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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
-----------------------------------
Date of Report
November 27, 1996
NeoStar Retail Group, Inc.
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-25272 75-2559376
- ---------------------------- ------------- -------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2250 William D. Tate Avenue, Grapevine, Texas 76051
- ---------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (817) 424-2000
----------------
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Item 5. Other Events
On September 16, 1996, NeoStar Retail Group, Inc., a Delaware
corporation (the "Company'), and its direct and indirect subsidiaries,
Babbage's, Inc., a Texas corporation ("Babbage's"), Software Etc. Stores, Inc.,
a Delaware corporation ("Software"), Augusta Enterprises, Inc., a Delaware
corporation, and Chasada, a Pennsylvania business trust, filed voluntary
petitions under Chapter 11 of the United States Bankruptcy Code, Case No.
396-36648-SAF-11 in the United States Bankruptcy Court, Northern District of
Texas, Dallas Division (the "Bankruptcy Court"), U.S. Bankruptcy Judge Steven
A. Felsenthal presiding.
On November 27, 1996, the Order Pursuant to Sections 105(a),
363(b)(1), 363(f), 365(b) and 365(f) of the Bankruptcy Code Authorizing and
Approving the Sale of Debtors' Assets, the Assumption and Assignment of Leases,
Rejection of Leases, and Assumption and Assignment of Verifone Executory
Contract (the "Order") was entered by the Bankruptcy Court approving the sale of
substantially all of the assets of the Company to Software Acquisition Company
LLC. Software Acquisition Company LLC was recently formed by Leonard Riggio, a
director and stockholder of the Company, for purposes of bidding for the
Company's assets.
On November 27, following the entry of the Order by the Bankruptcy
Court, the purchase by Software Acquisition Company LLC of substantially all of
the assets of the Company, as more specifically described in the Order, was
consummated.
The above description of the Order and the sale of the assets to
Software Acquisition Company LLC is qualified in its entirety by the Order
(including the exhibits and schedules attached thereto), a copy of which is
attached hereto and filed herewith as Exhibit 99.1 and is incorporated herein
by reference.
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Item 7. Financial Statements and Exhibits
(c) Exhibits
The following exhibit is filed as part of this report:
99.1 Order Pursuant to Sections 105(a), 363(b)(1), 363(f), 365(b)
and 365(f) of the Bankruptcy Code Authorizing and Approving
the Sale of Debtors' Assets, the Assumption and Assignment of
Leases, Rejection of Leases, and Assumption and Assignment of
Verifone Executory Contract (filed herewith).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NEOSTAR RETAIL GROUP, INC.
(Registrant)
By: /s/ OPAL P. FERRARO
---------------------------
Opal P. Ferraro
Vice President and
Chief Financial Officer
Date: November 27, 1996
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- ------- ----------- ------
<S> <C> <C>
99.1 Order Pursuant to Sections 105(a), 363(b)(1),
363(f), 365(b) and 365(f) of the Bankruptcy
Code Authorizing and Approving the Sale of
Debtors' Assets, the Assumption and Assignment
of Leases, Rejection of Leases, and Assumption
and Assignment of Verifone Executory Contract
(filed herewith)
</TABLE>
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Deborah D. Williamson
Texas State Bar No. 21617500
Patrick L. Huffstickler
Texas State Bar No. 10199250
Cox & Smith Incorporated
112 E. Pecan, Suite 1800
San Antonio, Texas 78205
210/554-5500
210/226-8395 (Fax)
Attorneys for NeoStar Retail Group, Inc.;
Babbage's, Inc.; Software Etc. Stores, Inc.;
Augusta Enterprises, Inc.; and Chasada
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
IN RE: ) CASE NOS. 396-36648-SAF-11
) THROUGH
NEOSTAR RETAIL GROUP, INC., ) CASE NO. 396-36652-SAF-11
BABBAGE'S, INC., ) (CHAPTER 11)
SOFTWARE ETC. STORES, INC., )
AUGUSTA ENTERPRISES, INC., and ) ADMINISTRATIVELY CONSOLIDATED
CHASADA, )
)
DEBTORS. )
ORDER PURSUANT TO SECTIONS 105(a), 363(b)(1),
363(f), 365(b) AND 365(f) OF THE BANKRUPTCY CODE AUTHORIZING
AND APPROVING THE SALE OF DEBTORS' ASSETS, THE ASSUMPTION AND
ASSIGNMENT OF LEASES, REJECTION OF LEASES, AND ASSUMPTION AND
ASSIGNMENT OF VERIFONE EXECUTORY CONTRACT
-----------------------------------------
Upon the Motions dated November 15, 1996 of NeoStar Retail Group, Inc.,
Babbage's, Inc., Software Etc. Stores, Inc., August Enterprises, Inc. and
Chasada, debtors and debtors in possession (collectively, the "Debtors") for
Orders Pursuant to Sections 105, 363, and 365 of title 11 of the United States
Code, 11 U.S.C. Sections 101 et seq. (the "Bankruptcy Code") (1) Establishing
Bid Procedures and Sales Guidelines for the Sale of Substantially All Assets of
Debtors and, Contingently, Authorizing Debtors and/or Their
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Liquidating Agent to Conduct Certain Store Closing sales, (2) Approving Sale of
Assets Free and Clear of Liens, Claims and Encumbrances and (3) to Assume and
Assign Unexpired Leases of Nonresidential Real Property (the leases being
assumed thereby being the "Leases" (such motions collectively the "Auction
Motions")); and hearings having been held on November 25 and 26, 1996 to
consider the Auction Motions; and it appearing that (a) actual notice of the
Auction Motions and the hearing has been provided to all known creditors and
parties in interest, except equity holders, (b) the Auction Sale Notice has
been disseminated to any and all known prospective Bidders for the Debtors'
assets, and (c) the Debtors have published notice of the proposed auction (the
"Auction") in the National Edition of The Wall Street Journal; and it appearing
that such notice constitutes good and sufficient notice of the Auction Motions
and that no other or further notice need be given; and any objections to the
Auction Motions having been withdrawn or overruled as reflected in the record
of the hearing; and upon the Auction Motions and, the Court having read its
Findings of Fact and Conclusions of Law into the record which are incorporated
herein by reference and based upon the record established at the hearing and
all other proceedings had before the Court; and it appearing that the Debtors
have good title to the Acquired Assets, as hereinafter defined; and it
appearing that the relief requested in the Auction Motions is in the best
interest of the Debtors, their creditors and all other parties in interest, and
sufficient cause appearing therefore; it is
FOUND, ORDERED, ADJUDGED AND DECREED, effective on November 26,
1996 based on the Court's bench rulings on the Auction Motions:
1. The Auction Motions and the entry of this order
together constitute a
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core proceeding under 28 U.S.C. Section 157(b). Due and proper notice of the
Auction Motions and the Auction has been given in accordance with the
provisions of 11 U.S.C. Sections 105, 363(b) and (f) and 365 and Federal Rules
of Bankruptcy Procedure 2002, 6004, and 6006 and Order of this Court.
2. The consideration to be received by the Debtors
pursuant to the bid of Software Acquisition Company, LLC (the "Winning
Bidder"), as announced on the record and as summarized on Exhibit "A" which is
attached hereto and incorporated herein for all purposes (the "Winning Bid"),
at the Auction constitutes the highest and best offer received by the Debtors
for the Acquired Assets as defined in Exhibit "A" (which Acquired Assets are
specifically exclusive of (i) all causes of action owned by, through, or under
the Debtors, (ii) causes of action under Chapter 5 of the Bankruptcy Code,
(iii) the Debtors' cash on hand, exclusive of cash on hand in Debtors' store
locations covered by the Leases assumed by the Debtors and assigned to the
Winning Bidder, and (iv) accounts receivable, tax refunds, and other tax
attributes, funds in bank accounts or in transit) and the Leases (as
hereinafter defined). The consideration to be received by the Debtors pursuant
to the second highest and best bid (the "Second Highest and Best Bid") of The
Electronics Boutique, Inc. (the "Second Highest and Best Bidder"), as announced
on the record and as summarized on Exhibit "B" which is attached hereto and
incorporated herein for all purposes. The Second Highest and Best Bidder has
topped off its earnest money deposit and the Winning Bidder shall top off its
earnest money deposit, each in an amount equal to 10% of the Purchase Price as
defined in Exhibits "A" and "B" respectively.
3. The closing shall occur on or before 12 Noon, C.S.T.,
November 27,
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1996. If the Winning Bidder cannot close and fund the Purchase Price, as
defined in Exhibit "A" (and other amounts then due under the Winning Bid), by
12:01 p.m., C.S.T., November 27, 1996 the Debtors shall proceed to close the
Second Highest and Best Bid, which shall then be considered the Winning Bid and
all such references to Winning Bidder shall include and incorporate references
to Exhibit "B," as the Winning Bidders' Bid. The Winning Bidder that fails to
close shall forfeit the earnest money deposit as so topped off and the Debtors
may retain such funds which shall be considered and treated as proceeds of the
sale and held with other Proceeds as set out herein subject to further order of
the Court.
4. The sale, transfer and assignment of the Acquired
Assets and the assignment of the Leases by the Debtors to the Winning Bidder is
approved in all respects pursuant to sections 363(b)(1) and 365(f) of the
Bankruptcy Code.
5. The Debtors are hereby authorized and directed to
assume the Leases and to assign them to Winning Bidder, which shall be required
to cure all amounts due or to become due under the Leases prior to closing and
compensate the affected lessors under the Leases for all actual pecuniary
losses in accordance with Section 365(b) of the Bankruptcy Code (collectively
the "Cure Amounts"), pursuant to claims filed by the Lessors or, in the event
of an objection by Debtors or the Winning Bidder, as ordered by the Court. An
amount equal to "The Known Cure Amounts" (i.e., September 1996 rent) shall be
paid by the Winning Bidder via a wire transfer into the Debtors' Operating
Account and the Debtors shall issue and mail checks in an amount not to exceed
such transferred funds to the lessors entitled to payment of Known Cure
Amounts. The Debtors shall provide notice
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to all Lessors under the Leases that they must file claims for Cure Amounts by
December 31, 1996, and, provided there are no objections thereto by Debtors or
Winning Bidder, Winning Bidder shall make the payments of the Cure Amounts less
previously paid Known Cure Amounts promptly thereafter. The assumption and
assignment of the Leases is approved and authorized pursuant to 11 U.S.C.
Section 365 and shall be effective pursuant hereto. Winning Bidder agrees to
assume all obligations for year-end reconciliation for common area maintenance,
taxes and other obligations as provided under the terms of the assumed Leases.
With respect to any percentage rent, the Court reserves jurisdiction to
determine the amount, if any, owed by the Winning Bidder.
6. The sales, transfers, and assignments of the Acquired
Assets and the Leases by the Debtors to Winning Bidder (i) are legal, valid
effective and indefeasible sales, transfers and assignments of the Acquired
Assets and the Leases, (ii) are not fraudulent conveyances or otherwise void or
voidable under the Bankruptcy Code or the laws of the United States or of any
State or territory, the District of Columbia, Puerto Rico or Canada; (iii)
shall not directly or indirectly subject Winning Bidder to any liability by
reason of such transfer under the laws of the United States or of any state,
territory, the District of Columbia, Puerto Rico or Canada, based in whole or
in part, directly or indirectly, on any theory of law or equity including,
without limitation, any theory of transferee or successor liability, and
Winning Bidder shall not assume or succeed to any of the Debtors, liabilities,
except as set forth on Exhibit "A" or expressly assumed by Winning Bidder in
writing or under this Order; (iv) are outright, absolute, irrevocable and
unconditional conveyances by the Debtors to Winning Bidder of all their right,
title and interest in and to the Acquired Assets and the Leases; (v) are not
financing transactions and do not create a joint venture,
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partnership, or equitable mortgage or lien; and (vi) vest Winning Bidder with
all of the Acquired Assets and Leases with good and marketable title to the
Acquired Assets and the Leases free and clear of all liens, claims and
encumbrances, pledges, security interests, deeds of trust and charges of any
kind, including, without limitation, any state taxing statutes, bulk sales laws
under the Uniform Commercial Code and the liens of the post-petition lenders,
all claims described in Part V of the Notice of Auction Sale approved by the
Court on November 15, 1996, whether known or unknown, and whether contingent,
unliquidated, or disputed, which existed before the closing on the transfer to
Winning Bidder; (collectively, the "Liens").
