Case BLS Doc 574 Filed 10/17/18 Page 1 of 14 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

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1 Case BLS Doc 574 Filed 10/17/18 Page 1 of 14 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: BROOKSTONE HOLDINGS CORP., et al., 1 Debtors. Chapter 11 Case No (BLS) (Jointly Administered) Ref. Docket No. 507 CERTIFICATION OF COUNSEL REGARDING ORDER APPROVING AGREED STIPULATION IMPLEMENTING SALE ORDER IN CONNECTION WITH PAY DOWN OF PREPETITION SECOND LIEN OBLIGATIONS The undersigned hereby certifies as follows: 1. On August 30, 2018, the Court entered that certain Final Order (I) Authorizing the Debtors to Obtain Postpetition Financing; (II) Authorizing the Debtors to Use Cash Collateral; (III) Granting Liens and Providing Superpriority Administrative Status; (IV) Granting Adequate Protection to the Prepetition ABL Parties; (V) Modifying the Automatic Stay; and (VI) Granting Related Relief [Docket No. 278] (the Final DIP Order ). 2. On October 5, 2018, the Court entered that certain Order (I) Authorizing the Sale of Certain Assets of the Debtors Free and Clear of All Liens, Claims, Liabilities, Rights, Encumbrances and Other Interests, (II) Authorizing the Assumption and Assignment of Certain Executory Contracts in Connection Therewith, and (III) Granting Related Relief [Docket No. 507] (the Sale Order ). 2 01: The Debtors, along with the last four digits of each Debtor s tax identification number, are: Brookstone Holdings Corp. (4638), Brookstone, Inc. (2895), Brookstone Company, Inc. (3478), Brookstone Retail Puerto Rico, Inc. (5552), Brookstone International Holdings, Inc. (8382), Brookstone Purchasing, Inc. (2514), Brookstone Stores, Inc. (2513), Big Blue Audio LLC (N/A), Brookstone Holdings, Inc. (2515), and Brookstone Properties, Inc. (2517). The Debtors corporate headquarters and the mailing address for each Debtor is One Innovation Way, Merrimack, NH Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Final DIP Order or the Sale Order, as applicable.

2 Case BLS Doc 574 Filed 10/17/18 Page 2 of Paragraph 43 of the Sale Order provides that (a) proceeds of the Sale shall be used, inter alia, to fund into the Segregated Account an amount sufficient to pay all Prepetition Second Lien Obligations through and including the Second Lien Payoff Date in full in cash, and (b) within one Business Day after the later of (i) the Closing Date, or (ii) the Challenge Deadline (if no Challenge is timely commenced by the Challenge Deadline in respect of the Prepetition ABL Liens, the Prepetition ABL Obligations, or the Prepetition Second Lien Obligations), the Prepetition Second Lien Obligations shall be paid in full in cash. 4. To facilitate the terms of the Sale Order, the Debtors, the Official Committee of Unsecured Creditors (the Committee ) and Wilmington Trust, National Association, as Indenture Trustee (the Indenture Trustee, and collectively with the Debtors and the Committee, the Parties ), entered into negotiations to resolve all pending disputes among the Parties and, in connection therewith, reached an agreement on the terms memorialized in the stipulation (the Stipulation ) attached to the proposed form of order (the Proposed Order ) annexed hereto as Exhibit A. 5. The Proposed Order has been reviewed by each Party to the Stipulation, and both the Proposed Order and the Stipulation were shared with the Office of the United States Trustee for the District of Delaware prior to submission hereof. In response, all such parties have advised the Debtors undersigned counsel that they either consent or do not object to entry of the Proposed Order approving the Stipulation. 01:

3 Case BLS Doc 574 Filed 10/17/18 Page 3 of 14 Accordingly, the Debtors respectfully request that the Court enter the Proposed Order attached hereto as Exhibit A without further notice or hearing at the Court s earliest convenience. Dated: Wilmington, Delaware October 17, 2018 /s/ Andrew L. Magaziner YOUNG CONAWAY STARGATT & TAYLOR, LLP Michael R. Nestor (No. 3526) Sean M. Beach (No. 4070) Andrew L. Magaziner (No. 5426) Rodney Square 1000 North King Street Wilmington, Delaware Tel: (302) Fax: (302) mnestor@ycst.com sbeach@ycst.com amagaziner@ycst.com -and- GIBSON, DUNN & CRUTCHER LLP Matthew J. Williams David M. Feldman Matthew K. Kelsey Keith R. Martorana Jason Zachary Goldstein 200 Park Avenue New York, New York Tel: (212) Fax: (212) mjwilliams@gibsondunn.com dfeldman@gibsondunn.com mkelsey@gibsondunn.com kmartorana@gibsondunn.com jgoldstein@gibsondunn.com Counsel to the Debtors and Debtors in Possession 01:

4 Case BLS Doc 574 Filed 10/17/18 Page 4 of 14 EXHIBIT A PROPOSED ORDER 01:

5 Case BLS Doc 574 Filed 10/17/18 Page 5 of 14 UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE In re: BROOKSTONE HOLDINGS CORP., et al., 1 Debtors. Chapter 11 Case No (BLS) Jointly Administered Docket Ref. Nos. 507 & ORDER APPROVING STIPULATION IMPLEMENTING SALE ORDER IN CONNECTION WITH PAY DOWN OF PREPETITION SECOND LIEN OBLIGATIONS Upon consideration of the Certification of Counsel Regarding Proposed Order Approving Stipulation Implementing Sale Order in Connection with Pay Down of Prepetition Second Lien Obligations, filed by the above-captioned debtors and debtors in possession (collectively, the Debtors ), requesting that this Court enter an order approving the Stipulation attached hereto as Exhibit A (the Stipulation ); and this Court having found that the Stipulation is reasonable and proper; IT IS HEREBY ORDERED, ADJUDGED and DECREED that: 1. The Debtors entry into the Stipulation is authorized and approved, and the Debtors are authorized to perform under the Stipulation. 2. The Stipulation is approved as fair, reasonable and adequate, and the terms and conditions of the Stipulation are incorporated into this Order as if fully set forth herein. 01: The Debtors, along with the last four digits of each Debtor s tax identification number, are: Brookstone Holdings Corp. (4638), Brookstone, Inc. (2895), Brookstone Company, Inc. (3478), Brookstone Retail Puerto Rico, Inc. (5552), Brookstone International Holdings, Inc. (8382), Brookstone Purchasing, Inc. (2514), Brookstone Stores, Inc. (2513), Big Blue Audio LLC (N/A), Brookstone Holdings, Inc. (2515), and Brookstone Properties, Inc. (2517). The Debtors corporate headquarters and the mailing address for each Debtor is One Innovation Way, Merrimack, NH

6 Case BLS Doc 574 Filed 10/17/18 Page 6 of The Debtors are authorized to take all actions necessary to effectuate the relief granted pursuant to this Order in accordance with the terms of the Stipulation. 4. This Order shall become effective immediately upon its entry and shall not be stayed, notwithstanding anything in the Federal Rules of Bankruptcy Procedure to the contrary. 5. This Court shall retain jurisdiction with respect to any matters related to or arising from the implementation of this Order, subject to the terms of the Stipulation. Dated: Wilmington, Delaware, 2018 BRENDAN LINEHAN SHANNON UNITED STATES BANKRUPTCY JUDGE 01:

7 Case BLS Doc 574 Filed 10/17/18 Page 7 of 14 Exhibit A STIPULATION 01:

8 Case BLS Doc 574 Filed 10/17/18 Page 8 of 14 UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE In re: BROOKSTONE HOLDINGS CORP., et al., 1 Debtors. Chapter 11 Case No (BLS) Jointly Administered Docket Ref. No. 507 AGREED STIPULATION IMPLEMENTING SALE ORDER IN CONNECTION WITH PAY DOWN OF PREPETITION SECOND LIEN OBLIGATIONS WHEREAS, on August 30, 2018, the Court entered the Final Order (I) Authorizing the Debtors to Obtain Postpetition Financing; (II) Authorizing the Debtors to Use Cash Collateral; (III) Granting Liens and Providing Superpriority Administrative Status; (IV) Granting Adequate Protection to the Prepetition ABL Parties; (V) Modifying the Automatic Stay; and (VI) Granting Related Relief [Docket No. 278] (the Final DIP Order ); WHEREAS, on October 5, 2018, the Court entered the Order (I) Authorizing the Sale of Certain Assets of the Debtors Free and Clear of All Liens, Claims, Liabilities, Rights, Encumbrances and Other Interests, (II) Authorizing the Assumption and Assignment of Certain Executory Contracts in Connection Therewith, and (III) Granting Related Relief [Docket No. 507] (the Sale Order ); 2 WHEREAS, paragraph 43 of the Sale Order provides that (a) proceeds of the Sale shall be used, inter alia, to fund into the Segregated Account an amount sufficient to pay all Prepetition Second Lien Obligations through and including the Second Lien Payoff Date in full in cash, and (b) within one Business Day after the later of (i) the Closing Date, or (ii) the Challenge Deadline (if no Challenge is timely commenced by the Challenge Deadline in respect of the Prepetition ABL Liens, the Prepetition ABL Obligations, or the Prepetition Second Lien Obligations), the Prepetition Second Lien Obligations shall be paid in full in cash; 01: The Debtors, along with the last four digits of each Debtor s tax identification number, are: Brookstone Holdings Corp. (4638), Brookstone, Inc. (2895), Brookstone Company, Inc. (3478), Brookstone Retail Puerto Rico, Inc. (5552), Brookstone International Holdings, Inc. (8382), Brookstone Purchasing, Inc. (2514), Brookstone Stores, Inc. (2513), Big Blue Audio LLC (N/A), Brookstone Holdings, Inc. (2515), and Brookstone Properties, Inc. (2517). The Debtors corporate headquarters and the mailing address for each Debtor is One Innovation Way, Merrimack, NH Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Final DIP Order or the Sale Order, as applicable. NY v3

9 Case BLS Doc 574 Filed 10/17/18 Page 9 of 14 NOW, THEREFOR, in order to resolve any remaining disputes among the parties, and in consideration of the agreement of the Indenture Trustee and counsel to the Indenture Trustee to reduce certain of their fees by an amount agreed upon with the Official Committee of Unsecured Creditors, and to facilitate the terms of the Sale Order, the parties, by and through their undersigned counsel, hereby agree as follows (this Stipulation ): 1. Upon the Indenture Trustee s receipt of the Second Lien Payoff Amount (as illustrated in Exhibit A attached hereto) pursuant to and in accordance with the Sale Order, the Indenture Trustee shall be authorized and directed to distribute all such funds to the Prepetition Second Lien Parties and their advisors (the Second Lien Noteholder Payoff ). 2. Upon the payment of the Second Lien Payoff Amount and the occurrence of the Second Lien Noteholder Payoff, (a) neither the Indenture Trustee (in its capacity as such) nor any of its direct and indirect current and former shareholders, subsidiaries, partners (including general partners and limited partners), investors, managing members, members, officers, directors, principals, employees, managers, controlling persons, agents, attorneys, investment bankers, other professionals, advisors, and representatives (each in their capacity as such) (collectively, Trustee Parties ) shall be deemed to have or incur liability for, and the Trustee Parties shall hereby be deemed released from, any claim, liability or cause of action arising from, related to or in connection with any acts or omissions taken or omitted to be taken, whether prior to or after the Petition Date, in connection with this Stipulation, the Prepetition Second Lien Notes, the Prepetition Second Lien Documents or the Prepetition Second Lien Obligations, and (b) the Debtors (on behalf of themselves and the Debtors estates) shall hereby be deemed to have released the Trustee Parties from, any and all claims, liabilities or causes of action arising from, related to or in connection with any acts or omissions taken or omitted to be taken, whether prior to or after the Petition Date, in connection with this Stipulation, the Final DIP Order or the Sale Order, the Debtors Chapter 11 cases, the Prepetition Second Lien Notes, the Prepetition Second Lien Documents or the Prepetition Second Lien Obligations. 3. The payment of the Second Lien Payoff Amount and the Second Lien Noteholder Payoff shall be indefeasible, and shall not be subject to any avoidance, reduction, recharacterization, disgorgement, subordination pursuant to the Bankruptcy Code, the Subordination Agreement or applicable non-bankruptcy law, objection, defense, counterclaim, crossclaims, set-off or offset, or any other challenges under the Bankruptcy Code, the Sale Order, the Final DIP Order, or any applicable nonbankruptcy law or regulation by any person or entity of any kind. 4. Subject to the prior receipt by the Indenture Trustee of written notice from the Debtors of Payment in Full of Senior Indebtedness pursuant to and in accordance with Section 14 of the Subordination Agreement, upon the payment of the Second Lien Payoff Amount in full in cash, the Prepetition Second Lien Notes and the Prepetition Second Lien Obligations shall be deemed to have been paid and satisfied in full, irrevocably discharged, terminated and released and the Prepetition Second Lien Documents and all related instruments, agreements and other documents shall immediately and automatically terminate and be of no further force or effect and the Prepetition Second Priority Liens shall be deemed canceled. 01:

10 Case BLS Doc 574 Filed 10/17/18 Page 10 of The Indenture Trustee hereby authorizes the Debtors, their agents, counsel and/or designees on and after the Second Lien Payoff Date to file on behalf of the Indenture Trustee any filings, instructions or other documents necessary or appropriate, if any, to evidence the releases contemplated by this Stipulation, in each case, without recourse or warranty of any kind, either express or implied. 6. From and after the Second Lien Payoff Date, the Indenture Trustee agrees, to the extent necessary and reasonably requested by the Debtors, to execute and deliver any applicable UCC termination statements covering all UCC financing statements and all other appropriate documents deemed reasonably necessary by the Debtors to further evidence the release and termination of the security interests, liens and other rights on or in the assets subject thereto, in each case, at the Debtors expense. 7. Miscellaneous. (a) Each of the undersigned represents that it has the requisite power and authority to sign this Stipulation on behalf of their respective clients. (b) The parties consent and submit to the exclusive jurisdiction of the Bankruptcy Court over any actions or proceedings relating to the enforcement or interpretation of this Stipulation. This consent to jurisdiction before the Bankruptcy Court shall be for the limited purposes set forth herein and shall not be used by any party for any other purpose whatsoever. (c) This Stipulation shall be governed by and construed in accordance with the laws of the State of New York and the Bankruptcy Code. (d) This Stipulation shall inure to the benefit of and be binding upon the parties and their respective successors and assigns, and shall be binding on any Chapter 11 trustee or Chapter 7 trustee appointed in any of the Debtors bankruptcy cases. (e) each party hereto. This Stipulation may be modified or amended only by a writing signed by (f) This Stipulation may be executed in counterparts, each of which constitutes an original, and all of which, collectively, constitute only one agreement. [Remainder of page intentionally left blank] 01:

11 Case BLS Doc 574 Filed 10/17/18 Page 11 of 14 Dated: October 17, 2018 Wilmington, Delaware YOUNG CONAWAY STARGATT & TAYLOR, LLP /s/ Andrew L. Magaziner Michael R. Nestor (No. 3526) Sean M. Beach (No. 4070) Andrew L. Magaziner (No. 5426) Rodney Square 1000 North King Street Wilmington, Delaware Telephone: (302) Facsimile: (302) and- GIBSON, DUNN & CRUTCHER LLP Matthew J. Williams David M. Feldman Matthew K. Kelsey Keith R. Martorana Jason Z. Goldstein. 200 Park Avenue New York, New York Telephone: (212) Facsimile: (212) Co-Counsel to the Debtors and Debtors in Possession FOX ROTHSCHILD LLP /s/ Thomas Horan Thomas M. Horan (No. 4641) Courtney A. Emerson (No. 6229) Citizens Bank Center 919 North Market Street Suite 300 Wilmington, Delaware Telephone: (302) Facsimile: (302) and- STROOCK & STROOCK & LAVAN LLP Frank A. Merola Erez E. Gilad Isaac S. Sasson 180 Maiden Lane New York, New York Telephone: (212) Facsimile: (212) Co-Counsel to Wilmington Trust, National Association, as Indenture Trustee 01:

12 Case BLS Doc 574 Filed 10/17/18 Page 12 of 14 BAYARD, P.A. /s/ Justin R. Alberto Justin R. Alberto (No. 5126) Erin R. Fay (No. 5268) 600 North King Street, Suite 400 Wilmington, Delaware Telephone: (302) Facsimile: (302) and- COOLEY LLP Seth Van Aalten Cathy Hershcopf Robert Winning 1114 Avenue of the Americas New York, New York Telephone: (212) Facsimile: (212) Co-Counsel for the Official Committee of Unsecured Creditors of Brookstone Holdings Corp., et al. 01:

13 Case BLS Doc 574 Filed 10/17/18 Page 13 of 14 Exhibit A to Stipulation Brookstone 10% Sr Sec Nts 2021 Daily Rate # of Days Principal $ 14,747, Prepetition August 1 Principal plus Interest $ 14,874, Postpetition August 29 Last Payment Date 7/2/2018 September 30 Petition Date 8/2/2018 October 18 Cusip AA3 Post Petition Interest 77 Rate 10% Defaulted Rate (10% plus 1.00% per annum) 11% Interest due 7/1/8 through 8/1/18 (31 days) $ 126, Defaulted Interest Due 8/2/18 through 10/18/18 (77 days) $ 354, TOTAL PRINCIPAL and INTEREST DUE $ 15,228, Daily Rate # of Days Principal $ 14,747, Prepetition August 1 Principal plus Interest $ 14,874, Postpetition August 29 Last Payment Date 7/2/2018 September 30 Petition Date 8/2/2018 October 19 Cusip AA3 Post Petition Interest 78 Rate 10% Defaulted Rate (10% plus 1.00% per annum) 11% Interest due 7/1/8 through 8/1/18 (31 days) $ 126, Defaulted Interest Due 8/2/18 through 10/19/18 (78 days) $ 358, TOTAL PRINCIPAL and INTEREST DUE $ 15,232, Daily Rate # of Days Principal $ 14,747, Prepetition August 1 Principal plus Interest $ 14,874, Postpetition August 29 Last Payment Date 7/2/2018 September 30 Petition Date 8/2/2018 October 22 Cusip AA3 Post Petition Interest 81 Rate 10% Defaulted Rate (10% plus 1.00% per annum) 11% Interest due 7/1/8 through 8/1/18 (31 days) $ 126, Defaulted Interest Due 8/2/18 through 10/22/18 (81 days) $ 372, TOTAL PRINCIPAL and INTEREST DUE $ 15,246, Daily Rate # of Days Principal $ 14,747, Prepetition August 1 Principal plus Interest $ 14,874, Postpetition August 29 Last Payment Date 7/2/2018 September 30 Petition Date 8/2/2018 October 23 Cusip AA3 Post Petition Interest 82 Rate 10% Defaulted Rate (10% plus 1.00% per annum) 11% Interest due 7/1/8 through 8/1/18 (31 days) $ 126, Defaulted Interest Due 8/2/18 through 10/23/18 (82 days) $ 377, TOTAL PRINCIPAL and INTEREST DUE $ 15,251, Daily Rate # of Days Principal $ 14,747, Prepetition August 1 Principal plus Interest $ 14,874, Postpetition August 29 Last Payment Date 7/2/2018 September 30 Petition Date 8/2/2018 October 24 Cusip AA3 Post Petition Interest 83 Rate 10% Defaulted Rate (10% plus 1.00% per annum) 11% Interest due 7/1/8 through 8/1/18 (31 days) $ 126, Defaulted Interest Due 8/2/18 through 10/24/18 (83 days) $ 381, TOTAL PRINCIPAL and INTEREST DUE $ 15,256, Daily Rate # of Days Principal $ 14,747, Prepetition August 1 Principal plus Interest $ 14,874, Postpetition August 29 Last Payment Date 7/2/2018 September 30 Petition Date 8/2/2018 October 25

14 Case BLS Doc 574 Filed 10/17/18 Page 14 of 14 Cusip AA3 Post Petition Interest 84 Rate 10% Defaulted Rate (10% plus 1.00% per annum) 11% Interest due 7/1/8 through 8/1/18 (31 days) $ 126, Defaulted Interest Due 8/2/18 through 10/25/18 (84 days) $ 386, TOTAL PRINCIPAL and INTEREST DUE $ 15,260, Daily Rate # of Days Principal $ 14,747, Prepetition August 1 Principal plus Interest $ 14,874, Postpetition August 29 Last Payment Date 7/2/2018 September 30 Petition Date 8/2/2018 October 26 Cusip AA3 Post Petition Interest 85 Rate 10% Defaulted Rate (10% plus 1.00% per annum) 11% Interest due 7/1/8 through 8/1/18 (31 days) $ 126, Defaulted Interest Due 8/2/18 through 10/26/18 (85 days) $ 391, TOTAL PRINCIPAL and INTEREST DUE $ 15,265, From and after 10/26/18, additional amounts due and owing under the Second Lien Indenture shall accrue consistent with the daily rate illustrated above Sub-Total Fox Rothschild LLP $18, $18, Stroock & Stroock & Lavan LLP $533, Less agreed upon discount: ($50,000) $483, Wilmington Trust National Association $69,343 Less agreed upon discount: ($10,000) $59,343 Total: $561,517.08