Case 20-13076-BLS Doc 735 Filed 05/24/21 Page 1 of 6 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ------------------------------------------------------------ x : In re: : Chapter 11 : FHC HOLDINGS CORPORATION, et al.,1 : Case No. 20-13076 (BLS) : Debtors. : Jointly Administered : ------------------------------------------------------------ x STIPULATION AND AGREED ORDER BETWEEN THE DEBTORS AND THE BROOKFIELD CLAIMANTS This stipulation and agreed order (this “Stipulation”) is made as of May 20, 2021, by and between FHC Holdings Corporation and its affiliated debtors and debtors in possession (collectively, the “Debtors”) and Brookfield Properties Retail, Inc. on behalf of Pioneer Place, LLC; Saint Louis Galleria LLC; Southwest Plaza LLC; GGP Staten Island Mall, LLC; Stonestown Shopping Center, L.P.; Baltimore Center Associates LP; Water Tower LLC; Augusta Mall LLC; FC-QIC Ballston Common Retail JV LLC; Bellis Fair Mall, LLC; Jordan Creek Town Center, LLC; Mizner Park Venture, LLC; Newpark Mall LP; Westcoast Estates; and GGP-Northridge Fashion Center LP (collectively, the “Claimants”). The parties hereto are individually referred to in this Stipulation as a “Party” and together referred to as “Parties.” 1 The Debtors in these cases, along with the last four digits of each Debtor’s federal tax identification number, are FHC Holdings Corporation (f/k/a Francesca’s Holdings Corporation) (4704), FHC LLC (f/k/a Francesca’s LLC) (2500), FHC Collections, Inc. (f/k/a Francesca’s Collections, Inc.) (4665), and FHC Services Corporation (f/k/a Francesca’s Services Corporation) (5988). The address of the legacy Debtors’ corporate headquarters is 8760 Clay Road, Houston, TX 77080. The address for correspondence related to the Debtors is c/o Saccullo Business Consulting, LLC, 27 Crimson King Drive, Bear, DE 19701. RLF1 25354605v.1 Case 20-13076-BLS Doc 735 Filed 05/24/21 Page 2 of 6 RECITALS WHEREAS, on December 3, 2020, each of the Debtors filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Court”), thereby commencing the above-captioned chapter 11 cases (the “Chapter 11 Cases”). WHEREAS, prior to the Petition Date, the Debtors and the Claimants were party to 15 non-residential real property leases for certain of the Debtors’ boutiques that were closed by the Debtors prior to the Petition Date (collectively, the “Leases”). WHEREAS, prior to the Petition Date, the Debtors terminated two of the Leases associated with the Debtors’ former boutiques located at Pioneer Place, 700 SW 5th Avenue, Portland, OR 97204 and Bellis Fair, One Bellis Fair Parkway, Bellingham, WA 98226 (together, the “Terminated Leases”). WHEREAS, on January 4, 2021, the Court entered the First Omnibus Order (I) Authorizing (A) Rejection of Certain Unexpired Leases of Nonresidential Real Property Nunc Pro Tunc to the Rejection Date and (B) Abandonment of De Minimis Property in Connection Therewith, (II) Granting a Limited Waiver of Bankruptcy Rule 6006(f)(6), and (III) Granting Related Relief [D.I. 260], which approved the rejection, of among others, the remaining 13 Leases as of the Petition Date (collectively, the “Rejected Leases”). WHEREAS, on February 17, 2021, the Court entered the Order (I) Establishing Deadlines and Procedures for Filing Proofs of Claim and Request for Payment of Postpetition Administrative Claims; (II) Approving the Form and Manner of Notices Thereof; and (III) Granting Related Relief [D.I. 471], which, among other things, established the general deadline to file proofs of claim in the Chapter 11 Cases as March 25, 2021. 2 RLF1 25354605v.1 Case 20-13076-BLS Doc 735 Filed 05/24/21 Page 3 of 6 WHEREAS, on March 17, 2021, the Claimants filed 15 proofs of claim, as reflected on the attached Exhibit A, asserting claims for prepetition rent and rejection damages related to the Terminated Leases and the Rejected Leases (collectively, the “Proofs of Claim”). Each of the Proofs of Claim asserted by the Claimants indicated that all or part of the claim was entitled to administrative priority under section 507(a)(2) of the Bankruptcy Code. WHEREAS, upon review of the Proofs of Claim, the Debtors identified that each of the Proofs of Claim were not entitled to administrative priority under section 507(a)(2) of the Bankruptcy Code as the Proofs of Claim assert claims for prepetition rent and rejection damages related to the termination and/or rejection of the Leases. WHEREAS, the Claimants have acknowledged that the Proofs of Claim are not entitled to administrative priority under section 507(a)(2) of the Bankruptcy Code. WHEREAS, the Parties have determined that it is in each of their own best interest to enter into this Stipulation to memorialize their agreement with respect to reclassifying the Proofs of Claim as set forth