7. Pursuant to section 363(f) of the Bankruptcy Code,
the Acquired Assets and the Leases are sold, assigned and transferred free and
clear of any and all Liens; provided, however that any Liens shall be
transferred to and shall attach to the Proceeds (as defined herein) of such
sale and assignments with the same force and effect and asserted priority as
such Liens had against the Acquired Assets and the Leases, subject to the
rights, claims, defenses and objections, if any, of the Debtors and all
interested parties with respect to the Liens. Debtors' and Winning Bidder
shall execute such documents as may be reasonably required by an affected
Landlord, including without limitation, execution of written Assumption and
Assignment Agreements in form reasonably satisfactory to Debtors and the
Winning Bidder.
8. The transfer of the Acquired Assets and the Leases to
Winning Bidder shall be deemed to have been made in connection with or
appurtenant to implementation of a plan of reorganization for the Debtors, if
any, and pursuant to section 1146(c) of the
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Bankruptcy Code, the transfers and assignments to Winning Bidder of any Leases
or Acquired Assets pursuant to this Order shall not be subject to the
imposition or payment of any transfer taxes or similar stamp taxes, and neither
Winning Bidder, nor any of its direct or indirect partners, directors,
officers, affiliates, principals, members, shareholders, agents, attorneys or
employees, or any of their assets or properties shall have any liability for
any of those taxes, and are expressly discharged from all liability in respect
of any such taxes and any penalty, interests or addition to the tax relating
thereto.
9. In consideration of its purchase of the Acquired
Assets and Leases, the Winning Bidder shall pay Debtors the Purchase Price,
subject to the later adjustment upon completion of the Physical Inventory (as
defined in Exhibits "A" and "B" attached hereto) (the "Proceeds") to the
Debtors, to be held in a separate interest bearing account at NationsBank of
Texas, N.A., with no distribution thereof until entry of further orders of this
Court.
10. Adjustments, if any, in connection with the closing
and sale and transfer of the Acquired Assets (exclusive of the Leases) shall be
made as of midnight of the date immediately before the date of the closing (the
"Adjustment Date"). The Winning Bidder shall be liable for all obligations
with respect to the Acquired Assets arising or accruing after the Adjustment
Date.
11. Nothing herein shall render Winning Bidder liable for
reclamation claims.
12. Winning Bidder is a good faith purchaser of the
Acquired Assets and
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the Leases, and the sale of the Acquired Assets and the Leases represents a
good faith transaction which shall be entitled to the protection afforded by
section 363(m) of the Bankruptcy Code in the event of a reversal or
modification on appeal of this Order.
13. Pursuant to 363(n) of the Bankruptcy Code, the
consideration paid by Winning Bidder for the Acquired Assets and the Leases was
not controlled by an agreement among potential bidders at the hearing on the
Auction Motions.
14. Except to conduct the Physical Inventory, pending the
closing of the sale, transfer and assignment contemplated by this Order, the
Debtors shall continue to operate the stores affected by this Order in the
ordinary course.
15. The Debtors are hereby authorized and directed to
execute any and all documents and take such other actions as are necessary to
effectuate the sale, assignments and transfers to Winning Bidder of the
Acquired Assets and the Leases, without further notice to creditors or other
interested parties or order of the Court, including without limitation, an
escrow agreement, instruments of title, licenses and bills of sale, assignments
and other necessary agreements, each to be in form and substance reasonably
satisfactory to Winning Bidder. The Debtors will make a good faith effort to
give the Unsecured Creditors' Committee notice of execution and/or delivery of
substantive and significant documents.
16. The terms of this order shall be binding upon the
Debtors, their creditors and other parties in interest, and any successors of
the Debtors, including any trustee or examiner appointed in any of these cases
or in any subsequent or converted case of the Debtors under chapter 7 or
chapter 11 of the Bankruptcy Code.
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17. The provisions of this Order are non-severable and
mutually dependent.
18. The sale of Debtors' property approved by this Order
is pursuant and subject to the terms of the "Order (1) Approving Bidding
Procedures and Sales Guidelines, (2) Approving Form of Notice of Auction Sales,
and (3) or Setting Expedited Hearing on Auction Sales" and the "Notice of
Auction Sale of All Assets of Debtors and Bid Procedures and Sales Guidelines
in Connection Therewith" attached thereto.
19. Subject to paragraph 11, in connection with the sale
of the Acquired Assets and assignment of the Leases approved herein (i) the
valid and enforceable rights of any and all creditors or parties in interest to
recover their goods, either because of an asserted, valid post or pre-petition
reclamation claim, post-petition agreement with Debtors for the return of such
goods, or otherwise shall not be invalid as a result of the Auction or such
creditors' or parties in interests' failure to recover goods that otherwise
could have been recovered or seized prior to the sale; (ii) any party opposing
any such claim shall bear the burden of establishing that the subject goods
were not in the possession of the Debtors at the time of the sale and were not
sold by the Debtors at the sale; (iii) a creditor's or party in interest's
failure to object to the sale shall not prejudice such creditor's or party in
interest's right to assert an interest, lien or claim against the proceeds of
the sale; and (iv) such liens, claims and interests, if any, shall continue to
attach to the proceeds of the sale, pending further Order of the Court.
20. Winning Bidder, as announced on the record at the
Auction, shall be responsible for payment of severance in an amount equal to at
least three (3) weeks
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compensation for all of Debtors' employees involved in store operations who are
not offered permanent and full time employment by the Winning Bidder and two
(2) weeks compensation for all other employees who are not offered permanent
and full time employment by Winning Bidder. Except as otherwise set forth
herein, the Winning Bidder shall not be responsible for or assume (i) any
employee benefit plan, (ii) any responsibility for any retiree benefits as
defined in 11 U.S.C. Section 1114, or (iii) any other obligations to current or
future employees of the Debtors.
21. In addition to the Purchase Price, as announced on
the record, Winning Bidder shall pay an amount equal to the cash in Debtors'
stores and shall honor, at its own cost, all gift certificates, store credits,
store trade-in credits and customer refunds.
22. In connection with purchase of the Acquired Assets,
Winning Bidder shall bear the cost of the Physical Inventory.
23. As announced on the record, the Winning Bidder shall
return "Defectives" included in the Acquired Assets to the vendors that
initially supplied such inventory to Debtors without any additional
consideration due or requested from such vendors. Also as announced on the
record, Recalls included in the Acquired Assets (i.e., slow moving inventory
which would otherwise be returned to vendors) shall not be returned to vendors
for credit by the Winning Bidder.
24. Winning Bidder shall, as reasonable and necessary,
make available to Debtors or any other party-in-interest as so ordered by the
Court any of Debtors' books and records in Winning Bidder's possession and/or
any employees hired by Winning Bidder as may be necessary for Debtors, after
the closing, to comply with any orders of this Court
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and with operating requirements, obligations under the Bankruptcy Code, or
reporting requirements, specifically including the preparation and filing of
tax returns or other governmental reporting requirements, at Winning Bidder's
cost and expense. The Winning Bidder shall NOT DESTROY any books and records of
the Debtors except as permitted by Court Order, after notice and hearing.
25. Winning Bidder shall be responsible to maintain medical
coverage for Debtors' full time employees for 90 days post-closing to the
extent that Winning Bidder does not hire such employees.
26. The Debtor is hereby authorized and directed to assume the
Equipment Lease Agreement, with Verifone Finance, Inc. (the "Verifone Lease"),
and assign the Verifone Lease to the Winning Bidder. The Winning Bidder shall
be required to cure all amounts due or become due under the Verifone Lease and
compensate the lessor under the Verifone Lease for all actual pecuniary losses
in accordance with Section 365(b) of the Bankruptcy Code (collectively, the
"Verifone Cure Amounts") pursuant to claims filed by the lessor under the
Verifone Lease or, in the event of an objection by Debtors or the Winning
Bidder, as ordered by the Court. The Debtors shall provide notice to the lessor
under the Verifone Lease that it must file the claim for Verifone Cure Amounts
by December 31, 1996, and, provided there are no objections thereto by Debtors
or Winning Bidder, Winning Bidder shall make the payments of the Verifone Cure
Amounts promptly after receipt of such claim. The assumption and assignment of
the Verifone Lease is approved and authorized pursuant to 11 U.S.C. Section 365
and shall be effective pursuant thereto.
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27. Debtors have made no representations or warranties in
connection with the sale and transfer of the Acquired Assets and the Leases and
the sale and transfer of the Acquired Assets and Leases are final are "as is,"
"where is," and "with any and all faults. "
28. With respect to Debtors' unexpired leases of non-residential
real property for Debtors' retail store locations and field offices which are
not assumed and assigned pursuant to this Order (the "Excluded Leases"), such
Excluded Leases shall be rejected effective November 30, 1996. The landlords of
the Excluded Leases shall file any and all rejection damage claims with respect
to the Excluded Leases on or before January 22, 1997 and such rejection damage
claims shall be subject to the limitations set out in 11 U.S.C. Section
502(b)(6). With respect to the Excluded Leases, set out on Exhibit "C," that
the Winning Bidder desires to occupy and use beyond November 30, 1996, Winning
Bidder hereby notifies the affected Landlords, Debtors and Unsecured Creditors'
Committee that it shall remain in the Leased Premises through December 31, 1996
(the "Occupancy Period"). On or before November 27, 1996, the Winning Bidder
will pay the affected landlords, in accordance with the Schedule attached
hereto as Exhibit "C" and incorporated herein by reference, the full
contractual amount of rents and other charges due for the Occupancy Period for
the Leased Premises which Winning Bidder is occupying during the Occupancy
Period, but not less than for the entire month of December 1996. At conclusion
of the Occupancy Period, the Winning Bidder
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shall turnover possession of the premises in "broom clean" condition to each
landlord. SAC shall indemnify Debtors for any claims or cause of action that
arises during the Occupancy Period out of or in connection with the stores
listed on Exhibit C.
29. If Software Acquisition Company LLC ("SAC") is the Winning
Bidder, the Debtors, the Winning Bidder and its agent are authorized to conduct
store closing sales (the "Store Closing Sales") at the Debtors' stores set
forth on Exhibit "C" attached hereto (the "Stores") as Store Closing Sales of
the Debtors, and take all actions related thereto or arising in connection
therewith without complying with federal, state or local laws, rules, statutes,
ordinances, licensing requirements and procedures of any kind or nature, in
accordance with the Guidelines For Conduct of Store Closing Sales attached
hereto as Schedule 29; provided, however, that no such sale shall take place at
any store if the lease of such store has been assumed and; provided, further,
that such authority is subject to the consent of the subject landlord.
30. If SAC is the Winning Bidder, the Debtors, the Winning Bidder
and its agent, and their respective officers, employees, and agents are
authorized to execute such documents and to do such acts as are necessary or
desirable to carry out the Store Closing Sales authorized hereby and related
actions authorized herein.
31. If there are Store Closing Sales, the advertising, promotion
and signage, of the Store Closing Sale in respect to all of the Stores as a
"store closing sale" are hereby authorized.
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32. Except as otherwise specified herein, all the provisions and
terms of the Order shall be binding on the Winning Bidder, or if applicable
under paragraph 2 herein, to the Second Highest and Best Bidder.
33. If SAC is the Winning Bidder at the Closing, and pursuant to
the agreement (the "RREEF Agreement") announced on the record by RREEF
Midcities Industrial L.P. ("RREEF"), SAC, and NeoStar Retail Group, Inc.
("NeoStar"), SAC shall pay directly to RREEF by wire transfer the estimated
rent payable under the RREEF lease for the Distribution Center for the period
December 1, 1996 through June 30, 1997. Pursuant to the RREEF Agreement, (i)
the Distribution Center lease is deemed rejected by NeoStar as of November 30,
1996, (ii) RREEF may immediately market the property to other tenants for
occupancy beginning July 1, 1997, all as announced more fully in the RREEF
Agreement, (iii) and the automatic stay under 11 U.S.C. Section 362 is lifted
with respect thereto, and (iv) SAC shall have a license to remain in possession
of the Distribution Center through June 30, 1997 on the terms and conditions
set forth in the RREEF Agreement and RREEF's lease.
34. The Court reserves the right to issue supplemental findings of
fact and conclusions of law.
35. To the extent that there is a conflict between the terms of
Exhibits attached hereto or any instrument executed in connection with the
sales and assignments provided for herein with the terms of this Order, the
terms of this Order shall govern.
