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ORDERED. Dated: August 14, 2020

UNITED STATES BANKRUPTCY COURT MIDDLE DISTRICT OF FLORIDA JACKSONVILLE DIVISION

In re: Chapter 11

STEIN MART, INC. Case No. 3:20-bk-2387

STEIN MART BUYING CORP. Case No. 3:20-bk-2388 Case No. 3:20-bk-2389 STEIN MART HOLDING CORP., Joint Administration Requested Debtors.

INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO ASSUME THE CONSULTING AGREEMENT, (II) APPROVING PROCEDURES FOR STORE CLOSING SALES, AND (III) APPROVING THE IMPLEMENTATION OF CUSTOMARY STORE BONUS PROGRAM AND PAYMENTS TO NON-INSIDERS THEREUNDER

THIS CASE came on for consideration upon the motion (the “Motion”)1 (Doc. No. 19) of

Stein Mart, Inc. (“SM”), Stein Mart Buying Corp. (“SMB”) and Stein Mart Holding Corp.

(“SMHC” and together with SM and SMB, the “Debtors” or the “Company”), as Debtors and

Debtors-in-Possession in the above-captioned chapter 11 cases pursuant to sections 105, 363,

365, and 554 of the title 11 of the United States Code, 11 U.S.C. §§ 101–1532 (the “Bankruptcy

Code”) and Rules 2002, 6003, and 6004 of the Federal Rules of Bankruptcy Procedure, for entry

1 Capitalized terms not otherwise herein defined shall have the meanings ascribed to them in the Motion.

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of an order (this “Interim Order”) (a) authorizing the Debtors to assume the Consulting

Agreement; (b) authorizing and approving the continuation or initiation of the Sales and Store

Closings at the Stores in accordance with the terms of the Consulting Agreement and the Store

Closing Procedures, with such Sales to be free and clear of all liens, claims, and encumbrances;

(c) approving the Dispute Resolution Procedures described herein to resolve any disputes with governmental units regarding certain applicable non-bankruptcy laws that regulate liquidation and similar-themed sales; (d) approving the implementation of the Store Bonus Program and authorizing payments thereunder to certain non-insider Store employees; (e) scheduling a final hearing to consider approval of the Motion on a final basis; and (f) granting related relief all as more fully set forth in the Motion; and upon the First Day Declaration; and this Court having jurisdiction over the Motion and the relief requested therein in accordance with 28 U.S.C. §§

157(a)-(b) and 1334(b) and the Order In re: Standing Order Reference of Cases Arising under

Title 11, United States Code, entered February 22, 2012, by the United States District Court for the Middle District of Florida; and consideration of the Motion and the relief requested therein being a core proceeding pursuant to 28 U.S.C. § 157(b); and venue being proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409; and notice of the Motion having been given as provided in the Motion, and such notice having been adequate and appropriate under the circumstances; and it appearing that no other or further notice of the Motion need be provided; and the Court having held a hearing on August 14, 2020 to consider the interim relief requested in the Motion (the

“Hearing”); and upon the record of the Hearing and all of the proceedings had before the Court; and the Court having found and determined that the relief sought in the Motion and granted herein is necessary to avoid immediate and irreparable harm to the Debtors and their estates as contemplated by Bankruptcy Rule 6003, is in the best interests of the Debtors, their respective

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estates and creditors, and all parties-in-interest, and provides a net benefit to the Debtors and their estates, and that the legal and factual bases set forth in the Motion and at the Hearing establish just cause for the relief granted herein; and upon all of the proceedings had before this Court; and after due deliberation and sufficient cause appearing therefor

IT IS HEREBY FOUND AND DETERMINED THAT:2

A. The Debtors have advanced sound business reasons for assuming the Consulting

Agreement and adopting the Store Closing Procedures, on an interim basis subject to the Final

Hearing (defined below), as set forth in the Motion and at the Hearing, and assuming the

Consulting Agreement is a reasonable exercise of the Debtors’ business judgment and in the best interests of the Debtors and their estates.

B. The Consulting Agreement, a copy of which is attached to this Interim Order as

Exhibit 1, was negotiated, proposed, and entered into by the Consultant and the Debtors without collusion, in good faith, and from arm’s length bargaining positions.

C. The Store Closing Procedures, which are attached hereto as Exhibit 2, are reasonable and appropriate, and the conduct of the Sales and Store Closings in accordance with the Store Closing Procedures will provide an efficient means for the Debtors to liquidate and dispose of the Store Closure Assets as quickly and effectively as possible, will maximize the returns on the Store Closure Assets, and are in the best interest of the Debtors’ estates.

D. The assumption of the Consulting Agreement is a sound exercise of the Debtors’ business judgment.

2 Findings of fact shall be construed as conclusions of law and conclusions of law shall be construed as findings of fact where appropriate. See Fed. R. Bankr. P. 7052.

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E. The relief set forth herein is necessary to avoid immediate and irreparable harm to the Debtors and their estates and the Debtors have demonstrated good, sufficient, and sound business purposes and justifications for the relief approved herein.

F. The Store Closings and Sales are in the best interest of the Debtors’ estates.

G. The Dispute Resolution Procedures are fair and reasonable and comply with applicable law.

H. The Debtors have represented that they are neither selling nor leasing personally identifiable information pursuant to the relief requested in the Motion, although the Consultant will be authorized to distribute emails and promotional materials to the Debtors’ customers consistent with the Debtors’ existing policies on the use of consumer information.

I. The entry of this Interim Order is in the best interests of the Debtors and their estates and creditors as well as all other parties-in-interest herein; and now therefore it is hereby

ORDERED:

1. The Motion is GRANTED on an interim basis.

2. The final hearing (the “Final Hearing”) on the Motion shall be held on

September 11, 2020, at 10:30 a.m. (Eastern Time) and any objections or responses to entry of a Final Order on the Motion shall be in writing, filed with the Court, with a copy to chambers, and served upon (i) the proposed attorneys for the Debtors, Foley & Lardner, LLP; (ii) the Office of the United States Trustee for Region 21, George C. Young Federal Building, 400 West

Washington Street, Suite 1100 Orlando, Florida 32801; (iii) counsel for the administrative agent under the Debtors’ pre-petition revolving credit facility, Well Fargo Bank, N.A., c/o (a)

Otterbourg P.C. (Attn: Daniel F. Fiorillo, Esq. and Chad B. Simon, Esq.), 230 Park Avenue,

New York, NY 10169-0075, and (b) Smith, Hulsey & Busey, One Independent Drive, Suite

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3300, Jacksonville, Florida 32202 (Attn: Stephen D. Busey); (iv) counsel for the administrative agent under the Debtors’ pre-petition term loan, Gordon Brothers Finance Company LLC, c/o (a)

Morgan Lewis & Bockius LLP, One Federal Street, Boston, Massachusetts 02110, Attn:

Matthew F. Furlong, Julia Frost-Davies and Christopher L. Carter, and (b) Holland & Knight

LLP, 50 North Laura Street, Suite 3900, Jacksonville, Florida 32202, Attn: Alan M. Weiss; (v) counsel for the Consultant c/o (a) Troutman Pepper Hamilton Sanders LLP, 1313 N. Market St.,

Suite 5100, Wilmington, Delaware 19801, Attn: Douglas D. Herrmann and Marcy J.

McLaughlin Smith, and (b) Quarles & Brady LLP, 101 East Kennedy Boulevard, Suite 3400,

Tampa, Florida 33602, Attn: Philip Martino; and (vi) the landlords at any Store(s) affected by such objection, in each case so as to be received no later than fourteen (14) days prior to the

Final Hearing. In the event no objections to entry of the Final Order on the Motion are timely received, this Court may enter such Final Order without need for the Final Hearing.

3. The Debtors and the Consultant are authorized and empowered to take any and all further actions as may be reasonably necessary or appropriate to give effect to this Interim Order.

The failure to specifically include any particular provision of the Consulting Agreement in this

Interim Order shall not diminish or impair the effectiveness of such provisions, it being the intent of this Court that the Consulting Agreement and all of its provisions, payments, and transactions, be and hereby are authorized and approved as and to the extent provided for in this Interim Order.

4. Subject to paragraph 15 and 24 of this Interim Order, to the extent of any conflict between this Interim Order, the Store Closing Procedures, and the Consulting Agreement, the terms of this Interim Order shall control over all other documents and the Store Closing

Procedures shall control over the Consulting Agreement.

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5. Notwithstanding the relief granted in this Interim Order, any payment made by the Debtors pursuant to the authority granted herein, or authorizations contained hereunder, shall be subject to and in compliance with any orders entered by the Court authorizing the Debtors’ use of cash collateral and any budget in connection therewith (the “Cash Collateral Order”); provided, however, that to the extent there is any inconsistency between the Cash Collateral

Order and any action taken or proposed to be taken hereunder, the terms of the Cash Collateral

Order (including any budget in connection therewith) shall control, other than as explicitly set forth in paragraphs 6 and 11 of this Interim Order; provided, further, that the Cash Collateral

Order shall neither cap nor reduce (nor be deemed to cap nor reduce) amounts due to the

Consultant under the Consulting Agreement other than any such cap or reduction resulting from the Debtors’ required general compliance (subject to permitted variances and waivers) with the

Budget (as defined in the Cash Collateral Order); provided, further, that, to the extent the

Debtors do not comply with the payment obligations under the Consulting Agreement, nothing in this Interim Order, the Cash Collateral Order or any other order of the Court shall limit any of the Consultant’s rights to (i) initiate the termination process and, if elected, terminate the agreement for non-payment, in each case in accordance with and pursuant to Section K of the

Consulting Agreement, and/or (ii) file an administrative claim for any amounts owed to

Consultant under the Consulting Agreement, all of the foregoing without further order of the

Court; provided, further, that if the Consulting Agreement is terminated by Consultant for the non-payment of fees due and owing pursuant to the Consulting Agreement, the Guaranteed

Amount shall no longer be due and payable.

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A. Authority to Assume the Consulting Agreement.

6. The assumption of the Consulting Agreement by the Debtors pursuant to sections

363 and 365 of the Bankruptcy Code is approved on an interim basis. The Debtors are authorized to act and perform in accordance with the terms of the Consulting Agreement, including, but not limited to, making payments required by the Consulting Agreement, including fees and reimbursement of expenses, to the Consultant on a weekly basis and pursuant to the terms governing the Final Reconciliation (as defined in the Consulting Agreement), in each case as set forth in more detail in the Consulting Agreement, without the need for any application of the

Consultant or a further order of this Court (and all such payments of fees and reimbursement of expenses shall be free and clear of any and all liens and encumbrances). The Consultant’s fees and expenses shall be subject to the terms of the Consulting Agreement, including as to any expense budget attached hereto.

