Exhibit 10.2
This stipulation and agreement (this “Agreement”) memorializes the parties’
agreement (the “RVI/DSW Settlement”) with respect to certain terms relating to a
comprehensive settlement including, without limitation, (i) a compromise and
settlement of all rights, claims, defenses and counterclaims involving Retail
Ventures, Inc. and its officers, directors and subsidiaries other than DSW (as
hereinafter defined) (collectively, “RVI”) and (ii) a compromise and settlement
of all rights, claims, defenses and counterclaims involving DSW, Inc. and its
officers, directors and subsidiaries (collectively, “DSW”).
Specifically, FB Liquidating Estate, Inc., formerly known as Filene’s Basement,
Inc. (“Filene’s”), FB Services LLC and FB Leasing Services LLC (collectively,
the “Debtors”), the Official Committee of Unsecured Creditors (the “Committee”),
RVI and DSW hereby stipulate and agree as follows (unless otherwise expressly
provided, such stipulation and agreement shall become effective upon the date of
entry of a final and non-appealable order of the U.S. Bankruptcy Court for the
District of Delaware approving the RVI/DSW Settlement) (the “Effective Date”):
1. Release and Expungement of RVI Note Claims: On the Effective Date, RVI’s
claims against the Debtors, including any and all principal and accrued
interest, in respect of (i) the $27,599,000 Amended and Restated Promissory
Note, dated as of January 17, 2008, made by Filene’s Basement, Inc. in favor of
RVI, and (ii) the $25,000,000 Subordinated Promissory Note, dated as of
January 3, 2008, made by Filene’s Basement, Inc. in favor of RVI, shall be
deemed withdrawn, released and expunged with prejudice from the Debtors’ claims
register.
2. Assumption of Pension Plan; Indemnification: On the Effective Date,
Filenes’s, as the sole sponsor of the Filene’s defined benefit pension plan (the
“Pension Plan”), hereby agrees to transfer to RVI all of its rights and
obligations with respect to (i) the Pension Plan, (ii) the Pension Plan’s
related trust agreement, (iii) the assets held pursuant to such trust agreement
and (iv) any and all other related agreements, and RVI hereby agrees to accept
such transfers and assume all of Filene’s rights and obligations with respect to
(i) the Pension Plan, (ii) the Pension Plan’s related trust agreement, (iii) the
assets held pursuant to such trust agreement and (iv) any and all other related
agreements (the “Pension Rights and Obligations”) and RVI agrees to assume the
Pension Rights and Obligations, which transfer and assumption shall be effective
as of the Effective Date. RVI shall indemnify Filene’s against any third party
claim asserted by any person or entity arising out of, or relating in any way
to, the Pension Plan; provided, however, that RVI shall not indemnify Filene’s
for any such claim to the extent attributable to any act or omission between
April 21, 2009 and the Effective Date. As used in this Agreement, unless
otherwise expressly stated, the term “person” means any natural person,
corporation, partnership, joint venture, association, trust, unincorporated
organization, limited liability company or governmental or other entity.

 

 

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3. [INTENTIONALLY OMITTED]
4. Allowed General Unsecured Claims of RVI:
(a) RVI shall have three allowed general unsecured claims against the Debtors
(collectively, the “RVI Claims”) for amounts owed by the Debtors to RVI or paid
by RVI on account of the Debtors’ business, as follows:
(i) a claim in the amount of $6.36 million representing amounts actually paid
(whether prior to, on or after the date of this Agreement) on account of
guarantees provided by RVI to factors of the Debtors and identified on Exhibit A
to this Agreement;
(ii) a claim in the amount of $3.0 million representing amounts owed by the
Debtors to RVI for inventory purchased for or provided to the Debtors prior to
April 21, 2009; and
(iii) a claim in the amount of $2.3 million representing a negotiated settlement
of: (w) amounts actually paid (whether prior to, on or after the date of this
Agreement) on account of guarantees provided by RVI to landlords of the Debtors;
(x) amounts owed by the Debtors to RVI for shared services rendered to the
Debtors prior to April 21, 2009; (y) amounts paid or in the future required to
be paid by RVI (whether prior to, on or after the date of this Agreement) to the
plaintiffs in connection with the trademark action Fendi Adele S.R.L., Fendi
S.R.L. and Fendi North America, Inc. v. Filene’s Basement, Inc. and Retail
Ventures, Inc., Case No. 06 CV 0244 (S.D.N.Y.); and (z) any additional amounts
that may be owed by the Debtors to RVI for any reason whatsoever.
(b) The RVI Claims will receive the same treatment under the Plan (as defined
below) as claims held by other general unsecured creditors; provided, however,
that the RVI Claims shall be deemed allowed claims as of the Effective Date and
shall not be objected to by any party to this Agreement for any reason, except
that any claims filed by RVI in excess of the RVI Claims shall be deemed reduced
to the amounts provided for herein without any further order of court.
Distributions on account of the RVI Claims shall be made to RVI or its designee.
5. Allowed General Unsecured Claims of DSW: DSW shall have an allowed general
unsecured claim (the “DSW Claim”) against the Debtors in the amount of $446,667.
The DSW Claim will receive the same treatment under the Plan as claims held by
other general unsecured creditors; provided, however, that the DSW Claim shall
be deemed an allowed claim as of the Effective Date and shall not be objected to
by any party to this Agreement for any reason, except that any claim filed by
DSW in excess of the DSW Claim shall be deemed reduced to the amount provided
for herein without any further order of court. Distributions on account of the
DSW Claim shall be made to DSW or its designee.