36. If SAC is the Winning Bidder, the Debtors, the Winning Bidder
and its agent are authorized to transfer inventory to and from Debtors' Stores
(including the Stores) and
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from the warehouse to the Stores, as Debtors, the Winning Bidder and its agent
deem necessary or desirable.
37. Subject to the provisions of this Order including, without limitation,
paragraph 29 hereof, the Winning Bidder and the agent shall be, and hereby are
granted peaceful use and occupancy of the Stores for purposes of conducting and
advertising the Store Closing Sale together with the right to use (a) all store
level assets of the Debtors and the Winning Bidder, including, but not limited
to, tradenames, logos, customer lists, credit card facilities, bank accounts,
tax identification numbers, furniture, fixtures and equipment and (b) the
Debtors employees, in accordance with an agreement in form and substance
similar to the letter agreement attached hereto as Exhibit "D."
Dated: Dallas, Texas
November 27,1996
/s/ STEVEN A. FELSENTHAL
--------------------------------
Steven A. Felsenthal
United States Bankruptcy Judge
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EXHIBIT "A"
SOFTWARE ACQUISITION COMPANY, LLC BID
1.1 PURCHASE AND SALE. Subject to the terms and conditions
announced on the record at the hearing on the Auction Motions, on the Closing
Date, Software Acquisition Company, LLC ("SAC") shall purchase from Debtors and
Debtors shall sell and transfer to SAC, all of the Debtors' real, personal and
other property, excepting only (i) the leaseholds not assigned pursuant to the
Order (the "Excluded Leases"), (ii) any equity interest of any Debtor in any
subsidiary, partnership or joint venture, (iii) the Debtors' corporate
headquarters, (iv) the Grapevine Distribution Center (except for the equipment
installed therein and except as set forth in the Order), (v) all of the
fixtures in the Excluded Leases, and (vi) the assets specifically excluded
pursuant to the Order, and including without limitation, all of the following
(collectively, the "Acquired Assets"):
1.1.1 All of Debtors' inventory, wherever situated,
including, without limitation, goods and inventory in the possession of
manufacturers, suppliers or dealers, or in transit to location of Debtors,
(collectively, the "Inventory");
1.1.2 All of Debtors' right, title and interest in and to
the Leases described on Schedule SAC-1 attached hereto, together with all
rights arising out of or relating to such leases (collectively, the "Leases");
1.1.3 All of Debtors' furnishings, furniture, fixtures,
office supplies, machinery, equipment, signs, signage, computers and other
tangible personal property located at the locations described in the Leases and
the stores listed on Schedule SAC-2 attached hereto, and the following,
wherever located: all point-of-sale equipment, spare parts, related equipment
and store operating supplies, computers and other electronic equipment
(collectively, the "Equipment");
1.1.4 All of Debtors' right, title, interest in and to all
intellectual property of Debtor, including, without limitation patents and
patent applications (including reissues. divisions, continuations-in-part and
extensions thereof), invention disclosures, inventions, and improvements
thereto, trademarks, tradenames, service marks, trade dress and logos and
registrations and applications for restoration thereof, copyrights and
registrations thereof and licenses of any of the foregoing, including an
exclusive right to use the names and associated marks and art: "NeoStar,"
"Babbages," "Software Etc." and "Game Stop"; and rights to sue for; and
remedies against, past, present and future infringements thereof, and rights of
priority and protection of interests therein under applicable law
(collectively, the "Intellectual Property"), provided however SAC hereby grants
a license back to Debtors to use the Intellectual Property for the limited
purpose of disposing of Debtors' other assets including the collection of
accounts receivable;
1.1.5 All of Debtors' rights under or pursuant to all
warranties, representations, guaranties, repurchase undertakings made by or on
behalf of suppliers, manufacturers and contractors in connection with the
operation of the Debtors' Business at any of the locations described in the
Leases or otherwise affecting the Inventory, Equipment, and Intellectual
Property;
<PAGE> 17
1.1.6 All written approvals, consents, exemptions,
franchises, licenses, permits, waivers, certificates or other authorizations
required to market, sell or otherwise dispose of the Inventory and otherwise to
conduct the Debtors' Business at the locations described in the Leases;
1.1.7 Copies of all books, records and other data relating
to Debtors' ownership of the Inventory, Equipment, Intellectual Property and
locations described in the Leases and the conduct of the Debtors' Business
thereon including, without limitations, customer and supplier lists
(collectively, the "Books and Records");
1.1.8 All computer software programs, including without
limitation BRIAN, data bases and computer hardware systems used by Debtors,
whether owned, licensed (subject to reasonable continued use rights of the
Debtors for compliance with the orders of the Court and the Bankruptcy Code and
other reasonable uses and subject to applicable restrictions), leased or
internally developed; and
1.1.9 All goodwill relating to the foregoing acquired
assets.
1.2 PURCHASE PRICE. In consideration of the sale of the Acquired
Assets to SAC,
(a) SAC shall pay to Debtors the "Purchase Price," for
the Acquired Assets as follows:
(i) 58% of the Debtors' cost for all of the
Inventory at the Debtors' stores (with no reserve or reduction for Defective,
Return or Recall Merchandise); and
(ii) 30% of the Debtors' cost for inventory at the
Debtors' Distribution Center;
(iii) $1,000,000 for all of the Debtors' Defective
Merchandise in the Distribution Center;
(iv) 2% of Debtors' Recall Merchandise; and
(v) $22,500,000 for the remainder of Acquired
Assets and the Leases.
1.3 Physical Inventory. To determine the amount of the Purchase
Price with respect to Debtors' Inventory, as soon as practicable after the
entry of the Order (as hereinafter defined), SAC shall cause a physical count
(the "Physical Inventory") to be conducted, at SACs' expense, by RGIS or such
other company as may be reasonably acceptable to SAC and Debtors where
currently located as soon as possible, with reasonable opportunity for
representatives of Debtors, the Creditors' Committee and postpetition lenders
to be present (at their expense) and to monitor the physical count. Promptly
after completion of the Physical Inventory, SAC shall deliver, to Debtors a
copy of the results of the Physical Inventory. Thereafter, but in any event
within twenty-days after the date that RGIS delivers a machine readable file to
SAC and Debtors, (with postpetition lenders and Creditors' Committee
representatives present) shall jointly determine the actual value of the
physically present Inventory based on the results of the Physical
2
<PAGE> 18
Inventory and the average cost of such Inventory as reflected on the Debtors'
most recent perpetual inventory records. The consideration paid for such
Inventory shall be increased or decreased, as the case may be as a result of
such determination. If the parties are unable to agree, the Court shall
determine the appropriate adjustment.
EXHIBIT A 3
<PAGE> 19
Schedule SAC - 1
SCHEDULE A - THE "STORES"
STORE # TRADE NAME STORE NAME CITY STATE
- ------- ------------- ------------------------- ----------- -----
S1703 Software Etc. Anchorage 5th Avenue Mall Anchorage AK
B318 Babbages Diamond Center Anchorage AK
B103 Babbages Riverchase Galleria Birmingham AL
B324 Babbages Regency Square Mall Florence AL
S1311 Software Etc. Madison Square Mall Huntsville AL
B102 Babbages Bel Air Mall Mobile AL
S1208 Software Etc. Eastdale Mall Montgomery AL
B256 Babbages University Mall Tuscaloosa AL
S1238 Software Etc. Northwest Arkansas Mall Fayetteville AR
B311 Babbages Indian Mall Jonesboro AR
S1354 Software Etc. Flagstaff Mall Flagstaff AZ
B132 Babbages Metrocenter Phoenix AZ
B140 Babbages Westridge Mall Phoenix AZ
S1433 Software Etc. El Con Mall Tucson AZ
S1320 Software Etc. Park Mall Tucson AZ
S1201 Software Etc. Tucson Mall Tucson AZ
S1267 Software Etc. County East Mall Antioch CA
S1408 Software Etc. Valley Plaza Bakersfield CA
S1971 Software Etc. Topanga Plaza Canoga Park CA
S1151 Software Etc. Capitola Mall Capitola CA
S1323 Software Etc. Chico Mall Chico CA
B167 Babbages Sun Valley Mall Concord CA
S1246 Software Etc. South Coast Plaza Costa Mesa CA
S1211 Software Etc. Parkway Plaza El Cajon CA
S1216 Software Etc. Bayshore Mall Eureka CA
S1082 Software Etc. Solano Mall Fairfield CA
B117 Babbages Glendale Galleria Glendale CA
S1252 Software Etc. Hanford Mall Hanford CA
S1119 Software Etc. Vintage Faire Mall Modesto CA
S1192 Software Etc. Del Monte Center Monterey CA
B337 Babbages Plaza Bonita National City CA
S1228 Software Etc. NewPark Mall Newark CA
S1402 Software Etc. Northridge Fashion Center Northridge CA
B189 Babbages Montclair Plaza Ontario CA
S1167 Software Etc. Palm Desert Town Center Palm Desert CA
S1214 Software Etc. Antelope Valley Mall Palmdale CA
B166 Babbages Stoneridge Mall Pleasanton CA
S1322 Software Etc. Mt. Shasta Mall Redding CA
S1426 Software Etc. Galleria at Tyler Riverside CA
S1213 Software Etc. Arden Fair Mall Sacramento CA
S1212 Software Etc. Sunrise Mall Sacramento CA
S1296 Software Etc. Inland Center San Bernardino CA
S1403 Software Etc. Mission Valley Center San Diego CA
S1058 Software Etc. Oakridge Mall San Jose CA
S1423 Software Etc. LaCumbre Plaza Santa Barbara CA
S1087 Software Etc. Santa Maria Town Center Santa Maria CA
S1134 Software Etc. Santa Rosa Plaza Santa Rosa CA
B341 Babbages Santa Rosa Plaza Santa Rosa CA
S1235 Software Etc. Sherwood Mall Stockton CA
B193 Babbages Oaks (The) Thousands Oaks CA
B222 Babbages Del Amo Fashion Center Torrance CA
S1183 Software Etc. Mall of Victor Valley Victorville CA
S1346 Software Etc. Visalia Mall Visalia CA
S1259 Software Etc. Mall at Yuba City (The) Yuba City CA
B171 Babbages Citadel Mall (The) Colorado Springs CO
B246 Babbages Foothills Fashion Mall Fort Collins CO
S1289 Software Etc. Mesa Mall Grand Junction CO
<PAGE> 20
SCHEDULE A - THE "STORES"
<TABLE>
<CAPTION>
STORE # TRADE NAME STORE NAME CITY STATE
- ------- ---------- ---------- ---- -----
<S> <C> <C> <C> <C>
S1343 Software Etc. Greeley Mall Greeley CO
S1079 Software Etc. Pueblo Mall Pueblo CO
B058 Babbages Danbury Fair Danbury CT
B206 Babbages Pavillons @ Buckland Hills Manchester CT
S1275 Software Etc. Meridan Square Meridan CT
S1250 Software Etc. DeSoto Square Mall Brandenton FL
S1281 Software Etc. Brandon Town Center Brandon FL
B161 Babbages Countryside Mall Clearwater FL
B175 Babbages Edison Mall Fort Myers FL