7. With respect to reasonable and documented costs and expenses incurred by the

Consultant pursuant to the Consulting Agreement and fees due to the Consultant on account of services provided from the Petition Date through the date of entry of this Interim Order, the

Consultant shall be entitled to and shall receive reimbursement of such reasonable and documented costs and expenses incurred and fees earned pursuant to the Consulting Agreement within seven business days of entry of this Interim Order.

8. The Consultant is authorized 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 at the Stores (the “Additional Agent Goods”); provided, however, that the aggregate Additional Agent Goods shall not exceed 20% of the aggregate cost of the

Merchandise to be sold during the Sales. The Additional Agent Goods shall be purchased by the

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Consultant as part of the Sale and delivered to the Stores at the Consultant’s sole expense

(including as to labor, freight, and insurance relative to shipping such Additional Agent Goods to the Stores). Sales of Additional Agent Goods shall be run through the Debtors’ cash register systems; provided, however, that the Consultant 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. The Consultant and Debtors shall cooperate to ensure that the Additional Agent Goods are marked in such a way that a reasonable consumer could identify the Additional Agent Goods from the Merchandise.

9. The Consultant shall pay to Debtors an amount equal to seven and one-half percent (7.5%) of the gross proceeds (excluding only Sale Taxes) from the sale of Additional

Agent Goods (the “Additional Agent Goods Fee”). The Consultant shall retain all remaining amounts from the sale of the Additional Agent Goods. The Consultant guarantees that the

Additional Agent Good’s Fee payable to the Debtors shall be not less than $1,500,000 (the

“Guaranteed Amount”) on account of the sale of the Additional Agent Goods, which Guaranteed

Amount shall be paid by Agent through payment of the 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) and, to the extent the Guaranteed Amount is not paid by the time of the Final Reconciliation, the difference between the amount then paid and the Guaranteed Amount shall be paid by Agent as part of the Final Reconciliation.

10. All transactions relating to the Additional Agent Goods are, shall be construed as, and are acknowledged by the Debtors to be, a true consignment from Consultant to the Debtors under Article 9 of the Uniform Commercial Code (the “UCC”) and not a consignment for

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security purposes. At all times and for all purposes, the Additional Agent Goods and their proceeds shall be the exclusive property of the Consultant, except as set forth herein, and no other person or entity (including, without limitation, the Debtors, or any third person claiming a security interest in the Debtors’ property, including any of the Debtors’ secured lenders) shall have any claim against any of the Additional Agent Goods or the proceeds thereof. The

Additional Agent Goods shall at all times remain subject to the exclusive control of the

Consultant. The Debtors shall, at Consultant’s sole cost and expense, insure Additional Agent

Goods and, if required, promptly file any proofs of loss with regard thereto.

11. The Consultant is hereby granted a first-priority security interest and lien upon (a) the Additional Agent Goods and (b) the Consultant’s portion of the Additional Agent Goods proceeds, which security interest shall be deemed perfected without the requirement of filing

UCC financing statements or providing notifications to any prior secured parties (provided that the Consultant is hereby authorized to deliver any notices and file any financing statements and amendments thereof under the applicable UCC identifying the Consultant’s interest in the

Additional Agent Goods (and any proceeds thereof) as consigned goods thereunder and the

Debtors as the consignee therefor, and the Consultant’s security interest in such Additional

Agent Goods and the Consultant’s portion of the Additional Agent Goods proceeds). As part of each weekly reconciliation, the Debtors shall turnover all proceeds from the sale of Additional

Agent Goods to the Consultant, net of any fee payable to the Debtors pursuant to the Consulting

Agreement.

12. Subject to the restrictions set forth in this Interim Order and the Store Closing

Procedures, the Debtors and the Consultant are hereby authorized to take any and all actions as may be necessary or desirable to implement the Consulting Agreement, the Sales and Store

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Closings, and each of the transactions contemplated by the Consulting Agreement. Any actions taken by the Debtors and the Consultant necessary or desirable to implement the Consulting

Agreement and/or the Sales prior to the date of this Interim Order are hereby approved and ratified.

13. The Consulting Agreement and related documents may be modified, amended or supplemented by the parties thereto in accordance with the terms thereof with the prior written consent of the prepetition ABL Agent and the prepetition Term Agent without further order of this Court so long as the interest of counterparties to leases of non-residential real property are not adversely affected or as otherwise ordered by this Court.

14. Notwithstanding anything to the contrary in the Consulting Agreement, the Debtors and their estates shall not indemnify the Consultant for any damages arising primarily out of the

Consultant’s fraud, willful misconduct, or gross negligence.

B. Authority to Engage in Sales and Conduct Store Closings.

15. The Debtors are authorized, on an interim basis pending the Final Hearing, pursuant to sections 105(a) and 363(b)(1) of the Bankruptcy Code, to immediately continue and conduct the Sales and Store Closings at the Stores in accordance with this Interim Order, the Store Closing

Procedures, and the Consulting Agreement, as may be modified by any Side Letters (defined below) between the Debtors and/or Consultant and the landlords at the Stores.

16. The Store Closing Procedures are approved in their entirety on an interim basis.

17. In accordance with this Interim Order and the Store Closing Procedures, the

Debtors are authorized to discontinue operations at the Stores at the conclusion of the Sales.

18. All entities that are presently in possession of some or all of the Store Closure

Assets in which the Debtors hold an interest that are or may be subject to the Consulting Agreement

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or this Interim Order hereby are directed to surrender possession of such Store Closure Assets to the Debtors or the Consultant.

19. Neither the Debtors nor the Consultant nor any of their officers, employees, or agents shall be required to obtain the approval of any third party, including, without limitation, any Governmental Unit (as defined under section 101(27) of the Bankruptcy Code) or landlord, to conduct the Sales and Store Closings and to take the related actions authorized herein.

20. If the Debtors request, in addition to conducting the Sales at the Stores, the

Consultant will also conduct the Sales through the Debtors’ e-commerce platform and all relief set forth herein related to authorization to conduct the Sales at the Stores will also authorize the

Debtors and Consultant to conduct the Sales through the Debtors’ e-commerce platform.

C. Conduct of the Sales.

21. All newspapers and other advertising media in which the Sales and Store Closings may be advertised and all landlords are directed to accept this Interim Order as binding authority so as to authorize the Debtors and the Consultant to conduct the Sales and Store Closings pursuant to the Consulting Agreement, including, without limitation, to conduct and advertise the sale of the Store Closure Assets and Additional Agent Goods in the manner contemplated by and in accordance with this Interim Order, the Store Closing Procedures, and the Consulting Agreement, as may be modified by any Side Letter.

22. The Debtors and Consultant are hereby authorized to take such actions as may be necessary and appropriate to implement the Consulting Agreement and to conduct the Sales and

Store Closings without necessity of further order of this Court as provided in this Interim Order, the Consulting Agreement, and the Store Closing Procedures (subject to any Side Letters), including, but not limited to, advertising the Sales and Store Closings as a “store closing sale,”

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“everything on sale,” “everything must go,” “going out of business,” or similar-themed sales as contemplated in the Store Closing Procedures through the posting of signs (including the use of exterior banners at non-enclosed mall closing locations, and at enclosed mall closing locations to the extent the applicable closing location entrance does not require entry into the enclosed mall common area), use of signwalkers, A-frames, and other street signage, as contemplated in the

Store; provided, however, that only Debtor-approved terminology will be used at each Store in connection with the Sales and Store Closing Procedures.

23. Notwithstanding anything herein to the contrary, and in view of the importance of the use of sign-walkers, banners, and other advertising to the Sales of the Store Closure Assets and

Additional Agent Goods, to the extent that, prior to the Final Hearing, disputes arise during the course of such sale regarding laws regulating the use of sign-walkers, banners, or other advertising and the Debtors and the Consultant are unable to resolve the matter consensually, any party may request an immediate telephonic hearing with this Court pursuant to these provisions. Such hearing will, to the extent practicable, be scheduled initially no later than the earlier of (a) the Final Hearing and (b) within two business days of such request. This interim scheduling procedure shall not be deemed to preclude additional hearings for the presentation of evidence or arguments as necessary.

24. Except as expressly provided in the Consulting Agreement and the Store Closing

Procedures, the sale of the Store Closure Assets and Additional Agent Goods shall be conducted by the Debtors and the Consultant notwithstanding any restrictive provision of any lease, sublease, license, reciprocal easement agreement, restrictive covenant, or other agreement relative to occupancy affecting or purporting to restrict the conduct of the Store Closings or the Sales

(including the sale of the Store Closure Assets and Additional Agent Goods), the necessity of obtaining any third party consents, abandonment of assets, or “going dark” provisions, and such

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provisions shall not be enforceable in conjunction with the Sales or Store Closings. Breach of any such provisions in these chapter 11 cases in conjunction with Sales or Store Closings shall not constitute a default under a lease or provide a basis to terminate such lease; provided that the Store

Closings and Sales are conducted in accordance with the terms of this Interim Order, any Side

Letter, and the Store Closing Procedures. The Debtors and/or Consultant and landlords of the

Stores are authorized to enter into agreements (“Side Letters”) between themselves modifying the

Store Closing Procedures without further order of the Court, and such Side Letters shall be binding as and among the Debtors, the Consultant, and such landlords, provided that nothing in such Side

Letters affects the provisions of paragraphs 35 and 36 of this Interim Order. In the event of any conflict between the Store Closing Procedures, the Consulting Agreement, this Interim Order, and any Side Letter, the terms of such Side Letter shall control. In the event of a dispute between the

Consultant and a landlord on the terms of a Side Letter, the Consultant and the landlord agree that they may seek an emergency hearing before the Court on no less than five (5) business days’ notice, unless the parties agree to a hearing on a shorter notice, in each respect subject to the Court's availability.

25. Except as expressly provided for herein or in the Store Closing Procedures, and except with respect to relief expressly granted to any Governmental Unit elsewhere in this Interim

Order, no person or entity, including, but not limited to, any landlord, licensor, property owner/manager, service provider, utility, or creditor, shall take any action to directly or indirectly prevent, interfere with, or otherwise hinder consummation or continuation of the Sales of the Store

Closure Assets and Additional Agent Goods or Store Closings, or the advertising and promotion

(including the posting of signs and exterior banners or the use of signwalkers) of such Sales, and all such parties and persons of every nature and description, including, but not limited to, any

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landlord, licensor, property owner/manager, service provider, utility, and creditor and all those acting for or on behalf of such parties, are prohibited and enjoined from (a) interfering in any way with, obstructing, or otherwise impeding the conduct of the Sales or Store Closings and/or (b) instituting any action or proceeding in any court (other than this Court) or before any administrative body seeking an order or judgment against, among others, the Debtors, the

Consultant, or the landlords at the Stores that might in any way directly or indirectly obstruct or otherwise interfere with or adversely affect the conduct of the Sales of the Store Closure Assets and Additional Agent Goods or Store Closings and/or seek to recover damages for breach(es) of covenants or provisions in any lease, sublease, license, or contract based upon any relief authorized herein.