herein. NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated into this Stipulation, the Parties hereby agree and stipulate, subject to the Court’s approval, as follows: 1. The Proofs of Claim are hereby reclassified as general unsecured claims, as indicated in the columns titled “Modified Claim Class” and “Modified Claim Amount” in the attached Exhibit A. 2. The rights of the Debtors to (i) file any objections to any of the Proofs of Claim listed in Exhibit A on any ground, (ii) seek expungement or reduction of any of the Proofs of 3 RLF1 25354605v.1 Case 20-13076-BLS Doc 735 Filed 05/24/21 Page 4 of 6 Claim to the extent all or a portion of such claim has been paid, and (iii) settle any of the Proofs of Claim for less than the asserted amount are fully preserved. 3. Nothing in this Stipulation or the relief granted thereby (including any actions taken by the Debtors) is to be construed as (i) an admission of the validity of any claim against any of the Debtors; (ii) an admission with respect to the validity, extent, or perfection of any lien; (iii) a waiver of the Debtors’ rights or those of any party in interest to dispute, contest, setoff, or recoup any claim, or assert any related rights, claims, or defenses; (iv) a waiver of the Debtors’ rights or those of any party in interest over the validity, extent, perfection, or possible avoidance of any lien; or (v) an approval or assumption of any agreement, contract, program, policy, or lease under section 365 of the Bankruptcy Code, and the Parties hereby reserve all of their rights in connection with the above. 4. This Stipulation constitutes the complete express agreement of the Parties with respect to the subject matter hereof and no material modification or amendment to this Stipulation shall be valid unless it is in writing and signed by the Parties. This Stipulation shall remain binding on the Parties hereto and all of their successors and assignees, including, but not limited to, any trustee appointed in these cases under chapter 11 or chapter 7 of the Bankruptcy Code. 5. Each person who executes this Stipulation represents that he or she is duly authorized to do so on behalf of the respective Party hereto and that each such Party has full knowledge and has consented to this Stipulation. 6. This Stipulation shall be construed and interpreted in accordance with the laws of the State of Delaware, without regard to the choice of law principles of the State of Delaware. For purposes of construing this Stipulation, none of the Parties shall be deemed to have been the drafter of this Stipulation. 4 RLF1 25354605v.1 Case 20-13076-BLS Doc 735 Filed 05/24/21 Page 5 of 6 7. This Stipulation may be executed in counterparts, any of which may be transmitted by facsimile or electronic mail, and each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 8. This Stipulation is subject to approval of the Court, and the Debtors shall submit this Stipulation to the Court for approval under a certification of counsel. 9. The terms and conditions of this Stipulation shall be immediately effective and enforceable upon approval by the Court. 10. The Parties agree that the Court shall retain jurisdiction to resolve any dispute arising from or related to this Stipulation. [Remainder of page intentionally left blank.] 5 RLF1 25354605v.1 Case 20-13076-BLS Doc 735 Filed 05/24/21 Page 6 of 6 IN WITNESS WHEREOF and in agreement herewith, the Parties have executed and delivered this Stipulation as of the date first set forth above. /s/ Jason M. Madron /s/ Julie Minnick Bowden RICHARDS, LAYTON & FINGER, P.A. BROOKFIELD PROPERTIES RETAIL, Mark D. Collins (No. 2981) INC. Michael J. Merchant (No. 3854) Julie Minnick Bowden Jason M. Madron (No. 4431) 350 N. Orleans Street, Suite 300 One Rodney Square Chicago, Illinois 60654-1607 920 North King Street Telephone: (312) 960-2707 Wilmington, Delaware 19801 Facsimile: (312) 442-6374 Telephone: (302) 651-7700 Facsimile: (302) 651-7701 Representative for Claimants - and - O’MELVENY & MYERS LLP Maria J. DiConza (admitted pro hac vice) Joseph Zujkowski (admitted pro hac vice) Diana M. Perez (admitted pro hac vice) Times Square Tower Seven Times Square New York, New York 10036 Telephone: (212) 326-2000 Facsimile: (212) 326-2061 Attorneys for the Debtors and Debtors in Possession IT IS SO ORDERED: BRENDAN L. SHANNON Dated: May 24th, 2021 UNITED STATES BANKRUPTCY JUDGE Wilmington, Delaware 6 RLF1 25354605v.1 Case 20-13076-BLS Doc 735-1 Filed 05/24/21 Page 1 of 2 EXHIBIT A RLF1 25354605v.1 Case 20-13076-BLS Doc 735-1 Filed 05/24/21 Page 2 of 2 FHC Holdings Corporation Misclassified Claims Claim Claim Asserted Asserted Claim Modified Modified Creditor Name Debtor Number Date Filed Claim Class Amount Claim Class Claim Amount FHC Collections, Unsecured Pioneer Place, LLC 713 03/17/2021 Inc.