S1313 Software Etc. Oaks Mall (The) Gainesville FL
B115 Babbages Orange Park North Jacksonville FL
B107 Babbages Regency Square Mall Jacksonville FL
S1109 Software Etc. Treasure Coast Square Jensen Beach FL
S1329 Software Etc. Santa Rose Mall Mary Esther FL
B098 Babbages Miami International Mall Miami FL
B073 Babbages Aventura Mall N Miami Beach FL
S1160 Software Etc. Coastland Center Naples FL
B084 Babbages Florida Mall Orlando FL
B197 Babbages Orlando Fashion Square Orlando FL
S1232 Software Etc. Panama City Mall Panama City FL
B218 Babbages Pennbroke Lakes Mall Pennbroke Pines FL
S1148 Software Etc. Cordova Mall Pensacola FL
B113 Babbages Cordova Mall Pensacola FL
B156 Babbages Port Charlotte Town Center Port Charlotte FL
B079 Babbages Sarasota Square Mall Sarasota FL
B082 Babbages Tyrone Square St. Petersburg FL
B170 Babbages Governors Square Tallahassee FL
B339 Babbages Albany Mall Albany GA
S1285 Software Etc. North Point Mall Alpharetta GA
S1179 Software Etc. Cumberland Mall Atlanta GA
S1959 Software Etc. Lenox Square Atlanta GA
B124 Babbages Southlake Mall Atlanta GA
B169 Babbages Augusta Mall Augusta GA
B154 Babbages Peachtree Mall Columbus GA
B234 Babbages Macon Mall Macon GA
S1388 Software Etc. Oglethorpe Mall Savannah GA
S1309 Software Etc. Valdosta Mall Valdosta GA
S1312 Software Etc. Pearlridge Center Alea HI
S1699 Software Etc. Prince Kuhio Plaza Hilo HI
S1366 Software Etc. Ata Moana Shopping Center Honolulu HI
S1334 Software Etc. Kaahumanu Center Kahului, Maui HI
S1333 Software Etc. Windward Mall Kaneoha, Oahu HI
S1472 Software Etc. Kukui Grove Center Lihue HI
S1355 Software Etc. North Grand Mall Arnes IA
S1243 Software Etc. College Square Mall Cedar Falls IA
S1107 Software Etc. Lindale Mall Cedar Rapids IA
S1379 Software Etc. Westdale Mall Cedar Rapids IA
B111 Babbages Valley West Mall West Des Moines IA
S1156 Software Etc. Boise Town Center Boise ID
S1340 Software Etc. Grand Teton Mall Idaho Falls ID
S1359 Software Etc. Magic Valley Mall Twin Falls ID
B242 Babbages University Mall Carbondale IL
B283 Babbages Chicago Ridge Mall Chicago Ridge IL
B016 Babbages 2462 Fox Valley Center Chicago/Aurora IL
B047 Babbages Golf Mill Chicago/Niles IL
B023 Babbages Orland Square S/C Chicago/Orland Park IL
B022 Babbages Hawthorn Shopping Center Chicago/Vernon Hills IL
</TABLE>
2
<PAGE> 21
SCHEDULE A - the "Stores"
Store # Trade Name Store Name City State
- ------- ------------- --------------------- ----------------- -----
S1349 Software Etc. Hickory Point Mall Decatur IL
B052 Babbages St. Clair Square Fairview Heights IL
B350 Babbages Gurnee Mills Gurnee IL
B138 Babbages Louis Joliet Mall Joliet IL
S1178 Software Etc. Lincoln Mall Matteson IL
B194 Babbages N Riverside Park Mall N Riverside IL
B183 Babbages Oakbrook Center Oakbrook IL
B229 Babbages Northwoods Mall Peoria IL
B092 Babbages Cherryvale Mall Rockford IL
B230 Babbages White Oaks Mall Springfield IL
B186 Babbages Charlestowne Mall St. Charles IL
S1144 Software Etc. Lakehurst Mall Waukegan IL
S1117 Software Etc. College Mall Bloomington IN
B340 Babbages Green Tree Mall Clarksville IN
B206 Babbages Glenbrook Square Fort Wayne IN
B087 Babbages Washington Square Indianapolis IN
B253 Babbages Tippecanoe Mall Lafayette IN
B329 Babbages Southlake Mall Merrillville IN
B243 Babbages Honey Creek Mall Terre Haute IN
S1224 Software Etc. Manhattan Town Center Manhattan KS
B055 Babbages Oak Park Mall Overland Park KS
S1466 Software Etc. Towne East Square Wichita KS
S1336 Software Etc. Greenwood Mall Bowling Green KY
B069 Babbages Florence Mall Florence KY
B252 Babbages Fayette Mall Lexington KY
B109 Babbages Jefferson Mall Louisville KY
S1290 Software Etc. Mall St. Matthews Louisville KY
B136 Babbages Oxmoor Center Louisville KY
B295 Babbages Towne Square Mall Owensboro KY
B244 Babbages Kentucky Oaks Mall Paducah KY
B301 Babbages Alexandria Mall Alexandria LA
B129 Babbages Cortana Mall Baton Rouge LA
B262 Babbages Pierre Bossier Mall Bossier City LA
B238 Babbages Oakwood Center Gretna LA
B355 Babbages Southland Mall Houma LA
B215 Babbages Acadiana Mall Lafayette LA
B158 Babbages Lakeside Shopping Center Metairie LA
B302 Babbages Pecanland Mall Monroe LA
S1280 Software Etc. Mall St. Vincent Shreveport LA
B310 Babbages North Shore Square Slidell LA
S1317 Software Etc. Prudential Center Boston MA
B210 Babbages Silver City Galleria East Taunton MA
S1352 Software Etc. Hanover Mall Hanover MA
B315 Babbages Natick Mall Natick MA
B145 Babbages Emerald Square North Attleboro MA
B061 Babbages Berkshire Mall Pittsfield MA
B048 Babbages Holyoke Mall Springfield/Holyoke MA
S1065 Software Etc. Greendale Mall Worcester MA
B080 Babbages Annapolis Mall Annapolis MD
B184 Babbages Montgomery Mall Bethesda MD
B045 Babbages Columbia Mall Columbia MD
B231 Babbages Francis Scott Key Mall Frederick MD
B305 Babbages Valley Mall Hagerstown MD
B090 Babbages Laurel Centre Laurel MD
S1307 Software Etc. Country Club Mall LaVale MD
S1239 Software Etc. Centre @ Salisbury (The) Salisbury MD
B164 Babbages St. Charles Towne Center Waldorf MD
3
<PAGE> 22
SCHEDULE A - THE "STORES"
STORE # TRADE NAME STORE NAME CITY STATE
- ------- ------------- ------------------------- ----------- -----
B223 Babbages Cranberry Mall Westminster MD
S1365 Software Etc. Maine Mall South Portland ME
B039 Babbages Briarwood Ann Arbor MI
B143 Babbages Lakeview Square Battle Creek MI
B033 Babbages Fairlane Town Center Dearborn MI
B040 Babbages Twelve Oaks Mall Detroit/Novi MI
B290 Babbages Courtland Center Flint MI
B077 Babbages Genessee Valley Center Flint MI
B280 Babbages Westhore Mall Jackson MI
B235 Babbages Westwood Mall Holland MI
B157 Babbages Crossroads (The) Kalamazoo MI
B297 Babbages Lansing Mall Lansing MI
B293 Babbages Livonia Mall Livonia MI
B272 Babbages Frenchtown Square Mall Monroe MI
S1292 Software Etc. Meridian Mall Okemos MI
S1194 Software Etc. Southland Mall Taylor MI
S1282 Software Etc. Grand Traverse Mall Traverse City MI
B066 Babbages Oakland Mall Troy MI
S1300 Software Etc. Mall of America (GS) Bloomington MN
S1120 Software Etc. Miller Hill Mall Duluth MN
S1966 Software Etc. Ridgehaven Square Minnetonka MN
S1448 Software Etc. Apache Mall Rochester MN
S1255 Software Etc. Crossroads Center St. Cloud MN
B261 Babbages West Park Mall Cape Girardeau MO
B053 Babbages Independence Center Independence MO
B159 Babbages Northpark Mall Joplin MO
S1137 Software Etc. Metro North Shopping Center Kansas City MO
S1469 Software Etc. Ward Parkway Center Kansas City MO
S1237 Software Etc. Saint Louis Galleria Richmond Heights MO
B200 Babbages Battlefield Mall Springfield MO
S1241 Software Etc. Northwest Plaza St. Ann MO
B024 Babbages Chesterfield Mall St. Louis MO
B019 Babbages Crestwood Plaza St. Louis MO
B041 Babbages Saint Louis Galleria St. Louis MO
B038 Babbages South County Center St. Louis MO
B037 Babbages Mid Rivers Mall St. Peters MO
B232 Babbages Metrocenter Jackson MS
S1353 Software Etc. Northpark Mall Ridgeland MS
B246 Babbages Mall at Barnes Crossing Tupelo MS
S1095 Software Etc. Rimrock Mall Billings MT
S1288 Software Etc. Holiday Village Great Falls MT
S1470 Software Etc. Southgate Mall Missoula MT
B269 Babbages Asheville Mall Asheville NC
B185 Babbages Carolina Place Charlotte NC
B074 Babbages Eastland Mall Charlotte NC
B050 Babbages Northgate Shopping Mall Durham NC
B190 Babbages Cross Creek Mall Fayetteville NC
B282 Babbages Valley Hills Mall Hickory NC
B368 Babbages Jacksonville Mall Jacksonville NC
B096 Babbages Crabtree Valley Mall Raleigh NC
S1308 Software Etc. North Hills Mall Raleigh NC
B142 Babbages Independence Mall Wilmington NC
S1210 Software Etc. Hanes Mall Winston-Salem NC
S1486 Software Etc. Kirkwood Mall Bismarck ND
S1318 Software Etc. Columbia Mall Grand Forks ND
S1345 Software Etc. Gateway Mall Lincoln NE
S1129 Software Etc. Crossroads Mall Omaha NE
4
<PAGE> 23
Schedule SAC - 1
SCHEDULE A - THE "STORES"
STORE # TRADE NAME STORE NAME CITY STATE
- ------- ------------- ------------------------- ----------- -----
B179 Babbages Oakview Mall Omaha NE
S1217 Software Etc. Westroads Mall Omaha NE
S1142 Software Etc. Mall of New Hampshire (The) Manchester NH
B196 Babbages Pheasant Lane Mall Nashua NH
S1066 Software Etc. Fox Run Mall Newington NH
B188 Babbages Mall @ Rockingham Park Salem NH
S1067 Software Etc. Bridgewater Commons Bridgewater NJ
B031 Babbages Burlington Center Burlington NJ
B141 Babbages Cherry Hill Mall Cherry Hill NJ
S1271 Software Etc. Deptford Mall Deptford NJ
B063 Babbages Monmouth Mall Eatontown NJ
S1218 Software Etc. Menlo Park Mall Edison NJ
S1397 Software Etc. Menlo Park Mall Edison NJ
B172 Babbages Freehold Raceway Freehold NJ
B035 Babbages Garden State Plaza Paramus NJ
B168 Babbages Phillipsburg Mall Phillipsburg NJ
B268 Babbages Rockaway Town Square Rockaway NJ
B065 Babbages Mall at Short Hills Short Hills NJ
S1174 Software Etc. Grove at Shrewsbury (The) Shrewsbury NJ
B273 Babbages Ocean County Mall Toms River NJ
S1338 Software Etc. Cumberland Mall Vineland NJ
B042 Babbages Echelon Mall Voorhees NJ
S1063 Software Etc. Willowbrook Plaza Wayne NJ
S1481 Software Etc. Woodbridge Mall Woodbridge NJ
S1412 Software Etc. Winrock Center Albuquerque NM
S1293 Software Etc. Villa Linda Mall Santa Fe NM
S1226 Software Etc. Boulevard Mall (The Las Vegas NV
B119 Babbages Crossgates Mall Albany NY
S1432 Software Etc. South Shore Mall Bay Shore NY
S1242 Software Etc. Kings Plaza Brooklyn NY
B219 Babbages Boulevard Mall Buffalo NY
S1143 Software Etc. Oakdale Mall Johnson City NY
B224 Babbages Smith Haven Mall Lake Grove NY
S1324 Software Etc. 124 E. 86th Street New York NY
S1363 Software Etc. 1282 Broadway New York NY
S1234 Software Etc. 8th & Broadway New York NY
S1115 Software Etc. Hippedrome Building
(44th & 6th) New York NY
B278 Babbages Wilton Mall at Saratoga Saratoga Springs NY
PC1001 Planet Comics Smith Haven Mall Smithtown NY
B266 Babbages Staten Island Mall Staten Island NY
S1287 Software Etc. Green Acres Mall Valley Stream NY
S1980 Software Etc. Cross County Center Yonkers NY
B036 Babbages Jefferson Valley Mall Yorktown NY
S1342 Software Etc. Chapel Hill Mall Akron OH
B269 Babbages Ashtabula Mall Ashtabula OH
B205 Babbages Belden Village Mall Canton OH
B088 Babbages Kenwood Towne Center Cincinnati OH
B126 Babbages Northgate Mall Cincinnati OH
B174 Babbages Great Lakes Mall Cleveland OH
S1479 Software Etc. Tower City Center Cleveland OH
B238 Babbages Midway Mall Elyria OH
B328 Babbages Richland Mall Mansfield OH
B203 Babbages Eastwood Mall Niles OH
B240 Babbages Sandusky Mall Sandusky OH
B248 Babbages Ohio Valley Mall St. Clairsville OH
B255 Babbages Franklin Park Mall Toledo OH
S1116 Software Etc. Southern Park Mall Youngstown OH
5
<PAGE> 24
SCHEDULE A - the "Stores"
Store # Trade Name Store Name City State
- ------- ---------- ---------- ---- -----
B264 Babbages Colony Square Zanesville OH
B331 Babbages Central Mall Lawton OK
S1316 Software Etc. Sooner Mall Norman OK
B071 Babbages Crossroads Mall Oklahoma City OK
