers, any of Merchants employees (subject to Agents compliance with its
obligations under Section 9 hereof), or any other person against any Agent Indemnified Party (including,
without limitation, claims by employees arising under workers compensation or the WARN Act); (vi)
any harassment or any other unlawful, tortious, or otherwise actionable treatment of any customers,
employees or agents of Agent by Merchant or any of its representatives; (vii) Subject to Agents
compliance with its obligations hereunder, any failure of Merchant to pay to any Occupancy Expenses or
Central Service Expenses during the Sale Term; and (viii) the gross negligence (including omissions) or
willful misconduct of the Merchant, its officers, directors, employees, agents (other than Agent) or
representatives.
13.2
Agent Indemnification. Agent shall indemnify and hold the Merchant and its
officers, directors, employees, agents and representatives harmless from and against all claims, causes of
action, demands, penalties, losses, liability, damage, or other obligations, including, without limitation,
reasonable attorneys fees and expenses, directly or indirectly asserted against, resulting from, or related
to: (i) Agents material breach of or failure to comply with any of its agreements, covenants,
representations or warranties contained herein or in any Agency Document; (ii) any claims by any party
engaged by Agent as an employee or independent contractor arising out of such employment; (iii) any
violation of Applicable General Laws that occurs in the Stores during the Sale Term and is attributable to
the Agents wrongful acts or omissions related to the Sale; (iv) any harassment or any other unlawful,
tortious or otherwise actionable treatment of any customers, employees or agents of the Merchant by
Agent or any of its representatives; (v) any claims brought against the Merchant by any Retained
Employees that arise out of the Agents wrongful actions or inactions with respect to such Retained
Employees; (vi) any consumer warranty or products liability claims relating to Additional Agent Goods;
(vii) as set forth in section 8.3 above; and (viii) the gross negligence (including omissions) or willful
misconduct of Agent, its officers, directors, employees, agents or representatives.
Section 14. Defaults. The following shall constitute Events of Default hereunder:
(a)
Merchant or Agent shall fail to perform any material obligation hereunder if such
failure remains uncured five (5) business days after receipt of written notice thereof;
(b)
Any representation or warranty made by the Merchant or Agent proves untrue in
any material respect as of the date made and, to the extent curable, continues uncured five (5) business
days after written notice to the defaulting party; or
(c)
During the Sale Term, the entry of an order by the Bankruptcy Court that
interrupts or has a material adverse effect on (such as, but not limited to materially increasing Expenses)
the Sale and has the effect of either (i) converting the Merchants Bankruptcy Cases to cases under
chapter 7 of the Bankruptcy Code, or (ii) appointing a chapter 11 or chapter 7 trustee; or
(d)
The Sale is terminated prior to the Sale Termination Date or materially
interrupted or impaired at any Store for any reason other than (i) an Event of Default by Agent, (ii) any
other material breach or action by Agent not authorized hereunder, or (iii) any Force Majeure (as
provided in Section 8.8).
Upon an Event of Default, the non-defaulting party (in the case of (a) or (b) above), or Agent (in the case
of (c) or (d) above) may in its discretion elect to terminate this Agreement, and any partys damages or

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entitlement to equitable relief on account of an Event of Default shall (in addition to the right to terminate
as provided above) be determined by a court of competent jurisdiction.
Section 15. Agents Security Interest.
(a)
In consideration of and effective upon payment by Agent of the Initial Guaranty
Payment on the Payment Date and delivery of the Letter of Credit, Merchant hereby grants to Agent first
priority, senior security interests in and liens (subject to the subordination provisions set forth herein
below) upon: (i) the Merchandise; (ii) the Additional Agent Goods; (iii) all Proceeds (including, without
limitation, credit card Proceeds); (iv) the Agents commission regarding the sale or other disposition of
Merchant Designated Goods under Section 5.4 and Consignment Goods under section 5.5 hereof; (v) in
the event Merchant elects the FF&E Guaranty Option, the Owned FF&E and the proceeds realized from
the sale or other disposition of Owned FF&E after payment of the Additional Guaranteed Amount; or,
alternatively, the FF&E Commission; (vi) Agents percentage share of the Sharing Amounts (if any); and
(vii) all proceeds (within the meaning of Section 9-102(a)(64) of the Code) of each of the foregoing (all
of which are collectively referred to herein as the Agent Collateral), to secure the full payment and
performance of all obligations of Merchant to Agent hereunder. Upon entry of the Approval Order,
payment of the Initial Guaranty Payment on the Payment Date, and delivery of the Letter of Credit, the
security interests and liens granted to the Agent hereunder shall be deemed properly perfected without the
necessity of filing UCC-1 financing statements or any other documentation.
(b)
Without any further act by or on behalf of the Agent or any other party (including
(without limitation) any Lender or the Merchant), the Agents security interests in and liens upon the
Agent Collateral created hereunder are (i) validly created; (ii) effective upon entry of the Approval Order,
perfected; and (iii) senior to all other liens and security interests; provided, however, that (x) until the
Merchant receives payment in full of the Guaranteed Amount, Merchants percentage share of the
Sharing Amounts (if any), Expenses, in the event Merchant elects the FF&E Guaranty Option, the
Additional Guaranteed Amount or, alternatively, the proceeds realized upon a sale of Owned FF&E (less
the Agent FF&E Commission), as applicable, and such other amounts due to Merchant hereunder, the
security interests and liens granted to Agent hereunder shall be junior and subordinate in all respects to
the security interests and liens of the Lenders in the Agent Collateral (other than the Additional Agent
Goods and proceeds thereof in which Merchant has no property or other interest and Lenders have no
security interest or other lien) but solely to the extent and amount of the unpaid portion of any of the
Guaranteed Amount, Merchants percentage share of the Sharing Amounts (if any), Expenses, in the
event Merchant elects the FF&E Guaranty Option, the Additional Guaranteed Amount or, alternatively,
the proceeds realized upon a sale of Owned FF&E (less the Agent FF&E Commission), as applicable, and
such other amounts due to Merchant hereunder, and (y) upon payment in full of the Guaranteed Amount,
Merchants percentage share of the Sharing Amounts (if any), Expenses, in the event Merchant elects the
FF&E Guaranty Option, the Additional Guaranteed Amount or, alternatively, the proceeds realized upon
a sale of Owned FF&E (less the Agent FF&E Commission), as applicable, and such other amounts due to
Merchant hereunder, any security interest or lien of the Lenders in the Agent Collateral shall be junior and
subordinate in all respects to the security interest and liens of Agent in the Agent Collateral. Merchant
shall cooperate with Agent with respect to all filings (including, without limitation, UCC-1 financing
statements) and other actions to the extent reasonably requested by Agent in connection with the security
interests and liens granted under this Agreement.
(c)
Merchant will not sell, grant, assign or transfer any security interest in, or permit
to exist any lien or encumbrance on, any of the Agent Collateral other than in favor of the Agent and
Lenders.

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(d)
In the event of an occurrence of an Event of Default by the Merchant hereunder,
in any jurisdiction where the enforcement of its rights hereunder is sought, the Agent shall have, in
addition to all other rights and remedies, the rights and remedies of a secured party under the Code.
(e)
Code shall mean the Uniform Commercial Code as the same may be in effect
from time to time in the State of Delaware.
Section 16. Bidding and Auction.
16.1
In consideration of Agent conducting its due diligence and entering into this
Agreement (which may serve as a base by which other offers may be measured and is subject to higher
and better offers by way of an auction process) ("Auction"); then in the event that this Agreement shall
not be consummated with Agent because Merchant elects as a consequence of the Auction or otherwise to
pursue an alternative higher/better transaction (whether with another party serving as liquidating agent, as
a going concern buyer, as part of a plan, or otherwise) Merchant shall pay Agent (on such date that the
Sale closes) one million three hundred fifty thousand dollars ($1,350,000) (Breakup Fee), plus
reimbursement of Agents actual costs and expenses (including freight) associated with procuring signage
for the Sale in an amount not to exceed $525,000 (the Signage Costs); in the event Agent is not the
successful bidder, Agent agrees to, upon reimbursement for the Signage Costs, make the signage
available to Merchant or the Merchants designee at no additional cost (other than reimbursement of the
Signage Costs). At the Auction: (i) the Breakup Fee shall not be eligible to be credit bid by Agent; (ii)
the first overbid by a (x) competing liquidation bidder shall be an amount equal to a Guaranty Percentage
of not less than 77.0%, plus agree in writing to reimburse the Signage Costs to the Agent, or (y)
competing going concern bidders shall be cash consideration payable by such bidder at closing equivalent
to a Guaranty Percentage of not less than 77.0%, plus agree in writing to reimburse the Signage Costs to
the Agent.
16.2
The Debtors shall request (and the Lenders shall support) that the order
approving this Agreement as a stalking horse agreement shall include the following ordered paragraph:
Notwithstanding anything in prior orders of this Court or the Bid
Procedures authorizing the Debtors to modify the Bid Procedures
(whether in Section XIII of the Bid Procedures or otherwise), the Debtors
are expressly prohibited from modifying section X of the Bid Procedures
absent prior approval of this Court after notice and a hearing.
Section 17. Miscellaneous.
17.1
Notices. All notices and communications provided for pursuant to this
Agreement shall be in writing and sent by email, by hand, or by Federal Express or other recognized
overnight delivery service, as follows:
If to the Agent:

HILCO MERCHANT RESOURCES, LLC

5 Revere Drive, Suite 206
Northbrook, IL 60062
Attention: Ian S. Fredericks
Tel: (847) 418-2075
Fax: (847) 897-0859
Email: ifredericks@hilcotrading.com
GORDON BROTHERS RETAIL PARTNERS, LLC

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Prudential Tower
800 Boylston Street
Boston, MA 02119
Attn: Michael Chartock
Tel:
617.210.7116
Email: mchartock@gordonbrothers.com
If to the Merchant:

Hastings Entertainment, Inc.

3601 Plains Boulevard
Amarillo, TX 79102-1098
Attn: Duane Huessers and John Merklein
Email: duane.huesers@gohastings.com
john.merklein@gohastings.com
With a copy to:
FTI Consulting
Two North Central Avenue, # 1200
One Renaissance Square
Phoenix, AZ 85004-4563
Attn: Mike Nowlan and Chas Harvick
Email: Mike.Nowlan@fticonsulting.com
chas.harvick@fticonsulting.com
With a copy to:
Cooley LLP
1114 Avenue of the Americas
New York, NY 10036
Attn: Cathy Hershcopf and Michael Klein
Email: chershcopf@cooley.com
mklein@cooley.com

If to the Lender:

Bank of America, N.A.