26. In accordance with and subject to the terms and conditions of the Consulting

Agreement, the Consultant shall have the right to use the Stores and all related services, furniture, fixtures, equipment, and other assets of the Debtors for the purpose of conducting the Sales and

Store Closings, free of any interference from any entity or person, subject to compliance with the

Store Closing Procedures and this Interim Order.

27. During the Sale Term (as defined in the Consulting Agreement), the Consultant shall accept the Debtors’ validly issued Gift Cards, MVP Program Certificates, and Coupons (all as defined in the Debtors’ Motion Pursuant to 11 U.S.C. §§ 105(a), 363(b), 365 and 507(a) for Interim and Final Authority to (I) Maintain and Administer Pre-Petition Customer

Programs, Promotions, and Practices, (II) Pay and Honor Related Pre-Petition Obligations, and

(III) Direct the Credit Card Processors to Honor the Debtors’ Credit Card Processing Agreement

Pending Its Assumption or Rejection (the “Customer Programs Motion”)) and honor the

Debtors’ pre-petition Return and Exchange Policies (as defined in the Debtors’ Customer

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Programs Motion) as modified by the Customer Programs Motion, provided, that such Return and

Exchange Policies, as modified by the Customer Programs Motion, shall apply solely with respect to goods sold prior to the Petition Date, in each instance as authorized by a Court Order granting the Customer Programs Motion; provided, further, that the customer is not returning or exchanging items in order to repurchase the same items so as to take advantage of the sale price being offered by the Consultant. For the avoidance of doubt, proceeds from Merchandise sold pursuant to Gift

Cards, MVP Program Certificates shall be treated as Gross Proceeds (as defined in the Consulting

Agreement) for purposes of calculating Consultant’s fee under the Consulting Agreement.

28. All sales of Store Closure Assets and Additional Agent Goods sold on or after the

Petition Date shall be “as is” and final.

29. The Consultant shall accept return of any goods that contain a defect which the lay consumer could not reasonably determine was defective by visual inspection prior to purchase for a full refund, provided that the consumer must return the merchandise within the time period proscribed by the Debtors’ return policy that was in effect when the merchandise was purchased, the consumer must provide a receipt, and the asserted defect must in fact be a

“latent” defect.

30. The Consultant shall not be liable for sales taxes except as expressly provided in the

Consulting Agreement and the payment of any and all sales taxes is the responsibility of the

Debtors. The Debtors are directed to remit all taxes arising from the Sales to the applicable

Governmental Units as and when due, provided that in the case of a bona fide dispute the Debtors are only directed to pay such taxes upon the resolution of the dispute if and to the extent that the dispute is decided in favor of the applicable Governmental Unit. For the avoidance of doubt, sales taxes collected and held in trust by the Debtors shall not be used to pay any creditor or any other

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party, other than the applicable Governmental Unit for which the sales taxes are collected. The

Consultant shall collect, remit to the Debtors, and account for sales taxes as and to the extent provided in the Consulting Agreement. This Interim Order does not enjoin, suspend, or restrain the assessment, levy, or collection of any tax under state or federal law and does not constitute a declaratory judgment with respect to any party’s liability for taxes under state or federal law.

31. Pursuant to section 363(f) of the Bankruptcy Code, the Consultant, on behalf of the

Debtors, is authorized to sell the Store Closure Assets, and all sales of Store Closure Assets, whether by the Consultant or the Debtors, shall be free and clear of any and all liens, claims, encumbrances, defenses (including, without limitation, rights of setoff and recoupment) and interests, including, without limitation, security interests of whatever kind or nature, mortgages, conditional sales or title retention agreements, pledges, deeds of trust, hypothecations, liens, encumbrances, assignments, preferences, debts, easements, charges, suits, licenses, options, rights- of-recovery, judgments, orders and decrees of any court or foreign or domestic governmental entity, taxes (including foreign, state, and local taxes), licenses, covenants, restrictions, indentures, instruments, leases, options, off-sets, claims for reimbursement, contribution, indemnity or exoneration, successor, product, environmental, tax, labor, ERISA, CERCLA, alter ego, and/or other liabilities, causes of action, contract rights, and claims, to the fullest extent of the law, in each case, of any kind or nature (including, without limitation, all “claims” as defined in section

101(5) of the Bankruptcy Code), known or unknown, whether pre-petition or post-petition, secured or unsecured, choate or inchoate, filed or unfiled, scheduled or unscheduled, perfected or unperfected, liquidated or unliquidated, noticed or unnoticed, recorded or unrecorded, contingent or non-contingent, material or non-material, statutory or non-statutory, matured or unmatured, legal or equitable (collectively, “Encumbrances”); as provided for herein because in each case,

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one or more of the standards set forth in section 363(f)(1)–(5) has been satisfied; provided, however, that any such Encumbrances shall attach to the applicable proceeds of the sale of the

Store Closure Assets with the same validity, in the amount, with the same priority as, and to the same extent that any such Encumbrances attached to the Store Closure Assets prior to such sale, subject to any claims and defenses that any party may possess with respect thereto. Payment of fees and expenses to the Consultant in accordance with this Interim Order and the Consulting

Agreement shall be free and clear of any Encumbrances.

32. The Debtors and/or the Consultant (as the case may be) are authorized and empowered to transfer Store Closure Assets and Additional Agent Goods among, and into, the

Stores. The Consultant is authorized to sell the Debtors’ FF&E and, with the consent of the prepetition Term Loan Agent, abandon the same, in each case as provided for and in accordance with the terms of the Consulting Agreement and the Store Closing Procedures, including, but not limited to, with respect to signage related to the Sales and Store Closings; provided, that the Gross

Proceeds of any sales of FF&E shall be separately accounted for and remitted by the Debtors to the Term Loan Agent. Any abandoned FF&E left in a Store after the later of the date the lease is rejected or the date the Debtors vacate the premises shall be deemed abandoned, and such landlord is authorized to dispose of the abandoned FF&E without further notice and without any liability to any individual or entity that may claim an interest in such property. The automatic stay is modified to the extent necessary to allow such dispositions. Notwithstanding any other provision of this

Order, (a) the Debtors may not abandon any personal property that is not property of the Debtors or property of the landlord of the location at which such personal property is abandoned, (b) the

Debtors are not authorized to abandon, and are directed to remove, any hazardous materials as defined under applicable law from any leased premises, and (c) to the extent the Debtors seek to

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abandon personal property that contains any “personally identifiable information,” as that term is defined in section 101(41A) of the Bankruptcy Code, or other personal and/or confidential information about the Debtors’ employees and/or customers, or any other individual (the

“Confidential Information”), the Debtors shall remove or wipe the Confidential Information from such personal property before abandonment.

33. Neither the Store Closing Procedures, Consulting Agreement, nor this Interim

Order authorize the Debtors to transfer or sell to Consultant or any other party the personal identifying information (which means information which alone or in conjunction with other information identifies an individual, including but not limited to an individual’s first name (or initial) and last name, physical address, electronic address, telephone number, social security number, date of birth, government-issued identification number, account number and credit or debit card number (“PII”) of any customers unless such sale or transfer is permitted by the

Debtors’ privacy policy and state, provincial or federal privacy and/or identity theft prevention laws and rules (collectively, the “Applicable Privacy Laws”). The foregoing shall not limit the

Consultant’s use of the Debtors’ customer lists and mailing lists solely for purposes of advertising and promoting the Sales.

34. The Debtors shall remove or cause to be removed any confidential and/or PII in any of the Debtors’ hardware, software, computers or cash registers or similar equipment which are to be sold or abandoned so as to render the PII unreadable or undecipherable. At the conclusion of the Sales, the Consultant shall provide the Debtors with written verification that the Consultant has not removed, copied, or transferred any customer PII and that any records containing PII were shredded, erased or otherwise modified to render the PII unreadable or undecipherable.

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D. Dispute Resolution Procedures with Governmental Units.

35. Nothing in this Interim Order, the Consulting Agreement, or the Store Closing

Procedures, releases, nullifies, or enjoins the enforcement of any liability to a Governmental Unit under environmental laws or regulations (or any associated liabilities for penalties, damages, cost recovery, or injunctive relief) to which any entity would be subject as the owner, lessor, lessee, or operator of any property after the date of entry of this Interim Order. Nothing contained in this

Interim Order, the Consulting Agreement, or the Store Closing Procedures shall in any way:

(a) diminish the obligation of any entity to comply with environmental laws; or (b) diminish the obligations of the Debtors to comply with environmental laws consistent with their rights and obligations as debtors in possession under the Bankruptcy Code. The Store Closings and the Sales shall not be exempt from laws of general applicability, including, without limitation, public health and safety, criminal, tax (including, but not limited to, the collection of sales taxes), labor, employment, environmental, antitrust, fair competition, traffic, and consumer protection laws, including consumer laws regulating deceptive practices and false advertising, consumer protection, the sale of gift certificates, layaway programs, return of goods, express or implied warranties of goods, and “weights and measures” regulation and monitoring (collectively,

“General Laws”). Nothing in this Interim Order, the Consulting Agreement, or the Store Closing

Procedures, shall alter or affect obligations to comply with all applicable federal safety laws and regulations. Nothing in this Interim Order shall be deemed to bar any Governmental Unit (as such term is defined in section 101(47) of the Bankruptcy Code) from enforcing General Laws in the applicable non-bankruptcy forum, subject to the Debtors’ rights to assert in that forum or before this Court that any such laws are not in fact General Laws or that such enforcement is impermissible under the Bankruptcy Code or this Interim Order. Notwithstanding any other

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provision in this Interim Order, no party waives any rights to argue any position with respect to whether conduct was or is in compliance with this Interim Order and/or any applicable law or that enforcement of such applicable law is preempted by the Bankruptcy Code. Nothing in this Interim

Order shall be deemed to have made any rulings on any such issues.

36. To the extent that the sale of Store Closure Assets and Additional Agent Goods is subject to any Liquidation Sale Laws, including any federal, state, or local law, statute, ordinance, rule, regulation or licensing requirement directed at regulating “going out of business,” “store closing,” similar inventory liquidation sales, or bulk sale laws, laws restricting safe, professional, and non-deceptive customary advertising such as signs, banners, posting of signage, and use of sign-walkers solely in connection with the Sales of the Store Closure Assets and Additional Agent

Goods and including ordinances establishing license or permit requirements, waiting periods, time limits, or bulk sale restrictions that would otherwise apply solely to the sale of the Store Closure

Assets and Additional Agent Goods, the following Dispute Resolution Procedures shall apply:

(a) Provided that the Sales are conducted in accordance with this Interim Order, any Final Order, and the Store Closing Procedures, the Debtors, the Consultant, and the Debtors’ landlords, shall be deemed to be in compliance with any requirements of all county, parish, or municipal or other local government (hereinafter referred to as “Local”) and State requirements governing the conduct of the Sales of the Store Closure Assets and Additional Agent Goods, including but not limited to Local statutes, regulation and ordinances establishing licensing or permitting requirements, waiting periods or time limits, or bulk sale restrictions that would otherwise apply to the Sales and sales of the Store Closure Assets and Additional Agent Goods (collectively, the “Liquidation Sale Laws”) of any state or local Governmental Unit (as defined in section 101(27) of the Bankruptcy Code); provided, that the term “Liquidation Sale Laws” shall be deemed not to include any public health or safety laws or any state (collectively, “Safety Laws”), and the Debtors and the Consultant shall continue to be required to comply, as applicable, with such Safety Laws and General Laws, subject to any applicable provision of the Bankruptcy Code and federal law, and nothing in this Order shall be deemed to bar

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Governmental Units (as defined in section 101(27) of the Bankruptcy Code) or public officials from enforcing Safety Laws or General Laws.