B112 Babbages Penn Square Mall Oklahoma City OK
B086 Babbages Quail Springs Mall Oklahoma City OK
S1326 Software Etc. Woodland Hills Mall Tulsa OK
S1270 Software Etc. Rogue Valley Mall Medford OR
B216 Babbages Clackamas Town Center Portland OR
S1440 Software Etc. Lloyd Center Portland OR
B332 Babbages Washington Square Portland OR
B221 Babbages Salem Centre Salem OR
S1254 Software Etc. Neshaminy Mall Bensalem PA
S1381 Software Etc. Clearview Mall Butler PA
S1305 Software Etc. Millcreek Mall Erie PA
B289 Babbages Exton Square Mall Exton PA
S1321 Software Etc. Westmoreland Mall Greensburg PA
B286 Babbages Colonial Park Mall Harrisburg PA
S1452 Software Etc. Court at King of King of Prussia PA
Prussia (The)
B028 Babbages King of Prussia King of Prussia PA
Plaza
S1347 Software Etc. Oxford Valley Mall Langhorne PA
B326 Babbages Granite Run Mall Media PA
B182 Babbages Monroeville Mall Monroeville PA
S1256 Software Etc. Montgomery Mall North Wales PA
S1193 Software Etc. Gallery II at Market Philadelphia PA
East
S1337 Software Etc. Shops at Penn (The) Philadelphia PA
B122 Babbages Century III Mall Pittsburgh PA
B056 Babbages Ross Park Mall Pittsburgh PA
B135 Babbages South Hills Village Pittsburgh PA
B030 Babbages Plymouth Meeting Mall Plymouth Meeting PA
S1264 Software Etc. Mall at Stearntown Scranton PA
(The)
S1253 Software Etc. Springfield Mall Springfield PA
B029 Babbages Willow Grove Park Willow Grove PA
B357 Babbages Plaza Carolina Carolina PR
B251 Babbages Plaza Las Americas San Juan PR
S1276 Software Etc. Anderson Mall Anderson SC
B133 Babbages Citadel Mall Charleston SC
B163 Babbages Northwoods Mall Charleston SC
B146 Babbages Haywood Mall Greenville SC
S1257 Software Etc. Rushmore Mall Rapid City SD
S1150 Software Etc. Empire (The) Sioux Falls SD
S1101 Software Etc. Hamilton Mall Chattanooga TN
B321 Babbages Governor's Square Clarksville TN
S1225 Software Etc. Coolsprings Galleria Franklin TN
S1314 Software Etc. Mall at Johnson City Johnson City TN
(The)
S1081 Software Etc. Fort Henry Mall Kingsport TN
B352 Babbages East Towne Mall Knoxville TN
B333 Babbages West Town Mall Knoxville TN
B101 Babbages Hickory Ridge Mall Memphis TN
S1088 Software Etc. Mall of Memphis Memphis TN
S1145 Software Etc. Oak Court Mall Memphis TN
B187 Babbages Hickory Hollow Mall Nashville TN
S1123 Software Etc. Raleigh Springs Mall Raleigh TN
B336 Babbages Mall of Abilene Abilene TX
B097 Babbages Highland Mall Austin TX
S1348 Software Etc. Parkdale Mall Beaumont TX
B227 Babbages Post Oak Mall College Station TX
6
<PAGE> 25
SCHEDULE A - THE "STORES"
<TABLE>
<CAPTION>
STORE # TRADE NAME STORE NAME CITY STATE
- ------- ---------- ---------- ---- -----
<S> <C> <C> <C> <C>
S1455 Software Etc. Golden Triangle Mall Denton TX
B225 Babbages Valle Vista Mall Harlingen TX
B009 Babbages Baybrook Square Houston TX
B046 Babbages Houston Galleria Houston TX
B300 Babbages Killeen Mall Killeen TX
S1222 Software Etc. Vista Ridge Mall Lewisville TX
S1358 Software Etc. Longview Mall Longview TX
B226 Babbages LaPlaza Mall McAllen TX
S1366 Software Etc. Collin Creek Mall Plano TX
B043 Babbages North Star Mall San Antonio TX
B270 Babbages Central Mall Texarkana TX
S1162 Software Etc. Broadway Square Tyler TX
S1291 Software Etc. Sikes Center Wichita Falls TX
B338 Babbages Layton Hills Mall Layton UT
S1086 Software Etc. Fashion Place Murray UT
B201 Babbages University Mall Orem UT
S1133 Software Etc. Cottonwood Mall Salt Lake City UT
S1164 Software Etc. Crossroads Plaza Salt Lake City UT
S1362 Software Etc. South Towne Mall Sandy UT
S1341 Software Etc. Red Cliffs Mall St. George UT
S1249 Software Etc. Valley Fair West Valley City UT
B166 Babbages Fashion Center Arlington VA
B239 Babbages Charlottesville Fashion Square Charlottesville VA
B304 Babbages Greenbrier Mall Chesapeake VA
S1501 Software Etc. New River Valley Mall Christiansburg VA
B026 Babbages Fair Oaks Fairfax VA
B181 Babbages Spotsylvania Mall Fredericksburg VA
S1316 Software Etc. Valley Mall Harrisonburg VA
B192 Babbages River Ridge Mall Lynchburg VA
S1274 Software Etc. Patrick Henry Mall Newport News VA
S1231 Software Etc. Military Circle Norfolk VA
S1122 Software Etc. Chesterfield Towne Center Richmond VA
B110 Babbages Cloverleaf Mall Richmond VA
B191 Babbages Regency Square Richmond VA
B064 Babbages Valley View Mall Roenoke VA
S1970 Software Etc. Springfield Mall Springfield VA
B195 Babbages Lynnhaven Mall Virginia Beach VA
S1140 Software Etc. Apple Blossom Mall Winchester VA
B298 Babbages University Mall South Burlington VT
S1979 Software Etc. Bellevue Square Bellevue WA
S1130 Software Etc. Bellis Fair Mall Bellingham WA
S1215 Software Etc. Cascade Mall Burlington WA
S1152 Software Etc. Columbia Shopping Center Kennewick WA
S1191 Software Etc. Alderwood Mall Lynwood WA
S1080 Software Etc. Capital Mall Olympia WA
S1295 Software Etc. South Hills Mall Puyallup WA
B267 Babbages Bellevue Square Seattle WA
S1102 Software Etc. Kitsap Mall Silverdale WA
S1230 Software Etc. Northtown Mall Spokane WA
S1223 Software Etc. Lakewood Mall Tacoma WA
S1415 Software Etc. Tacoma Mall Shopping Center Tacoma WA
S1190 Software Etc. Southcenter Mall Tukwila WA
S1319 Software Etc. Vancouver Mall Vancouver WA
S1273 Software Etc. Yakima Mall Yakima WA
S1077 Software Etc. Fox River Mall Appleton WI
B139 Babbages Brookfield Square Brookfield WI
S1076 Software Etc. West Towne Mall Madison WI
</TABLE>
7
<PAGE> 26
SCHEDULE A - the "Stores"
<TABLE>
<CAPTION>
Store # Trade Name Store Name City State
- --------- -------------- ------------------------ -------------- -------
<S> <C> <C> <C> <C>
S1950 Software Etc. Grand Avenue (The) Milwaukee WI
B054 Babbages Southridge Mall Milwaukee WI
S1171 Software Etc. Regency Mall Racine WI
S1373 Software Etc. Wausau Center Wausau WI
B198 Babbages Huntington Mall Barboursville WV
S1383 Software Etc. Mercer Mall Bluefield WV
B303 Babbages Meadowbrook Mall Bridgeport WV
S1330 Software Etc. Charleston Town Center Charleston WV
B202 Babbages Charleston Town Center Charleston WV
</TABLE>
408 Stores
8
<PAGE> 27
Schedule B - the "B Dalton Stores"
<TABLE>
<CAPTION>
Store # Trade Name Store Name City State
- ------- -------------- ---------------------------- -------------- -----
<S> <C> <C> <C> <C>
S1976 Software Etc. Santa Anita Fashion Square Arcadia CA
S1114 Software Etc. Plaza Camino Real Carlsbad CA
S1977 Software Etc. Puente Hills Mall City of Industry CA
S1975 Software Etc. North County Fair Escondido CA
S1948 Software Etc. Fresno Fashion Fair Fresno CA
S1935 Software Etc. Century City SC Los Angeles CA
S1973 Software Etc. Manhattan Village Manhattan Beach CA
S1301 Software Etc. Moreno Valley Mall (GS) Moreno Valley CA
S1972 Software Etc. Galleria at South Bay Redondo Beach CA
S1955 Software Etc. Horton Plaza San Diego CA
S1978 Software Etc. Eastridge Shopping Center San Jose CA
S1960 Software Etc. Valley Fair Santa Clara CA
S1983 Software Etc. Santa Monica Place Santa Monica CA
S1984 Software Etc. Sherman Oaks Galleria Sherman Oaks CA
S1989 Software Etc. Crossroads Mall Boulder CO
S1988 Software Etc. Southglenn Center Littleton CO
S1981 Software Etc. Southwest Plaza Littleton CO
S1951 Software Etc. Westminster Mall Westminster CO
S1946 Software Etc. Trumbull Shopping Park Trumbull CT
S1957 Software Etc. Crystal Mall Waterford CT
S1963 Software Etc. Shops at Natl Press Bldg Washington DC
S1985 Software Etc. Tampa Bay Center Tampa FL
S1936 Software Etc. Northlake Mall Atlanta GA
S1940 Software Etc. Gwinnett Place Duluth GA
S1943 Software Etc. Stratford Square Bloomingdale IL
S1062 Software Etc. Springhill Mall West Dundee IL
S1939 Software Etc. Gallery at Harborplace (The) Baltimore MD
S1937 Software Etc. Hunt Valley Mall Cockeysville MD
S1969 Software Etc. Bumsville Center Bumsville MN
S1075 Software Etc. Eden Prarie Center Eden Prarie MN
S1944 Software Etc. Bannister Mall Kansas City MO
S1113 Software Etc. 101 Fifth Avenue New York NY
S1956 Software Etc. Galleria at White Plains White Plains NY
S1942 Software Etc. Valley River Center Eugene OR
S1962 Software Etc. Clackamas Town Center Portland OR
S1945 Software Etc. Prestonwood Town Center Dallas TX
S1964 Software Etc. Ballston Common Arlington VA
S1986 Software Etc. Crystal Underground Arlington VA
S1949 Software Etc. Mayfair Mall Wauwatosa WI
</TABLE>
39 Stores
<PAGE> 28
EXHIBIT "B"
THE ELECTRONICS BOUTIQUE, INC. BID
1.1 PURCHASE AND SALE. Subject to the terms and conditions announced
on the record at the hearing on the Auction Motions, on the Closing Date, The
Electronics Boutique, Inc. ("EB") shall purchase from Debtors and Debtors shall
sell and transfer to EB, all of the following (collectively, the "Acquired
Assets"):
1.1.1 All of Debtors' inventory, wherever situated, including,
without limitation, goods and inventory in the possession of manufacturers,
suppliers or dealers, or in transit to location of Debtors, (collectively, the
"Inventory");
1.1.2 All of Debtors' right, title and interest in and to the
Leases described on Schedule EB-1 attached hereto, together with all rights
arising out of or relating to such leases (collectively, the "Leases");
1.1.3 All of Debtors' furnishings, furniture, fixtures, office
supplies, machinery, equipment, signs, signage, computers and other tangible
personal property located at the Debtors' corporate headquarters and
distribution center and at the locations described in the Leases, and the
following, wherever located: all point-of-sale equipment, spare parts, related
equipment and store operating supplies, computers and other electronic
equipment (collectively, the "Equipment");
1.1.4 All of Debtors' right, title, interest in and to all
intellectual property of Debtor, including, without limitation patents and
patent applications (including reissues, divisions, continuations-in-part and
extensions thereof), invention disclosures, inventions, and improvements
thereto, trademarks, tradenames, service marks, trade dress and logos and
registrations and applications for restoration thereof, copyrights and
registrations thereof and licenses of any of the foregoing, including an
exclusive right to use the names and associated marks and art: "NeoStar,"
"Babbages," "Software Etc." and "Game Stop"; and rights to sue for; and
remedies against, past, present and future infringements thereof, and rights of
priority and protection of interests therein under applicable law
(collectively, the "Intellectual Property"), provided however EB hereby grants
a license back to Debtors to use the Intellectual Property for the limited
purpose of disposing of Debtors' other assets including the collection of
accounts receivable;
1.1.5 All of Debtors' rights under or pursuant to all
warranties, representations, guaranties, repurchase undertakings made by or on
behalf of suppliers, manufacturers and contractors in connection with the
operation of the Debtors' Business at any of the locations described in the
Leases or otherwise affecting the Inventory, Equipment, and Intellectual
Property.