100 Federal Street, 9th Floor
Boston, Massachusetts 02110
Attn:Mr. Andrew Cerussi and Mr. Richard D. Hill, Jr.
Email: andrew.cerussi@baml.com rick.hill@baml.com
with a copy to:
Riemer & Braunstein LLP
Three Center Plaza
Boston, Massachusetts 02108
Attn: Donald E. Rothman and Steven E. Fox
E-mail: DRothmanr@riemerlaw.com
sfox@riemerlaw.com
with a copy to:
Pathlight Capital, LLC

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130 West 42nd Street

Suite 1001
New York NY 10036
Attn: Daniel T. Platt
E-mail: dplatt@pathlightcapital.com
with a copy to:
Choate, Hall & Stewart LLP
Two International Place
Boston, MA 02110
Attn: Kevin J. Simard, Esq.
Email: ksimard@choate.com

If to the Committee:

Lowenstein Sandler LLP

1251 Avenue of the Americas
New York, New York 10020
Tele: 646-414-6886
Fax: 973-422-6469
Attn: Bruce Beuchler and Eric S. Chafetz
Email: bbuechler@lowenstein.com and
echafetz@lowenstein.com

17.2
Governing Law/Exclusive Jurisdiction. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of Delaware, without reference to any conflict of
laws provisions thereof, except where governed by the Bankruptcy Code. Each of the parties hereto
irrevocably and unconditionally submits, for itself and its properties, to the exclusive jurisdiction of the
Bankruptcy Court, in any action or proceeding arising out of or relating to this Agreement.
17.3
Amendments. This Agreement may not be modified except in a written
instrument executed by each of the parties hereto.
17.4
No Waiver. No consent or waiver by any party, express or implied, to or of any
breach or default by the other in the performance of its obligations hereunder shall be deemed or
construed to be a consent or waiver to or of any other breach or default in the performance by such other
party of the same or any other obligation of such party. Failure on the part of any party to complain of
any act or failure to act by the other party or to declare the other party in default, irrespective of how long
such failure continues, shall not constitute a waiver by such party of its rights hereunder.
17.5
Currency. All reference to dollars in this Agreement and all schedules, exhibits,
and ancillary documents related to this Agreement shall refer to US dollars.
17.6
Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon Agent, the Lenders and Merchant and their respective successors and assigns, including, but
not limited to, any chapter 11 or chapter 7 trustee; provided, however, that this Agreement may not be
assigned by Merchant or Agent to any party without the prior written consent of the other.
17.7
Execution in Counterparts. This Agreement may be executed in one or more
counterparts. Each such counterpart shall be deemed an original but all such counterparts together shall
constitute one and the same agreement. This Agreement, to the extent signed and delivered by means of a

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facsimile machine, electronic mail or other electronic transmission in which the actual signature is
evident, shall be treated in all manner and respects as an original agreement or instrument and shall be
considered to have the same binding legal effect as if it were the original signed version thereof delivered
in person. At the request of any party hereto, each other party hereto or thereto shall re-execute original
forms hereof and deliver them to all other parties. No party hereto shall raise the use of a facsimile
machine, electronic mail, or other electronic transmission in which the actual signature is evident to
deliver a signature or the fact that any signature or agreement or instrument was transmitted or
communicated through the use of a facsimile machine, electronic mail or other electronic transmission in
which the actual signature is evident as a defense to the formation of a contract and each party forever
waives such defense. In proving this Agreement, it shall not be necessary to produce or account for more
than one such counterpart signed by the party against which enforcement is sought.
17.8
Section Headings. The headings of sections of this Agreement are inserted for
convenience only and shall not be considered for the purpose of determining the meaning or legal effect
of any provisions hereof.
17.9
Wiring of Funds. All amounts required to be paid by Agent or the Merchant
under any provision of this Agreement shall be made by wire transfer of immediately available funds
which shall be wired by Agent or Merchant, as applicable, no later as 2:00 p.m. (Eastern Time) on the
date that such payment is due; provided, however, that all of the information necessary to complete the
wire transfer has been received by Agent or Merchant, as applicable, by 10:00 a.m. (Eastern Time) on the
date that such payment is due. In the event that the date on which any such payment is due is not a
business day, then such payment shall be made by wire transfer on the next business day.
17.10 Nature of Remedies. No failure to exercise and no delay in exercising, on the
part of the Agent, any right, remedy, power, privilege or adjustment hereunder, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power, privilege, or adjustment
hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power,
privilege, or adjustment.
17.11 Entire Agreement. This Agreement contains the entire agreement between the
parties hereto with respect to the transactions contemplated hereby and supersedes and cancels all prior
agreements, including, but not limited to, all proposals, letters of intent or representations, written or oral,
with respect thereto.

34

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List of Exhibits
Exhibit 1(a) Store List.
Exhibit 1(b) Distribution Centers
Exhibit 3.1(b) Merchandise Level Adjustment Schedule.
Exhibit 3.1(c) Cost Factor Threshold Adjustment Schedule
Exhibit 3.4 Form of Letter of Credit.
Exhibit 4.1(c) Per Store, Per Diem Occupancy Expenses.
Exhibit 4.3 Allocation Schedule.
Exhibit 5.1(a) Inventory Taking Instructions.
Exhibit 5.2(b)(1) In-Transit Merchandise
Exhibit 5.2(b)(2) Merchandise File
Exhibit 5.2(b)(3) Previously Viewed/Rental Merchandise
Exhibit 7.1 Owned FF&E
Exhibit 8.1 Sale Guidelines
Exhibit 11.1(u) Promotional Calendar

36

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Hastings
Exhibit 1 (a)
Store List
Store #
9401
9402
9602
9604
9605
9606
9607
9608
9609
9610
9611
9614
9615
9618
9619
9620
9622
9623
9627
9628
9629
9630
9636
9639
9642
9647
9652
9655
9660
9661
9662
9663
9664
9666
9672
9674
9675
9676
9677
9678
9680
9681
9683
9685
9686
9688
9689
9690

Name
9401-Littleton
9402-Albuquerque
9602-Nacogdoches
9604-Amarillo
9605-Amarillo
9606-Carlsbad
9607-Garden City
9608-San Angelo
9609-Farmington
9610-San Marcos
9611-Alamogordo
9614-Abilene
9615-Dodge City
9618-Hobbs
9619-Seguin
9620-Albuquerque
9622-Victoria
9623-Conway
9627-Longview
9628-Brownwood
9629-Albuquerque
9630-Albuquerque
9636-Roswell
9639-Albuquerque
9642-Midland
9647-Santa Fe
9652-Lawton
9655-Ada
9660-Benton
9661-Ponca City
9662-Billings
9663-Wichita Falls
9664-Bryan
9666-Las Cruces
9672-Jonesboro
9674-Stillwater
9675-Enid
9676-Lawrence
9677-Kerrville
9678-Muskogee
9680-Missoula
9681-Rio Rancho
9683-Conroe
9685-Sherman
9686-Russellville
9688-Grand Junction
9689-Lake Jackson
9690-Hutchinson

Address
8500 WEST CRESTLINE AVE
12501 CANDELARIA RD NE
4501 NORTH STREET
2020 S. GEORGIA
4301 S.W. 45TH
1601 WEST PIERCE
2108 E. KANSAS AVENUE
4238 SUNSET DR
3020 E. 20TH ST.
917 S. HIGHWAY 80
805 N WHITE SANDS BLVD
4709 S. 14TH ST
1701 N. 14TH
1822 N. TURNER
1380 E. COURT ST.
6001-R LOMAS BLVD. N.E.
5206 N. NAVARRO
1360 HIGHWAY 64 WEST
405 W LOOP 281
600 N. CENTER AVENUE
4315 WYOMING N.E.
840 A JUAN TABO
1705 N. MAIN
6051 WINTER HAVEN ROAD, NW
3111 W. CUTHBERT
542 N. GUADALUPE
616 NW SHERIDAN ROAD
1140 LONNIE ABBOTT IND. BLVD.
1421 MILITARY ROAD
2900 N. 14TH STREET
1603 GRAND AVE.
2801 SOUTHWEST PARKWAY
725 EAST VILLA MARIA
2350 LOHMAN
1315 S. CARAWAY RD.
316 NORTH MAIN
610 S CLEVELAND, SUITE 104
1900 W. 23RD
501 MAIN STREET
2230 E. SHAWNEE
2501 BROOKS ST, STE A
1630 RIO RANCHO DR.
1306 W. DAVIS ST.
2114 TEXOMA PARKWAY
104 N. HAMPTON AVE.
2401 NORTH AVE.
208 W. HWY 332
416 EAST 30TH ST.

City
Littleton
Albuquerque
Nacogdoches
Amarillo
Amarillo
Carlsbad
Garden City
San Angelo
Farmington
San Marcos
Alamogordo
Abilene
Dodge City
Hobbs
Seguin
Albuquerque
Victoria
Conway
Longview
Brownwood
Albuquerque
Albuquerque
Roswell
Albuquerque
Midland
Santa Fe
Lawton
Ada
Benton
Ponca City
Billings
Wichita Falls
Bryan
Las Cruces
Jonesboro
Stillwater
Enid
Lawrence
Kerrville
Muskogee
Missoula
Rio Rancho
Conroe
Sherman
Russellville
Grand Junction
Lake Jackson
Hutchinson

State
CO
NM
TX
TX
TX
NM
KS
TX
NM
TX
NM
TX
KS
NM
TX
NM
TX
AR
TX
TX
NM
NM
NM
NM
TX
NM
OK
OK
AR
OK
MT
TX
TX
NM
AR
OK
OK
KS
TX
OK
MT
NM
TX
TX
AR
CO
TX
KS

Zip
80123
87112
75961
79109
79109
88220
67846
76904
87402
78666
88310
79605
67801
88240
78155
87110
77901
72032
75605
76801
87111
87123
88201
87120
79701
87501
73505
74820
72015
74601
59102
76308
77801
88007
72401
74075
73703
66046
78028
74403
59801
87124
77304
75090
72802
81501
77566
67502

Selling
Sq. Ft.
38,379
17,753
23,894
24,234
24,071
14,563
14,336
26,770
25,262
30,342
20,510
24,430
17,507
18,114
13,854
21,298
22,980
26,835
22,699
17,210
33,312
21,068
20,925
22,980
27,140
15,145
26,381
19,225
22,994
21,023
22,828
29,020
21,827
31,723
22,802
23,592
18,312
27,792
23,798
23,186
23,191
11,398
26,770
22,862
22,780
18,484
21,442
22,978

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Hastings
Exhibit 1 (a)
Store List
Store #
9691
9692
9693
9694
9695
9696
9697
9698
9699
9701
9702
9703
9707
9715
9719
9724
9726
9727
9729
9730
9736
9737
9739
9740
9741
9744
9745
9746
9747
9750
9757
9758
9759
9760
9767
9768
9769
9770
9801
9802
9803
9807
9810
9813
9817
9822
9823
9824

Name
9691-Greenville
9692-Ardmore
9693-Helena
9694-Kingman
9695-Idaho Falls
9696-Coeur D'Alene
9697-Searcy
9698-Altus
9699-Jefferson City
9701-Maryville
9702-Richmond
9703-Fort Smith
9707-Grand Island
9715-Richmond
9719-Auburn
9724-Gillette
9726-Bartlesville
9727-Moscow
9729-Moses Lake
9730-Fremont
9736-Mountain Home
9737-Batesville
9739-Hays
9740-Dyersburg
9741-Tullahoma
9744-Butte
9745-Richland
9746-Mt. Pleasant
9747-Montrose
9750-Lubbock
9757-Clovis
9758-Canon City
9759-Meridian
9760-Amarillo
9767-Alexandria
9768-Lubbock
9769-Nampa
9770-Kearney
9801-Lake Havasu
9802-Sierra Vista
9803-Bozeman
9807-Ogden
9810-Yuma
9813-Boise
9817-Boise
9822-Boise
9823-Laramie
9824-Rock Springs