 

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6. Transition Services: The Debtors shall (i) promptly execute an Assumption and
Modification Agreement substantially in the form attached hereto as Exhibit B to
assume and modify the Transition Services Agreement, dated as of April 21, 2009
(the “Transition Services Agreement”), by and between DSW and Filene’s Basement,
Inc., and (ii) promptly pay all cure costs (which are agreed by the parties to
equal $53,333 in the aggregate as of the date of this Agreement) relating to the
Transition Services Agreement.
7. Visa Check/MasterMoney Litigation Proceeds: Attached hereto as Exhibit C is a
form of letter from RVI directing that any future proceeds or distributions due
and owing to Filene’s in respect of the Visa Check/MasterMoney Antitrust
Litigation be remitted to Filene’s. RVI agrees that it will promptly remit to
Filene’s any sums due to Filene’s in respect of such litigation that may be
inadvertently paid to RVI, and Filene’s agrees that it will promptly remit to
RVI any sums due to RVI in respect of such litigation that may be inadvertently
paid to Filene’s.
8. Workers’ Compensation Matters: The Debtors and the Committee agree that if
they seek to estimate any claim of any person with respect to workers’
compensation liability, if such person was or is the beneficiary of a letter of
credit or otherwise holds any collateral at the time such claim is estimated and
such person’s claim is estimated at an amount that is less than the amount of
such letter of credit or collateral, then the Debtors and the Committee may seek
to recover from such person an amount equal to but no greater than the
difference between such amounts so that such person will at all times remain
fully secured. The Debtors and the Committee agree that in estimating any claim
pursuant to this paragraph 8, such estimate shall be determined in good faith so
as to reasonably estimate the ultimate total liability associated with all
pending claims and claims incurred but not reported, based on information
prepared in accordance with generally accepted actuarial methods and
assumptions.
9. Mutual Releases: In consideration of the covenants contained in this
Agreement, including, without limitation, RVI’s agreements with respect to the
Pension Plan pursuant to paragraph 2 of this Agreement, and other good and
valuable consideration (receipt and sufficiency of which is hereby acknowledged)
on the Effective Date:
(i) the Debtors, their estates, the Committee, and any party that may acquire
standing to prosecute estate claims on their behalf (the “Debtor Releasors”)
shall be deemed to forever release RVI and DSW and their officers, directors,
agents, attorneys and employees and the Buxbaum Releasees (as hereinafter
defined) (collectively, the “RVI/DSW Releasees”) from any and all claims and
causes of action of any nature whatsoever, including, without limitation, any
and all claims pursuant to Chapter 5 of the Bankruptcy Code, that the Debtor
Releasors may have against the RVI/DSW Releasees;
(ii) the RVI/DSW Releasees shall be deemed to forever release the Debtor
Releasors from any and all claims and causes of action that the RVI/DSW
Releasees may have against the Debtor Releasors, except with respect to those
claims allowed herein; and

 