1.1.6 All written approvals, consents, exemptions, franchises,
licenses, permits, waivers, certificates or other authorizations required to
market, sell or otherwise dispose of the Inventory and otherwise to conduct the
Debtors' Business at the locations
<PAGE> 29
described in the Leases;
1.1.7 Copies of all books, records and other data relating to
Debtors' ownership of the Inventory, Equipment, Intellectual Property and
locations described in the Leases and the conduct of the Debtors' Business
thereon including, without limitations, customer and supplier lists
(collectively, the "Books and Records");
1.1.8 All computer software programs, data bases and computer
hardware systems used by Debtors, whether owned, licensed (subject to
reasonable continued use rights of the Debtors for compliance with the orders
of the Court and the Bankruptcy Code and other reasonable uses and subject to
applicable restrictions), leases or internally developed; and
1.1.9 All goodwill relating to the foregoing acquired assets.
1.2 PURCHASE PRICE. In consideration of the sale of the
Acquired Assets to EB,
(a) EB shall pay to Debtors the "Purchase Price," for
the Acquired Assets as follows:
(i) 58% of the Debtors' cost for all of the
Inventory at the Debtors' stores (with no reserve or reduction for Defective,
Return or Recall Merchandise); and
(ii) 30% of the Debtors' cost for inventory
at the Debtors' Distribution Center;
(iii) $1,000,000 for all of the Debtors' Defective
Merchandise in the Distribution Center;
(iv) 2% of Debtors, Recall Merchandise; and
(v) $24,000,000 for the remainder of
Acquired Assets and the Leases.
1.3 PHYSICAL INVENTORY. To determine the amount of the
Purchase Price with respect to Debtors' Inventory, as soon as practicable after
the Closing (as hereinafter defined), EB shall cause a physical count (the
"Physical Inventory") to be conducted, at EBs' expense, by RGIS or such other
company as may be reasonably acceptable to EB and Debtors where currently
located as soon as possible with reasonable opportunity for representatives of
Debtors, the Creditor's Committee and post-petition lenders to be present (at
their expense) and to monitor the physical count. Promptly after completion of
the Physical Inventory, EB shall deliver, to Debtors a copy of the results of
the Physical Inventory. Thereafter, but in any event within twenty days after
RGIS delivers a machine readable file to EB and Debtors, (with post-petition
lenders' and Creditors' Committee representatives present) shall negotiate to
determine the actual value of the physically present Inventory based on the
results of the Physical Inventory and the average cost of such Inventory as
reflected on the Debtors' most recent perpetual inventory records. The
consideration paid for such Inventory shall be increased or decreased, as the
case may be
- 2 -
<PAGE> 30
as a result of such negotiations. If the parties are unable to agree, the
Court shall determine the appropriate adjustment.
- 3 -
<PAGE> 31
Schedule EB - 1
NEOS Store Analysis
Schedule A
Stores to Keep Open
LOCATION NEOS
- -------------------------------------------------------------------------------
ST Town Description Store No.
- -------------------------------------------------------------------------------
AK Anchorage Anchorage 5th Avenue Mall 1703
AK Anchorage Dimond Center 318
AL Mobile Bel Air Mall 102
AL Montgomery Eastdale Mall 1208
AL Gadsden Gadsden Mall 1543
AL Huntsville Madison Square Mall 1311
AL Birmingham Riverchase Galleria 103
AL Tuscaloosa University Mall 258
AR Jonesboro Indian Mall 311
AR Fayetteville Northwest Arkansas Mall 1238
AZ Tucson El Con Mall 1433
AZ Flagstaff Flagstaff Mall 1354
AZ Phoenix Metrocenter 132
AZ Tucson Park Mall 1320
AZ Tucson Tucson Mall 1201
CA Palmdale Antelope Valley Mall 1214
CA Eureka Bayshore Mall 1216
CA Brea Brea Mall 1139
CA Capitola Capitola Mall 1151
CA Chico Chico Mall 1323
CA Torrance Del Amo Fashion Center 222
CA Glendale Glendale Galleria 117
CA Hanford Hanford Mall 1252
CA Santa Barbara LaCumbre Plaza 1423
CA Victorville Mall of Victor Valley 1183
CA Merced Merced Mall 1244
CA Ontario Montclair Plaza 189
CA Redding Mt. Shasta Mall 1322
CA Thousand Oaks Oaks (The) 1263
CA Palm Desert Palm Desert Town Center 1167
CA El Cajon Parkway Plaza 1211
CA National City Plaza Bonita 337
CA Santa Maria Santa Maria Town Center 1087
CA Santa Rosa Santa Maria Plaza 341
CA Santa Rosa Santa Rosa Plaza 1134
CA Stockton Sherwood Mall 1235
CA Fairfield Solano Mall 1082
CA Costa Mesa South Coast Plaza 1246
CA Sacramento Sunrise Mall 1212
CA Bakersfield Valley Plaza 1408
CA Modesto Vintage Faire Mall 1119
CA Visalia Visalia Mall 1346
CO Colorado Springs Citadel Mall (The) 171
CO Fort Collins Foothills Fashion Mall 245
Page 1
<PAGE> 32
NEOS Store Analysis
Schedule A
Stores to Keep Open
LOCATION NEOS
ST Town Description Store No.
- -- ---- ----------- ---------
CO Greeley Greeley Mall 1345
CO Grand Junction Mesa Mall 1289
CO Pueblo Pueblo Mall 1079
CT Danbury Danbury Fair 58
CT Meriden Meriden Square 1275
CT Stamford Stamford Center 34
FL Miami Aventura Mall 73
FL Pensacola Cordova Mall 113
FL Pensacola Cordova Mall 1148
FL Brandenton DeSoto Square Mall 1250
FL Fort Myers Edison Mall 178
FL Orlando Florida Mall 84
FL Ft. Lauderdale Galleria @ Ft. Lauderdale 207
FL Lakeland Lakeland Square 1127
FL Gainesville Oaks Mall (The) 1313
FL Orlando Orlando Fashion Square 197
FL Panama City Panama City Mall 1232
FL Pembroke Pines Pembroke Lakes Mall 218
FL Port Charlotte Port Charlotte Town Center 158
FL Mary Esther Santa Rosa Mall 104
FL Sarasota Sarasota Square Mall 79
FL St. Petersburg Tyrone Square 82
GA Albany Albany Mall 339
GA Augusta Augusta Mall 169
GA Atlanta Cumberland Mall 1179
GA Atlanta Lenox Square 1958
GA Macon Macon Mall 234
GA Alpharetta North Point Mall 1288
GA Columbus Peachtree Mall 154
GA Valdosta Valdosta Mall 1309
HI Honolulu Ala Moana Shopping Center 1368
HI Kahulul, Maul Kaahumanu Center 1334
HI Honolulu Kahala Mall 1344
HI Lihue Kukui Grove Center 1472
HI Aiea Pearlridge Center 1312
HI Hilo Prince Kuhio Plaza 1899
HI Kaneoha, Oahu Windward Mall 1333
IA Cedar Falls College Square Mall 1243
IA Des Moines Marie Hay Mall 1443
IA Ames North Grand Mall 1355
IA Iowa City Old Capitol Center 1328
IA West Des Valley West Mall 111
ID Boise Boise Town Center 1158
ID Idaho Falls Grand Teton Mall 1340
ID Twin Falls Magic Valley Mall 1359
Page 2
<PAGE> 33
ELECTRONICS BOUTIQUE
NEOS Store Analysis
Schedule A
Stores to Keep Open
LOCATION NEOS
- -------------------------------------------------------------------------------
ST Town Description Store No.
- -------------------------------------------------------------------------------
ID Coeur D'Alene Silver Lake Mall 1532
IL St. Charles Charlestowne Mall 186
IL Rockford Cherryvale Mall 92
IL Chicago/Niles Golf Mill 47
IL Chicago/Vernon Hawthorn Shopping Center 22
IL Decatur Hickory Point Mall 1349
IL Joliet Louis Joliet Mall 138
IL N Riverside N Riverside Park Mall 194
IL Peoria Northwoods Mall 229
IL Chicago/Orland Orland Square S/C 23
IL Fairview Heights St. Clair Square 52
IL Carbondale University Mall 242
IL Springfield White Oaks Mall 230
IN Bloomington College Mall 1117
IN Fort Wayne Glenbrook Square 208
IN Clarksville Green Tree Mall 340
IN Terre Haute Honey Creek Mall 243
IN Lafayette Tippecanoe Mall 253
KS Manhattan Manhattan Town Center 1224
KY Lexington Fayette Mall 252
KY Bowling Green Greenwood Mall 1336
KY Louisville Jefferson Mall 109
KY Paducah Kentucky Oaks Mall 244
KY Louisville Mall St. Matthews 1290
KY Owensboro Towne Square Mall 295
LA Lafayette Acadiana Mall 215
LA Baton Rouge Cortana Mall 129
LA Metairie Lakeside Shopping Center 158
LA Shreveport Mall St. Vincent 1280
LA Slidell North Shore Square 310
LA Gretna Oakwood Center 238
LA Monroe Pecanland Mall 302
LA Bossier City Pierre Bossier Mall 262
LA Houma Southland Mall 355
MA Pittsfield Berkshire Mall 51
MA North Attleboro Emerald Square 145
MA Worcester Greendale Mall 1085
MA Hanover Hanover Mall 1352
MA Boston Prudential Center 1317
MA Leominister Searstown Mall 1485
MD Salisbury Centre @ Salisbury (The) 1239
MD Frederick Francis Scott Key Mall 231
MD Laurel Laurel Centre 90
MD Owings Mills Owings Mills 72
MD Waldorf St. Charles Towne Center 164
Page 3
<PAGE> 34
ELECTRONICS BOUTIQUE
NEOS Store Analysis
Schedule A
Stores to Keep Open
LOCATION NEOS
- -------------------------------------------------------------------------------
ST Town Description Store No.
- -------------------------------------------------------------------------------
MD Hagerstown Valley Mall 305
ME South Portland Maine Mall 1365
MI Ann Arbor Briarwood 39
MI Flint Courtland Center 290
MI Kalamazoo Crossroads (The) 157
MI Flint Genessee Valley Center 77
MI Traverse City Grand Traverse Mall 1282
MI Battle Creek Lakeview Square 143
MI Lansing Lansing Mall 297
MI Okemos Meridian Mall 1292
MI Troy Oakland Mall 66
MI Taylor Southland Mall 1194
MI Holland Westshore Mall 235
MI Jackson Westwood Mall 280
MN Rochester Apache Mall 1448
MN Duluth Miller Hill Mall 1120
MO Springfield Battlefield Mall 200
MO St. Louis Crestwood Plaza 19
MO Independence Independence Center 53
MO Kansas City Metro North S/C 57
MO Joplin Northpark Mall 159
MO Richmond Saint Louis Galleria 1237
MO Cape Girardeau West Park Mall 261
MS Tupelo Mall at Barnes Crossing 245
MS Jackson Metrocenter 232
MT Great Falls Holiday Village 1288
MT Bozeman Main Mall 1502
MT Billings Rimrock Mall 1095
MT Missoula Southgate Mall 1470
NC Asheville Asheville Mall 259
NC Boone Boone Mall 1548
NC Fayetteville Cross Creek Mall 190
NC Winston-Salem Hanes Mall 1210
NC Wilmington Independence Mall 142
NC Durham South Square 59
NC Hickory Valley Hills Mall 282
ND Grand Forks Columbia Mall 1318
ND Bismarck Kirkwood Mall 1486
NE Grand Island Conestoga Mall 1547
NE Omaha Oakview Mall 179
NE Omaha Westroads Mall 1217
NH Salem Mall @ Rockingham Park 188
NH Manchester Mall of New Hampshire (The) 1142
NH Nashua Pheasant Lane Mall 196
NJ Bridgewater Bridgewater Commons 1067
Page 4
<PAGE> 35
NEOS STORE ANALYSIS
SCHEDULE A
STORES TO KEEP OPEN
================================================================================
LOCATION NEOS
- --------------------------------------------------------------------------------
ST TOWN DESCRIPTION STORE NO.