Address
5101 WESLEY ST.
601 NORTH COMMERCE STREET
3215 N. MONTANA AVE.
3153 STOCKTON HILL ROAD
540 EAST 17TH STREET
101 BEST AVE.
105 NORTH POPLAR
1700 NORTH MAIN ST.
2233 MISSOURI BLVD.
501 N. FOOTHILLS PLAZA DRIVE
4601 NATIONAL ROAD EAST
6808 ROGERS AVE.
2300 WEBB RD STE. 102
2193 LANTERN RIDGE DR
750 EAST GLENN AVE.
2610 S.DOUGLAS HWY ST 300BX12
3005 E. FRANK PHILLIPS BLVD.
2230 WEST PULLMAN RD
601 SOUTH PIONEER WAY
900 E 23rd STREET STE 140
950 HIGHWAY 62 EAST
2340 HARRISON STREET
3300 VINE
650 US HIGHWAY 51 BY-PASS W
1905 JACKSON STREET
2307 HARRISON AVENUE
1425 GEORGE WASHINGTON WAY
2306 S. JEFFERSON AVE.
2201-A SOUTH TOWNSEND
8209 SLIDE RD.
1925 N. PRINCE
1811 FREMONT DRIVE
1769 NORTH LAKES AVENUE
5512 GEM LAKE RD
1460 MACARTHUR DR
3249 50TH ST.
1870 CALDWELL BLVD.
5027 2nd AVE STE 43
321 LAKE HAVASU AVENUE N.
3758 EAST FRY BLVD.
1601 W. MAIN
340 EAST 525 NORTH
2820 S. 4TH AVENUE
7500 FAIRVIEW AVE.
10539 OVERLAND ROAD
680 E. BOISE AVENUE
654 NORTH 3RD ST.
1451 DEWAR DRIVE

City
Greenville
Ardmore
Helena
Kingman
Idaho Falls
Coeur D'Alene
Searcy
Altus
Jefferson City
Maryville
Richmond
Fort Smith
Grand Island
Richmond
Auburn
Gillette
Bartlesville
Moscow
Moses Lake
Fremont
Mountain Home
Batesville
Hays
Dyersburg
Tullahoma
Butte
Richland
Mt. Pleasant
Montrose
Lubbock
Clovis
Canon City
Meridian
Amarillo
Alexandria
Lubbock
Nampa
Kearney
Lake Havasu
Sierra Vista
Bozeman
Ogden
Yuma
Boise
Boise
Boise
Laramie
Rock Springs

State
TX
OK
MT
AZ
ID
ID
AR
OK
MO
TN
IN
AR
NE
KY
AL
WY
OK
ID
WA
NE
AR
AR
KS
TN
TN
MT
WA
TX
CO
TX
NM
CO
ID
TX
LA
TX
ID
NE
AZ
AZ
MT
UT
AZ
ID
ID
ID
WY
WY

Zip
75402
73401
59602
86401
83404
83814
72143
73521
65109
37801
47374
72903
68803
40475
36830
82718
74006
83843
98837
68025
72653
72501
67601
38024
37388
59701
99354
75455
81401
79424
88101
81212
83646
79106
71301
79413
83651
68847
86403
85635
59715
84404
85364
83704
83709
83706
82072
82901

Selling
Sq. Ft.
20,080
16,235
20,675
14,706
19,508
27,641
20,600
17,344
20,187
21,299
19,261
23,078
15,384
20,497
23,000
22,873
18,410
18,228
13,763
7,299
12,629
13,384
16,635
13,303
18,138
14,211
22,828
18,230
14,515
22,675
14,716
14,302
17,900
13,059
22,700
26,110
20,201
7,393
22,600
26,605
29,633
19,060
25,168
24,530
20,758
17,574
20,223
17,710

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Hastings
Exhibit 1 (a)
Store List
Store #
9826
9827
9828
9830
9831
9832
9836
9840
9850
9851
9865
9866
9867
9869
9874
9876
9878
9879
9880
9883
9885
9887
9890
9891
9894
9895
9896
123

Name
9826-Waco
9827-Tyler
9828-Veradale
9830-Spokane
9831-Spokane
9832-Wenatchee
9836-Norman
9840-Great Falls
9850-Logan
9851-Prescott
9865-Twin Falls
9866-St. Joseph
9867-Yukon
9869-Cape Girardeau
9874-Bullhead
9876-Manhattan
9878-Poplar Bluff
9879-Kirksville
9880-Stephenville
9883-Waxahachie
9885-Warrensburg
9887-Lewiston
9890-Killeen
9891-Odessa
9894-Murfreesboro
9895-New Braunfels
9896-Clarksville

Address
5526 BOSQUE BLVD.
4015 SOUTH BROADWAY AVE
15312 E SPRAGUE AVENUE
2512 E. 29TH AVENUE
1704 WEST WELLESLEY
315 NINTH STREET
2300 W. MAIN
726 10TH AVENUE SOUTH
50 E 400 NORTH
940 WILLOW CREEK RD.
870 BLUE LAKES N.BLV
605 N. BELT HIGHWAY
1155 GARTH BROOKS BLVD.
2136 WILLIAM SUITE #165
1985 HIGHWAY 95
626 TUTTLE CREEK RD
950 N. WESTWOOD BLVD
1800 N. BALTIMORE
2900 W. WASHINGTON STE 10A
791 NORTH HIGHWAY 77 SUITE 101
723 N. CHARLES
139 THAIN RD
1500 LOWES BLVD
3897 E. 42ND STREET
1660 MEMORIAL BLVD
651 BUSINESS LOOP IH-35
1600 FT. CAMPBELL BLVD.

City
Waco
Tyler
Veradale
Spokane
Spokane
Wenatchee
Norman
Great Falls
Logan
Prescott
Twin Falls
St. Joseph
Yukon
Cape Girardeau
Bullhead
Manhattan
Poplar Bluff
Kirksville
Stephenville
Waxahachie
Warrensburg
Lewiston
Killeen
Odessa
Murfreesboro
New Braunfels
Clarksville

State
TX
TX
WA
WA
WA
WA
OK
MT
UT
AZ
ID
MO
OK
MO
AZ
KS
MO
MO
TX
TX
MO
ID
TX
TX
TN
TX
TN

Zip
76710
75701
99037
99223
99205
98801
73069
59405
84321
86301
83301
64506
73099
63703
86442
66502
63902
63501
76401
75165
64093
83501
76542
79762
37129
78130
37042

Selling
Sq. Ft.
28,847
21,065
27,503
23,250
23,715
21,067
31,186
22,563
21,213
19,671
18,335
23,510
23,545
19,504
16,739
24,315
18,539
15,850
18,291
20,423
18,490
20,988
31,450
22,645
26,420
17,173
20,431
21,086

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Hastings
Exhibit 1 (b)
Distribution Center List

DC
7100

Name
7100-Amarillo

Address
3601 Plains Blvd

City
Amarillo

State

Zip

TX

79102

Selling
Sq. Ft.

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Hastings
Exhibit 3.1(b)
Merchandise Threshold
Cost
Value
120,400,000
120,100,000
119,800,000
119,500,000
119,200,000
118,900,000
118,600,000
118,300,000
118,000,000
117,700,000
117,400,000
117,100,000
116,800,000
116,500,000
116,200,000
115,900,000
115,600,000
115,300,000
115,000,000
114,500,000
114,000,000
106,000,000

Adjustment
Points

Adjusted
Guaranty

0.28%
0.28%
0.28%
0.25%
0.25%
0.25%
0.20%
0.20%
0.20%
0.15%
0.15%
0.15%
0.15%
0.13%
0.13%
0.13%
0.13%
0.10%
0.10%
0.10%

71.39%
71.67%
71.95%
72.23%
72.48%
72.73%
72.98%
73.18%
73.38%
73.58%
73.73%
73.88%
74.03%
74.18%
74.31%
74.44%
74.57%
74.70%
74.80%
74.90%
75.00%
75.00%

105,500,000

0.05%

74.95%

105,000,000

0.05%

74.90%

104,700,000

0.10%

74.80%

104,400,000

0.10%

74.70%

104,100,000

0.10%

74.60%

103,800,000

0.13%

74.47%

103,500,000

0.13%

74.34%

103,200,000

0.13%

74.21%

102,900,000

0.15%

74.06%

102,600,000

0.15%

73.91%

102,300,000

0.15%

73.76%

102,000,000

0.18%

73.58%

101,700,000

0.18%

73.40%

101,400,000

0.18%

73.22%

101,100,000

0.20%

73.02%

100,800,000

0.20%

72.82%

100,500,000

0.20%

72.62%

100,200,000

0.23%

72.39%

99,900,000

0.23%

72.16%

99,600,000

0.23%

71.93%

Note(s):
1. Adjustments between the increments shall be on a prorata basis.
2. In the event that the Cost value of the Merchandise is greater than $120,400,000, each
$300,000 (or pro rata portion thereof) increment shall decrease the Guaranty by 0.3%.
3. In the event that the Cost value of the Merchandise is less than $99,600,000, each $300,000
(or pro rata portion thereof) increment shall decrease the Guaranty by 0.25%.

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Hastings
Exhibit3.1(c)
CostFactor(New)
Cost
Factor
58.50%
58.60%
58.70%
58.80%
58.90%
59.00%
59.10%
59.20%
59.30%
59.40%
59.50%
59.60%
59.70%
59.80%
59.90%
60.00%
60.10%
60.20%
60.30%
60.40%
60.50%

Adjustment
Points

Adjusted
Guaranty

0.16%
0.16%
0.16%
0.16%
0.16%
0.16%
0.16%
0.16%
0.16%
0.16%
0.16%
0.16%
0.16%
0.16%
0.16%
0.16%
0.16%
0.16%
0.16%
0.16%

75.00%
74.84%
74.68%
74.52%
74.36%
74.20%
74.04%
73.88%
73.72%
73.56%
73.40%
73.24%
73.08%
72.92%
72.76%
72.60%
72.44%
72.28%
72.12%
71.96%
71.80%

Notes:
1.Adjustmentsbetweentheincrementsshallbeonaproratabasis.
2.IntheeventthattheCostFactorofMerchandiseisgreaterthan60.50%,each0.10%(or
prorataportionthereof)incrementshalldecreasetheGuarantyby0.16%.