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(iii) to the extent approved by the Bankruptcy Court in the context of a
Chapter 11 plan of liquidation or reorganization to be proposed in the Debtors’
Chapter 11 cases, to the extent a creditor votes in favor of any plan of
liquidation or reorganization proposed by the Debtors and/or the Committee (the
“Plan”), or to the fullest extent permitted by law, such creditor shall be
deemed to forever release the RVI/DSW Releasees from any and all claims and
causes of action that such creditor may have against the RVI/DSW Releasees
related to the prepetition and postpetition conduct of the Debtors’ business and
the Debtors’ Chapter 11 cases;
provided, however, that the foregoing releases shall not limit the rights of any
party to enforce the terms of this Agreement. Approval of the release provided
in paragraph 9(iii) of this Agreement shall not serve as a condition precedent
to the effectiveness of the RVI/DSW Settlement, provided that the Debtors and
the Committee shall cooperate in good faith and use their best efforts to obtain
such approval.
The releases provided under this paragraph 9 shall apply to all rights arising
from or pursuant to Chapter 5 of the Bankruptcy Code; for the avoidance of
doubt, claims against RVI and/or DSW, including under Chapter 5 of the
Bankruptcy Code, shall not be used to offset RVI Claims and/or DSW Claims. As
used in this Agreement, the term “Buxbaum Releasees” refers to FB II Acquisition
Corp., its subsidiaries and other affiliates (excluding the Debtors and any of
their subsidiaries which may from time to time exist) and their respective
stockholders, directors, managers, officers, employees, agents, attorneys and
representatives (excluding such persons of the Debtors and any of their
subsidiaries which may from time to time exist).
10. RVI/DSW Exculpation: To the extent approved by the Bankruptcy Court in the
context of a Plan, the RVI/DSW Releasees and their respective attorneys shall be
afforded the benefit of any and all exculpation and limitation of liability
provisions afforded under the Plan to the Debtors and the Committee. Approval of
the exculpation and limitation of liability provided in this paragraph 10 shall
not serve as a condition precedent to the effectiveness of the RVI/DSW
Settlement, provided that the Debtors and the Committee shall cooperate in good
faith and use their best efforts to obtain such approval.
11. Plan Support by RVI / DSW: Subject to paragraph 12, and except as otherwise
agreed with the Debtors: each of RVI and DSW agrees to support the Plan; not to
file any objection to confirmation of the Plan; and not to support any other
party in connection with any efforts to defeat the Plan.
12. Settlement Incorporation into Plan: The parties agree that neither the
Debtors nor the Committee shall propose or support a plan of reorganization or
liquidation that contains any terms inconsistent with the terms of the RVI/DSW
Settlement or materially adverse to RVI or DSW or that otherwise fails to
incorporate and/or ratify the terms of the RVI/DSW Settlement.

 

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13. Entire Agreement: This Agreement constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof. This Agreement is not
intended to confer, and shall not confer, upon any person other than the parties
hereto any remedies, claims of liability or reimbursement, causes of action or
any other rights whatsoever, except for the provisions of paragraph 9, which are
intended to be for the benefit of, and shall be enforceable by, each RVI/DSW
Releasee. This Agreement shall be binding upon and enforceable against any
successors or assigns of any of the parties, including, without limitation, any
trustee for any of the Debtors under Chapter 7 or Chapter 11 of the Bankruptcy
Code.
14. Bankruptcy Court Approval; Comprehensive and Integrated Settlement: This
Agreement remains subject to approval of the Bankruptcy Court of the District of
Delaware presiding over the Chapter 11 cases of the Debtors. This Agreement
shall terminate and be of no further force or effect in the event that the
RVI/DSW Settlement is not approved in all respects by the United States
Bankruptcy Court for the District of Delaware. The RVI/DSW Settlement is
intended to be a comprehensive and integrated settlement.
15. Governing Law; Submission to Jurisdiction: This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware without
giving effect to the principles of conflicts of law thereof. Each of the parties
hereto (a) consents to submit itself to the personal jurisdiction of the
Bankruptcy Court of the District of Delaware in connection with any dispute
arising out of this Agreement, (b) agrees that it shall not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court and (c) agrees that it shall not bring any such action relating to
this Agreement in any court other than the Bankruptcy Court of the District of
Delaware.
16. Descriptive Headings: The paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
[Signature Page to Follow]

 

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              RVI        
 
            Retail Ventures, Inc.     (on behalf of itself and its subsidiaries
    other than DSW Inc. and its subsidiaries)    
 
            By:   /s/ James A. McGrady              
 
  Name:   James A. McGrady         Title:   Chief Executive Officer, Chief
Financial Officer, President and Treasurer
 
            September 25, 2009    
 
            DSW        
 
            DSW Inc.     (on behalf of itself and its subsidiaries)    
 
            By:   /s/ Douglas J. Probst              
 
  Name:   Douglas J. Probst         Title:   Executive Vice President and Chief
Financial Officer
 
            September 25, 2009    

 

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                      DEBTORS:   OFFICIAL COMMITTEE OF UNSECURED CREDITORS:
 
                    FB Liquidating Estate, Inc.             (formerly Filene’s
Basement, Inc.)            
 
                    By:   /s/ Alan Cohen   By:   /s/ Lawrence Gottlieb          
   
 
  Name:   Alan Cohen       Name:   Lawrence Gottlieb
 
  Title:   Chief Restructuring Officer       Title:   Duly Authorized Signatory
 
                                September 25, 2009
 
                    FB Services LLC            
 
                    By:   /s/ Alan Cohen                              
 
  Name:   Alan Cohen            
 
  Title:   Chief Restructuring Officer            
 
                    FB Leasing Services LLC            
 
                    By:   /s/ Alan Cohen                              
 
  Name:   Alan Cohen            
 
  Title:   Chief Restructuring Officer            
 
                    September 25, 2009            

 

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