================================================================================
NJ Vineland Cumberland Mall 1338
NJ Paramus Garden State Plaza 35
NJ Shrewsbury Grove at Shrewsbury (The) 1174
NJ Short Hills Mall at Short Hills 85
NJ Edison Menlo Park Mall 1218
NJ Rockaway Rockaway Town Square 268
NJ Wayne Willowbrook Plaza 1063
NM Santa Fe Villa Linda Mall 1293
NM Albuquerque Winrock Center 1412
NV Las Vegas Boulevard Mall (The) 1226
NV Henderson Galleria at Sunset 1332
NY New York Hippedrome Building (44th & 6th) 1115
NY Yorktown Jefferson Valley Mall 38
NY Johnson City Oakdale Mall 1143
NY Lake Grove Smith Haven Mall 224
NY Bay Shore South Shore Mall 1432
NY Staten Island Staten Island Mall 266
NY Saratoga Springs Wilton Mall at Saratoga 278
OH Ashtabula Ashtabula Mall 260
OH Canton Belden Village Mall 205
OH Akron Chapel Hill Mall 1342
OH Zanesville Colony Square 264
OH Columbus Columbus City Center 1208
OH Niles Eastwood Mall 203
OH Findlay Findlay Village Mall 1541
OH Toledo Franklin Park Mall 255
OH Cincinnati Kenwood Towne Center 88
OH Cincinnati Northgate Mall 125
OH St. Clairsville Ohio Valley Mall 248
OH Mansfield Richland Mall 328
OH Sandusky Sandusky Mall 240
OH Youngstown Southern Park Mall 1116
OH Cleveland Tower City Center 1479
OK Lawton Central Mall 331
OK Oklahoma City Crossroads Mall 71
OK Oklahoma City Penn Square Mall 112
OK Norman Sooner Mall 1315
OK Tulsa Woodland Hills Mall 1326
ON Kitchener Fairview Park 307
ON Barrie Georgian Mall 312
ON Hamilton Lime Ridge Mall 309
OR Portland Clackamas Town Center 216
OR Medford Rogue Valley Mall 1270
OR Salem Salem Centro 221
OR Portland Washington Square 332
Page 5
<PAGE> 36
NEOS STORE ANALYSIS
SCHEDULE A
STORES TO KEEP OPEN
LOCATION NEOS
ST TOWN DESCRIPTION STORE NO.
- -- ---- ----------- ---------
PA Chambersburg Chambersburg Mall 344
PA Butler Clearview Mall 1381
PA Harrisburg Colonial Park Mall 286
PA Philadelphia Gallery II at Market East 1193
PA King of Prussia King of Prussia Plaza 28
PA Scranton Mall at Steamtown (The) 1264
PA Erie Millcreek Mall 1305
PA North Wales Montgomery Mall 1258
PA Bensalem Neshaminy Mall 1254
PA Plymouth Plymouth Meeting Mall 30
PA Pittsburgh South Hills Village 135
PR Ponce Plaza Del Caribe 250
PR San Juan Plaza Las Americas 251
SC Anderson Anderson Mall 1276
SC Charleston Citadel Mall 133
SC Charleston Northwoods Mall 153
SD Rapid City Rushmore Mall 1257
TN Franklin Coolsprings Galleria 1225
TN Kingsport Fort Henry Mall 1081
TN Clarksville Governors Square 321
TN Chattanooga Hamilton Mall 1101
TN Memphis Hickory Ridge Mall 101
TN Johnson City Mall at Johnson city (The) 1314
TN Memphis Oak Court Mall 1145
TN Raleigh Raleigh Springs Mall 1123
TN Knoxville West Town Mall 333
TX Texarkana Central Mall 270
TX Plano Collin Creek Mall 1356
TX Denton Golden Triangle Mall 1455
TX Austin Highland Mall 97
TX Houston Houston Galleria 48
TX San Antonio Ingram Park Mall 98
TX McAllen LaPlaza Mall 226
TX Longview Longview Mall 1358
TX Abilene Mall of Abilene 336
TX San Antonio North Star Mall 43
TX College Station Post Oak Mall 227
TX Wichita Falls Sikes Center 1291
UT Salt Lake City Cottonwood Mall 1133
UT Salt Lake City Crossroads Plaza 1164
UT Murray Fashion Place 1086
UT Layton Layton Hills Mall 338
UT Ogden Newgate Mall 1376
UT St. George Red Cliffs Mall 1341
UT Sandy South Towne Mall 1362
Page 6
<PAGE> 37
NEOS Store Analysis
Schedule A
Stores to Keep Open
<TABLE>
<CAPTION>
LOCATION
- -------------------- NEOS
STATE TOWN DESCRIPTION STORE NO.
- ----- ---- ----------- ---------
<S> <C> <C> <C>
UT Orem University Nall 201
UT West Valley City Valley Fair 1249
VA Winchester Apple Blossom Mall 1140
VA Charlottesville Charlottesville Fashion Square 239
VA Richmond Chesterfield Towne Center 327
VA Arlington Fashion Center 155
VA Newport News Patrick Henry Mall 1274
VA Richmond Regency Square 191
VA Lynchburg River Ridge Mall 192
VA Fredericksburg Spotsylvania Mall 181
VA Springfield Springfield Mall 1970
VA Harrisonburg Valley Mall 1316
VA Roanoke Valley View Mall 64
VT S. Burlington University Mall 298
WA Bellevue Bellevue Square 1979
WA Olympia Capital Mall 1080
WA Burlington Cascade Mall 1215
WA Kennewick Columbia Shopping Center 1152
WA Tacoma Lakewood Mall 1223
WA Spokane Northtown Mall 1230
WA Puyallup South Hills Mall 1295
WA Tacoma Tacoma Mall Shopping Center 1415
WA Vancouver Vancouver Mall 1319
WI Appleton Fox River Mall 1077
WI Milwaukee Southridge Mall 54
WI Wausau Wausau Center 1373
WI Madison West Towne Mall 1070
WV Charleston Charleston Town Center 202
WV Charleston Charleston Town Center 1330
WV Beckley Crossroads Mall 1545
WV Barboursville Huntington Mall 198
WV Bridgeport Meadowbrook Mall 303
WV Bluefield Mercer Mall 1383
</TABLE>
Page 7
<PAGE> 38
Exhibit "C"
<TABLE>
<S> <C> <C> <C> <C> <C>
1204 Moorestown Mall Moorestown NJ 08057 1,712
249 Roosevelt Field Garden City NY 11530 1,865
319 Sunrise Mall Massapequa NY 11758 1,403
120 Walden Galeria Buffalo NY 14225 1,506
306 Carousel Center Syracuse NY 13204 1,276
199 Shoppingtown Mall DeWitt NY 13214 1,507
316 Sangertown Square New Hartford NY 13413 1,406
1147 Great Northern Mall Clay NY 12065 1,900
271 Calorie Center Albany NY 12205 2,161
1265 150 Broadway New York NY 10038 1,530
163 Irondequoit Mall Rochester NY 14622 1,250
1995 Bromley Building (225 W. New York NY 10024 1,020
1294 Westchester (The) White Plains NY 10601 990
1141 Marketplace Mall Rochester NY 14623 1,728
322 Broadway Mall Hicksville NY 11801 1,618
275 Richland Mall Waco TX 76710 1,528
1221 Birchwood Mall Port Huron MI 48059 1,292
294 Macomb Mall Roseville MI 48066 1,559
212 Woodland Grand Rapids MI 49512 1,177
291 Paramus Park Paramus NJ 07652 1,599
1177 Wick Plaza Edison NJ 08817 2,052
1306 Jefferson Valley Mall Yorktown NY 10598 1,200
1351 Princeton Market Fair Princeton NJ 08540 1,485
1132 Seaview Square Ocean NJ 07712 1,762
347 Clifton Country Mall Clifton Park NY 12065 1,250
1278 Mall at Greece Ridge Center Rochester NY 14626 1,275
277 Nanuet Mall Nanuet NY 10954 1,335
1233 Wheaton Plaza Wheaton MD 20902 952
1128 Deerbrook Mall Humble TX 77338 1,247
1161 Southwyck Shopping Center Toledo OH 43614 1,731
308 Franklin Mills Philadelphia PA 19114 2,261
1283 Warwick Mall Warwick RI 02886 1,237
98 Ingram Park Mall San Antonio TX 78278 1,752
1106 Windmor Park Shopping Center San Antonio TX 78218 973
1357 Galleria at Brieview Cleveland OH 44114 1,124
346 NorthPark Center Dallas TX 75225 1,536
1118 North East Mall Hurst TX 76053 2,200
1248 Memorial City Mall Houston TX 77024 1,265
1462 Franklin Park Mall Toledo OH 43623 1,512
296 Southwyck S/C Toledo OH 43614 1,607
1206 Columbus City Center Columbus OH 43215 1,314
1509 Eastview Mall Victor NY 14564 1,170
209 Rolling Acres Mall Akron OH 44322 1,206
1331 Newburgh Mall Newburgh NY 12550 1,662
1085 Barton Creek Square Austin TX 78746 1,824
1996 Dayton Mall Dayton OH 45459 2,563
254 Mall @ Fairfield Commons Dayton OH 45431 1,271
276 Parmatown Mall Parma OH 44129 1,862
247 Great Northern Mall North Olmstead OH 44070 1,598
1125 Great Northern Mall North Olmstead OH 44070 1,980
1209 Tri-County Mall Cincinnati OH 45246 1,500
106 Salem Mall Dayton OH 45426 1,640
127 Summit Place Detroit MI 48328 1,329
</TABLE>
Page 1
<PAGE> 39
Y 288 Prince Georges Plaza Hyattsville MD 20782 1,475
Y 334 Whale Point North Bethesda MD 20895 1,452
Y 137 Dallas Galleria Dallas TX 75240 1,181
Y 1126 Mall at Northgate (The) San Rafael CA 94903 1,919
Y 1135 Vallco Fashion Park Cupertino CA 95014 2,106
Y 1417 Grossmont Shopping Center La Mesa CA 91941 1,397
Y 1253 Oaks (The) Thousand Oaks CA 91360 1,000
Y 1096 Fox Hills Mall Culver City CA 90230 2,000
Y 1488 Hemet Valley Mall Hemet CA 92543 1,156
Y 1266 217 Sutter Street San Francisco CA 94108 2,078
Y 299 Plaza at West Covina West Covina CA 91790 2,127
Y 144 MainPlace/Santa Ana Santa Ana CA 92701 1,610
Y 1476 Laguna Hills Mall Laguna Hills CA 92653 2,158
Y 150 South Coast Plaza Costa Mesa CA 92626 1,213
Y 1139 Brea Mall Brea CA 92621 2,209
Y 211 Westfarms Mall Farmington CT 06032 1,200
Y 1186 Riverside Plaza Riverside CA 92506 1,960
Y 1244 Merced Mall Merced CA 95348 1,142
Y 1083 Sunnyvale Town Center Sunnyvale CA 94086 1,224
Y 1982 Mall of Orange Orange CA 92613 2,513
Y 118 Mission Viejo Mall Mission Viejo CA 95356 1,763
Y 1187 7 Marketplace at Citicorp Los Angeles CA 90017 1,460
Y 1227 Moreno Valley Mall Moreno Valley CA 92553 1,200
Y 1154 Sierra Vista Mall Clovis CA 93612 1,672
Y 1297 Lakewood Center Mall Lakewood CA 90712 1,653
Y 317 Towson Town Center Towson MD 21204 1,972
Y 1153 East Hills Mall Bakersfield CA 93306 1,641
Y 1261 Union Station Washington DC 20002 740
Y 233 Eastfield Mall Springfield MA 01129 1,398
Y 114 Atrium (The) Chestrull Hill MA 02167 1,177
Y 1277 Square One Mall Saugus MA 01906 1,008
Y 1268 Meadow Glen Mall Medford MA 02155 984
Y 314 Woodlands Mall (The) The Woodlands TX 77380 2,249
Y 1146 Pompano Square Mall Pompano Beach FL 33062 1,799
Y 1071 Burlington Mall Burlington MA 01803 2,134
Y 1364 Worcester Commons Fashion Worcester MA 01608 1,594
Y 292 Independence Mall Plymouth MA 02364 1,612
Y 1335 Woodlands Mall (The) The Woodlands TX 77380 1,320
Y 134 Town Center @ Boca Raton Boca Raton FL 33431 1,612
Y 1172 Gardens (The) Palm Beach Gardens FL 33410 2,063
Y 126 Oaks Mall Gainesville FL 32605 1,887
Y 1127 Lakeland Square Lakeland FL 33809 1,750
Y 1537 Edison Mall Fort Myers FL 33901 1,800
Y 1157 Fullerton Mall Plantation FL 33324 2,065
Y 207 Galleria @ Ft. Lauderdale Ft. Lauderdale FL 33304 1,498
Y 151 Broward Mall Plantation FL 33388 1,120
100 1195 Willowbrook Houston TX
Page 2
<PAGE> 40
Exhibit "D"
Gordon Brothers Partners, Inc.