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Exhibit 3.4
Form of Letter of Credit

7/20/2016 4:07 PM

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FORM OF AGENT LETTER OF CREDIT

[NAME OF ISSUING BANK]
[ADDRESS]
Date: ______________, 2016

Irrevocable Standby Letter of Credit Number: ________

BENEFICIARY:

_______________________
_______________________
_______________________
_______________________

Credit No.: _______

Openers Reference No.: ________
Gentlemen:
BY ORDER OF:

___________________

We hereby open in your favor our Irrevocable Standby Letter of Credit (the Letter of Credit)
for the account of _________________ (the Agent) for a sum or sums not exceeding a total of
__________ U.S. Dollars (__________________________) available by your draft(s) at SIGHT
on OURSELVES effective immediately and expiring at OUR COUNTERS on _____________,
2015, or such earlier date on which the Beneficiary shall notify us in writing that this Letter of
Credit shall be terminated accompanied by the original Letter of Credit (the Expiry Date).
Draft(s) must be accompanied by the original of this Letter of Credit and a signed statement in
the form attached hereto as Exhibit A signed by an officer of _______________ (the
Beneficiary).
This Letter of Credit may be reduced from time to time when accompanied by a signed statement
from the Beneficiary in the form attached as Exhibit B.
If a drawing is received by __________________ at or prior to 12:00 noon, Eastern Time, on a
Business Day, and provided that such drawing conforms to the terms and conditions hereof,
payment of the drawing amount shall be made to the Beneficiary, as directed below, in
immediately available funds on the next Business Day. If however, a drawing is received by
_______________ after 12:00 noon, Eastern Time, on a Business Day, and provided that such

7/20/2016 4:07 PM

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drawing conforms with the terms and conditions hereof, payment of the drawing amount shall be
made to the Beneficiary in immediately available funds on the second succeeding Business Day.
As used in this Letter of Credit, Business Day shall mean any day other than Saturday, Sunday
or a day on which banking institutions in ____________________ are required or authorized to
close.
Partial and/or multiple drawings are permitted.
Each draft must bear upon its face the clause, Drawn under Letter of Credit No. _________,
dated _______________, 20[ ] of [NAME AND ADDRESS OF ISSUING BANK].
Except so far as otherwise expressly stated herein, this Letter of Credit is subject to the Uniform
Customs and Practices for Documentary Credits (2007 Revision), International Chamber of
Commerce Publication No. 600.
We hereby agree that drafts drawn under and in compliance with the terms of this Letter of
Credit will be duly honored if presented to the above mentioned drawee bank on or before the
Expiry Date.
Kindly address all correspondence regarding this Letter of Credit to the attention of our Letter of
Credit Operations, [ADDRESS OF L/C DEPARTMENT OF ISSUING BANK] attention
_____________, mention our reference number as it appears above. Telephone inquiries can be
made to ______________ at _____________.
Very truly yours,

Authorized official

7/20/2016 4:07 PM

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Page 49 of 69

EXHIBIT A
IRREVOCABLE STANDBY LETTER OF CREDIT NO. ________
Re:

Drawing for Amounts Due to:

_______________________
_______________________
_______________________
_______________________

Ladies and Gentlemen:

The undersigned refer to your Letter of Credit No. _______ (the Letter of Credit). Capitalized
terms used but not defined herein, shall have the meaning assigned to them in the Letter of Credit.
The undersigned, duly authorized officer of _______________, in their capacity as Beneficiary of
the Letter of Credit hereby certifies to you that:
(i)

_______________ (the Agent) has not made a payment when due of or for the
Guaranteed Amount or Expenses due by the Agent to _______________ (the
Merchant), pursuant to, and as such terms are defined in that certain Agency
Agreement, dated as of ____________, 2015, by and between the Merchant on
the one hand, and the Agent, on the other.

(ii)

The amount to be drawn is $_____________ (the Amount Owing).

(iii)

Payment is hereby demanded in an amount equal to the lesser of (a) the Amount
Owing and (b) the face amount of the Letter of Credit as of the date hereof.

(iv)

The Letter of Credit has not expired prior to the delivery of this letter and the
accompanying sight draft.

(v)

In accordance with the terms of the Letter of Credit, the payment hereby
demanded is requested to be made by wire transfer to the following account:

[_________________________]
[_________________________]
[_________________________]
Further Credit to: [Account Title]
[Account No. ______________]
IN WITNESS WHEREOF, the undersigned have executed and delivered this certificate as of this
_____ day of __________, 20[ ].

By: _________________________
Name: _______________________
Title: ________________________
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Case 16-11452-KJC

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EXHIBIT B
IRREVOCABLE STANDBY LETTER OF CREDIT NO. _________
Re:

Reduction of Face Amount

_______________________
_______________________
_______________________
_______________________
Ladies and Gentlemen:
The undersigned refer to your Letter of Credit No. _______ (the Letter of Credit). Capitalized
terms used but not defined herein, shall have the meaning assigned to them in the Letter of
Credit. The undersigned, duly authorized officer of _______________, in their capacity as
Beneficiary of the Letter of Credit hereby confirms to you that the face amount of the Letter of
Credit No. _________ shall be reduced from its original face amount to a new face amount of
$_________.
IN WITNESS WHEREOF, the undersigned have executed and delivered this certificate as of this
_____ day of __________, 20[ ].

By: _________________________
Name: _______________________
Title: ________________________

7/20/2016 4:07 PM

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Hastings Entertainment, Inc.

Occupancy Per Diem
Schedule 4.1
# Store #
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38

9401
9402
9602
9604
9605
9606
9607
9608
9609
9610
9611
9614
9615
9618
9619
9620
9622
9623
9627
9628
9629
9630
9636
9639
9642
9647
9652
9655
9660
9661
9662
9663
9664
9666
9672
9674
9675
9676

Location

Rent

8500 W Crestline, Littleton, CO

12501 Candelaria Road Northeast, Albuquerque, NM
4501 North Street, Nacogdoches, TX
2020 S. Georgia, Amarillo, TX
Western Square Shopping Center, Amarillo, TX
Northgate Shopping Center, Carlsbad, NM
2108 E. Kansas Ave., Garden City, KS
Sunset Plaza Shopping Center, San Angelo, TX
San Juan Shoping Center, Farmington, NM
San Mar Plaza Shopping Center, San Marcos, TX
Veterans Plaza, Alamogordo, NM
Frenchman's Creek Shopping Center, Abilene, TX
Comanche Plaza Shopping Center, Dodge City, KS
1822 N. Turner St., Hobbs, NM
1380 E. Court St., Seguin, TX
Fair Plaza, Albuquerque, NM
Victoria Crossings Shopping Center, Victoria, TX
Ridge Plaza, Conway, AR
Oak Forest Plaza Shopping Center, Longview, TX
600 N. Center Ave, Brownwood, TX
LaMirada Shopping Center, Albuquerque, NM
Manzano Center, Albuquerque, NM
Old Post Plaza Shopping Center, Roswell, NM
Montano Plaza II, Albuquerque, NM
Cuthbert Plaza, LLC, Midland, TX
DeVargas Center, Santa Fe, NM
616 NW Sheridan Rd., Lawton, OK
North Hills Shopping Center, Ada, OK
1421 Military Rd., Benton, AR
2900 N. 14th St., Ponca City, OK
West Park Plaza, Billings, MT
Hobby Lobby Plaza - The Falls, Wichita Falls, TX
Tejas Center West, Bryan, TX
2350 Lohman, Space D, Las Cruces, NM
Caraway Plaza, Jonesboro, AR
316 N. Main Street, Stillwater, OK
Sunset Plaza Shopping Center, Enid, OK
Southwest Plaza, Lawrence, KS

1,155
1,031
621
1,077
399
226
475
1,232
707
1,088
1,069
1,052
286
477
282
653
1,033
836
597
357
749
906
986
1,030
584
942
747
494
435
374
967
492
817
722
610
841
392
1,235

Utilities
220
152
102
161
150
82
119
171
150
212
222
118
133
112
112
186
138
104
135
82
265
187
120
179
199
94
120
125
150
147
127
148
127
201
113
238
117
167

Telephone
and Wi-Fi

Store
Security

54
48
44
63
64
46
43
52
59
43
53
50
42
47
48
52
50
47
52
45
49
56
50
53
54
46
46
44
49
43
58
57
44
53
54
48
47
48

DRAFTSubjecttoChangePrivilegedandConfidential

5
19
7
11
12
5
6
12
12
5
11
9
5
7
12
21
9
6
7
6
20
15
6
20
3
12
9
8
7
7
9
7
4
8
8
14
12
6

Repairs and
Maintenance
114
95
122
165
138
95
98
168
137
123
162
132
55
101
71
99
113
94
125
74
124
88
154
122
132
74
125
72
95
80
112
121
76
135
125
130
110
98

Taxes and
Licenses
99
27
95
135
100
17
15
161
27
103
15
139
14
9
56
17
113
53
91
86
31
27
10
29
82
18
53
40
51
48
22
134
97
18
43
66
64
9

Insurance
56
18
23
35
26
27
18
38
44
28
29
36
14
20
14
25
33
30
34
23
39
22
23
33
29
31
29
23
24
16
36
33
20
27
25
29
21
23

Total
1,702
1,390
1,014
1,645
889
497
773
1,835
1,136
1,601
1,561
1,537
548
772
597
1,053
1,488
1,171
1,041
671
1,277
1,301
1,350
1,465
1,083
1,217
1,130
805
811
716
1,331
991
1,184
1,165
977
1,367
763
1,585

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Hastings Entertainment, Inc.

Occupancy Per Diem
Schedule 4.1
#
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76

Store #
9677
9678
9680
9681
9683
9685
9686
9688
9689
9690
9691
9692
9693
9694
9695
9696
9697
9698
9699
9701
9702
9703
9707
9715
9719
9724
9726
9727
9729
9730
9736
9737
9739
9740
9741
9744
9745
9746

Location
501 Main St., Kerrville, TX
Curt's Shopping Center, Muskogee, OK
2501 Brooks Street, Suite A, Missoula, MT
Hilltop Plaza, Rio Rancho, NM
Towne Center North S/C, Conroe, TX
Texoma Square Shopping Center, Sherman, TX
104 N. Hampton, Russellville, AR
Teller Arms Shopping Center, Grand Junction, CO
Jackson Square Center, Lake Jackson, TX
Farmington Plaza Shopping Center, Hutchinson, KS
Town South Shopping Center, Greenville, TX
Ardmore Shopping Center, Ardmore, OK
North City Center, Helena, MT
Kingman Square, Kingman, AZ
17th Street Shopping Center, Idaho Falls, ID
Coeur d'Alene Mall S/C, Coeur d'Alene, ID
105 North Poplar, Searcy, AR
Northtown Shopping Center, Altus, OK
2233 Missouri Blvd., Jefferson City, MO
501 N. Foothills Plaza Dr., Maryville, TN
4601 National Road East, Richmond, IN
Rogers Avenue Shopping Center, Fort Smith, AR
Grand Island Mall, Grand Island, NE
Richmond Centre, Richmond, KY
Glendean Shopping Center, Auburn, AL
Powder Basin S/C, Gillette, WY
Bartlesville Plaza Shopping Center, Bartlesville, OK
Palouse Empire Mall, Moscow, ID
Grant County Mall, Moses Lake, WA
Hinky-Dinky Shopping Center, Fremont, NE
950 Hwy 62 East, Mountain Home, AR
Oaks Shopping Center, Batesville, AR
3300 Vine, Hays, KS
Green Village Shopping Ctr, Dyersburg, TN
Forrest Gallery Shopping Ctr, Tullahoma, TN
Harrington Shopping Center, Butte, MT
1425 George Washington Way, Richland, WA
Airport Plaza Shopping Center, Mt. Pleasant, TX