(b) Within three business days after entry of this Interim Order, the Debtors will serve by email, facsimile, or first-class mail, copies of this Interim Order, the proposed Final Order, the Consulting Agreement, and the Store Closing Procedures on the following: (i) the landlords for the Stores; (ii) the Attorney General’s office for each state in which the Sales are being held; (iii) the county consumer protection agency or similar agency for each county in which the Sales are being held; (iv) the division of consumer protection for each state in which the Sales are being held; (v) the chief legal counsel for each local jurisdiction in which the Sales are being held (collectively, the “Dispute Notice Parties”).

(c) To the extent that there is a dispute arising from or relating to the Sales, this Interim Order, or the proposed Final Order, as applicable, the Consulting Agreement, or the Store Closing Procedures, which dispute relates to any Liquidation Sale Laws (a “Reserved Dispute”), the Bankruptcy Court shall retain exclusive jurisdiction to resolve such Reserved Dispute. Any time within ten days following entry of this Interim Order, any Governmental Unit may assert that a Reserved Dispute exists by sending a notice (the “Dispute Notice”) explaining the nature of the dispute to: (i) proposed counsel to the Debtors, Foley & Lardner, LLP, Attention Gardner Davis, John Wolfel and Richard Guyer, Suite 1300, One Independent Drive, Jacksonville Florida 32202; (ii) counsel to the Consultant, Troutman Pepper Hamilton Sanders LLP, 1313 N. Market St., Suite 5100, Wilmington, Delaware 19801, Attn: Douglas D. Herrmann and Marcy J. McLaughlin Smith, and (b) Quarles & Brady LLP, 101 East Kennedy Boulevard, Suite 3400, Tampa, Florida 33602, Attn: Philip Martino; (iii) counsel for Wells Fargo Bank, NA, c/o (a) Otterbourg P.C. (Attn: Daniel F. Fiorillo, Esq. and Chad B. Simon, Esq.), 230 Park Avenue, New York, NY 10169-0075, and (b) Smith, Hulsey & Busey, One Independent Drive, Suite 3300, Jacksonville, Florida 32202 (Attn: Stephen D. Busey); (iv) counsel for the administrative agent under the Debtors’ pre-petition term loan, Gordon Brothers Finance Company LLC, c/o (a) Morgan Lewis & Bockius LLP, One Federal Street, Boston, Massachusetts 02110, Attn: Matthew F. Furlong, Julia Frost-Davies and Christopher L. Carter, and (b) Holland & Knight LLP, 50 North Laura Street, Suite 3900, Jacksonville, Florida 32202, Attn: Alan M. Weiss; and (v) the landlord(s) (and, if known, its counsel) for the affected Stores, if any. If the Debtors, the Consultant, and the Governmental Unit are unable to resolve the Reserved Dispute within 15 days after service of the Dispute Notice, the Governmental Unit may file a motion with the Bankruptcy Court requesting that the Bankruptcy Court resolve the Reserved Dispute (a “Dispute Resolution Motion”).

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(d) In the event that a Dispute Resolution Motion is filed, nothing in the Interim Order or the Final Order, as applicable, shall preclude the Debtors, a landlord, the Consultant or any other interested party from asserting (i) that the provisions of any Liquidation Sale Laws are preempted by the Bankruptcy Code or (ii) that neither the terms of the Interim Order or the Final Order, as applicable, nor the conduct of the Debtors or the Consultant pursuant to the Interim Order or the Final Order, as applicable, violates such Liquidation Sale Laws. Filing a Dispute Resolution Motion as set forth herein shall not be deemed to affect the finality of the Interim Order or the Final Order, as applicable, or to limit or interfere with the Debtors’ or the Consultant’s ability to conduct or to continue to conduct the Sales pursuant to the Interim Order or the Final Order, as applicable, absent further order of the Bankruptcy Court. Upon the entry of the Interim Order or the Final Order, as applicable, the Bankruptcy Court grants authority for the Debtors and the Consultant to conduct the Sales pursuant to the terms of the Interim Order or the Final Order, as applicable, the Consulting Agreement, and the Store Closing Procedures and to take all actions reasonably related thereto or arising in connection therewith. The Governmental Unit will be entitled to assert any jurisdictional, procedural, or substantive arguments it wishes with respect to the requirements of its Liquidation Sale Laws or the lack of any preemption of such Liquidation Sale Laws by the Bankruptcy Code. Nothing in the Interim Order or the Final Order will constitute a ruling with respect to any issues to be raised in any Dispute Resolution Motion.

(e) If, at any time, a dispute arises between the Debtors and/or the Consultant and a Governmental Unit as to whether a particular law is a Liquidation Sale Law, and subject to any provisions contained in the Interim Order or the Final Order related to the Liquidation Sale Laws, then any party to that dispute may utilize the provisions of subparagraphs (c) and (d) above by serving a notice to the applicable parties and proceeding thereunder in accordance with those paragraphs. Any determination with respect to whether a particular law is a Liquidation Sale Law shall be made de novo.

37. Subject to paragraphs 35 and 36 above, each and every federal, state, or local agency, departmental unit, or Governmental Unit with regulatory authority over the Sales and

Store Closings, and all newspapers and other advertising media in which the Sales and Store

Closings are advertised shall consider this Interim Order as binding authority such that no further approval, license, or permit of any Governmental Unit shall be required, nor shall the Debtors or the Consultant be required to post any bond, to conduct the Sales and Store Closings.

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38. Provided that the Sales are conducted in accordance with the terms of this Interim

Order, the Consulting Agreement, and the Store Closing Procedures, and in light of the provisions in the laws that exempt court-ordered sales from their provisions, the Debtors and

Consultant shall be presumed to be in compliance with any Liquidation Sale Laws and are authorized to conduct the Sales in accordance with the terms of this Interim Order and the Store

Closing Procedures without the necessity of further showing compliance with any such

Liquidation Sale Laws.

39. Within three business days of the entry of this Interim Order, the Debtors shall serve copies of this Interim Order, the Consulting Agreement, and the Store Closing Procedures via e-mail, facsimile, or regular mail, on: (i) the Office of the United States Trustee for Region 21;

(ii) counsel to any official committee of unsecured creditors appointed in these chapter 11 cases;

(iii) counsel to the Consultant, c/o (a) Troutman Pepper Hamilton Sanders LLP, 1313 N. Market

St., Suite 5100, Wilmington, Delaware 19801, Attn: Douglas D. Herrmann and Marcy J.

McLaughlin Smith, and (b) Quarles & Brady LLP, 101 East Kennedy Boulevard, Suite 3400,

Tampa, Florida 33602, Attn: Philip Martino; (iv) counsel for Wells Fargo Bank, N.A., c/o (a)

Otterbourg P.C. (Attn: Daniel F. Fiorillo, Esq. and Chad B. Simon, Esq.), 230 Park Avenue, New

York, NY 10169-0075, and (b) Smith, Hulsey & Busey, One Independent Drive, Suite 3300,

Jacksonville, Florida 32202 (Attn: Stephen D. Busey); (v) counsel for the administrative agent under the Debtors’ pre-petition term loan, Gordon Brothers Finance Company LLC, c/o (a)

Morgan Lewis & Bockius LLP, One Federal Street, Boston, Massachusetts 02110, Attn: Matthew

F. Furlong, Julia Frost-Davies and Christopher L. Carter, and (b) Holland & Knight LLP, 50 North

Laura Street, Suite 3900, Jacksonville, Florida 32202, Attn: Alan M. Weiss; (vi) all parties known to the Debtors who hold any liens or security interest in the Debtors’ assets who have filed UCC-1

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financing statements against the Debtors, or who, to the Debtors’ knowledge, assert liens against the Store Closure Assets; (vii) all state attorneys general for the states in which the Store Closure

Assets are located; (viii) all of the Debtors’ landlords for the Stores; (ix) the Internal Revenue

Service; and (xiii) any party that has requested notice pursuant to Bankruptcy Rule 2002. The

Debtors submit that, in light of the nature of the relief requested, no other or further notice need be given.

E. Other Provisions.

40. The Debtors shall require all employees and customers to wear masks or face shields and practice proper social distancing at each of the Stores.

41. The Debtors or the Consultant, as applicable, shall acquire the prior written consent of the prepetition ABL Agent and the prepetition Term Loan Agent before modifying the Store

Closing Procedures or the Consulting Agreement.

42. The Debtors shall acquire the prior written consent of the prepetition ABL Agent and the prepetition Term Loan Agent prior to the termination, discontinuation or suspension of

Sales or Store Closings at any of the Stores or through any of their e-commerce platforms.

43. The Consultant shall not be liable for any claims against the Debtors, and the

Debtors shall not be liable for any claims against Consultant, in each case, other than as expressly provided for in the Consulting Agreement.

44. Neither the Consultant nor any of its respective affiliates (whether individually, as part of a joint venture, or otherwise), shall be precluded from providing additional services to the

Debtors and/or bidding on the Debtors’ assets in connection with any other future process that may or may not be undertaken by the Debtors to close additional stores, provided that any such services and/or transactions is approved by separate order of this Court.

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45. No later than five (5) business days prior to the Final Hearing, the Consultant shall file a declaration disclosing connections to the Debtors, their creditors, and other parties in interest in these chapter 11 cases.

46. The Debtors shall not be required to comply with any state or local law requiring that the Debtors pay an employee substantially contemporaneously with his or her termination; provided, however, that the Debtors shall pay any accrued wages to terminated employees as expeditiously as possible.

47. The Debtors are authorized, but not directed, to implement and make payments under the Store Bonus Program, including payments of any amounts that accrued but were unpaid as of the Petition Date.

48. The Debtors are authorized to issue post-petition checks, or to effectuate post- petition fund transfer requests, in replacement of any checks or fund transfer requests in respect of payments made in accordance with this Interim Order that are dishonored or rejected.

