UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT …media.publishersmarketplace.com/wp-content/uploads/2015/02/FCSFiling.pdfseveral hundred thousand “shoe box” gifts and gospel

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UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF MICHIGAN

In re: FAMILY CHRISTIAN, LLC et al. 1 Debtors.

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CHAPTER 11 CASE NO. 15-00643 (Joint Administration Proposed) HON. JUDGE JOHN T. GREGG

DEBTORS’ MOTION FOR (I) AN ORDER (A) APPROVING PROCEDURES FOR THE SALE OF SUBSTANTIALLY ALL OF THE DEBTORS' ASSETS AND

THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES (B) APPROVING THE ESTABLISHMENT

OF CURE AMOUNTS, AND (C) SCHEDULING A FINAL SALE HEARING AND APPROVING THE FORM AND MANNER OF NOTICE THEREOF, AND

(II) AN ORDER (A) AUTHORIZING THE SALE OF SUBSTANTIALLY ALL

OF THE DEBTORS’ ASSETS FREE AND CLEAR OF LIENS AND (B) AUTHORIZING THE ASSUMPTION AND ASSIGNMENT OF EXECUTORY

CONTRACTS AND LEASES, AND (C) GRANTING RELATED RELIEF

The above-captioned debtors (the “Debtors”), hereby file this motion (the “Motion”)

pursuant to sections 363 and 365 of chapter 11 of title 11 of the United States Code, 11 U.S.C.

§§ 101, et seq. (the “Bankruptcy Code”) and Rules 2002, 6004, 6006 and 9006 of the Federal

Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), requesting (I) an order (a) approving

procedures (the “Sale Procedures”) for the sale of substantially all of the assets of the Debtors'

assets, the assumption and assignment of certain executory contracts and unexpired leases and

related relief, (b) approving the establishment of cure amounts with respect thereto, and (c)

scheduling a final hearing date for the approval of the sale (the “Sale Hearing”) and approving

the form and manner of notice thereof, and (II) an order (a) authorizing the sale of substantially

all of the Debtors' assets free and clear of liens, claims, interests and encumbrances pursuant to

Section 363(f) of the Bankruptcy Code, (b) authorizing the assumption and assignment of certain 1 The Debtors are: Family Christian, LLC; Family Christian Holding, LLC; and FCS Giftco, LLC.

Case:15-00643-jtg Doc #:30 Filed: 02/12/15 Page 1 of 21

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executor contracts and leases, and (c) granting related relief to all of the foregoing. In support of

this Motion, the Debtors respectfully state as follows:

BACKGROUND

A. The Chapter 11 Filing

1. On February 11, 2015 (the "Petition Date"), the Debtors commenced their

reorganization cases by filing voluntary petitions for relief under chapter 11 of the Bankruptcy

Code, 11 U.S.C. §§ 101-1330, et seq. (the "Bankruptcy Code"). The Debtors are continuing in

possession of their property and are operating and managing their businesses, as debtor-in-

possession, pursuant to sections 1107 and 1108 of the Bankruptcy Code.

2. As of the date hereof, a creditors’ committee (the “Committee”) has not been

appointed yet in these chapter 11 cases (the “Chapter 11 Cases”) by the United States Trustee.

No trustee or examiner has been appointed in these Chapter 11 Cases.

3. The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and

1334. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409. This is a core proceeding

pursuant to 28 U.S.C. § 157(b)(2).

4. The statutory predicates for the relief requested herein are sections 105(a), 363

and 365 of the Bankruptcy Code, Bankruptcy Rules 2002, 6004 and 6006.

B. Background and Business Operations

5. The factual background relating to the Debtors' business and the commencement

of these Chapter 11 Cases is set forth in detail in the Declaration of Chuck Bengochea In Support

Of Chapter 11 Petition And First Day Motions (the “Bengochea Declaration”) filed

contemporaneously herewith.


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6. The Debtors operate a non-profit business. Family Christian, LLC, a Georgia

company (sometimes called the “Operating Debtor”) conducts most all business operation

through a chain of retail stores known as Family Christian® stores, and it is wholly owned by

Family Christian Holding, LLC (sometimes called the “Holding Company”). The Holding

Company does not conduct any business operations, and its primary asset is the ownership of all

the membership interests of the Operating Debtor. The Holding Company is owned 100% by a

separate, non-debtor company known as Family Christian Resource Centers, Inc. a/k/a "Family

Christian Ministries," ("FCRC"), a 501(c)(3) tax exempt, non-profit Georgia corporation that is

the ultimate parent company that serves as the organization for coordinating and supporting the

charitable causes and ministries supported through any profits of the Debtors and their collection

of donations that are described herein.

7. Family Christian stores is one of the largest retail sellers of Christian books,

music, DVDs, church supplies, and other merchandise related to the Christian faith. The

company has approximately 3,100 employees and 266 stores in 36 states operating under the

name. Sales are also generated through direct mail catalogs and internet purchases

(https://familychristian.com). In 2014, the Operating Debtor had gross sales approximating $216

million.

8. The Debtors operate as non-profit companies. As a result, any available and

legally disposable profits of the Debtors and their collected donations go to supporting "Family

Christian Ministries," a non-profit, charitable organization dedicated to sharing and promoting

the Christian message and lifestyle, and supporting charitable causes and missionary goals.

Based upon the lack of profits, however, for reasons explained below, since 2012, the Debtors

have only paid an approximate amount of $300,000 to FCRC for charitable donations to its


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missionally-aligned causes (exclusive of any third-party donations collected in the retail stores).

A non-exhaustive sampling of such past and present activities include (with the majority of these

activities occurring prior to the 2012 acquisition described below):

• Bible donations. To date the company has donated over 120,000 bibles to military members and their families, and over half a million bibles to children and students in Latin America and Africa.

• Orphanage / Widow Support. Since 2003, the company and its employees have raised and donated several hundred thousand dollars and needed supplies to organizations and ministries that care for orphans and widows or facilitate adoptions in countries across the globe, including China, Haiti, Mexico and the Dominican Republic. They have likewise raised funds to support ministries aimed at rescuing persons enslaved in the sex trafficking industry.

• Missions. The company and its employees have supported and travelled on more than 48 mission trips across the USA and other countries, sharing the Christian faith and distributing needed supplies and goods to many persons, such as building 16 homes for widows in other countries, restoring 32 more widow’s homes, and supplying fuel efficient stoves and water purifiers.

• Giving. In addition to the funds and gifts noted above, the company has given several hundred thousand “shoe box” gifts and gospel tracks to needy families in their annual “Operation Christmas Child.” After Hurricane Alex in 2010, the Debtors’ supported ministries and relief efforts to aid squatters’ communities in Monterrey, Mexico. Since 2003, Family Christian Ministries and its ministry partners or predecessor company have impacted over 4.5 million lives.

9. The Debtors' headquarters and primary management offices are located at 5300

Patterson Avenue SE, Grand Rapids, Michigan, 49530. The Debtors lease all of their retail store

locations.

10. The Debtors' origins dated back to 1931 when the "Zondervan" stores were first

established, and that store chain grew over time and began operating its stores under the name

"Family Bookstores." The business was sold and acquired more than one time and changed its

name to Family Christian stores in the 1990s.

11. In 2012, Family Christian Stores was purchased by its current ownership and has

operated since early 2013 as a non-profit organization through which, as explained above, 100%


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of any available and legally disposable profits and donations raised by the Debtors are paid over

to FCRC for charitable donations to missionally-aligned causes. To facilitate the 2012

acquisition, Family Christian, LLC and Family Christian Holding, LLC were formed, both being

organized under the laws of the State of Georgia.

C. Prepetition Debt and Capital Structure

12. To facilitate the acquisition of the business in 2012 and provide for general

working capital, the Operating Debtor obtained two loans, both of which were guaranteed by the

Holding Company. Pursuant to such loans, the Operating Debtor, as borrower, is indebted to FC

Special Funding, LLC, as assignee of JP Morgan Chase Bank, N.A., individually and in its role

as agent (the “Senior Lender”) under a "Credit Agreement" dated November 14, 2012 (the

"Revolver") that provides a revolving line of credit up to a maximum of $40 million, which loan

provides working capital for the Operating Debtor’s business operations. Upon information and

belief, the Revolver is secured by a security interest and lien upon substantially all of the

Operating Debtor's assets, including without limitation, its accounts receivable, inventory, and

cash collateral; provided nothing herein constitutes a stipulation as to any liens or a waiver of the

Debtors' right to challenge or dispute the perfection, amount or other aspects of any asserted

liens upon the Debtors' property.