Rent
726
398
1,345
615
1,010
1,100
1,043
637
985
627
456
406
835
669
838
681
419
237
414
378
608
485
470
1,059
571
936
335
494
590
121
154
133
364
296
398
261
789
391

Utilities
156
20
158
128
250
147
207
142
136
184
184
133
112
109
63
148
155
127
125
98
104
141
103
112
177
127
133
92
63
53
76
128
120
74
130
77
78
106

Telephone
and Wi-Fi
48
44
55
44
47
50
49
44
50
47
52
46
53
42
53
58
47
43
47
68
48
42
43
57
50
51
43
48
58
12
46
49
44
64
61
45
51
47

Store
Security

DRAFTSubjecttoChangePrivilegedandConfidential

6
7
8
19
11
6
5
11
5
6
7
5
7
13
8
11
7
6
5
8
10
6
4
8
1
10
4
4
10
5
9
4
6
5
4
7
7
6

Repairs and
Maintenance
139
73
116
67
142
100
126
79
152
108
76
62
86
60
94
100
135
96
77
99
78
101
68
108
77
92
82
69
76
37
67
86
66
70
76
62
75
90

Taxes and
Licenses
82
48
30
12
111
95
47
15
100
16
96
33
23
11
33
29
37
31
11
15
32
45
7
56
29
17
58
31
20
8
27
30
8
10
10
12
23
72

Insurance
34
23
34
16
32
22
26
23
27
26
24
19
27
21
31
37
23
17
19
28
23
22
17
32
22
30
23
19
21
9
17
15
18
18
68
20
25
18

Total
1,192
614
1,746
901
1,602
1,521
1,502
952
1,455
1,014
895
703
1,144
924
1,121
1,063
823
557
698
694
903
842
713
1,432
927
1,263
678
757
839
245
395
445
626
537
748
484
1,047
730

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Hastings Entertainment, Inc.

Occupancy Per Diem
Schedule 4.1
#
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114

Store #
9747
9750
9757
9758
9759
9760
9767
9768
9769
9770
9801
9802
9803
9807
9810
9813
9817
9822
9823
9824
9826
9827
9828
9830
9831
9832
9836
9840
9850
9851
9865
9866
9867
9869
9874
9876
9878
9879

Location
Marketplace West S/C, Montrose, CO
Lakeridge Plaza, Lubbock, TX
Clovis Shopping Center, Clovis, NM
1811 Fremont Drive, Canon City, CO
Fairview Lakes Shopping Center, Meridian, ID
5512 Gem Lake Road, Amarillo, TX
1460 Macarthur Dr., Alexandria, LA
Monterey Shopping Center, Lubbock, TX
Canyon Plaza, Nampa, ID
Kearney (Hastings), Kearney, NE
321 Lake Havasu Ave. North, Lake Havasu, AZ
The Center of Sierra Vista, Sierra Vista, AZ
Hastings Shopping Center, Bozeman, MT
Harrisville Shopping Center, Harrisville, UT
Hastens Shopping Center, Yuma, AZ
Westgate Shopping Center, Boise, ID
Country Square Shopping Center, Boise, ID
Eastgate Shopping Center, Boise, ID
Gateway Plaza, Laramie, WY
Rock Springs Plaza, Rock Springs, WY
Bosque Plaza Shopping Ctr, Waco, TX
Rose Plaza, Tyler, TX
Sullivan Square, Spokane Valley, WA
Lincoln Heights Plaza Shopping Ctr, Spokane, WA
Shadle Park Center, Spokane, WA
315 Ninth St., Wenatchee, WA
Normandy Square Shopping Center, Norman, OK
726 10th Ave. South, Great Falls, MT
50 East 400 North, Logan, UT
940 Willow Creek Rd., Prescott, AZ
Twin Falls Plaza Shopping Center, Twin Falls, ID
Hillcrest Plaz, St. Joseph, MO
Chisholm Shopping Center, Yukon, OK
Town Plaza, Cape Giradeau, MO
1985 Hwy 95, Bullhead City, AZ
626 Tuttle Creek Blvd., Manhattan, KS
950 N. Westwood Blvd., Poplar Bluff, MO
1800 N. Baltimore St., Kirksville, MO

Rent
324
1,021
339
397
579
563
874
855
998
102
949
714
780
881
1,047
716
527
399
458
539
866
465
730
1,030
715
530
180
1,279
779
768
516
602
515
423
349
1,238
342
298

Utilities
111
152
74
137
72
81
166
241
92
61
189
170
151
131
267
91
88
85
111
99
115
140
102
99
181
88
198
109
121
177
91
148
229
150
133
176
153
125

Telephone
and Wi-Fi
45
57
48
47
48
54
60
63
51
12
51
45
48
71
49
48
45
43
52
52
49
49
50
53
60
55
47
51
48
45
43
43
42
43
42
47
43
41

Store
Security

DRAFTSubjecttoChangePrivilegedandConfidential

5
9
6
6
6
6
7
13
11
4
12
6
8
9
7
6
6
12
5
9
10
9
6
5
10
7
7
8
7
4
8
5
5
7
12
8
7
4

Repairs and
Maintenance
65
134
90
59
88
114
148
139
91
40
111
110
118
102
90
81
64
54
77
120
104
76
97
79
87
113
157
122
96
115
70
95
115
99
83
125
80
64

Taxes and
Licenses
13
88
10
13
22
72
80
102
44
9
16
22
23
22
22
36
34
27
13
15
123
84
23
24
31
22
88
14
17
10
17
27
51
18
11
16
18
16

Insurance
17
27
19
18
23
11
27
30
32
7
24
27
66
38
20
25
19
19
21
20
30
66
26
26
29
31
33
26
27
24
23
31
25
22
17
25
22
17

Total
581
1,487
585
678
839
901
1,362
1,443
1,320
234
1,351
1,095
1,195
1,255
1,503
1,004
783
638
737
853
1,297
889
1,035
1,318
1,113
848
710
1,609
1,095
1,143
768
950
982
761
647
1,634
665
566

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Filed 07/20/16

Page 54 of 69

Hastings Entertainment, Inc.

Occupancy Per Diem
Schedule 4.1
#
115
116
117
118
119
120
121
122
123

Store #
9880
9883
9885
9887
9890
9891
9894
9895
9896
Stores Total

Location
Bosque River Centre, Stephenville, TX
791 North Hwy 77, Waxahachie, TX
723 N. Charles, Warrensburg, MO
139 Thain Rd, Lewiston, ID
Expressway Plaza, Kileen, TX
Winwood Town Center, Odessa, TX
Northfield Crossing Shopping Center, Murfreesboro, TN
New Braunfels Marketplace, New Braunfels, TX
Cunningham Place Shopping Center, Clarksville, TN

Rent
339
839
509
464
1,115
621
610
477
404
80,311

Utilities
86
135
114
112
170
93
182
131
121
16,612

Telephone
and Wi-Fi
45
51
44
49
50
54
65
47
56
6,046

Store
Security
7
5
8
5
10
5
5
8
4
973

Repairs and
Maintenance
90
109
72
87
113
112
113
102
90
12,179

Taxes and
Licenses
77
92
18
16
118
105
11
84
13
5,413

Insurance
19
23
23
27
28
31
32
25
20
3,196

Total
663
1,254
787
761
1,604
1,021
1,016
873
708
124,731

Notes:
1) Per Diem amounts are based on estimated expenses for July, August, September and October.
2) Landlord payments reflect all expenses paid to landlords, including Base Rent, CAM, and any other expenses paid directly to Landlords.
3) Taxes represent personal property and other miscellaneous taxes. Taxes do not include real estate taxes.
4) Insurance includes Property and General Liability Insurance.
5) The following 15 properties have percentage rent obligations included as occupancy expenses. The % Rent and the Sales Breakpoint for % Rent is provided below.
Percentage Rent Details

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Store #
9607
9639
9647
9664
9666
9672
9697
9715
9813
9830
9836
9867
9885
9887
9896

Location
2108 E. Kansas Ave., Garden City, KS
Montano Plaza II, Albuquerque, NM
DeVargas Center, Santa Fe, NM
Tejas Center West, Bryan, TX
2350 Lohman, Space D, Las Cruces, NM
Caraway Plaza, Jonesboro, AR
105 North Poplar, Searcy, AR
Richmond Centre, Richmond, KY
Westgate Shopping Center, Boise, ID
Lincoln Heights Plaza Shopping Ctr, Spokane, WA
Normandy Square Shopping Center, Norman, OK
Chisholm Shopping Center, Yukon, OK
723 N. Charles, Warrensburg, MO
139 Thain Rd, Lewiston, ID
Cunningham Place Shopping Center, Clarksville, TN

% Rent
2.00%
2.00%
4.00%
3.00%
2.00%
2.00%
1.00%
3.00%
3.00%
3.00%
1.20%
2.00%
6.00%
3.00%
3.00%

Sales Breakpoint for

% Rent
2,500,000
19,837,500
5,304,000
4,775,200
9,576,528
10,072,000
4,228,000
8,075,200
4,500,000
14,925,000
2,200,000
7,331,250
6,596,700
4,425,000
3,460,800

DRAFTSubjecttoChangePrivilegedandConfidential

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Filed 07/20/16

Exhibit 4.3
Allocation Schedule
To be mutually agreed upon by the Merchant and Agent.

Page 55 of 69

Case 16-11452-KJC

Doc 421-1

Filed 07/20/16

Exhibit 5.1(a)
Inventory Taking Instructions
To be mutually agreed upon by the Merchant and Agent.

Page 56 of 69

Case 16-11452-KJC

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Filed 07/20/16

Exhibit5.2(b)(1)

InTransitMerchandiseFiles:

intransit_07162016.csv

Page 57 of 69

Case 16-11452-KJC

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Filed 07/20/16

Exhibit5.2(b)(2)

MerchandiseFiles:
05312016_Inv_for_dept_BIKES.txt
05312016_Inv_for_dept_COMICS.txt
05312016_Inv_for_dept_CONSUMABLES.txt
05312016_Inv_for_dept_ELECTRONICS.txt
05312016_Inv_for_dept_GAMES.txt
05312016_Inv_for_dept_HBC.txt
05312016_Inv_for_dept_MOVIES.txt
05312016_Inv_for_dept_MUSIC.txt
05312016_Inv_for_dept_MUSICALINSTRUMENTS.txt
05312016_Inv_for_dept_NEWSTAND.txt
05312016_Inv_for_dept_OTHER.txt
05312016_Inv_for_dept_part1_BOOK.txt
05312016_Inv_for_dept_part2_BOOK.txt
05312016_Inv_for_dept_PULSE.txt
05312016_Inv_for_dept_RECREATION&LIFESTYLES.txt
05312016_Inv_for_dept_SOFTWARE.txt
05312016_Inv_for_dept_WIRELESS.txt

merch_item_07172016.csv
clearance_item_07172016.csv

Page 58 of 69

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Exhibit 5.2 (b) (3)