49. In accordance with this Interim Order (or any other order of this Court), each of the financial institutions at which the Debtors maintain their accounts relating to the payment of the obligations described in the Motion is authorized and directed to (i) receive, process, honor, and pay all checks presented for payment and to honor all fund transfer requests made by the Debtors related thereto, to the extent that sufficient funds are on deposit in those accounts and (ii) accept and rely on all representations made by the Debtors with respect to which checks, drafts, wires, or automated clearing house transfers should be honored or dishonored in accordance with this or any other order of this Court, whether such checks, drafts, wires, or transfers are dated prior to, on, or subsequent to the Petition Date, without any duty to inquire otherwise, and without liability for following the Debtors’ instructions.

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50. On a confidential basis and for professionals’ “eyes only” and upon the written

(including email) request of the U.S. Trustee, the prepetition Term Loan Agent, the prepetition ABL

Agent, or any official committee of unsecured creditors appointed in these chapter 11 cases, the

Debtors shall provide such requesting party, if any, with copies of periodic reports concerning the

Sales and Store Closings that are prepared by the Debtors, their professionals, or the Consultant; provided, however, that the foregoing shall not require the Debtors, their professionals, or the

Consultant to prepare or undertake to prepare any additional or new reports not otherwise being prepared in connection with the Sales.

51. Consultant shall act solely as an independent consultant to the Debtors and shall not be liable for any claims against the Debtors other than as expressly provided in the

Consulting Agreement (including the Consultant’s indemnity obligations thereunder) or the Store

Closing Procedures, with the exception of acts of gross negligence or willful misconduct and, for greater certainty, the Consultant shall not be deemed to be an employer, or a joint or successor employer or a related or common employer or payor within the meaning of any legislation governing employment or labor standards or pension benefits or health and safety or other statute, regulation or rule of law or equity for any purpose whatsoever, and shall not incur any successor liability whatsoever.

52. The Debtors are authorized and permitted to transfer to the Consultant personal information in the Debtors’ custody and control solely for the purposes of assisting with and conducting the Sale and only to the extent necessary for such purposes, provided that Consultant removes such personal information from the FF&E prior to the abandonment of the same.

53. Except with respect to the Consultant and the Consulting Agreement, nothing contained in the Motion or this Interim Order or any payment made pursuant to the authority

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granted by this Interim Order is intended to be or shall be construed as (i) an admission as to the validity of any claim against the Debtors, (ii) a waiver of the Debtors’ or any party-in-interest’s rights to dispute any claim, or (iii) an approval or assumption of any agreement, contract, program, policy, or lease under section 365 of the Bankruptcy Code.

54. Except with respect to the Consultant and the Consulting Agreement, notwithstanding entry of this Interim Order, nothing herein shall create, or is intended to create, any rights in favor of, or enhance the status of, any claim held by any party.

55. The requirements of Bankruptcy Rule 6003(b) have been satisfied.

56. The requirements of Bankruptcy Rule 6004(a) are waived.

57. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Interim

Order shall be immediately effective and enforceable upon its entry.

58. This Interim Order is effective only from the date of entry through this Court’s disposition of the Motion on a final basis; provided that the Court’s ultimate disposition of the

Motion on a final basis shall not impair or otherwise affect any action taken pursuant to this Interim

Order.

60. The Debtors and the Consultant are authorized to take all action necessary to carry out this Interim Order.

61. This Court shall retain jurisdiction to hear and determine all matters arising from or related to the implementation, interpretation, and/or enforcement of this Interim Order.

Counsel for the Debtors is directed to serve a copy of this order on interested parties who do not receive service by CM/ECF and file a proof of service within three days of entry of this order.

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EXHIBIT 1

Consulting Agreement

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August 7, 2020

VIA EMAIL Stein Mart c/o Pat Diercks, CIRA Clear Thinking Group LLC 401 Towne Centre Drive Hillsborough, NJ 08844 [email protected]

Re: Letter Agreement Governing Inventory Disposition

Dear Pat:

By executing below, subject to section S hereof, this letter shall serve as an agreement (“Agreement”) between the contractual joint venture comprised of Hilco Merchant Resources, LLC, Gordon Brothers Retail Partners, LLC, Great American Group, LLC, Tiger Capital Group, LLC, and SB360 Capital Partners, LLC, on the one hand ( collectively, “Agent” or a “Party”), and Stein Mart, Inc., on the other hand (“Merchant” or a “Party” and together with the Agent, the “Parties”), under which Agent shall act as the exclusive agent for the purpose of conducting a sale of certain Merchandise (as defined below) at the Merchant’s stores set forth on Exhibit A (each a “Store” and collectively, the “Stores”) and, if requested, Merchant’s e-commerce platform through a “Going out of Business”, “Store Closing”, “Everything Must Go”, “Everything on Sale” or similar themed sale (the “Sale”).

A. Merchandise

For purposes hereof, “Merchandise” shall mean all goods, saleable in the ordinary course, located in the Stores, Merchant’s distribution centers, or in transit to or from the foregoing as of the Sale Commencement Date (defined below), as well as goods, saleable in the ordinary course that have been consigned to Merchant for sale in the Stores. "Merchandise" does not mean and shall not include: (1) owned furnishings, trade fixtures, equipment and improvements to real property that are located in the Stores (collectively, "FF&E"); (2) damaged or defective merchandise that cannot be sold for the purpose for which it is intended; (3) any Additional Agent Goods (as defined below); or (4) goods that belong to sublessees, licensees or concessionaires of Merchant.

B. Sale Term

For each Store, the Sale shall commence on such date designated in writing by Merchant by not later than August 12 2020 (the “Sale Commencement Date”) and conclude no later than October 31, 2020 (the “Sale Termination Date”); provided, however, that the Parties may mutually agree in writing to extend or terminate the Sale at any Store prior to the Sale Termination Date. The period between the Sale Commencement Date and the Sale Termination Date shall be referred to as the “Sale Term.” At the conclusion of the Sale, Agent shall surrender the premises for each Store to Merchant in broom clean condition and in accordance with the lease requirements for such premises, as directed by the Merchant; provided, however, Merchant shall bear all costs and expenses associated with surrendering the premises in accordance with the lease requirements for such premises according to a budget mutually agreed to between the Agent and Merchant. At the conclusion of the Sale at each Store, Agent shall photographically document the condition of each Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 30 of 60 such Store and contemporaneously provide copies to the photographs by electronic means to Merchant. To the extent that the Sale as it pertains to a particular Store is delayed or interrupted because it is required to be closed due to the issuance of an order, rule, or regulation by a federal, state or local government agency related to COVID-19, the Sale Termination Date as to the affected Store shall be extended by the time period for which the Sale was delayed or interrupted. Such photographs shall reference the with specificity each Store by number, name and/or location.

C. Project Management

(i) Agent’s Undertakings

During the Sale Term, Agent shall, in collaboration with Merchant, (a) provide qualified supervisors (the "Supervisors") engaged by Agent to oversee the management of the Stores; (b) determine appropriate point-of-sale and external advertising for the Stores, approved in advance by Merchant; (c) determine appropriate discounts of Merchandise, staffing levels for the Stores, approved in advance by Merchant, and appropriate bonus and incentive programs, if any, for the Stores’ employees, approved in advance by Merchant; (d) oversee display of Merchandise for the Stores; (e) to the extent that information is available, evaluate sales of Merchandise by category and sales reporting and monitor expenses; (f) maintain the confidentiality of all proprietary or non- public information regarding Merchant in accordance with the provisions of the confidentiality agreement signed by the Parties; (g) assist Merchant in connection with managing and controlling loss prevention and employee relations matters; (h) determine the necessity for obtaining any applicable permits and governmental approvals to conduct the Sale, including working with Merchant to obtain each in a timely and orderly fashion and preparing or causing to be prepared all forms necessary to assist in Merchant’s securing any applicable permits and governmental approvals necessary to conduct the Sale, the costs and expenses of which shall be paid by Merchant and shall be in addition to the costs and expenses set forth on the Expense Budget; (i) implement Agent’s affiliate CareerFlex program for Merchant’s Store level and other employees; and (j) provide such other related services deemed necessary or appropriate by Merchant and Agent.

The Parties expressly acknowledge and agree that Merchant shall have no liability to the Supervisors for wages, benefits, severance pay, termination pay, vacation pay, pay in lieu of notice of termination or any other liability arising from Agent’s hiring or engagement of the Supervisors, and the Supervisors shall not be considered employees of Merchant.

Agent and its designated representatives shall communicate regularly with the Merchant’s management, financial advisors, and Merchant’s senior secured lenders Wells Fargo Bank, N.A., and Gordon Brothers Finance Company, including by telephone or web-based video conference, with respect to the liquidation process contemplated under this Agreement, including promptly responding to questions and comments posed Merchant’s management, financial advisors, and secured lenders.

(ii) Merchant’s Undertakings

During the Sale Term, Merchant shall (a) be the employer of the Stores’ employees, other than the Supervisors; (b) pay all taxes, costs, expenses, accounts payable, and other liabilities relating to the Stores, the Stores’ employees and other representatives of Merchant; (c) prepare and process all tax forms and other documentation; (d) collect all sales taxes and pay them to the 2

Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 31 of 60 appropriate taxing authorities for the Stores; (e) use reasonable efforts to cause Merchant’s employees to cooperate with Agent and the Supervisors; (f) execute all agreements determined by the Merchant and Agent to be necessary or desirable for the operation of the Stores during the Sale; (g) arrange for the ordinary maintenance of all point-of-sale equipment required for the Stores; (h) apply for and obtain, with Agent’s assistance and support, all applicable permits and authorizations (including landlord approvals and consents) for the Sale; (i) assist Agent with implementing the CareerFlex program for Merchant’s Store level and other employees; and (j) ensure that Agent has quiet use and enjoyment of the Stores for the Sale Term in order to perform its obligations under this Agreement.

Merchant shall provide throughout the Sale Term central administrative services necessary for the Sale, including (without limitation) customary POS administration, sales audit, cash reconciliation, accounting, and payroll processing, all at no cost to Agent.

Merchant shall be responsible for providing direction to and supplies for the Stores in order to comply with federal, state and local COVID-19 related health and safety requirements, and Agent will assist with the implementation of such requirements at the Stores; provided, however, that Agent shall not be responsible for the payment of nor liable for any fine, injury, death, or damage caused by or related to COVID-19. Agent’s supervisors will provide their own personal protective equipment (“PPE”) at no additional cost to Merchant. To the extent that temporary labor do not source and provide their own PPE, Agent will provide Merchant with Agent’s cost (without lift or mark-up) for PPE and, if requested by Merchant, Agent will procure such PPE, and Merchant agrees to reimburse Agent for the costs associated therewith (in addition to amounts reflected in Exhibit B).

The Parties expressly acknowledge and agree that Agent shall have no liability to Merchant’s employees for wages, benefits, severance pay, termination pay, vacation pay, pay in lieu of notice of termination or any other liability arising from Merchant’s employment, hiring or retention of its employees, and such employees shall not be considered employees of Agent.