13. Additionally, the Operating Debtor, as borrower, is indebted to Credit Suisse AG,

Cayman Island Branch, individually and in its role as agent for Credit Suisse Loan Funding,

LLC, Medley Capital Corporation, Congruent Credit Opportunities Fund II, LP, and Main Street

Mezzanine Fund, LP (the “Junior Lenders” and together with the Senior Lender, the "Secured

Lenders") under a "Term Loan Credit Agreement" dated November 14, 2012 (the "Term Loan")

for the loan amount of $38 million, which loan provided part of the acquisition financing for the

2012 acquisition. Upon information and belief, the Term Loan is secured by a security interest


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and lien upon substantially all of the Operating Debtor's assets; provided nothing herein

constitutes a stipulation as to any liens or a waiver of the Debtors' right to challenge or dispute

the perfection, amount or other aspects of any asserted liens upon the Debtors' property.

14. As of the Petition Date, the amount owed under the Revolver is approximately

$23 million, while the amount owed under the Term Loan is approximately $34 million.

15. In the ordinary course of the Operating Debtor’s business it is often necessary and

appropriate to order, purchase and take delivery of supplies, inventory and other goods on credit

from various suppliers and vendors. The Operating Debtor currently owes approximately $40

million in outstanding debt to its trade suppliers and vendors (the "Trade Debt").

16. In addition to the Trade Debt, the Operating Debtor’s business takes delivery of

supplies, inventory and other goods on “consignment” from various suppliers and vendors;

provided nothing herein constitutes a stipulation as to any liens or a waiver of the Debtors' right

to challenge or dispute the perfection, amount or other aspects of any asserted liens or ownership

rights upon the Debtors' property related to any such consignment arrangements. The Operating

Debtor currently has on hand approximately $20 million in consignment inventory.

D. Events Leading to a Chapter 11 Filing and Negotiation of Sale Agreement

17. The Operating Debtor’s sales have been in steady decline since 2008. For fiscal

year ending (FYE) 2008, the Operating Debtor’s annual sales were $305,000,000. For FYE

2014, the annual sales were $230,000,000. The Operating Debtor projects a further decline in

annual sales for FYE 2015 with a forecasted amount of $216,000,000.

18. Some of the factors for the declining sales include the “Great Recession” that

started in 2008 and general industry trends in both the music industry and book industry that

have resulted in fewer consumer purchases at the retail store level. The declining sales have


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deprived the Operating Debtor of the liquidity necessary for capital and infrastructure

improvements in the retail stores. As a result, the Operating Debtor has struggled in meeting

staffing needs for some of the Family Christian stores or making certain improvements

necessary to update the appearance and appeal of the stores.

19. As a result of the factors described above, in late 2014, the Operating Debtor and

its management team began evaluating a number of options to respond to their operational and

liquidity issues. To this end, the Operating Debtor engaged multiple professionals to evaluate

the Debtors' business and to propose potential strategies, including but not limited to, the raising

of additional capital, a sale of some or all assets, or a restructuring transaction.

20. One of the professionals engaged to serve as a financial advisor to the Operating

Debtor was Gary Murphey of Resurgence Financial Services, Ltd. ("Resurgence Financial").

Among other activities performed in connection with its engagement, Resurgence Financial

evaluated the Operating Debtor’s retail business and financial performance to determine if there

were alternative business models that could lead to improved financial strength. Resurgence

Financial modeled store closings and infrastructure changes to determine if there was a better

path to profitability. Their ultimate conclusion was that there was not a better model. The

primary issue, per their assessment, was not to close “unprofitable stores” or make additional

infrastructure cuts, but rather to reduce the size of the debt load burdening the company.

21. Additionally, the Operating Debtor retained Fair Value Advisors to take a

comprehensive look at the company’s financial situation and determine its fair market value.

22. Notwithstanding these industry and financial challenges, the Operating Debtor

strongly believes there is a viable place for the Family Christian brand and its mission in today’s

marketplace. In consultation with its advisors, the Operating Debtor decided upon a Chapter 11


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bankruptcy and sales process to effect a balance sheet restructuring that would provide the

business with the best chance for greater success and prosperity.

23. Lacking any other firm offers for the business assets, the Debtors engaged in good

faith negotiations with the Buyer (defined below), which resulted in a firm bid for the purchase

of the Debtors' business on a going concern basis through a sale conducted under Section 363 of

the Bankruptcy Code.

24. As described further below, the bid is memorialized by an Asset Purchase

Agreement (the "Purchase Agreement") with FCS Acquisition, LLC, a newly-formed subsidiary

of FCRC (the "Buyer"), for the sale and purchase of substantially all of the assets of the

Operating Debtor, which in turn would allow Family Christian stores to continue operating as a

non-profit, charitable organization dedicated to the sharing and promoting of the Christian

message and lifestyle, and supporting charitable causes and missionary goals. The Buyer, as the

proposed stalking horse bidder, is not seeking a break-up fee or expense reimbursement in

connection with its bid.

E. Proposed Stalking Horse Purchase Agreement

25. A. copy of the Purchase Agreement is attached hereto as Exhibit "A".

26. The principal terms of the Purchase Agreement are summarized below. To the

extent there are any discrepancies between the following summary and the Purchase Agreement,

the Purchase Agreement shall govern and control. For purposes of the Purchase Agreement,

“Sellers” means the Operating Debtor and Family Christian Holding, LLC.

A. Assets to be Sold. The “Assets” to be sold consist of substantially all of the operating assets of the Sellers, as encompassing: those certain real property leases to be scheduled and assumed, operating contracts to be scheduled and assumed, all equipment, all inventory (including “consignment” inventory in the possession of the Sellers as of the Petition Date that is transferred to the Buyer at Closing, as more particularly described in


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paragraph 48 below), rights to intellectual property including licenses, prescribed employee benefit plans, certain prepaid items, cash in stores, books and records, “avoidance actions” arising under the Bankruptcy Code, and goodwill. Such Assets also include the Sellers’ business relationship with iDisciple LLC. Certain assets to be retained by the Sellers as “Excluded Assets” include its tax attributes for pre-closing periods, contract rights not assumed by the Buyer, and cash in bank accounts.

B. Free and Clear. The Assets are to be sold free and clear of all liens, claims, encumbrances and interests (including “consignment” inventory in the possession of the Sellers as of the Petition Date that is transferred to Buyer at Closing, as more particularly described in paragraph 48 below).

C. Purchase Price. The aggregate consideration for the Assets is specified in the Purchase Agreement as $73,773,000, consisting of: (a) $28,000,000 in Cash; (b) the assumption by the Buyer of the Assumed Real Property Leases that the Parties estimate the present value of to be $43,773,000, and (c) the assumption of other accrued operating liabilities related to employees, gift cards and other items described in the Purchase Agreement that the Parties estimate to be $2,000,000 (the estimates in clauses (b) and (c) to be finalized by agreement of the Sellers and Buyer prior to Closing).

D. Deposit. The Buyer will advance a deposit of $1,000,000, subject to the terms of the Purchase Agreement.

E. Breakup Fee/Expense Reimbursement. None.

F. Closing. Subject to the Bankruptcy Court approval referenced below, the Purchase Agreement contemplates a closing of the sale and purchase of the Assets on or before May 4, 2015, with a targeted closing date of April 30, 2015.

G. Assumption of Liabilities. The Buyer agrees to assume certain prescribed liabilities of the Operating Debtor as would exist at the closing time from the operation of the business, as encompassing: liabilities related to assumed real property leases and assumed contracts; liabilities with respect to any gift cards issued by CardFact, Ltd. or other loyalty programs involving presells; liabilities with respect to the transferred employees; liabilities relating to accrued and unpaid property taxes or sales taxes; certain liabilities to consignment vendors only with respect to certain of the transferred assets (as more particularly described in paragraph 48 below); and obligations with respect to donations collected on behalf of Family Christian Resource Centers, Inc. Other than the prescribed liabilities to be assumed, the Sellers are retaining all other liabilities, including without limitation, indebtedness to lenders holding a security interest in the assets, income taxes, certain post-petition trade accounts, obligations to former employees, certain post-petition lease obligations and claims arising under Section 503(b)(9) of the Bankruptcy Code. The Purchase Agreement specifies all such liabilities, whether assumed or excluded, in greater detail.


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H. Lease Designation Rights. Although the Buyer intends to finalize the majority of its assumption or rejection decisions by the Closing, the Buyer shall have the right to designate any unexpired real property lease or executory contract for assumption or rejection for a period of time not to exceed sixty days after Closing. The Buyer shall reimburse the Sellers for rent and real property taxes that arise and become due during the designation period and any applicable post-closing occupancy period.

I. Release of Directors and Officers. The Purchase Agreement provides that, upon the closing as occurring subject to the Sale Order, each of the Debtors, along with any person or entity acting for, derivatively, on behalf of, or claiming through them, including any committee appointed in any of the Cases or prescribed trustee or examiner, along with their affiliates or advisors as described, unconditionally release the Debtor’s directors and officers (and affiliates) from any past, present and future claims (as defined per custom, in a long-form list of possible items). The release includes a covenant that the releasing parties will not assert or otherwise participate in or maintain (by themselves or encouragement of others) in any such claim against the directors of officers with respect to the matters so released.