Previously Viewed/Rental files:

pv_item_07112016.csv
rental_item_07112016.csv

Page 59 of 69

Case 16-11452-KJC

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Exhibit7.1

OwnedFF&E
StoreandDistributionCenterFF&Easof05.31.2016.xlsx

Page 60 of 69

Case 16-11452-KJC

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Exhibit 8.1

Page 61 of 69

Case 16-11452-KJC

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Filed 07/20/16

Page 62 of 69

SALE GUIDELINES
A.
The Sale shall be conducted so that the Stores in which sales are to occur will remain open no longer
than during the normal hours of operation provided for in the respective leases for the Stores.
B.
The Sale shall be conducted in accordance with applicable state and local Blue Laws, where
applicable, so that no Sale shall be conducted on Sunday unless the Merchant had been operating such Store on
a Sunday.
C.
On shopping center property, the Agent shall not distribute handbills, leaflets or other written
materials to customers outside of any Stores premises, unless permitted by the lease or, if distribution is
customary in the shopping center in which such Store is located; provided that Agent may solicit customers in
the Stores themselves. On shopping center property, the Agent shall not use any flashing lights or amplified
sound to advertise the Sale or solicit customers, except as permitted under the applicable lease or agreed to by
the landlord.
D.
At the conclusion of the Sale, the Agent shall vacate the Stores in broom clean condition, and shall leave
the Locations in the same condition as on Sale Commencement Date, ordinary wear and tear excepted, in
accordance with Section 6 of the Agency Agreement, provided, however, that the Merchant and the Agent
hereby do not undertake any greater obligation than as set forth in an applicable lease with respect to a Store.
The Agent and Merchant may abandon any FF&E not sold in the Sale at the Stores at the conclusion of the Sale.
Any abandoned FF&E left in a Store after a lease is rejected shall be deemed abandoned to the landlord having a
right to dispose of the same as the landlord chooses without any liability whatsoever on the part of the landlord
to any party and without waiver of any damage claims against the Merchant. For the avoidance of doubt, as of
the Sale Termination Date, the Agent may abandon, in place and without further responsibility, any FF&E
located at a Store.
E.
The Merchant and the Agent may advertise the Sale as a going out of business, store closing sale
on everything, everything must go, or similar themed sale.
F.
Agent shall be permitted to utilize display, hanging signs, and interior banners in connection with the
Sale; provided, however, that such display, hanging signs, and interior banners shall be professionally produced
and hung in a professional manner. The Merchant and the Agent shall not use neon or day-glo on its display,
hanging signs, or interior banners. Furthermore, with respect to enclosed mall locations, no exterior signs or
signs in common areas of a mall shall be used unless otherwise expressly permitted in these Sale Guidelines. In
addition, the Merchant and the Agent shall be permitted to utilize exterior banners at (i) non-enclosed mall
Stores and (ii) enclosed mall Stores to the extent the entrance to the applicable Store does not require entry into
the enclosed mall common area; provided, however, that such banners shall be located or hung so as to make
clear that the Sale is being conducted only at the affected Store, shall not be wider than the storefront of the
Store, and shall not be larger than 4 feet x 40 feet. In addition, the Merchant and the Agent shall be permitted to
utilize sign walkers in a safe and professional manner and in accordance with the terms of the Approval Order.
Nothing contained in these Sale Guidelines shall be construed to create or impose upon the Agent any additional
restrictions not contained in the applicable lease agreement.
F.
Conspicuous signs shall be posted in the cash register areas of each of the affected Stores to effect that
all sales are final.
G.
Except with respect to the hanging of exterior banners, the Agent shall not make any alterations to the
storefront or exterior walls of any Stores.
H.
The Agent shall not make any alterations to interior or exterior Store lighting. No property of the
landlord of a Store shall be removed or sold during the Sale. The hanging of exterior banners or in-Store signage
and banners shall not constitute an alteration to a Store.
1
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Page 63 of 69

I.
The Agent shall keep Store premises and surrounding areas clear and orderly consistent with present
practices.
J.
Subject to the provisions of the Agency Agreement the Agent shall have the right to sell all furniture,
fixtures, and equipment located at the Stores and Distribution Center(s) (the FF&E). The Agent may advertise
the sale of the FF&E in a manner consistent with these guidelines at the Stores and Distribution Center(s). The
purchasers of any FF&E sold during the sale shall be permitted to remove the FF&E either through the back
shipping areas at any time, or through other areas after Store business hours. For the avoidance of doubt, as of
the Sale Termination Date, the Agent may abandon, in place and without further responsibility, any FF&E.
K.
The Agent shall be entitled to include Additional Agent Goods in the Sale in accordance with the terms
of the Approval Order and the Agency Agreement.
L.
At the conclusion of the Sale at each Store, pending assumption or rejection of applicable leases, the
landlords of the Stores shall have reasonable access to the Stores premises as set forth in the applicable leases.
The Merchant, the Agent and their agents and representatives shall continue to have exclusive and unfettered
access to the Stores.
M.
Post-petition rents shall be paid by the Merchant as required by the Bankruptcy Code until the rejection
or assumption and assignment of each lease. Agent shall have no responsibility therefor.
N.
The rights of landlords against Merchant for any damages to a Store shall be reserved in accordance
with the provisions of the applicable lease.
O.
If and to the extent that the landlord of any Store affected hereby contends that the Agent or Merchant is
in breach of or default under these Sale Guidelines, such landlord shall email or deliver written notice by
overnight delivery on the Merchants counsel and the Agents counsel as follows:
If to the Merchant:
Cooley LLP
1114 Avenue of the Americas
New York, NY 10036
Attention: Cathy Hershcopf and Michael A. Klein
If to the Agent:
Curtis, Mallet-Prevost, Colt & Mosle LLP
101 Park Avenue
New York, NY 10178
Attention: Steven J. Reisman and Cindi M. Giglio

2
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Exhibit 11.1(u)

Page 64 of 69

Case 16-11452-KJC

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Page 65 of 69

Hastings Entertainment
Hastings Coupon Data- As of 07/14/16
Coupon Code

Description

Start Date

End Date

2014 3 FOR 10 MAGIC PLAYER

3 Magic the Gathering Packs for $10

3/20/2014

12/31/2016

0% $

2014 CCG GAME PLAY

2014 COMICCON FREE MOVIE
2015 BB CAFE 1 OFF PM TO AM

Coupon to track Magic the Gathering Attendance

Free 9.99 or less Movielimit 1
$1 Off Caf drinks the following morning

3/27/2014
8/10/2015
1/1/2016

12/31/2016
12/31/2016
12/31/2016

0%
0%
0%

1.00

4SQUARE 5 OFF 25 1ST CHECKIN

4SQUARE 5 OFF 25 5TH CHECKIN
9301 13 15 OFF OTC CLUB
9301/9302 FEB 13 25 OFF SKATE
9302 13 15 OFF WTCA CLUB
9401 FEB 13 TRN 2 FOR 1 COMIC
9401 JUL15 BKS B1G1F1 USED BKS
9401 MAR 12 VHS CLAMSHELL
9401 SEP 13 TRN FREE VARIANT
9402 JUL 16 VID B1G1 PV/USED
9676/9865 TEST HAPPY HOUR 121
9676/9865 TEST HAPPY HOUR 45

$5 Off 25 purchased 4Square

$5 Off 25 purchased 4Square
15% off for the OTC Club (whole transaction)
25% Off Skate product at the Bike Stores (now closed)
15% off for the WTCA Club (whole transaction)
2 Comics for $1 (select comics, 9401 only)
Buy 1, Get 2nd for $1 Used Books priced 29.99 or less
VHS SellOff Coupon
Free Variant Comic with a Comic Subscription
Buy 1, get 2nd for $1 Used and PV Movies Priced 29.99 or les
Caf Happy Hour Coupon Set 1
Caf Happy Hour Coupon Set 2

7/25/2012
7/25/2012
3/5/2013
2/26/2013
3/5/2013
7/15/2013
7/28/2015
2/9/2014
8/22/2013
6/19/2016
11/5/2010
11/5/2010

12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
7/31/2016
12/31/2016
12/31/2016

0%
0%
15%
25%
15%
0%
0%
0%
0%
0%
0%
0%

5.00
5.00
-

9730 TRN B2G1F BB COMICS

APR 11 SAS AMA 20 PCT OFF
APR11 INT YELP 5 OFF 20 PURCH
APR15 9348 TNDR 10 OFF ALL
AUG 15 BKS BB SERIES
AUG 16 SBC 7/1 FREE KIDS RENT
AUG15 BRONCOS HB 25 OFF PLUSH
AUG15 HBC 9680 1 OFF CHEALTH
AUG15 HBC 9680 1 OFF UM STUDEN

Buy 2, Get 1 free Comics (bounceback offer)

Bike Store: 20% Off a single item
5 Off Your $20 Purchase
10% Off the entire transaction (9348 only)
Buy a book in a aseries, get $1 off another item in the series
Free Kids Rental for Summer Book Club
25% Off Broncos Plush
$1 Off Caf Drinks for Chealth Club
$1 Off Caf Drinks for UM Students (with id)

9/12/2015
4/15/2011
4/1/2011
4/21/2015
7/27/2015
7/1/2016
8/26/2015
9/3/2015
9/3/2015

12/31/2016
12/31/2016
12/31/2016
12/31/2020
7/30/2016
7/31/2016
12/31/2016
5/31/2017
5/31/2017

0%
20%
0%
10%
0%
0%
25%
0%
0%

5.00
1.00
1.00
1.00

AUG15 TRN FREE PREVIEW

AUG15 VG MADDEN EXCEPTION
DEC 13 RSV 20 OFF SG GUIDE MAG
DEC 13 RSV 20 OFF USED VG ACC
DEC 13 RSV 25 OFF USED VG
DEC 13 RSV R1G1 RENTAL
DEC 13 SAS 10 OFF BIKES
DEC 13 SAS 15 OFF BIKES
DEC 13 SAS 5 OFF BIKES
DEC 13 VG RSV FREE GAME RENTAL
DEC 14 CE 12/28 FREE CASE/HEAD
DEC 15 10 OFF PRCH STAR WARVII

Free Preview comic with purchase of another comic

Free Madden Game (exception offer for customers)
20% Off Strategy guides
20% Off Used Video Game accessories
25% Off Used Video Games
Rent 1, Get 1 Free Movie Rentals
10% Off Bikes
15% Off Bikes
5% Off Bikes
Free Game Rental
Free Case with headphones purchase
10% Off Star Wars VII Product

7/29/2015
8/25/2015
11/25/2013
11/25/2013
11/25/2013
11/25/2013
11/12/2013
11/12/2013
11/12/2013
11/25/2013
12/28/2014
12/18/2015