D. The Sale

All sales of Merchandise shall be made on behalf of Merchant. Agent does not have, nor shall it have, any right, title or interest in the Merchandise. All sales of Merchandise shall be by cash, gift card, gift certificate, merchandise credit, credit card, or debit card, and, at Merchant’s discretion, by check or otherwise in accordance with Merchant’s policies, and shall be "final" with no returns accepted or allowed, unless otherwise directed by Merchant.

E. Agent Fee and Expenses in Connection with the Sale

As used in this Agreement, the following terms shall have the following meanings:

(i) “Cost Value” shall mean the cost of each item of Merchandise, as reflected in the Merchant’s books, records, and files provided to Agent during due diligence.

(ii) “Gross Proceeds” shall mean the sum of the gross proceeds of all sales of Merchandise made through the Stores or the e-commerce platform during the Sale Term, net only of sales taxes. 3

Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 32 of 60

(iii) “Recovery Percentage” shall mean the Gross Proceeds, calculated using the “gross rings” method, divided by the Cost Value of the Merchandise sold, calculated using the “gross rings” method.

In consideration of its services hereunder, Merchant shall pay Agent a fee weekly equal to 0.95% of Gross Proceeds (the “Tier 1 Fee”). In addition to the “Tier 1 Fee”, Agent may also earn a “Tier 2 Fee” and “Tier 3 Fee” (together with the Tier 1 Fee, the “Merchandise Fee”) equal to the aggregate sum of the percentages shown in the following table, based upon the following thresholds of Recovery Percentage1 (e.g., in each case, as calculated back to first dollar):

Recovery Percentage Merchandise Fee Up to 123% 0.95% Tier 1 Fee is the total Merchandise Fee Greater than 123%, but 0.95% Tier 1 Fee less than 127% 0.55% Tier 2 Fee Total Merchandise Fee of 1.5% above 127.0% 0.95% Tier 1 Fee 0.55% Tier 2 Fee 0.25% Tier 3 Fee Total Merchandise Fee of 1.75%

The definitive Recovery Percentage shall be determined in connection with the Final Reconciliation, and once determined, the parties (as part of the Final Reconciliation) shall determine the actual amount of any applicable Tier 2 Fees and Tier 3 Fees due and payable to Agent. Merchant shall pay Agent’s definitive Tier 2 Fees and Tier 3 Fees in connection with the Final Reconciliation.

Merchant shall be responsible for all expenses of the Sale, including (without limitation) all Store level operating expenses, all costs and expenses related to Merchant’s other retail store operations, and Agent’s other reasonable, documented out of pocket expenses. To control expenses of the Sale, Merchant and Agent have established an aggregate budget (the “Expense Budget”) of certain delineated expenses, including (without limitation) payment of the costs of supervision (including (without limitation) Supervisors’ wages, fees, travel, and deferred compensation) and advertising costs (including signage and the shipping, freight, and sales tax related thereto where applicable). The Expense Budget for the Sale is attached hereto as Exhibit B. The Expense Budget may only be modified by mutual agreement of Agent and Merchant, and Merchant may review, verify and/or audit the expenses at any time, including, without limitation, any expense paid in advance by the Sale Expense Advance (as defined below).. The costs of supervision set forth on Exhibits B include, among other things, industry standard deferred compensation. Notwithstanding anything to the contrary contained in this Agreement, Merchant shall not be responsible or obligated to pay Agent’s costs that have not been included, or provided for, in the Expense Budget, as the same may be amended in accordance with this Agreement.

All accounting matters (including, without limitation, all fees, expenses, or other amounts reimbursable or payable to Agent or, with respect to the Additional Goods Fee, Merchant) shall be

1 To the extent the Sale Term is changed – longer or shorter – the Recovery Percentages and ranges shall be adjusted in accordance with updated models mutually acceptable to the Merchant and Agent. 4

Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 33 of 60 reconciled on every Wednesday for the prior week and shall be paid within seven (7) days after each such weekly reconciliation. The Parties shall complete a final reconciliation (the “Final Reconciliation”) and settlement of all amounts payable to Agent or, with respect to the Additional Agent Goods Fee, Merchant and contemplated by this Agreement (including, without limitation, Expense Budget items, and fees earned hereunder) no later than forty five (45) days following the Sale Termination Date for the last Store.

Upon execution of this Agreement, the Merchant shall pay by wire transfer to the Agent an advance payment of costs and expenses delineated in the Expense Budget of $3,000,000 (the “Sale Expense Advance”). Other than with respect to the costs of signage, which shall be applied against the Sale Expense Advance, the balance of the Sale Expense Advance shall be held by Agent until the Final Reconciliation (and Merchant shall not apply the balance of the Sale Expense Advance to, or otherwise offset any portion of the balance of the Sale Expense Advance against, any weekly reimbursement, payment of fees, or other amount owing to Agent under this Agreement prior to the Final Reconciliation). Without limiting any of Agent’s other rights, Agent may apply the Sale Expense Advance to any unpaid obligation owing by Merchant to Agent under this Agreement. Any portion of the Sale Expense Advance not used to pay amounts explicitly contemplated by this Agreement shall be returned to Merchant within three days following the Final Reconciliation.

F. Indemnification

(i) Merchant’s Indemnification

Merchant shall indemnify, defend, and hold Agent and its consultants, members, managers, partners, officers, directors, employees, attorneys, advisors, representatives, lenders, potential co- investors, principals, affiliates, and Supervisors (collectively, "Agent Indemnified Parties") harmless from and against all liabilities, claims, demands, damages, costs and expenses (including reasonable attorneys' fees) arising from or related to: (a) the willful or negligent acts or omissions of Merchant or the Merchant Indemnified Parties (as defined below); (b) the material breach of any provision of this Agreement by Merchant, after Merchant has received notice of the asserted breach and Merchant fails to promptly cure the same to the extent the breach is curable; (c) any liability or other claims, including, without limitation, product liability claims, asserted by customers, any Store employees (under a collective bargaining agreement or otherwise), or any other person (excluding Agent Indemnified Parties) against Agent or an Agent Indemnified Party, except claims arising from Agent’s negligence, willful misconduct or unlawful behavior; (d) any harassment, discrimination or violation of any laws or regulations or any other unlawful, tortious or otherwise actionable treatment of Agent’s Indemnified Parties or Merchant’s customers by Merchant or Merchant’s Indemnified Parties; and (e) Merchant’s failure to pay over to the appropriate taxing authority any taxes required to be paid by Merchant during the Sale Term in accordance with applicable law.

(ii) Agent’s Indemnification

Agent shall indemnify, defend and hold Merchant and its consultants, members, managers, partners, officers, directors, employees, attorneys, advisors, representatives, lenders, potential co- investors, principals, and affiliates (other than the Agent or the Agent Indemnified Parties) (collectively, "Merchant Indemnified Parties") harmless from and against all liabilities, claims, demands, damages, costs and expenses (including reasonable attorneys' fees) arising from or related 5

Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 34 of 60 to (a) the willful or negligent acts or omissions of Agent or the Agent Indemnified Parties; (b) the breach of any provision of, or the failure to perform any obligation under, this Agreement by Agent; (c) any liability or other claims made by Agent’s Indemnified Parties or any other person (excluding Merchant Indemnified Parties) against a Merchant Indemnified Party arising out of or related to Agent’s conduct of the Sale, except claims arising from Merchant’s negligence, willful misconduct, or unlawful behavior; (d) any harassment, discrimination or violation of any laws or regulations or any other unlawful, tortious or otherwise actionable treatment of Merchant Indemnified Parties, or Merchant’s customers by Agent or any of the Agent Indemnified Parties and (e) any claims made by any party engaged by Agent as an employee, agent, representative or independent contractor arising out of such engagement.

G. Insurance

(i) Merchant’s Insurance Obligations

Merchant shall maintain throughout the Sale Term, liability insurance policies (including, without limitation, products liability (to the extent currently provided), comprehensive public liability insurance and auto liability insurance) covering injuries to persons and property in or in connection with the Stores, and shall cause Agent to be named an additional insured with respect to all such policies. At Agent’s request, Merchant shall provide Agent with a certificate or certificates evidencing the insurance coverage required hereunder and that Agent is an additional insured thereunder. In addition, Merchant shall maintain throughout the Sale Term, in such amounts as it currently has in effect, workers compensation insurance in compliance with all statutory requirements.

(ii) Agent’s Insurance Obligations

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

H. Representations, Warranties, Covenants and Agreements

(i) Merchant warrants, represents, covenants and agrees that (a) Merchant is a company duly organized, validly existing and in good standing under the laws of its state of organization, with full power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and maintains its principal executive office at the address set forth herein, (b) the 6

Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 35 of 60 execution, delivery and performance of this Agreement has been duly authorized by all necessary actions of Merchant and this Agreement constitutes a valid and binding obligation of Merchant enforceable against Merchant in accordance with its terms and conditions, and the consent of no other entity or person is required for Merchant to fully perform all of its obligations herein, (c) all ticketing of Merchandise at the Stores has been and will be done in accordance with Merchant’s customary ticketing practices; (d) all normal course hard markdowns on the Merchandise have been, and will be, taken consistent with customary Merchant’s practices, and (e) the Stores will be operated in the ordinary course of business in all respects as they are being operated at the time of execution of this Agreement, subject to adjustment based upon the liquidation contemplated by this Agreement, other than those expressly agreed to in writing (including by email) by Merchant and Agent.

(ii) Each member comprising Agent warrants, represents, covenants and agrees that (a) Agent is a company duly organized, validly existing and in good standing under the laws of its state of organization, with full power and authority to execute and deliver this Agreement and to perform the Agent’s obligations hereunder, and maintains its principal executive office at the addresses set forth herein, (b) the execution, delivery and performance of this Agreement has been duly authorized by all necessary actions of Agent and this Agreement constitutes a valid and binding obligation of Agent enforceable against Agent in accordance with its terms and conditions, and the consent of no other entity or person is required for Agent to fully perform all of its obligations herein, (c) Agent shall comply with and act in accordance with any and all applicable state and local laws, rules, and regulations, and other legal obligations of all governmental authorities, (d) no non- emergency repairs or maintenance in the Stores will be conducted without Merchant’s prior written consent, and (e) Agent will not take any disciplinary action against any employee of Merchant.

I. Furniture, Fixtures and Equipment

Agent shall sell the FF&E in the Stores from the Stores, distribution centers, and corporate office(s) themselves. Merchant shall be responsible for all reasonable costs and expenses incurred by Agent in connection with the sale of FF&E, which costs and expenses shall be incurred pursuant to a budget or budgets to be established from time to time by mutual agreement of the Parties. Agent right, upon notice to and consent by Merchant and Gordon Brothers Finance Company, shall have the right to abandon at the Stores any unsold FF&E.