J. Representations and Warranties. The Assets will be sold "AS IS, WHERE IS," and Debtors will not make any representation or warranty as to the Assets to be sold, or their suitability for any particular purpose or merchantability, except as to certain representations or warranties set forth in the Purchase Agreement, as supplemented by Disclosure Schedules, which do not survive the closing.

K. Other Customary Provisions. The Purchase Agreement has what are believed to be other customary provisions for a sale of this nature, including procedures for assumption or rejection of leases and contracts, closing deliveries, conditions to closing and termination rights, and stalking horse procedures.

L. Bankruptcy Court Approval. The Sale and the transactions contemplated therein are subject to approval by the Bankruptcy Court pursuant to the entry of an order authorizing the sale of assets free and clear of liens pursuant to Section 363(f) of the Bankruptcy Code.

27. The Debtors believe that the best way to maximize the value of its estate for the

benefit of creditors is to preserve the going concern value of the Company and to conduct a sale

of substantially all the Debtors’ assets, to the Buyer or a third party submitting a competing

proposal with superior terms, with the goal of stabilizing and deleveraging the Company.

RELIEF REQUESTED


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28. Summary Overview. The Debtors' seek the entry of the following orders in

connection with a proposed two-step process for the requested sale of their assets:

a. An order in the form attached hereto as Exhibit "B" (the "Bidding

Procedures Order") that (i) approves the proposed process for the marketing and sale of

the Debtors' assets, including procedures attached as Schedule 1 thereto establishing a

bidding process and auction for the sale (the "Bidding Procedures"); (ii) approves the

form of notice to parties regarding the sale (the "Sale Notice") attached as Schedule 2

thereto; (iii) approves the form of notice to contract parties whose executory contracts

and leases are to be assumed and assigned pursuant to the Purchase Agreement and the

form of notice regarding the establishment of cure amounts with respect thereto, such

form being attached as Schedule 3 thereto (the "Cure Notice"); and (v) schedules a

hearing (the "Sale Hearing") for the purpose of approving the sale of the Assets pursuant

to the Purchase Agreement with Buyer or a higher and better bidder at the auction; and

b. At the time of the Sale Hearing, an order in substantially the same form as

that attached hereto as Exhibit "C" (the "Sale Order") approving the sale of Assets free

and clear of liens, claims and encumbrances, approving the assumption and assignment of

the Debtors' executory contracts and unexpired leases and granting other relief.

29. Proposed Sale Procedures and Bidding Procedures. The Debtors propose to

engage the services of a professional business broker and investment banker (the "Broker"),

through which the Debtors will provide solicitation packages, along with the Sale Notice, to any

parties who have previously expressed an interest in the Assets and to potential bidders and

interested parties identified by the Broker who may be interested in purchasing the Assets. The


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Debtors also intend to publish a form of the Sale Notice in the Wall Street Journal or such other

publication as recommended by the Broker.

30. In conjunction with the sale process, the Debtors shall be represented by the

Debtors' Broker, the Operating Debtor’s CEO, Chuck Bengochea, and the Debtors' financial

advisor, Gary Murphy (collectively the “Debtor Auction Team”) for all purposes in publicizing

the Sale, evaluating bids and generally guiding the course of the auction process.

31. The Debtors request that this Court set April 8, 2015, 5:00 p.m. (prevailing

Eastern time), as the deadline (the “Bid Deadline”) by which a competing bid for the Assets must

be submitted in writing to the Notice Parties (defined in paragraph 36 below). Additionally, the

Debtor requests that, April 13, 2015, be set as the date for any auction to occur (the “Auction

Date”) if the Debtors receive one or more Qualifying Bids (as defined in the Bidding Procedures)

with such Auction to occur at the offices of Debtors' counsel, A. Todd Almassian, Esq., Keller &

Almassian, PLC, 230 East Fulton Street, Grand Rapids, Michigan 49503, at 10:00 a.m.

(prevailing ET).

32. The requested Bidding Procedures are set forth on Schedule 1 to the proposed

Bidding Procedures Order at attached Exhibit "B". Generally summarized, the Debtor Auction

Team, in consultation with any appointed Committee and the Debtors' secured lenders, will

consider any Qualified Bids.

33. The proposed Bidding Procedures provide in summary, among other things:

(a) The proposed Purchase Agreement with Buyer is deemed a Qualified Bid.

(b) The Secured Lenders shall have the right, but not the obligation, to credit

bid to the extent allowable under § 363(k) of the Bankruptcy Code, subject to the Bidding

Procedures, unless the Court for cause orders otherwise.


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(c) In order to be considered, all bids must be delivered in writing by the Bid

Deadline to the following (collectively, the “Notice Parties”): (a) the Debtors, 5300 Patterson

Ave. SE, Grand Rapids, Michigan 49530, Attn: Chuck Bengochea, CEO; (b) the Debtors'

counsel, A. Todd Almassian, Esq., Keller & Almassian, PLC, 230 East Fulton Street, Grand

Rapids, Michigan 49503, ([email protected]) and Erich Durlacher, Burr & Forman LLP,

171 17th Street, NW, Atlanta, Georgia 30363 ([email protected]); (c) counsel to the Senior

Lender, [ to be inserted ] ; (d) counsel to the Junior Lender, [ to be inserted ]; (e) counsel for any

appointed Committee [ to be inserted ], and (f) counsel to the Buyer, Kilpatrick Townsend &

Stockton LLP, Suite 2800, 1100 Peachtree Street, Atlanta, Georgia 30309-4528 (Attn: Todd C.

Meyers, Esq. and Paul M. Rosenblatt, Esq.).

(d) Any overbids shall be made in overbid increments of at least $100,000.00

or greater than the Best Qualified Bid.

34. Assumption and Assignment of Contracts and Leases. In connection with the

sale, the Debtors also seek to assume and assign certain of its executory contracts and unexpired

leases (collectively, the “Executory Contracts”) to Buyer. The Buyer will cure all monetary

defaults under such Executory Contracts to the extent required by Section 365(b) of the

Bankruptcy Code and as set forth in the Purchase Agreement.

35. Not less than thirty (30) days before the Sale Hearing, the Debtors will file with

the Court and serve on each party to an Executory Contract a notice setting forth the amount of

cure owed thereunder according to the Debtors' books and records (the “Cure Notice”). The

Cure Notice will state the amount that the Debtors believe is necessary to assume such contract

or lease pursuant to section 365 of the Bankruptcy Code (the “Cure Amount”), and notify each

party that such party’s lease or contract may be assumed and assigned to the Buyer.


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36. The Cure Notice will require that any objection to the Cure Amount be filed on or

before a deadline prior to the Sale Hearing that is established by the Court (the “Cure Objection

Deadline”). The Cure Notice will also provide that any objection to the Cure Amount must state

with specificity what cure the party to the Executory Contract believes is required with

appropriate documentation in support thereof. The Debtors request that, if an objection is timely

filed, the Court resolve any dispute regarding the amount of any disputed Cure Amount or

objection to the assumption and assignment of an Executory Contract at the Sale Hearing. If no

objection is timely received, the Debtors request that the Cure Amount set forth in the Cure

Notice be controlling notwithstanding anything to the contrary in any assumed contract or other

document.

BASIS FOR RELIEF AND APPLICABLE AUTHORITY

A. The Sale

37. Section 363(b)(1) of the Bankruptcy Code provides that “[t]he trustee, after notice

and a hearing, may use, sell or lease, other than in the ordinary course of business, property of

the estate.” 11 U.S.C. § 363(b)(1). Section 363(b), does not provide an express standard for

determining whether the Court should approve any particular purchase or sale.

38. A broad consensus of courts, including the Sixth Circuit and this District, hold

that a debtor may sell property of the estate outside of the ordinary course of its business where

such use represents an exercise of the debtor's sound business judgment. Stephens Industries,

Inc. v. McClung, 789 F.2d 386, 390 (6th Cir.1986) ("We adopt the Second Circuit's reasoning in

In re Lionel Corporation, supra, and conclude that a bankruptcy court can authorize a sale of all

a Chapter 11 debtor's assets under § 363(b)(1) when a sound business purpose dictates such

action."); citing, Committee of Equity SEC Holders v. Lionel Corp. (In re Lionel Corp.), 722

F.2d 1063, 1070 (2d Cir. 1983); In re Quality Stores, Inc., 272 B.R. 643, 647-48 (Bankr.