12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016

0%
0%
20%
20%
25%
0%
10%
15%
5%
0%
0%
1000%

Priveleged and Confidential

Page1 of 2

Percent Off

Disc. Amount
-

Draft- Subject to Change

Case 16-11452-KJC

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Page 66 of 69

Hastings Entertainment
Hastings Coupon Data- As of 07/14/16
Coupon Code

Description

DEC13 9401 VG RES B1G1 COMICS

DEC13 RSV BYBK 10 CRDT
DEC13 TS FS 10 OFF 25 PURCH
DEC13 VG RE 40 OFF USED DVD/BD
DEC14 VG RSV 10 OFF GAME
DEC14 VG RSV 10 OFF NEW ACCESS
DEC14 VG RSV 5 OFF GAME
DEC15 EM OMT 5 OFF 20 PRCH
DEC15 PASSPORT WELCOME
DEC15 VID EM OMT R1G1 FREE
FEB 15 VID 2/15 GOT W/FLEECE
FEB 15 VID FREE SHIRT W/INTER
FEB 15 VID GOT FLEECE BD
FEB 15 VID GOT FLEECE DVD
FEB 16 B1G1 50OFF POPVIN
FEB16 CE GUITAR 40 OFF DEMO
JAN 14 FB HSFOURSQUARE5 OFF 25
JAN 14 FB TSFOURSQUARE5 OFF 25
JAN 16 1/17 B1G1 USED MUSIC
JAN 16 VG 20 OFF ACCESSORY
JAN 16 VG 50 OFF USED
JUL 16 9401 VID B1G1
JUL 16 7/1 20OFF VINYL APP
JUL 16 7/1 EMAIL 5OFF20
JUL 16 7/1 VID R1G1 FREE

Buy 1, Get 2nd Free Comics (Video Game Reservations)

$10 Buyback Credit when you trade in 5 qualifying titles
$10 Off your $25 Purchase (Foursquare)
40% Off Used DVds and Bds
10% Off New Games
10% Off New Accessories
$5 Off a Game
$5 Off a $20 purchase
$10 Off a $20 Purchase welcome Offer
Rent 1, Get 1 Free Movie Rentals
Free Game of Thrones Fleece with Fleece Purchase
Free Shirt with the Interview dvd purchase
Free Game of Thrones Fleece with Series Purchase
Free Game of Thrones Fleece with Series Purchase
Buy 1, Get 2nd 50% Off Pop Vinyl
40% Off Guitar Demo Units
5 Off $25 Purchase
5 Off $25 Purchase
Buy 1, Get 2nd Free Used Music
20% Used Video Game Accessories
50% Off Used Video Games
Buy 1, Get 2nd Free Pv and Used Movies
20% Off Vinyl
5 Off $20 Purchase
Rent 1, Get 1 Free Movie Rentals

Priveleged and Confidential

Page2 of 2

Start Date

End Date

Percent Off

Disc. Amount

12/3/2013
11/25/2013
11/5/2013
12/3/2013
12/24/2014
12/24/2014
12/24/2014
12/7/2015
11/10/2015
12/7/2015
2/17/2015
2/17/2015
2/17/2015
2/17/2015
2/29/2016
2/16/2016
1/3/2014
1/3/2014
4/6/2016
1/1/2016
1/1/2016
6/19/2016
7/1/2016
6/29/2016
6/29/2016

12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
12/31/2016
1/7/2017
1/7/2017
7/31/2016
7/31/2016
7/31/2016
7/31/2016

0%
0%
0%
40%
10%
10%
0%
0%
10%
0%
0%
0%
0%
0%
50%
40%
0%
0%
0%
20%
50%
0%
20%
5%
0%

10.00
5.00
5.00
5.00
5.00
-

Draft- Subject to Change

Case 16-11452-KJC

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Filed 07/20/16

Page 67 of 69

Hastings Entertainment
Ad Checklist Force Pricing - Summary of SKUs, Product Codes, and Product Categories as of 7/13/16
Note: Certain promotions on the Promotion Calendar are processed through / included on the Ad Checklist. Ad Checklist Force Pricing is pricing set by Corporate.
The Merchandise File's Sell Price reflects the lower of Tag Price and Ad Checklist Force Price and is the price rung up at the register prior to coupons.

#
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56

Promo ID
62381
84169
87891
88135
88178
88714
89701
90398
90494
92169
92614
92616
92617
92618
92619
92620
92632
92635
92636
92638
92641
92642
92643
92644
92645
92646
92647
92648
92649
92651
92652
93319
93378
93432
93433
93502
93578
93752
93917
93920
93921
94173
94185
94235
94441
94583
94680
94682
94683
94830
94831
94832
94836
94838
94839
94840

Department
MOVIES FOR SALE
VIDEO GAMES
MUSIC
MUSIC
BOUTIQUE/GIFTS
ACCESSORIES
MUSIC
BOUTIQUE/GIFTS
MOVIES FOR SALE
MOVIES FOR SALE
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
ACCESSORIES
ACCESSORIES
BOUTIQUE/GIFTS
ACCESSORIES
VIDEO GAMES
ACCESSORIES
ACCESSORIES
BOUTIQUE/GIFTS
MOVIES FOR SALE
BOUTIQUE/GIFTS
BOUTIQUE/GIFTS
BOUTIQUE/GIFTS
MUSIC
MUSIC
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE

Privileged and Confidential

Promotion Description
SALE PRICED UNIVERSAL TITLES
JAN 15 VG WIIU BASIC DROP
Q2 15 MUS 3.99 ENDBIN
9402 6.99 4-WAY
JUN 15 TRN ACTION FIGURE $6.99
9401 JUL 15 CE PORT CLEARANCE
Q3 15 MUS 4.99-6.99 ENDBIN
OCT 15 TRN COMIC 0.25 SALE
OCT 15 VID INSURGENT FLEECE
DEC 15 VID STAR WARS DIG BD
JAN 16 CE DURACELL
JAN 16 CE FASHION SALE
JAN 16 CE KOSS SALE
JAN 16 CE PUMA
JAN 16 CE ACCELLORIZE SALE
JAN 16 CE SALE 2
CE 16 POP
CE 16 POP 2
JAN 16 CE TABLETS
JAN 16 CE KID ELECTRONICS
JAN 16 CE SALE
JAN 16 CE SALE 3
JAN 16 CE WESC 50
JAN 16 CE APP ENHANCED SALE
JAN 16 CE SC IFROGZ SALE
JAN 16 CE MP3 CLEARANCE
JAN 16 CE MP3 CLEARANCE 2
JAN 16 CE ANDROID TABLET SALE
JAN 16 CE DL AND NM SALE
JAN 16 CE MP3 CLEARANCE
JAN 16 CE MP3 CLEARANCE 2
FEB 16 CE BEM SPEAKER SALE
TRN POG 16 MOVIE GOT EC
FEB 16 PG VIDEO 4FT
FEB 16 PF VIDEO 4FT
9604 FEB 16 CE SKULLCANDY
9604 FEB 16 CE SONY 30
MAR 16 TRN SCORPIO POSTER
CE 16 SLOW MOVER CLEARANCE
VG 16 SLOW MOVER CLEARANCE
TRN 16 SLOW MOVER CLEARANCE
CE TURNTABLES
TRN POG 16 POSTER CONSIGN PRIC
MAR 16 VID BVS DOJ DIGITAL
APR 16 TRN 50 SW TOTE
APR 16 TRN .99 CANDY
KRL 16 KERUSSO NONPOG
Q2 16 MUS 5.99 TABLE
Q2 16 MUS 5.99 TABLE ADD
Q2 16 VID PRE SHCOOL
Q2 16 VID KIDS IFRAME
Q2 16 VID 5.99 DVD CORR
TS Q2 16 VID 5.99 DVD CORR
Q2 16 VID 7.99 DVD CORR
TS Q2 16 VID 7.99 DVD CORR
Q2 16 VID 9.99 DISC POG
Page 1 of 3

Start Date
5/29/2012
1/20/2015
6/17/2015
6/13/2015
6/19/2015
7/16/2015
8/25/2015
9/30/2015
10/7/2015
12/20/2015
1/4/2016
1/4/2016
1/4/2016
1/4/2016
1/4/2016
1/4/2016
1/4/2016
1/4/2016
1/4/2016
1/4/2016
1/4/2016
1/4/2016
1/4/2016
1/4/2016
1/4/2016
1/4/2016
1/4/2016
1/4/2016
1/4/2016
1/4/2016
1/4/2016
2/1/2016
2/7/2016
2/7/2016
2/7/2016
2/9/2016
2/12/2016
3/6/2016
3/2/2016
3/2/2016
3/2/2016
3/11/2016
3/11/2016
3/22/2016
3/30/2016
4/10/2016
5/22/2016
5/31/2016
5/31/2016
5/4/2016
5/4/2016
5/4/2016
5/4/2016
5/4/2016
5/4/2016
5/4/2016

End Date
12/31/2016
12/31/2016
8/20/2016
12/30/2018
1/31/2017
7/24/2017
8/20/2016
1/31/2017
12/31/2016
12/31/2016
1/4/2017
1/4/2017
1/4/2017
1/4/2017
1/4/2017
1/4/2017
1/4/2017
1/4/2017
1/4/2017
1/4/2017
1/4/2017
1/4/2017
1/4/2017
1/4/2017
1/4/2017
1/4/2017
1/4/2017
1/4/2017
1/4/2017
1/4/2017
1/4/2017
12/31/2016
1/31/2017
12/31/2016
12/31/2016
12/31/2016
12/31/2016
1/31/2017
12/31/2016
12/31/2016
12/31/2016
12/31/2016
1/31/2017
7/25/2016
1/31/2017
1/31/2017
12/31/2016
8/1/2016
8/1/2016
8/2/2016
8/2/2016
8/2/2016
8/2/2016
8/2/2016
8/2/2016
8/2/2016

# of SKUs
Impacted
107
2
3,570
4,104
336
900
1,993
20
4
7
36
330
42
59
40
86
13
20
30
140
268
280
50
14
42
362
472
70
90
328
438
2
42
160
164
182
58
1,160
336
247
815
4
432
5
12
21
140
2,808
328
300
484
304
76
260
260
360

# of Product Codes /
Categories Impacted
Draft - Subject to Change

Case 16-11452-KJC

Doc 421-1

Filed 07/20/16

Page 68 of 69

Hastings Entertainment
Ad Checklist Force Pricing - Summary of SKUs, Product Codes, and Product Categories as of 7/13/16
Note: Certain promotions on the Promotion Calendar are processed through / included on the Ad Checklist. Ad Checklist Force Pricing is pricing set by Corporate.
The Merchandise File's Sell Price reflects the lower of Tag Price and Ad Checklist Force Price and is the price rung up at the register prior to coupons.