In consideration for providing the services set forth in this section I, Agent shall be entitled to a commission from the sale of the FF&E equal to seventeen and one-half percent (17.5%) of the Gross Proceeds of the sale of the FF&E.

Agent shall remit to Merchant all Gross Proceeds from the sale of FF&E, which shall be separately accounted for and remitted by Merchant to Gordon Brothers Finance Company. During each weekly reconciliation described in section E above, Agent’s FF&E fee shall be calculated, and Agent’s calculated FF&E fee and all FF&E costs and expenses then incurred shall paid within seven (7) days after each such weekly reconciliation.

J. Additional Agent Goods

Agent shall have the right, at Agent’s sole cost and expense, to supplement the Merchandise in the Sale at the Stores with additional goods procured by Agent which are of like kind, and no 7

Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 36 of 60 lesser quality to the Merchandise in the Sale at the Stores (“Additional Agent Goods”); provided, however, that the aggregate cost of the Additional Agent Goods shall not exceed 20% of the aggregate cost of the Merchandise to be sold during the Sale. The Additional Agent Goods shall be purchased by Agent as part of the Sale, and delivered to the Stores at Agent’s sole expense (including as to labor, freight and insurance relative to shipping such Additional Agent Goods to the Stores). Sales of Additional Agent Goods shall be run through Merchant’s cash register systems; provided however, that Agent shall mark the Additional Agent Goods using either a “dummy” SKU or department number, or in such other manner so as to distinguish the sale of Additional Agent Goods from the sale of Merchandise. Agent and 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. Further, Merchant agrees to use reasonable efforts based upon its then-existing technologies and staffing capabilities to expeditiously create SKUs and other information technology related items necessary or appropriate to track the sale of the Additional Agent Goods and the proceeds thereof.

Agent shall pay to Merchant an amount equal to seven and one-half percent (7.5%) percent of the gross proceeds (excluding only Sale Taxes) from the sale of the Additional Agent Goods (the “Additional Agent Goods Fee”), and Agent shall retain all remaining amounts from the sale of the Additional Agent Goods. Agent hereby guarantees that the Additional Agent Good’s Fee payable to Merchant shall be not less than $1,500,000 (the “Guaranteed Amount”) on account of the sale of the Additional Agent Goods, which Guaranteed Amount shall be paid by Agent through payment of the 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) and, to the extent the Guaranteed Amount is not paid by the time of the Final Reconciliation, the difference between the amount then paid and the Guaranteed Amount shall be paid by Agent as part of the Final Reconciliation.

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 Agent’s obligations to pay to Merchant the Guaranteed Amount and 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.

Merchant shall, at Agent’s sole cost and expense, insure the Additional Agent Goods and, if required, promptly file any proofs of loss with regard to same with Merchant’s 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.

Merchant acknowledges, and, to the extent applicable, the Approval Order shall provide, that the Additional Agent Goods shall be consigned to Merchant as a true consignment under Article 9 of the Code. Agent is hereby granted a first priority security interest in and lien upon (i) the Additional Agent Goods and (ii) Agent’s portion of the Additional Agent Goods proceeds, and Agent is hereby authorized to file UCC financing statements and provide notifications to any prior secured parties; provided, however, in the event the Merchant files a Bankruptcy Case, the Approval Order shall also provide that the security interest granted to Agent hereunder shall be deemed perfected pursuant to the Approval Order without the requirement of filing UCC financing 8

Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 37 of 60 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 Agent’s interest in the Additional Agent Goods as consigned goods thereunder and the Merchant as the consignee therefor, and Agent’s security interest in and lien upon such Additional Agent Goods and Agent’s portion of the Additional Agent Goods proceeds).

K. Termination

The following shall constitute “Termination Events” hereunder:

(a) Merchant’s or Agent’s failure to perform any of their respective material obligations hereunder, which failure shall continue uncured seven (7) days after receipt of written notice thereof to the defaulting Party; or

(b) Any representation or warranty made by Merchant or Agent is untrue in any material respect as of the date made or at any time and throughout the Sale Term.

If a Termination Event occurs, the non-defaulting Party may, in its discretion, elect to terminate this Agreement by providing seven (7) business days’ written notice thereof to the other Party and, in the case of an event of default, in addition to terminating this Agreement, pursue any and all rights and remedies and damages resulting from such default. If this Agreement is terminated, Merchant shall be obligated to pay Agent all amounts due under this Agreement through and including the termination date.

Anything herein to the contrary notwithstanding, Merchant shall have the right to terminate this Agreement, with such termination not constituting a breach of this Agreement, at any time before the Sale Commencement Date upon providing notice to Agent and subject to Merchant being liable for payment of the costs and expenses contemplated by the Expense Budget under this Agreement that are incurred or accrued by Agent up to date of termination or reasonably incurred by Agent thereafter to stand-down and disengage from proceeding with the Sale (the “Termination Costs”), plus a termination fee of $250,000.00, which sums Agent may deduct from the Sale Expense Advance.

Anything herein to the contrary notwithstanding, if Merchant receives a bona fide offer to purchase such Store locations as part of a going-concern business to be operated by buyer that would in the business judgment of the Board of Directors would produce a better recovery outcome for all creditors and stakeholders of Merchant, Merchant shall have the right to remove Store locations from the scope of the Sale, from time to time, both before or after the Sale Commencement Date, with such removal of Store locations not constituting a breach of this Agreement, upon Merchant providing notice to Agent and subject to Merchant being liable for payment of the Termination Costs related to such Store locations, which Agent may deduct from the Sale Expense Advance and for which Merchant shall be liable to the extent the Sale Expense Advance is insufficient to cover the Termination Costs. To the extent any Store locations are removed by Merchant, (i) the Merchant hereby agrees to cause the buyer of such Store locations to purchase from Agent all Additional Agent Goods in (or in transit to) such removed Store locations (the “Buyer Purchased Goods”) at an amount mutually agreed to between Agent and such buyer, which amount shall be not less than Agent’s fully landed cost; and (ii) the Merchant and Agent shall 9

Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 38 of 60 use commercially reasonable and good faith efforts to negotiate a reduction to the Guaranteed Amount; provided, however, that if, despite such commercially reasonable and good faith efforts, the Merchant and Agent are unable to agree upon such reduction, the Guaranteed Amount shall no longer apply, but the Agent shall remain obligated to pay the Additional Agent Goods Fee on account of Additional Agent Goods (other than the Buyer Purchased Goods) that are sold through the Sale.

L. Notices

All notices, certificates, approvals, and payments provided for herein shall be sent by fax or by recognized overnight delivery service as follows: (a) To Merchant: at the address listed above; (b) To Agent: c/o Hilco Merchant Resources, LLC, One Northbrook Place, 5 Revere Drive, Suite 206, Northbrook, IL 60062, Fax: 847- 849-0859, Attn: Ian S. Fredericks; or (c) such other address as may be designated in writing by Merchant or Agent.

M. Independent Consultant

Agent’s relationship to Merchant is that of an independent contractor without the capacity to bind Merchant in any respect. No employer/employee, principal/agent, joint venture or other such relationship is created by this Agreement. Merchant shall have no control over the hours that Agent or its employees or assistants or the Supervisors work or the means or manner in which the services that will be provided are performed and Agent is not authorized to enter into any contracts or agreements on behalf of Merchant or to otherwise create any obligations of Merchant to third parties, unless authorized in writing to do so by Merchant.

N. Non-Assignment

Neither this Agreement nor any of the rights hereunder may be transferred or assigned by either Party without the prior written consent of the other Party. No modification, amendment or waiver of any of the provisions contained in this Agreement, or any future representation, promise or condition in connection with the subject matter of this Agreement, shall be binding upon any Party to this Agreement unless made in writing and signed by a duly authorized representative or agent of such Party. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, legal representatives, successors and permitted assigns.

O. Severability

If any term or provision of this Agreement, as applied to either Party or any circumstance, for any reason shall be declared by a court of competent jurisdiction to be invalid, illegal, unenforceable, inoperative or otherwise ineffective, that provision shall be limited or eliminated to the minimum extent necessary so that this Agreement shall otherwise remain in full force and effect and enforceable. If the surviving portions of the Agreement fail to retain the essential understanding of the Parties, the Agreement may be terminated by mutual consent of the Parties.

P. Governing Law, Venue, Jurisdiction and Jury Waiver

This Agreement, and its validity, construction and effect, shall be governed by and enforced in accordance with the internal laws of the State of Florida (without reference to the conflicts of 10

Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 39 of 60 laws provisions therein). Merchant and Agent waive their respective rights to trial by jury of any cause of action, claim, counterclaim or cross-complaint in any action, proceeding and/or hearing brought by either Agent against Merchant or Merchant against Agent on any matter whatsoever arising out of, or in any way connected with, this Agreement, the relationship between Merchant and Agent, any claim of injury or damage or the enforcement of any remedy under any law, statute or regulation, emergency or otherwise, now or hereafter in effect. The Parties agree that any disputes shall be adjudicated in the state, federal or bankruptcy courts, as applicable, located in Duval County, Florida.

Q. Entire Agreement

This Agreement, together with all additional schedules and exhibits attached hereto, constitutes a single, integrated written contract expressing the entire agreement of the Parties concerning the subject matter hereof. No covenants, agreements, representations or warranties of any kind whatsoever have been made by any Party except as specifically set forth in this Agreement. All prior agreements, discussions and negotiations are entirely superseded by this Agreement.

R. Execution

This Agreement may be executed simultaneously in counterparts (including by means of electronic mail, facsimile or portable document format (pdf) signature pages), any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same instrument. This Agreement, and any amendments hereto, to the extent signed and delivered by means of electronic mail, a facsimile machine or electronic transmission in portable document format (pdf), shall be treated in all manner and respects as an original thereof and shall be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person.

S. Bankruptcy

If Merchant commences a case under Chapter 11 of title 11, United States Code (the “Bankruptcy Code”), with a bankruptcy court (the “Bankruptcy Court”), Merchant shall promptly file a motion to assume this Agreement under section 365 of the Bankruptcy Code, and utilize its commercially reasonable efforts to ensure that such motion is approved by an order (the “Approval Order”) that provides, among other things, as follows: (i) the payment of all fees and reimbursement of expenses hereunder to Agent is approved without further order of the court and shall be free and clear of all liens, claims and encumbrances; (ii) all such payments of fees and reimbursement of expenses shall be made on a weekly basis without further order of the Bankruptcy Court and otherwise in accordance with this Agreement; (iii) approval of the transaction contemplated hereby; (iv) authorizing the Sale without the necessity of complying with state and local rules, laws, ordinances and regulations, including, without limitation, permitting and licensing requirements, that could otherwise govern the Sale; (iv) authorizing the Sale notwithstanding restrictions in leases, reciprocal easement agreements or other contracts that purport to restrict the Sale or the necessity of obtaining any third party consents; (v) approval of the sale of Additional Agent Goods in accordance with the terms and conditions hereof; (vi) authorizing Merchant to take all further actions as are necessary or appropriate to carry out the terms and conditions of this Agreement; and (vii) other terms and conditions substantially similar to orders recently entered in 11

Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 40 of 60 other large chapter 11 retail cases. In such event, any legal action, suit or proceeding arising in connection with this Agreement shall be submitted to the exclusive jurisdiction of the Bankruptcy Court having jurisdiction over Merchant, and each Party hereby waives any defenses or objections based on lack of jurisdiction, improper venue, and/or forum non conveniens. From and after entry of the Approval Order, Agent shall conduct the Sale in accordance with the terms of the Approval Order in all material respects.