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W.D.Mich.2002)("[A] sale of assets is appropriate if all provisions of § 363 are followed, the bid

is fair, and the sale is in the best interests of the estate and its creditors.") quoting, In re Embrace

Systems Corp., 178 B.R. 112, 124 (Bankr. W.D. Mich. 1995) ("In this circuit, a bankruptcy court

can authorize a sale of all of a chapter 11 debtor's assets under Section 363(b)(1) when a sound

business purpose dictates such action.").

39. Courts often consider the following factors in determining whether a proposed

sale satisfies the sound business purpose standard: (a) whether a sound business justification

exists for the sale, (b) whether accurate and reasonable notice of the sale was given to interested

parties, (c) whether the sale will produce a fair and reasonable price for the property and (d)

whether the parties have acted in good faith. In re Titusville Country Club, 128 B.R. 396, 399

(Bankr. W.D. Pa. 1991); In re Daufuskie Island Props., LLC, 431 B.R. 626, 637 (Bankr. D.S.C.

2010) (citing same four factors).

40. In Stephens Industries, the Sixth Circuit concluded the standards for approving a

sale were satisfied where the facts showed "[t]he trustee had been unable to operate the radio

station at a profit . . . [and] the trustee faced the prospect of ceasing [the debtors'] operations."

Stephen Industries, 789 F.2d at 390.

41. Indeed, some courts have held the approval of a proposed transaction “should

only be withheld if the debtor’s judgment is clearly erroneous, too speculative, or contrary to the

provisions of the Bankruptcy Code. . . .” Richmond Leasing Co. v. Capital Bank, N.A., 762 F.2d

1303, 1309 (5th Cir. 1985) (quoting Allied Technology, Inc. v. R.B. Brunemann & Sons, 25

Bankr. 484, 495 (Bankr.S.D. Ohio 1982). Similarly, in Quality Stores, this court approved the

sale of substantially all assets and noted it was in part "[d]eferring to the business judgment of

the Debtor, the Committee and the Lenders," all whom supported the sale. Quality Stores, 272


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B.R. at 647-48.

42. The Debtors have a sound business justifications for selling the Assets at this time

pursuant to the Sale Procedures outlined above. As set forth in the Bengochea Declaration, the

Debtors have experienced declining sales for several years due to several factors including the

general economy and specific trends with the book and music industry. In order to make the

company viable and profitable, Debtors' management team, in consultation with professionals

engaged pre-petition to evaluate their business and business model, determined a reduction of the

debt load burdening the company was needed, which could best be accomplished through a sale

of the assets conducted under Section 363 of the Bankruptcy Code.

43. The Debtors have acted in good faith, and the proposed sale process and Sale

Procedures will provide accurate and reasonable notice of the sale to interested parties.

44. The Debtors have therefore determined, based upon their sound business

judgment, that the most viable option for maximizing the value of their estates is through a sale

of substantially all of its assets based upon the Sale Procedures.

B. Sales "Free and Clear of Liens, Claims and Encumbrances"

45. The Debtors seek permission to sell the Assets free and clear of all liens, claims

and encumbrances (collectively, the “Liens”), with such Liens attaching to the proceeds

applicable the Assets encumbered by the Liens. Section 363(f) of the Bankruptcy Code provides

that property may be sold free and clear of any interest in the property if:

(1) applicable nonbankrupcty law permits sale of such property free and clear of such interest; (2) such entity consents; (3) such interest is a lien and the price at which such property is sold is greater than the aggregate value of all liens on such property; (4) such interest is in bona fide dispute; or


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(5) such entity could be compelled, in a legal or equitable proceeding, to accept a money satisfaction of such interest

11 U.S.C. § 363(f).

46. The Debtors need only satisfy one of the noted conditions. In re Wolverine

Radio Co., 930 F.2d 1132, 1148 (6th Cir. 1991). The Debtors believe the Secured Lenders will

consent to the proposed sale.

47. Otherwise, Section 363(f)(5) allows a debtor to sell property free and clear of

Liens when a legal or equitable proceeding exists that will force the lienholder to accept less than

full money satisfaction for its interest. In re James, 203 B.R. 449, 453 (W.D. Mo. 1997); In re

Grand Slam USA, Inc, 178 B.R. 460, 463-64 (E.D. Mo. 1995). Courts considering this issue

have held that the "cram down" provision under the Bankruptcy Code constitutes such a "legal or

equitable proceeding" and permits a sale under Section 363(f)(5) where a secured creditor may

receive less than the value of its claim. Grand Slam USA, Inc., 178 B.R. at 464; In re Terrace

Chalet Apartments, Ltd., 159 B.R. 821, 829 (N.D. Ill. 1993); WPRV-TV, Inc., 143 B.R. at 321; In

re Healthco International, Inc., 174 B.R. 174, 176 (Bankr. D.Mass. 1994).

48. The Debtors are also seeking to sell to the Buyer supplies, inventory and other

goods delivered to the Debtors on “consignment” free and clear of such alleged consignment

rights to the extent that such items were delivered to the Debtors prior to the commencement of

the Chapter 11 Cases and are transferred to Buyer at Closing. To the extent that such items were

delivered to the Debtors after the commencement of the Chapter 11 Cases, the Purchase

Agreement provides that to the extent such items are transferred to the Buyer at Closing, the

Buyer will honor the applicable consignment rights regarding such items and only with respect to

such items actually transferred to the Buyer at Closing. The Purchase Agreement also provides


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that the Buyer is not assuming any liabilities or obligations regarding consignment items that

were sold by the Sellers at any time prior to the Closing.

49. The Debtors propose that any valid Liens shall attach to the sales proceeds

attributable to the Asset(s) being sold and encumbered by such Liens and in the same priority as

such Liens.

C. The Assumption and Assignment of the Executory Contracts Should be Authorized

50. Section 365(f)(2) of the Bankruptcy Code provides that:

[t]he trustee may assign an executory contract or unexpired lease of the debtor only if –

(A) the trustee assumes such contract or lease in accordance with the provisions of this section; and

(B) adequate assurance of future performance by the assignee of such contract or lease is provided, whether or not there has been a default in such contract or lease.

51. Under section 365(a) of the Bankruptcy Code, a debtor, “subject to the court’s

approval, may assume or reject any executory contract or unexpired lease of the debtor.” Section

365(b)(1) of the Bankruptcy Code, in turn, codifies the requirements for assuming an unexpired

lease or executory contract of a debtor as follows:

(b)(1) If there has been a default in an executory contract or unexpired lease of the debtor, the trustee may not assume such contract or lease unless, at the time of assumption of such contract or lease, the trustee –

(A) cures, or provides adequate assurance that the trustee will promptly cure, such default;

(B) compensates, or provides adequate assurance that the trustee will promptly compensate, a party other than the debtor to such contract or lease, for any actual pecuniary loss to such party resulting from such default; and

(C) provides adequate assurance of future performance under such contract or lease.


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52. The meaning of “adequate assurance of future performance” depends on the facts

and circumstances of each case, but should be given a “practical, pragmatic construction.” See,

e.g., EBG Midtown South Corp. v. McLaren/Hart Env. Engineering Corp. (In re Sanshoe

Worldwide Corp.), 139 B.R. 585, 593 (S.D.N.Y. 1992); In re Prime Motor Inns Inc., 166 B.R.

993, 997 (Bankr. S.D. Fla. 1994) (“[a]lthough no single solution will satisfy every case, the

required assurance will fall considerably short of an absolute guarantee of performance”);

Carlisle Homes, Inc. v. Azzari (In re Carlisle Homes, Inc.), 103 B.R. 524, 538 (Bankr. D.N.J.

1988).

53. Among other things, adequate assurance may be provided by demonstrating the

assignee’s financial health and experience in managing the type of enterprise or property

assigned. See, e.g., In re Bygaph, Inc., 56 B.R. 596, 605-06 (Bankr. S.D.N.Y. 1986) (adequate

assurance of future performance is present when prospective assignee of lease from debtor has

resources and has expressed willingness to devote sufficient funding to business in order to give

it strong likelihood of succeeding).

54. To the extent that any defaults exist under any of the Executory Contracts to be

assumed and assigned in connection with the Sale, the Buyer shall cure any such default in

connection with such assumption and assignment subject to the terms and conditions of the

Purchase Agreement. Moreover, the Debtors will present evidence at the Sale Hearing

demonstrating the financial wherewithal of the Buyer, and its willingness and ability to perform

under the Executory Contracts to be assumed and assigned.

55. The Sale Hearing will therefore provide the Court and other interested parties

ample opportunity to evaluate and, if necessary, challenge the ability of the Buyer to provide


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adequate assurance of future performance under the Executory Contracts to be assumed and

assigned.

D. Form and Manner of Notice

56. The Debtors will provide the Sale Notice to any parties who have previously

expressed an interest in the Assets or who may be interested in purchasing the Assets and all

creditors of the Debtors and all contract parties, in accordance with Bankruptcy Rule 2002(a)(2),

by mailing such notice more than thirty (30) days prior to the Sale Hearing. In addition, the

Debtors will publish a form of the Sale Notice in the Wall Street Journal or some similarly

suitable publication.