#
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112

Promo ID
94841
94843
94845
94846
94848
94849
94850
94851
94852
94853
94854
94855
94856
94857
94858
94859
94862
94942
94959
95045
95046
95047
95048
95053
95055
95056
95057
95058
95059
95060
95061
95062
95063
95064
95065
95066
95067
95068
95069
95070
95080
95081
95084
95085
95087
95233
95234
95237
95238
95239
95240
95379
95395
95403
95445
95462

Department
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MUSIC
BOUTIQUE/GIFTS
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
ACCESSORIES
VIDEO GAMES
BOUTIQUE/GIFTS
BOOKS
MUSIC
BOUTIQUE/GIFTS

Privileged and Confidential

Promotion Description
Q2 16 VID 7.99 BUD POG
Q2 16 VID 5.99 VAL POG
Q2 16 VID 7.99 BUD POG T2
Q2 16 VID 5.99 VAL POG T2
MS Q2 16 VID 6.99 VAL POG
MS Q2 16 VID 8.99 BUD POG
Q2 16 VID DISNEY NR
TS Q2 16 VID 9.99 DISC POG F1
TS Q2 16 VID 9.99 DISC POG F2
TS Q2 16 VID 9.99 DISC POG F3
TS Q2 16 VID 7.99 BUD POG F1
TS Q2 16 VID 7.99 BUD POG F2
TS Q2 16 VID 7.99 BUD POG F3
TS Q2 16 VID 5.99 VAL POG F1
TS Q2 16 VID 5.99 VAL POG F2
TS Q2 16 VID 5.99 VAL POG F3
MAY 16 MUS SW CORR 4.99
9401 APR 16 R&L SPORT SWEATERS
TRN POG 16 TMNT 2FT
Q2 16 VID 7.99 BD CORR
Q2 16 VID 9.99 BD
Q2 16 VID 7.99/9.99 BD
Q2 16 VID 14.99 4WAY
Q2 16 VID TV1
Q2 16 VID TV2
EXP Q2 16 VID TV1
EXP Q2 16 VID TV2
EXP Q2 16 VID TVI 1
EXP Q2 16 VID TVI 2
EXP Q2 16 VID TVI 3
MS Q2 16 VID TV1
MS Q2 16 VID TV2
TS Q2 16 VID 7.99 BD CORR
TS Q2 16 VID 9.99 F1
TS Q2 16 VID 9.99 F2
TS Q2 16 VID 9.99 F3
TS Q2 16 VID 7.99 F1
TS Q2 16 VID 14.99 F1
TS Q2 16 VID TV1
TS Q2 16 VID TV2
Q2 16 VID S1 $7.99 BD
Q2 16 VID S2 $7.99 BD
Q2 16 VID S3 $9.99 BD
Q2 16 VID S4 $9.99 BD
MAY 16 CE SMS HEADPHONES
JUL 16 CE POD
JUL 16 CE POD 9604
JUN 16 CE TOWER SIDE C
JUN 16 CE TOWER SIDE B
JUN 16 CE TOWER SIDE A
JUN 16 CE TABLE
JUN 16 VG DISNEY INFINITY SALE
TRN POG 16 TSHIRT ROUNDER 1
JUN 16 KIDS EC 1 & 1B
JUN 16 MUS CHILI PED
JUL 16 7/3 FSI R&L PLUSH MONTH
Page 2 of 3

Start Date
5/4/2016
5/4/2016
5/4/2016
5/4/2016
5/4/2016
5/4/2016
5/4/2016
5/4/2016
5/4/2016
5/4/2016
5/4/2016
5/4/2016
5/4/2016
5/4/2016
5/4/2016
5/4/2016
5/2/2016
4/28/2016
5/8/2016
5/11/2016
5/11/2016
5/11/2016
5/11/2016
5/11/2016
5/11/2016
5/11/2016
5/11/2016
5/11/2016
5/11/2016
5/11/2016
5/11/2016
5/11/2016
5/11/2016
5/11/2016
5/11/2016
5/11/2016
5/11/2016
5/11/2016
5/11/2016
5/11/2016
7/6/2016
7/6/2016
7/6/2016
7/6/2016
5/1/2016
6/5/2016
6/5/2016
6/5/2016
6/5/2016
6/5/2016
6/5/2016
5/27/2016
6/1/2016
6/6/2016
6/10/2016
7/3/2016

End Date
8/2/2016
8/2/2016
8/2/2016
8/2/2016
8/2/2016
8/2/2016
8/2/2016
8/2/2016
8/2/2016
8/2/2016
8/2/2016
8/2/2016
8/2/2016
8/2/2016
8/2/2016
8/2/2016
7/23/2016
12/31/2016
10/1/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
8/9/2016
1/31/2017
9/30/2016
9/30/2016
9/30/2016
9/30/2016
9/30/2016
9/30/2016
12/31/2016
3/31/2017
7/31/2016
7/21/2016
7/30/2016

# of SKUs
Impacted
244
240
122
120
240
244
160
40
40
40
41
41
40
40
40
40
2,300
11
140
608
255
255
90
740
628
375
251
36
35
35
312
314
608
35
35
35
35
35
334
313
30
30
30
30
8
116
114
16
16
4
26
140
3,812
108
33
188

# of Product Codes /
Categories Impacted
Draft - Subject to Change

Case 16-11452-KJC

Doc 421-1

Filed 07/20/16

Page 69 of 69

Hastings Entertainment
Ad Checklist Force Pricing - Summary of SKUs, Product Codes, and Product Categories as of 7/13/16
Note: Certain promotions on the Promotion Calendar are processed through / included on the Ad Checklist. Ad Checklist Force Pricing is pricing set by Corporate.
The Merchandise File's Sell Price reflects the lower of Tag Price and Ad Checklist Force Price and is the price rung up at the register prior to coupons.

#
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167

Promo ID
95502
95508
95510
95511
95512
95513
95576
95577
95582
95583
95595
95605
95606
95611
95666
95667
95680
95697
95698
95700
95701
95703
95726
95727
95728
95731
95732
95744
95745
95747
95748
95749
95753
95754
95755
95756
95757
95758
95759
95760
95761
95763
95766
95585
95776
95676
95485
95685
94032
95376
94953
95461
95496
95498
95501

Department
BOOKS
BOUTIQUE/GIFTS
BOOKS
BOOKS
BOOKS
BOOKS
SALE VIDEO
MUSIC
BOOKS
SIDELINES/ACCESSORIES
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
MUSIC
ACCESSORIES
BOOKS
SIDELINES/ACCESSORIES
BOOKS
BOOKS
BOOKS
BOOKS
BOOKS
MUSIC
MUSIC
MUSIC
MUSIC
MUSIC
MOVIES FOR SALE
MOVIES FOR SALE
MOVIES FOR SALE
BOOKS
MOVIES FOR SALE
BOOKS
BOOKS
BOOKS
BOOKS
BOOKS
BOOKS
BOOKS
BOOKS
BOOKS
BOOKS
BOOKS
MOVIES FOR SALE
MOVIES FOR SALE
VIDEO GAMES
VIDEO GAMES
MOVIES FOR SALE
ACCESSORIES
ACCESSORIES
ACCESSORIES
Product Category
Product Category
Product Category
Product Category

Privileged and Confidential

Promotion Description
JUL 16 BKS 7/10 FSI
JUN 16 TRN SW 25% OFF
JUN 16 BKS SEASONAL SR S1
JUN 16 BKS SEASONAL SR S2
JUN 16 BKS SEASONAL SR RISE S1
JUN 16 BKS SEAS ER RISE S2
JUL 16 VID 7/10 FSI
JUL 16 MUS 7/10 FSI
JUN 16 BKS 4.99 BARG CORR
JUL 16 CE 7/10 FSI HS/TS
TS JUL 16 VID CO 1.99
JUL 16 VID 1.99 PVD CO
JUL 16 VID PV PROMO IFRAME
JUN 16 MUS BCS PED
JUL 16 TRN DW TABLE 50% OFF
JUN 16 BKS 4WAY 1 BEST
JUL 16 CE 7/17 FSI 30 OFF FNDR
JUL 16 BKS TOWER 3
JUL 16 BKS TOWER 4
JUL 16 BKS EC2 TEEN
JUL 16 BKS EC6 TRAVEL
JUL 16 BKS EC3 BOOK CLUB
JUL 16 MUS 7/8 H&N WALL
JUL 16 MUS 7/8 RR WALL
JUL 16 MUS 7/8 H&N TOP ROW
JUL 16 MUS 7/8 H&N WALL TS
JUL 16 MUS 7/8 RR WALL TS
JUL 16 VID NEW ARR 7/12
JUL 16 VID BESTSELLERS 7/12
JUL 16 VID PROMO BIN
JUL 16 BKS 9402 TRADE TABLE 2
TS JUL 16 VID NEW ARR 7/12
JUL 16 BKS 9402 MTI 2
JUL 16 BKS TRADE TABLE 2
JUL 16 BKS TRADE TABLE 2.
JUL 16 BKS 9770 EC MTI 2
JUL 16 BKS 9770 EC TEEN 2
JUL 16 BKS 9770 EC TRADE PAP 2
JUL 16 BKS BESTSELLER 2A
JUL 16 BKS BESTSELLER 2B
JUL 16 BKS BESTSELLER FEAT 2A
JUL 16 BKS MEGAHIT CART 2
JUL 16 BKS BYSK 2
9668 JUN 16 VID 3.99 PV
9742 MAY 16 VID .99 PV
JUL 16 VG 39.99 PPG
JUN 16 VG 49.99 PPG
JUN 16 VID 9668 PV 3.99
MAR 16 CE TV 30% OFF SALE
MAY 16 CE TV 50% OFF CLRNC
MAY16 9401 CE 50 OFF TVS
JUL 16 KDS PLUSH MONTH
JUN 16 R&L 25% PET/SEASONAL SP
JUN 16 R&L 25% OUTDOOR
JUN 16 R&L 25% EXERCISE

Page 3 of 3

Start Date
7/10/2016
6/17/2016
6/20/2016
6/20/2016
6/20/2016
6/20/2016
7/10/2016
7/10/2016
6/21/2016
7/10/2016
6/30/2016
6/30/2016
6/30/2016
6/26/2016
7/10/2016
6/28/2016
7/10/2016
7/5/2016
7/5/2016
7/5/2016
7/5/2016
7/5/2016
7/8/2016
7/8/2016
7/8/2016
7/8/2016
7/8/2016
7/12/2016
7/12/2016
7/12/2016
7/12/2016
7/12/2016
7/12/2016
7/12/2016
7/12/2016
7/12/2016
7/12/2016
7/12/2016
7/12/2016
7/12/2016
7/12/2016
7/12/2016
7/12/2016
6/22/2016
7/11/2016
6/29/2016
6/13/2016
6/30/2016
3/13/2016
3/13/2016
5/1/2016
7/3/2016
6/17/2016
6/17/2016
6/17/2016

End Date
7/16/2016
12/31/2016
9/4/2016
9/4/2016
9/4/2016
9/4/2016
7/16/2016
7/16/2016
8/21/2016
7/16/2016
7/27/2016
7/27/2016
7/27/2016
7/21/2016
12/31/2017
7/25/2016
7/16/2016
9/4/2016
9/4/2016
8/28/2016
8/28/2016
8/28/2016
7/14/2016
7/14/2016
7/14/2016
7/14/2016
7/14/2016
7/18/2016
7/18/2016
8/8/2016
7/18/2016
7/18/2016
7/18/2016
7/18/2016
7/18/2016
7/18/2016
7/18/2016
7/18/2016
7/18/2016
7/18/2016
7/18/2016
7/18/2016
7/18/2016
8/30/2016
7/30/2016
12/31/2016
12/31/2016
7/31/2016
12/29/2016
12/29/2016
12/31/2016
7/30/2016
12/31/2016
12/31/2016
12/31/2016

# of SKUs
Impacted
102
895
129
144
72
72
88
24
581
60
40
120
360
55
360
162
312
159
180
123
30
18
305
340
1,087
541
437
106
8
900
399
38
252
456
456
81
133
207
356
204
36
54
117
-

# of Product Codes /
Categories Impacted
8
8
4
4
8
1
1
1
-

Draft - Subject to Change