* * *

12

Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 41 of 60 DocuSign Envelope ID: 414C88DA-FC0B-4C45-922C-55E741297895Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 42 of 60

If this Agreement is acceptable to you, kindly execute a copy in the space provided, and return a countersigned version to the undersigned. Thank you again for this opportunity -- we look forward to working with you.

Very truly yours,

HILCO MERCHANT RESOURCES, LLC

______By: Its:

GORDON BROTHERS RETAIL PARTNERS, LLC

______By: Its:

GREAT AMERICAN GROUP, LLC

______By: Its:

TIGER CAPITAL GROUP, LLC

______By: Its:

SB360 CAPITAL PARTNERS, LLC

By: Its:

AGREED AND ACCEPTED as of the ___ day of August, 2020:

STEIN MART, INC.

By: Its:

13

Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 43 of 60 Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 44 of 60 Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 45 of 60 Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 46 of 60 Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 47 of 60 Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 48 of 60 Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 49 of 60 Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 50 of 60 Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 51 of 60 Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 52 of 60

Steinmart Exhibit B

Expense Budget (1)

Advertising Media 687,900 Signs (2) 1,686,000 Sign Walkers 1,857,551 Subtotal Advertising 4,231,451

Supervision Fees / Wages / Expenses (3) 3,225,830 Subtotal Supervision 3,225,830

Miscellaneous /Legal (4) 50,000

Total Expenses 7,507,281

Note(s): 1. This Expense Budget contemplates a sale term of August, 8, 2020 through October 25, 2020. The Expense Budget remains subject to modification in the event that this term is extended, or as otherwise agreed to by the parties. 2. Includes Sales Tax. 3. Includes Deferred Compensation and Insurance. 4. Any legal expenses associated with issues raised by or disputes with landlords, including (without limitation) negotiations in respect of landlord side letters, shall be in addition to and not part of the budgeted legal expenses.

Hilco Merchant Resources, LLC 8/4/2020 Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 53 of 60

EXHIBIT B Invoice & Wire Instructions Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 54 of 60

Invoice

REMIT TO: Hilco Merchant Resources, LLC INVOICE DATE: 8/5/2020 5 Revere Drive, Suite 206 Northbrook, IL 60062 INVOICE NUMBER: 15848 Attention: Lori Henry DUE DATE: 8/7/2020

BILL TO: Stein Mart, Inc. 1200 Riverplace Blvd. Jacksonville, FL 32207

DESCRIPTION: AMOUNT

RE: Stein Mart

Sale Expense Advance 3,000,000.00

INVOICE SUB-TOTAL: 3,000,000.00 LESS PRE-PAYMENT: 0.00 INVOICE TOTAL: 3,000,000.00

Wiring Instructions: Acct. Name: Hilco Merchant Resources, LLC Bank:

Acct Number: ABA Routing: Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 55 of 60

EXHIBIT 2

Store Closing Procedures

4822-7491-8342.3 6238466.5 Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 56 of 60

UNITED STATES BANKRUPTCY COURT MIDDLE DISTRICT OF FLORIDA JACKSONVILLE DIVISION

In re: Chapter 11

STEIN MART, INC.1 Case No. ______Jointly Administered with STEIN MART BUYING CORP. Case No. ______STEIN MART HOLDING CORP., Case No. ______Debtors.

STORE CLOSING PROCEDURES2

The following procedures (the “Store Closing Procedures”) shall apply to the Sales to be held at the Stores subject to the Consulting Agreement:

1. The Sales will be conducted during normal business hours or such hours as otherwise permitted by the applicable unexpired lease.

2. The Sales will be conducted in accordance with applicable state and local “Blue

Laws.” Accordingly, where Blue Laws apply, no Store Closings will be conducted on Sundays unless the Debtors have been operating such Stores on Sundays.

3. On “shopping center” property, neither the Debtors nor the Consultant shall distribute handbills, leaflets, or other written materials to customers outside of any Store’s

1 The tax identification numbers of the Debtors are as follows: Stein Mart, Inc. 6198; Stein Mart Buying Corp. 1114; and Stein Mart Holding Corp. 0492. The address of the principal offices of the Debtors is: 1200 Riverplace Blvd., Jacksonville, FL 32207.

2 Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Debtors’ Motion for Entry of Interim and Final Orders (I) Authorizing the Debtors to Assume the Consulting Agreement, (II) Approving Procedures for Store Closing Sales, and (III) Approving the Implementation of Customary Store Bonus Program and Payments to Non-Insiders Thereunder

4822-7491-8342.3 6238466.5 Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 57 of 60

premises, unless permitted by the applicable lease or customary in the “shopping center” in which a Store is located; provided that the Debtors and the Consultant may solicit customers in the Stores themselves.

4. On “shopping center” property, neither the Debtors nor the Consultant shall use any flashing lights or amplified sound to advertise the Store Closings or solicit customers, except as permitted under the applicable lease or agreed in writing by the landlord.

5. The Debtors and the Consultant shall have the right to use and sell the FF&E. The

Debtors and the Consultant may advertise the sale of the FF&E in a manner consistent with these

Store Closing Procedures. The purchasers of any FF&E sold during the Sales shall be permitted to remove the FF&E either through the back or alternative shipping areas at any time or through other areas after Store business hours; provided, however, that the foregoing shall not apply to de minimis FF&E sales made whereby the item can be carried out of a Store in a shopping bag.

6. The Consultant and Debtors may abandon any FF&E not sold in the Sales at the

Stores at the conclusion of the Sales, including, but not limited to, Store signage related to the

Sales and Store Closings provided, that, the Consultant and the Debtors shall acquire the prior written consent of (i) Wells Fargo Bank N.A., as lender under Debtor’s prepetition revolving credit facility, and (ii) Gordon Brothers Finance, as lender under the Debtors’ pre-petition term loan, before abandoning any FF&E. Any abandoned FF&E left in a Store after a lease is rejected shall be deemed abandoned by the Debtors, with the landlord having a right to dispose of the same as it chooses without any liability whatsoever to any party and without waiver of any damage claims against the Debtors.

7. The Debtors and the Consultant may, but are not required to, advertise all of the

Sales and Store Closings as “store closing,” “everything on sale,” “everything must go,” “going

2 4822-7491-8342.3 6238466.5 Case 3:20-bk-02387-JAF Doc 102 Filed 08/14/20 Page 58 of 60

out of business,” or similarly themed sales. The Debtors and the Consultant may also have a

“countdown to closing” sign prominently displayed in a manner consistent with these Store

Closing Procedures.

8. The Consultant shall be entitled to include Additional Agent Goods in the Sales in accordance with the terms of the Consulting Agreement and the Court Orders approving the

Consulting Agreements.

9. The Debtors and the Consultant shall be permitted to utilize sign walkers, displays, hanging signs, and interior banners in connection with the Sales and Store Closings; provided that such sign walkers, displays, hanging signs, and interior banners shall be professionally produced and hung in a professional manner. Neither the Debtors nor the

Consultant shall use neon or day-glo on its sign walkers, displays, hanging signs, or interior banners if prohibited by the applicable lease or applicable law. 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 Store Closing Procedures. The Debtors and the Consultant shall be permitted to utilize exterior banners at (a) Stores in non-enclosed malls and (b) Stores in enclosed malls 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 or Store Closing is being conducted only at the affected Store and shall not be wider than the storefront of the Store. In addition, the Debtors and Consultant shall be permitted to utilize sign walkers in a safe and professional manner. Nothing contained in these

Store Closing Procedures shall be construed to create or impose upon the Debtors or the

Consultant any additional restrictions not contained in the applicable lease agreement.

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10. Neither the Debtors nor the Consultant shall make any alterations to the storefront, roof, or exterior walls of any Stores or shopping centers or to interior or exterior store lighting, except as authorized by the applicable lease. The hanging of in-store signage shall not constitute an alteration to a Store.

11. Affected landlords will have the ability to negotiate with the Debtors or, at the

Debtors’ direction, the Consultant with respect to any particular modifications to the Store

Closing Procedures. The Consultant, at the direction of the Debtors, and the landlord of any

Store are authorized to enter into Side Letters without further order of the Court, provided that such agreements do not have a material adverse effect on the Debtors or their estates.

12. Conspicuous signs will be posted in each of the affected stores to the effect that all sales are “final.”

13. The Debtors will keep store premises and surrounding areas clear and orderly, consistent with past practices.

14. An unexpired nonresidential real property lease will not be deemed rejected by reason of a Store Closing or the adoption of these Store Closing Procedures.

15. The rights of landlords against the Debtors for any damages to a Store shall be reserved in accordance with the provisions of the applicable lease; provided that (a) Stores shall be surrendered in as-is condition, and (b) to the extent certain leases of Stores require written confirmation of receipt of a key to effectuate surrender, this requirement is waived.

16. If and to the extent that the landlord of any Store contends that the Debtors or the

Consultant are in breach of or default under these Store Closing Procedures, such landlord shall provide at least five (5) days’ written notice, served by email or overnight delivery, on:

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If to the Debtors: ______with copies (which shall not Foley & Lardner, LLP constitute notice) to: Attn: Gardner Davis, John Wolfel and Richard Guyer Suite 1300 One Independent Drive Jacksonville Florida, 32202 If to Consultant: c/o Hilco Merchant Resources, LLC Attn: Sarah Baker One Northbrook Place 5 Revere Drive, Suite 206 Northbrook, IL 60062 with copies (which shall not Troutman Pepper Hamilton Sanders LLP constitute notice) to: Attn: Douglas D. Herrmann and Marcy J. McLaughlin Smith 1313 N. Market Street, Suite 5100 Wilmington, Delaware 19801

If to Wells Fargo Bank, NA: Otterbourg P.C. Attn: Daniel F. Fiorillo, Esq. and Chad B. Simon, Esq. 230 Park Avenue New York, NY 10169-0075

If to Gordon Brothers Morgan Lewis & Bockius LLP Attn: Matthew F. Furlong, Julia Frost-Davies and Christopher L. Carter One Federal Street Boston, Massachusetts 02110

17. If the parties are unable to resolve the dispute, either the landlord or the Debtors shall have the right to schedule a hearing before the Court on no less than five (5) days’ written notice to the applicable parties, served by email or overnight delivery.

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