57. The Debtors submit that the form and manner of service of the Sale Notice is

appropriate under the circumstances and complies with all applicable Bankruptcy Rules.

58. Finally, the Debtors request that the Court waive any 14-day stay that might be

imposed under Bankruptcy Rules 6004(h) and 6006(d) for any order authorizing the sale of

property and the assignment of the Executory Contracts such that the Debtors can close the Sale

promptly after the entry of the Sale Order.

WHEREFORE, the Debtors respectfully request the Court grant the relief requested

within this Motion, including (a) entry of the Bidding Procedures Order approving the Sale

Procedures, approving the Sale Notice and Cure Notice, and setting a date for the Sale Hearing;

(b) at the conclusion of the Sale Hearing, entry of the Sale Order; and (c) granting such other and

further relief as is necessary.


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Dated: February 12, 2015

Respectfully submitted, KELLER & ALMASSIAN, PLC /s/ A. Todd Almassian A. Todd Almassian (P55467) Greg J. Ekdahl (P67768) 230 East Fulton Street Grand Rapids, MI 49503 (616) 364-2100 [email protected] - and - BURR & FORMAN LLP Erich Durlacher (Ga Bar No. 235563) Brad Baldwin (Ga Bar No. 034220) Pro hac applications pending 171 17th Street, N.W. - Suite 1100 Atlanta, Georgia 30363 Telephone: (404) 815-3000 Facsimile: (404) 817-3244 Proposed Attorneys To The Debtors and Debtors-in-Possession


22841173 v1

EXHIBIT "A"

Purchase Agreement

Case:15-00643-jtg Doc #:30-1 Filed: 02/12/15 Page 1 of 82

EXECUTION VERSION

1 6313127V.16

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”), is entered into this 11th day of February, 2015, by and among (a) FAMILY CHRISTIAN HOLDING, LLC, a limited liability company formed under the laws of the State of Georgia (“Parent”), and FAMILY CHRISTIAN, LLC, a limited liability company formed under the laws of the State of Georgia, (together with Parent, the “Sellers,” and each, individually, a “Seller”), (b) FCS GIFTCO, LLC, a limited liability company formed under the laws of the State of Colorado (“Giftco”), and (c) FCS ACQUISITION, LLC, a limited liability company formed under the laws of the State of Georgia (the “Buyer”). The Sellers, Giftco and the Buyer are referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS

WHEREAS, the Sellers filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) on February 11, 2015 (the “Petition Date”) in the United States Bankruptcy Court for the Western District of Michigan (the “Bankruptcy Court”), and such bankruptcy cases are administered under Case No. ____________________ and are hereinafter referred to as the “Cases;” and

WHEREAS, each of the Sellers wishes to sell, transfer, convey, assign and deliver to the Buyer, and the Buyer wishes to purchase, assume and acquire, in accordance with Sections 363 and 365 and the other applicable provisions of the Bankruptcy Code, the Assets (as hereinafter defined), together with the Assumed Liabilities (as hereinafter defined), upon the terms and subject to the conditions set forth in this Agreement; and

WHEREAS, subject to the Bankruptcy Court’s entry of the Sale Order (as hereinafter defined) as set forth herein, the Buyer shall purchase from the Sellers, and the Sellers shall sell, transfer, convey, assign and deliver to the Buyer, the Assets together with the Assumed Liabilities, upon the terms and subject to the conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual promises and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties mutually agree as follows:

ARTICLE 1

PURCHASE AND SALE OF ASSETS

1.1 Defined Terms. All capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings set forth for such terms in Article 13.

1.2 Purchase and Sale. Subject to the terms and conditions set forth in this Agreement, the Sellers hereby agree that at the Closing, or such other date or dates provided in Section 1.4, they shall sell, transfer, convey and assign to the Buyer, free and clear of all Liens (except for Permitted Liens) and Excluded Liabilities, and the Buyer shall purchase, assume and


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2 6313127V.16

acquire from the Sellers all right, title and interest of the Sellers in, to and under all of the business, properties, assets and goodwill of whatever kind and nature, real or personal, tangible or intangible, actual or contingent, which are owned or held by the Sellers, other than the Excluded Assets (collectively, the “Assets”), including the following:

(a) All of the interest of the Sellers in and to the Assumed Real Property Leases;

(b) All of the interest of the Sellers in and to the Assumed Contracts, which shall include the Revenue Sharing Agreement between the Sellers and iDLLC, dated February 2, 2014, and the insurance policies listed on Schedule 4.13;

(c) All of the interest of the Sellers in and to all (i) Equipment and leasehold improvements in the Transferred Stores, Distribution Center(s), and the Home Office, and (ii) all Equipment at the Excluded Leased Property (collectively, the “Transferred Equipment and Improvements”);

(d) All Licenses (to the extent such Licenses are freely transferable), other than Licenses relating exclusively to any Excluded Leased Property (the “Excluded Licenses”);

(e) All of the interest of the Sellers in Intellectual Property;

(f) All of the interest of the Sellers in and to all Inventory (the “Transferred Inventory”);

(g) All security and other deposits and advances and all pre-paid expenses maintained by the Sellers, other than the deposits, advances and pre-paid expenses relating exclusively to any Excluded Leased Property (the “Excluded Deposits”);

(h) All Accounts Receivable arising prior to the Closing Date (the “Transferred Accounts Receivable”);

(i) All goodwill of the Sellers associated with the Business as a going concern;

(j) All of the Sellers’ books, records, files, documents and other written or electronic materials, including customer lists, except those related solely to the Excluded Assets or the Excluded Liabilities or expressly included in the Excluded Assets pursuant to Section 1.3;

(k) All claims, deposits, prepayments, prepaid assets, refunds, causes of action, credits, choses in action, rights of recovery, rights of set off and rights of recoupment relating primarily to any of the other Assets, including all rights of the Sellers under any property, casualty, workers’ compensation or other insurance policy (and any collateral underlying any such policy, including the collateral securing the workers’ compensation policy) or related insurance services contracts affecting any of the Assets;

(l) all rights to receive payments from iDisciple LLC, a limited liability company formed under the laws of the State of Georgia (“iDLLC”), pursuant to the Revenue


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Sharing Agreement between the Sellers and iDLLC, dated February 2, 2014, whether such payments relate to sales made prior to or after the Closing Date;

(m) all Avoidance Actions;

(n) all claims, actions, and rights of recovery any Seller may have with credit card companies;

(o) All rights of the Sellers in the Employee Plans; and

(p) All Cash on Premises.

1.3 Excluded Assets. Notwithstanding anything to the contrary contained herein, expressly excluded from the Assets are all of the right, title and interest of the Sellers in and to the following (collectively, the “Excluded Assets”):

(a) All corporate and Tax records of the Sellers, including corporate charters, corporate minute and stock books and records, and other documents and instruments relating solely to the organization, maintenance and existence of the Sellers or the Taxes of the Sellers;

(b) All claims (including any litigation or arbitration claims and any refunds and deposits), rights, rights of offset or causes of action that the Sellers or their Affiliates may have against or from any Person relating to any of the Excluded Assets or the Excluded Liabilities;

(c) All refunds, pre-payments, net operating losses and claims relating to federal, state or municipal income Taxes of the Sellers or their Affiliates for any period, or portion of any period, ending on or prior to the Closing Date;

(d) The membership interests of the Sellers and all equity securities owned or held by any member of the Sellers;

(e) All causes of action and claims that may be asserted under this Agreement or any Ancillary Agreement or any other agreements or instruments otherwise delivered in connection with this Agreement or any Ancillary Agreement against the Buyer and all rights of the Sellers therein;

(f) All of the interest of the Sellers in and to all Real Property Leases other than the Assumed Real Property Leases (the “Excluded Real Property Leases”);

(g) All of the interest of the Sellers in and to all Contracts other than the Assumed Contracts (the “Excluded Contracts”);

(h) all leasehold improvements in the Excluded Leased Property;

(i) All Excluded Licenses;

(j) All Excluded Deposits;


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4 6313127V.16

(k) All confidential personnel and medical records of employees who do not become Transferred Employees;

(l) All assets and other rights relating to the Business sold or otherwise transferred or disposed of during the period from the date of this Agreement through and including the Closing Date, in any event in accordance with the provisions of this Agreement;

(m) All Sellers’ Cash except for Cash on Premises;

(n) All assets of Giftco; and

(o) All of the other assets, rights and properties set forth on Schedule 1.3(o).