500 North Michigan Avenue
Suite 1460
Chicago, Illinois 60611
Tel. (312) 321-1001
Fax (312) 321-1323
November 26, 1996
Software Acquisition Company LLC
Attn: Mr. Leonard Riggio
Re: Proposal to Conduct a "Store Closing" Sale at Neostar Retail
Group, Inc., Babbages, Inc., Software Etc. Stores, Inc.,
Augusta Enterprises, Inc., Chasada, debtors and debtors in
possession (the "Debtors")
------------------------------------------------------------
Dear Mr. Riggio:
This letter is submitted to you to confirm your agreement with a joint
venture composed of Gordon Brothers Partners, Inc. and Hilco/Great American
Group (the "Joint Venture") that the Joint Venture shall act as your exclusive
agent for the purpose of conducting a store closing sale (the "Sale") at
approximately 100 of the Debtors' locations (the "Stores") pursuant to the
terms and conditions set forth herein in the event you are successful in
purchasing substantially all of the assets of the Debtors.
1. Purchase Price. The Joint Venture shall pay a guaranteed return
equal to fifteen percent (15%) of the Retail Price (as hereinafter defined) of
the inventory located at the Stores and the Closing Stores (as hereinafter
defined) (the "Guaranteed Amount"), plus all of the Expenses (as hereinafter
defined) (collectively, the "Purchase Price"). The proceeds (the "Proceeds") of
the Sale (including the proceeds of inventory located in the Stores, all
inventory transferred into the Stores from the Closing Stores and all
Transferred Merchandise Proceeds as hereinafter defined) shall be distributed
as follows:
(a) first, all Proceeds up to an amount equal to the Purchase
Price plus two percent (2%) of the Retail Price of the inventory
located at the Stores and the Closing Stores shall be distributed to
the Joint Venture; and
(b) second, all remaining Proceeds shall be distributed
seventy percent (70%) to you and thirty percent (30%) to the Joint
Venture.
The Guaranteed Amount shall be paid by authorizing Cox and Smith Incorporated,
trustee, to transfer to the Debtors sums existing in a Cox and Smith
Incorporated client funds account, in the amount of approximately $2.2 million
to an account designated by you (the "Initial
<PAGE> 41
Attn: Mr. Leonard Riggio
November 26, 1996
Page 2
Payment") promptly after the entry of an order of the Bankruptcy Court in
accordance with paragraph 7 below and your transmittal to the Joint Venture of
evidence that funds sufficient to close your acquisition transaction have been
wired to the Debtors. Any additional sums due on account of the Guaranteed
Amount shall be paid within two days of the certification of the Inventory
Taking (as hereinafter defined). To the extent that the Initial Payment exceeds
the amounts required to be paid on account of the Guaranteed Amount, you shall
immediately pay such excess sums to the Joint Venture.
2. Inventory Taking. A physical inventory will be taken by a
certified independent taking service such as RGIS (the "Inventory Taking"). The
"inventory located at the Stores" subject to this agreement shall be saleable
goods in the ordinary course of business that are not damaged or defective
located at the Stores and at approximately 86 stores closed in connection with
your acquisition transaction (the "Closing Stores"). The inventory will be
taken at "Retail Price," which means the lower of (i) the lowest ticketed price
offered to the public since November 1, 1996, or (ii) the lower SKU or "scan"
price of each item of inventory since November 1, 1996 (the "Base Retail
Price") except for Defective and Damaged Inventory, including merchandise in
distressed packages and display merchandise, where "Retail Price" shall mean
such value as you, the Debtors and the Joint Venture shall mutually agree.
3. Expenses. The Joint Venture shall be responsible for all
Expenses incurred in conducting the Sale. As used herein, "Expenses" shall mean
all Store-level operating expenses of the Sale which arise during the term of
the Sale at the Stores, limited to the following: (a) base payroll for retained
employees for actual days/hours worked in the conduct of the Sale; (b) amounts
actually payable in respect of payroll taxes, worker's compensation and
benefits of retained employees (other than Excluded Benefits), with such taxes,
worker's compensation and benefits provided that such amounts shall not exceed,
on an aggregate basis, 16% of the total base payroll for all retained
employees; (c) 50% of the fees and costs of the inventory taking service to
conduct the Inventory Taking at the Stores and the Closing Stores; (d) on-site
supervision; (e) advertising and signage; (f) telephone expenses from the
Stores during the term of the Sale; (g) credit card and bank card fees,
chargebacks and discounts; (h) costs of security personnel; (i) a pro-rata
portion of the Joint Venture's casualty insurance premiums attributable to the
inventory; (j) costs of transfers of inventory during the term of the Sale
other than transfers of the Transferred Merchandise and the Store Transferred
Merchandise; (k) retention bonuses to key employees to the extent deemed
necessary by the Joint Venture in its sole discretion; (l) Occupancy Expenses on
a per diem per Store basis in accordance with the schedule attached hereto (but
the Joint Venture shall be responsible for Occupancy Expenses at the Stores
through at least December
<PAGE> 42
Attn: Mr. Leonard Riggio
November 26, 1996
Page 3
31, 1996); (m) the costs and expenses of providing such additional goods and
services which the Joint Venture in its sole discretion deems appropriate; and
(n) housekeeping in the Stores.
"Expenses" shall not include: (i) Excluded Benefits; (ii) any rent or
occupancy expenses related to the Stores other than Occupancy Expenses; (iii)
Central Service Expenses; (iv) any other costs, expenses or liabilities payable
by you or the Debtors, all of which shall be paid by you or the Debtors
promptly when due for and during the term of the Sale; and (v) costs of
transfers of the Transferred Merchandise and the Store Transferred Merchandise.
As used herein, the following terms have the following respective
meanings:
"Central Service Expenses" means costs and expenses for the
central administrative services necessary for the Sale at the Stores,
including, but not limited to, POS administration, MIS services, sales audits,
cash reconciliation, payroll processing, inventory processing and handling and
data processing and reporting, which services shall be provided to the Joint
Venture.
"Excluded Benefits" means vacation days or vacation pay, sick
days or sick leave, maternity leave or other leaves of absence, termination or
severance pay, pension benefits, ERISA coverage and similar contributions, and
payroll taxes, worker's compensation and benefits in excess of the 16%
limitation provided in clause 3(b) above.
"Occupancy Expenses" means rent, common area maintenance charges and
utility charges for the Stores on a per-diem, per-Store basis as set forth on
the schedule attached hereto and incorporated herein by reference.
4. Transferred Merchandise. You shall transfer all merchandise
from the Closing Stores (the "Store Transferred Merchandise") to the Stores as
mutually agreed by the parties. In addition, you shall transfer "recall"
merchandise from a distribution center in an amount of approximately $5,000,000
at retail value (the "Transferred Merchandise") to the Stores for sale at the
Stores as part of the Sale, which Transferred Merchandise shall arrive at the
stores by December 9, 1996. The Joint Venture shall not pay for such
Transferred Merchandise, but the proceeds from the sale of such Transferred
Merchandise (the "Transferred Merchandise Proceeds") shall be distributed as
set forth in Section 1(b) hereof.
5. Sale Commencement. Termination and Gross Rings. The Sale shall
commence on Friday, November 29, 1996, and shall terminate on or before
December 31, 1996, and thereafter for such period of time, if any, as may
mutually agreed with the consent of the
<PAGE> 43
Attn: Mr. Leonard Riggio
November 26, 1996
Page 4
applicable lessors. To the extent the Sale commences prior to completion of the
Inventory Taking, the gross rings method shall be used to calculate all sales
until the completion of the Inventory Taking.
6. Proceeds. At the Joint Ventures discretion the Joint Venture shall
be permitted to utilize existing bank accounts, depository accounts and credit
card processing facilities or, alternatively, establish new bank accounts,
depository accounts and credit card processing facilities.
7. Bankruptcy Court Order. The Joint Venture's obligation to go
forward with the transactions contemplated hereby is subject to the entry of an
order by the Bankruptcy Court in form and substance satisfactory to the Joint
Venture in its sole discretion.
Very truly yours,
GORDON BROTHERS PARTNERS, INC.
By: ___________________________________
Its: __________________________________
HILCO/GREAT AMERICAN GROUP
By: ___________________________________
Its: __________________________________
AGREED AND ACKNOWLEDGED:
SOFTWARE ACQUISITION COMPANY LLC
By: _______________________________
Leonard Riggio
Its: ______________________________
<PAGE> 44
SCHEDULE 29
GUIDELINES FOR CONDUCT OF STORE CLOSING SALES
1. The sale shall be conducted so that the subject Store remains open only
during that Store's normal hours of operation as provided for in the
lease for that Store or as otherwise ordered by the Court.
2. The Sale shall be conducted in accordance with applicable state and
local "Blue Laws" not otherwise affected by applicable Court Order.
3. The Agent shall not solicit, distribute handbills, leaflets or other
written materials to customers outside of any Store's premises on any
property owned by the landlord for the Store, but may solicit customers
in the Store premises themselves.
4. The Agent shall not use flashing lights or any type of amplified sound
on the leased premises or on any common areas to advertise the sales or
solicit customers for the Sale at that Store.
5. A Sale shall end no later than December 31, 1996. The Agent shall give
notice to the affected landlord, as soon as practicable in advance, as
to the anticipated end date for the Sale.
6. At the conclusion of a Sale, the Agent shall vacate the Stores in
broom-clean condition, except for the removal of furniture, fixtures,
equipment and remaining supplies, and shall leave the Stores in the same
condition as on the commence of the Sales, ordinary wear and tear
excepted. The Agent shall conduct no auction sales from the stores.
7. All banners, A-frame, display and hanging signs used by the Agent in
connection with the sales shall be professionally lettered, and all
banners and hanging signs shall be hung in a professional manner,
Applicable to any Store located in a Mall, except as otherwise agreed by
the applicable mall manager, store front signs must be on a pedestal or
hung inside the Store at least one (1) foot from the window and there
shall be no more than one sign for every eight feet of window, which
sign shall be no more than 60" by 36". In the aggregate, the Agent shall
have no more than eighteen signs in any store. In addition, the signs
shall not be neon or fluorescent in color. Nothing contained herein
shall be construed to create or impose upon any additional restrictions
not contained in the applicable lease agreement.
8. If sales at a Store are to be considered "final," conspicuous signs
shall be posted at the Store to the effect that all sales are "final."
9. The Agent shall not make any alterations to the storefront or exterior
walls or erect any objects except signage of any of the Stores
(including the removal of Store signs).
<PAGE> 45
10. The Agent shall not make any alterations to interior or exterior Store
lighting.
11. The Agent shall keep Store premises and surrounding areas clean and
orderly consistent with present practices.
12. Except as modified by these guidelines, or any Order of the Court in
which the Debtors Chapter 11 case is pending, all provisions of any
lease with respect to the affected premises shall remain in full force
and effect.
13. Removal by the Agent of inventory or equipment must be before or after
regular business hours of the Store, or otherwise effected so as not to
disrupt the operations of other tenants or disturb customers, and in a
manner reasonably satisfactory to store's landlord.
14. On or before November 30, 1996, the Winning Bidder or Agent shall pay
rent for December in accordance with the schedule attached hereto and
incorporated herein by reference. In the event that the sale at any
Store extends through January 7, 1996, The Agent shall pay in advance
for the additional week on a per diem basis for 7 days.
15. The sale shall be referred to as a "Store Closing Sale" and may be
advertised and signed as a "Store Closing Sale." The Sale shall not be
referred to as advertised or signed as a "going-out-of-business,"
"bankruptcy" or "Chapter 11 Sale."
16. The Agent may not bring in "non-debtor" inventory into the sale, but may
consolidate inventory from the Stores or the warehouse.
2