1.4 Assumed and Rejected Leases and Contracts.

(a) At Closing, the Buyer shall have the right to designate any Real Property Lease or Contract (i) for immediate assumption by the Sellers and assignment to the Buyer effective as of the Closing (an “Initial Assumed Real Property Lease” or “Initial Assumed Contract”) or (ii) for removal from the list of Real Property Leases or Contracts that may be potentially assumed by the Sellers and assigned to the Buyer (a “Removed Real Property Lease” or a “Removed Contract”). Any Real Property Lease that as of Closing is neither an Initial Assumed Real Property Lease nor a Removed Real Property Lease is referred to as a “Remaining Real Property Lease” and any Contract that as of Closing is neither an Initial Assumed Contract nor a Removed Contract is referred to as a “Remaining Contract”.

(b) The Buyer shall have a period of time which shall begin at Closing and end at 5:00 p.m. Eastern Time on the date that is sixty (60) days after the Closing (the “Designation Period”) to designate any Remaining Real Property Lease or Remaining Contract to be assumed and assigned to the Buyer (a “Designated Real Property Lease” or a “Designated Contract”) or to be a Removed Real Property Lease or Removed Contract. Any such designation shall be effective upon delivery of a notice given to the Sellers in accordance with Section 12.1 (a “Designation Notice”). Subject to Section 1.4(g), the Sellers shall not reject any Remaining Real Property Leases or Remaining Contract during the Designation Period unless the Buyer provides a Designation Notice to the Sellers that such Remaining Real Property Lease or Remaining Contract is designated as a Removed Real Property Lease or Removed Contract. Any Remaining Real Property Lease or Remaining Contract that is not designated by the end of the Designation Period shall be treated as a Removed Real Property Lease or Removed Contract, as applicable.

(c) In addition to any other obligations the Buyer may have with respect to the Remaining Real Property Leases or Remaining Contracts, the Buyer shall be obligated to reimburse the Sellers, within five (5) Business Days after demand by Sellers, for rent and real property Taxes that first arise and become due under the Remaining Real Property Leases, and for any obligations that first arise and become due under the Remaining Contracts, for the period commencing upon the Closing Date and ending on the later of (i) the date of delivery to Sellers of an applicable Designation Notice and (ii) the conclusion of the Post-Closing Occupancy Period.


EXECUTION VERSION

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(d) As of the Closing Date in the case of the Initial Assumed Real Property Leases and the Initial Assumed Contracts, and as of the date of delivery of an applicable Designation Notice pursuant to Section 1.4(b) for each of the Designated Real Property Leases and Designated Contracts, the Sellers shall assume and assign to the Buyer such Assumed Real Property Leases and Assumed Contracts in accordance with Section 365 of the Bankruptcy Code, and the Sale Order shall so authorize such assumption and assignment. On the date of the assignment thereof to the Buyer, the Sellers shall be released from any further liability under the Assumed Real Property Leases and Assumed Contracts, and all right, title and interest of the Sellers in and to any Assets located at any Store subject to such Assumed Real Property Lease shall be deemed sold, transferred, conveyed and assigned to the Buyer, except to the extent any such Assets are otherwise Excluded Assets hereunder. Within three (3) Business Days after the end of the Designation Period, the Sellers shall file with the Bankruptcy Court a complete list of the Initial Assumed Real Property Leases and the Designated Real Property Leases (collectively, the “Assumed Real Property Leases”) and the Initial Assumed Contracts and the Designed Contracts (collectively, the “Assumed Contracts”).

(e) Subject to Section 1.4(g), as of the Closing Date in the case of the Removed Real Property Leases and the Removed Contracts, and as of the date of delivery of an applicable Designation Notice pursuant to Section 1.4(b) for each of the subsequently designated Removed Property Leases and Removed Contracts, or in either case if applicable, upon the conclusion of the Post-Closing Occupancy Period, Sellers shall be deemed to have rejected such Removed Real Property Leases and Removed Contracts in accordance with Section 365 of the Bankruptcy Code, and the Sale Order shall so authorize such rejection.

(f) To the extent that any Assumed Real Property Lease or Assumed Contract is subject to a cure (pursuant to Section 365 of the Bankruptcy Code and described in any Order of the Bankruptcy Court relating to such cure liability), the Buyer shall be obligated to timely pay the Cure Costs as a condition to such assumption and assignment to the Buyer. A Schedule of such Cure Costs shall be provided to the Buyer no later than the date the Proposed Cure Notice is due under Section 11.2(b). To the extent that the Cure Costs for any Assumed Real Property Lease or Assumed Contract are determined by a Final Order of the Bankruptcy Court to exceed such good faith estimate, Buyer shall have fourteen (14) days from the entry of such Final Order to elect to treat such Assumed Real Property Lease or Assumed Contract as a Removed Real Property Lease or Removed Contract.

(g) Subject to the access provisions relating to time, day and manner in the applicable lease, Buyer shall have reasonable access for thirty (30) days following any Real Property Lease becoming a Removed Real Property Lease (the “Post-Closing Occupancy Period”) for the purposes of disassembling, packing, loading and removing the Assets located at such Removed Real Property Lease. During the Post-Closing Occupancy Period, Buyer, by notice to Sellers, may elect to treat any Asset located at a Removed Real Property Lease as an Excluded Asset retroactive to the Closing Date, and the Buyer shall have no obligation to remove or otherwise dispose of such Excluded Asset.


EXECUTION VERSION

6 6313127V.16

ARTICLE 2

PURCHASE PRICE AND PAYMENT

2.1 Purchase Price. The aggregate consideration to be paid by the Buyer for the sale of the Assets shall be $73,773,000 (the “Purchase Price”), consisting of: (a) $28,000,000 in Cash (the “Cash Component”); (b) the assumption by the Buyer of the Assumed Real Property Leases that the Parties estimate the present value of to be $43,773,000, and (c) assumption of other accrued operating liabilities related to employees, gift cards and other items described in Section 2.3 hereof, that the Parties estimate to be $2,000,000, with the estimates in clauses (b) and (c) to be finalized by agreement of the Parties prior to Closing.

2.2 Payment and Discharge of Liabilities.

(a) No later than three (3) Business Days prior to the Closing Date, the Sellers shall prepare and deliver to the Buyer a statement setting forth in reasonable detail, as of the Closing Date, an estimate of the amount of FC Debt, the Closing Liabilities and the Sellers’ Cash which will be available at the Closing.

(b) At the Closing, the obligations of the Sellers in categories (i) through and including (vi) below shall be discharged in full. In the event any such obligations in categories (ii) through and including (vi) (collectively, the “Closing Liabilities”) cannot reasonably be satisfied at Closing, the Buyer and Sellers shall at Closing make provisions for the prompt payment of such obligations following Closing. The obligations shall be satisfied first from the Cash Component, and then from so much of the Sellers’ Cash as is necessary to discharge such obligations in full.

(i) FC Debt;

(ii) Post-Petition Trade Accounts Payable;

(iii) 503(b)(9) Claims;

(iv) Post-Petition Lease Payables;

(v) Post-Petition Operating Expenses; and

(vi) Operating Taxes.

2.3 Assumed Liabilities and Excluded Liabilities.

(a) Subject to the terms and conditions set forth in this Agreement, the Buyer hereby agrees that at the Closing, or such other date or dates provided in Section 1.4, it shall assume and become responsible for the following liabilities and obligations of the Sellers existing as of such time and arising from the operation of the Business prior to the Closing or the


EXECUTION VERSION

7 6313127V.16

other date or dates provided in Section 1.4, as applicable (collectively, the “Assumed Liabilities”):

(i) All liabilities and obligations under the Assumed Real Property Leases and Assumed Contracts that are assumed and assigned to the Buyer in accordance with Section 1.4, whether at the Closing or thereafter, including all related Cure Costs (other than the Closing Liabilities);

(ii) All liabilities and obligations with respect to any gift cards outstanding on the Closing Date and issued by CardFact, Ltd., and all liabilities with respect to other loyalty programs and customer presells outstanding on the Closing Date;

(iii) All liabilities and obligations with respect to Inventory returned to the Stores after the Closing Date;

(iv) All liabilities and obligations with respect to the Transferred Employees, including any obligations Sellers may have under the Employee Plans, to the extent set forth in Section 7.4;

(v) All obligations to iDLLC as set forth on Schedule 2.3(a)(v) (the “iDLLC Obligations”);

(vi) All liabilities and obligations to consignment vendors for consigned inventory that (x) was delivered to the Sellers between the commencement of the Cases and the Closing Date and (y) is Transferred Inventory; and

(vii) All liabilities and obligations as of the Closing Date with respect to donations collected on behalf of Family Christian Resource Centers, Inc.

(b) Except for the Assumed Liabilities, the Buyer shall not be subject to and shall not assume nor be liable for any liabilities of any kind or nature, whether absolute, contingent, accrued, known or unknown, of the Sellers, Giftco, or related to the Assets or the Business, including the following (collectively, the “Excluded Liabilities”):

(i) Any obligation or liability in respect of Outstanding Indebtedness, other than the iDLLC Obligations;

(ii) Any obligation or liability of the Sellers for Taxes, including any liability for Taxes described in Section 2.3(b)(xi);

(iii) Any pre-petition obligation or liability of the Sellers and any obligation or liability of the Sellers that constitutes a claim or interest against the Sellers under Sections 502 or 503 of the Bankruptcy Code to the extent not specifically included in the Assumed Liabilities;


EXECUTION VERSION

8 6313127V.16

(iv) Subject to Section 1.4(c), any obligation or liability in respect of the Excluded Real Property Leases and the Excluded Contracts;

(v) Any obligation or liability in respect of professional fees and expenses incurred by the Sellers;

(vi) Any obligation or liability in respect of any contingent or success-based fees payable by the Sellers in connection with the Closing;

(vii) Any obligation or liability of the Sellers to their respective shareholders or equity holders or Affiliates of the Sellers, except for the iDLLC Obligations;

(viii) Any obligation or liability in respect of any current or former employee of the Sellers, or their dependents and beneficiaries, other than the obligations and liabilities set forth in Section 7.4;

(ix) Any obligation or liability in respect of any gift cards issued by FCS Giftco, LLC;

(x) Any obligation or liability in respect of trade accounts payable;

(xi) Any obligation or liability arising from or related to current litigation involving Sellers, including the matter set forth on Schedule 4.6 regarding Illinois sales Taxes;

(xii) All liabilities and obligations to consignment vendors that (x) arise on or prior to the Closing Date including for the sale of consignment inventory on or prior to the Closing Date, or (y) relate to the Buyer’s sale after the Closing Date of Transferred Inventory that was delivered to or in the possession of the Sellers prior to the commencement of the Cases; and

(xiii) Any obligation or liability in respect of the FC Debt or the Closing Liabilities.

2.4 Non-Assignable Assets. If any Asset is by its terms or by Applicable Law non- assignable or non-transferable, to the extent such terms are not superseded by the terms of the Sale Order, the Sellers shall use their reasonable best efforts to obtain, or cause to be obtained, on or prior to the Closing, any approvals or consents necessary to convey to the Buyer the benefit thereof. The Buyer shall cooperate with the Sellers in such manner as may be reasonably requested in connection therewith. In the event any consent or approval to an assignment contemplated hereby is not obtained on or prior to the Closing Date, the Sellers shall continue to use reasonable best efforts to obtain any such approval or consent after the Closing Date and the Sellers agree to enter into any appropriate and commercially reasonable arrangement to provide that the Buyer shall receive the Sellers’ interest in the benefits under any such Asset; provided that the Buyer shall undertake to pay or satisfy the corresponding liabilities for the enjoyment of such benefit to the extent the Buyer would have been responsible therefor if such consent or approval had been obtained.


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2.5 Transfer Taxes. To the extent the transactions contemplated hereby are not exempt under Section 1146 of the Bankruptcy Code, the Buyer shall be liable for and pay any sales and transfer Taxes, filing fees, documentary fees or other similar Taxes payable in connection with the purchase, sale or transfer of the Assets to, and the assumption of the Assumed Liabilities by, the Buyer pursuant to this Agreement. The Buyer and the Sellers shall use reasonable best efforts to minimize the amount of all the foregoing Taxes and shall cooperate in providing each other with any appropriate resale exemption certifications, Tax clearance certificates and other similar documentation. The Party that is required by Applicable Law to make the filings, reports, or returns and to handle any audits or controversies with respect to any of the foregoing Taxes shall do so, and the other Party shall cooperate (and make reimbursement) with respect thereto as necessary.

2.6 Deposit. The Buyer shall, within two (2) Business Days after the entry of the Bidding Procedures Order, deposit with a mutually acceptable independent escrow agent (the “Escrow Agent”) an amount equal to $1,000,000 (the “Deposit”), pursuant to an escrow agreement in customary commercial form (the “Escrow Agreement”). If the Closing takes place as provided herein, then the Deposit shall be credited against the Cash Component pursuant to Section 2.1. If this Agreement is terminated in accordance with Article 10 for any reason other than pursuant to Section 10.1(g), then the Escrow Agent shall promptly return the Deposit to the Buyer. If this Agreement is terminated pursuant to Section 10.1(g), the Escrow Agent shall promptly deliver the Deposit to the Sellers, which shall be the sole and exclusive remedy to the Sellers for any breach by Buyer of this Agreement. The Deposit shall not be considered property of the Sellers’ bankruptcy estates unless and until the Deposit is delivered to Sellers in accordance with this Section 2.6.

2.7 Release of Directors and Officers. Notwithstanding anything herein to the contrary, upon the Closing Date, and without the need for the execution and delivery of additional documentation or the entry of any additional Orders of the Bankruptcy Court other than the Sale Order, and notwithstanding anything contained in any other Order of the Bankruptcy Court to the contrary:

(a) Each Seller and Giftco, along with any Person acting for, derivatively, on behalf of, or claiming through them, including but not limited to any committee appointed in any of the Cases, and any trustee or examiner whether appointed in any of the Cases or any subsequent case, for themselves and their respective past and present officers, directors, shareholders, partners, principals, members, managers, subsidiaries, parent companies, Affiliates, agents, employees, successors and predecessors-in-interest, advisors, accountants, attorneys, representatives, and assigns (“Releasing Parties”) irrevocably and unconditionally forever releases, acquits and forever discharges each of the Directors and Officers (and their properties) of and from any and all past, present and future legal actions, choses in action, causes of action, rights, demands, suits, claims, liabilities, encumbrances, lawsuits, adverse consequences, amounts paid in settlement, costs, fees, damages, debts, deficiencies, diminution in value, disbursements, expenses, losses and other obligations of any kind, character or nature whatsoever, whether in law, equity or otherwise (including, without limitation, those arising under Chapter 5 of the Bankruptcy Code and applicable non-bankruptcy law, and interest or other costs, penalties, legal, accounting and other professional fees and expenses, and incidental, consequential and punitive damages payable to third parties), whether known or unknown, fixed


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or contingent, direct, indirect, or derivative, asserted or unasserted, foreseen or unforeseen, suspected or unsuspected, now existing, heretofore existing or which may heretofore accrue (collectively, a “Charge”) against any of the Directors and Officers, whether held in a personal or representative capacity occurring from the beginning of time to and including the date of the release including, but not limited to, in any way, directly or indirectly arising out of, connected with or relating to any or all of the Sellers, their estates or the Cases (collectively, the “Released Matters”). Further, notwithstanding anything contained herein to the contrary, this release is not intended to, nor shall it have the effect of releasing, any claim or cause of action, if any, arising under this Agreement or precluding the Releasing Parties from offering into evidence the fact and/or terms of this Agreement in connection with any action to enforce the same, provided that the fact of the negotiation of this Agreement shall not be admissible in any action and shall not form the basis for any claim or recovery therein.

(b) The Releasing Parties, and each of them, further covenant and agree that neither they, nor any of them, will assert, initiate, institute, prosecute, participate in or maintain, or will instigate, abet or encourage any other person or entity to assert, initiate, institute, prosecute, participate in or maintain, any Charge, currently or in the future, against the Directors and Officers, or any of them, with respect to any of the Released Matters.

(c) In addition to, and without in any way limiting the scope of, Section 2.7(a) above, each Releasing Party severally agrees that such Releasing Party shall not commence, assert, maintain, continue or pursue any claim, demand or cause of action of any type or nature that such Releasing Party may have, claim to have or assert to have, of any type or nature, (including any such claims, demands and causes of action that have not been discharged that may hereafter accrue or arise or which they may in the future acquire in any way) against any Person, that seeks damages, contribution, indemnity, right of set off or any other economic benefit or recovery with respect to in any way, directly or indirectly, arising out of, connected with or relating to any or all of the Sellers, Giftco and their estates and the Cases, if such claim, demand or cause of action (a “Resulting Claim”) would result in any liability or an indemnity or any payment obligation of any type or nature on the part of any of the Directors and Officers (or a good faith claim, demand, action or proceeding for such liability, indemnity or payment obligation), unless such Releasing Party shall have executed an indemnity in favor of, and in form and substance satisfactory to, the Directors and Officers, as applicable, for payment (not collection) of any liability, payment obligations and costs (including, without limitation, advancement of attorneys’ and other litigation advisory fees and expenses) that may be incurred in connection with such Resulting Claim.

ARTICLE 3

CLOSING

3.1 Closing. Consummation of the transactions contemplated hereby (the “Closing”) shall occur as soon as practicable after the date the conditions to Closing set forth in this Agreement are satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing), but in any event no later than May 4, 2015, unless Buyer specifies a later date. The Parties anticipate that the Closing Date shall occur on April 30, 2015. The Closing shall begin at 10:00 a.m. Eastern Time at the offices of Kilpatrick Townsend & Stockton, LLP,


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1100 Peachtree Street NE, Atlanta, GA 30309, or at such time and place as the Buyer and the Sellers may otherwise agree. The date on which the Closing actually takes place is referred to in this Agreement as the “Closing Date.” The Closing shall be effective as of 11:59 p.m. on the Closing Date (the “Closing Time”).

3.2 Deliveries by the Sellers at Closing. At the Closing, the Sellers shall each execute, acknowledge and deliver to the Buyer the following (each being deemed to have occurred simultaneously with the others):

(a) A Bill of Sale in a form reasonably satisfactory to the Buyer and its counsel and the Sellers and their counsel;

(b) An Assignment and Assumption Agreement in a form reasonably satisfactory to the Buyer and its counsel and the Sellers and their counsel, pursuant to which the Sellers shall assign to Buyer the Initial Assumed Real Property Leases, Initial Assumed Contracts and Assumed Liabilities from the Sellers (as may be amended from time to time to include Designated Real Property Leases and Designated Contracts, the “Assignment and Assumption Agreement”);

(c) A copy of the Sale Order;

(d) Trademark, patent and domain name assignments in a form reasonably satisfactory to the Buyer and its counsel and the Sellers and their counsel, pursuant to which the Sellers shall assign the Transferred Intellectual Property to the Buyer (the “IP Assignments”);

(e) The Escrow Agreement, in a form reasonably satisfactory to the Buyer and its counsel and the Sellers and their counsel;

(f) A copy of the resolutions adopted by the Sellers’ governing board authorizing the transactions contemplated hereby and the consummation thereof, certified by a secretary or assistant secretary of the Sellers to be a true and correct copy;

(g) A certificate of incumbency as to those officers of the Sellers executing instruments in connection with this Agreement;

(h) An affidavit of each Seller in a form reasonably satisfactory to Buyer certifying that such Seller is not a “foreign person” within the meaning of Section 1445 of the Internal Revenue Code of 1986, as amended;

(i) An amount of Sellers’ Cash required to satisfy Section 2.2; and

(j) All other documents, certificates, instruments or writings, including the Ancillary Agreements, reasonably requested by the Buyer in connection herewith.

3.3 Deliveries by the Buyer at Closing. At the Closing, the Buyer shall execute, acknowledge and deliver to the Sellers the following (which events shall occur, each being deemed to have occurred simultaneously with the others):


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(a) A duly executed Assignment and Assumption Agreement;

(b) The Bill of Sale and the IP Assignments, if any, that call for a signature by the Buyer;

(c) The Escrow Agreement, in a form reasonably satisfactory to the Buyer and its counsel and the Sellers and their counsel;

(d) The Cash Component in immediately available funds;

(e) A copy of the resolutions adopted by the Buyer’s governing board authorizing the transactions contemplated hereby and the consummation thereof, certified by a secretary or assistant secretary of the Buyer to be a true and correct copy;

(f) A certificate of incumbency as to those officers of the Buyer executing instruments in connection with this Agreement; and

(g) All other documents, certificates, instruments or writings, including the Ancillary Agreements, reasonably requested by the Sellers in connection herewith.

3.4 Deemed Consents and Cures. The Sellers shall be deemed to have obtained all required consents, as applicable, in respect of the assignment of any of the Assumed Real Property Leases and Assumed Contracts and all defaults thereunder shall be deemed to have been cured if, and to the extent that, pursuant to the Sale Order or another Order of the Bankruptcy Court, the Sellers are authorized to assume and assign any such Assumed Real Property Leases and Assumed Contracts to the Buyer pursuant to Section 365 of the Bankruptcy Code.

3.5 Subsequent Documentation; Further Assurances. The Buyer and the Sellers shall, at any time and from time to time after the Closing Date, upon the reasonable request of the other, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, all such further (a) assignments, transfers and conveyances as may be required for assigning, transferring, granting, conveying and confirming the transactions contemplated hereby, including aiding and assisting the Buyer in collecting and reducing to possession any or all of the Assets and (b) documents and instruments as may be reasonably necessary for the further completion of any of the transactions contemplated hereby.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

The Sellers, jointly and severally, represent that the following are true and correct as of the date hereof and shall be true and correct at the date of the Closing after giving effect to the Sale Order (taking into account any updates to Sellers’ Disclosure Schedules contemplated by Section 6.10 hereunder):

4.1 Organization and Power. Each Seller (a) is a limited liability company duly organized, validly existing and in good standing under the laws of the State of its organization,


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(b) is duly authorized to conduct business and is in good standing under the laws of each jurisdiction where such qualification is required, except where the lack of such qualification would not have a Material Adverse Effect, (c) has all requisite limited liability company power and authority to carry on its business as currently conducted, and (d) has the requisite limited liability company power and authority to own, lease, operate or hold the applicable Assets.

4.2 Authority; No Conflicts. Subject to the Bankruptcy Court’s approval and entry of the Sale Order, each Seller has the authority to enter into and consummate this Agreement and the Ancillary Agreements, and to consummate the transactions contemplated hereby and thereby. Subject to the Bankruptcy Court’s approval and entry of the Sale Order, the execution, delivery and performance by each Seller of this Agreement and of the Ancillary Agreements to which it is a party (a) do not and shall not violate or conflict with any provision of the articles of organization or limited liability company agreement of such Seller, (b) do not and shall not violate any provision of any Applicable Law or any order, judgment or decree of any Governmental Entity or any Governmental Authority, (c) do not and shall not violate or result in a material breach of or constitute (with due notice or lapse of time or both) a material default under any Assumed Contract that is a Material Contract, and (d) shall not result in the creation or imposition of any Lien upon any of the Assets.

4.3 Execution and Delivery. Subject to the Bankruptcy Court’s approval and entry of the Sale Order, the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby by the Sellers have been duly authorized by all necessary company action, and the execution and performance of the Ancillary Agreements by the Sellers has been or shall be authorized by all necessary company action prior to the Closing Date. Subject to the Bankruptcy Court’s approval and entry of the Sale Order, this Agreement constitutes, and upon execution of each of the Ancillary Agreements such agreements shall constitute, valid and binding obligations of the Sellers, enforceable against the Sellers in accordance with their respective terms.

4.4 Sale Free and Clear of Liens. On the Closing Date or such other applicable date as provided in Section 1.4, after giving effect to the Sale Order, (a) the Assets shall be transferred to the Buyer free and clear of all Liens (except for Permitted Liens) and Excluded Liabilities and (b) the Buyer shall obtain good title to the Assets free and clear of all Liens (except for Permitted Liens) and Excluded Liabilities.

4.5 Ownership of Assets; Sufficiency; Subsidiaries.

(a) Except as set forth on Schedule 4.5, the Sellers collectively have good title to, or valid leasehold interests in, the Assets.

(b) No Seller has any equity participation in any Person that is not another Seller.

(c) Parent is the holder of all ownership interests of Family Christian, LLC and Family Christian, LLC is the parent of Giftco.

4.6 Taxes. Except as set forth on Schedule 4.6, the Sellers have timely filed all Tax returns required to be filed prior to the date hereof, and have paid (or shall pay on or before the


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Closing) all Taxes shown to be due thereon, and with respect to real property Taxes, to the extent due and payable. The amount of Taxes of whatever kind pertaining to the Assets and the Business and required to be paid by the Sellers for all periods up to and including the Closing Date (including all material ad valorem and other property Taxes relating to the Assets) shall be accurately reflected in the schedules filed by the Sellers with the Bankruptcy Court.

4.7 Material Contracts. Schedule 4.7 sets forth a list of the Material Contracts. Each Assumed Contract that is a Material Contract is valid, binding and enforceable against the Sellers, as applicable, in accordance with its terms, and is in full force and effect on the date of this Agreement.

4.8 Permits; Compliance with Laws.

(a) The Sellers possess all permits, Licenses, approvals, authorizations, consents or filings with Governmental Authorities necessary for the conduct of the Business (the “Permits”) other than Permits that (a) are not customarily required to be obtained in connection with businesses having operations similar to those of the Business, (b) could, in the reasonable judgment of the Sellers, be obtained in the ordinary course of business after Closing through routine, administrative filings, and (c) if not obtained, would not, individually or in the aggregate, materially and adversely affect the Buyer, the Assets or the Business. All material Permits issued to the Sellers are in full force and effect.

(b) The operation of the Business by the Sellers complies in all material respects with all Applicable Laws and the requirements and conditions of all Permits, including all applicable operating certificates and authorities, and all other rules, regulations, directives and policies of all Governmental Authorities having jurisdiction over the Business.

4.9 Third Party Approvals. Except for (a) entry of the Sale Order, and (b) approvals or consents set forth on Schedule 4.9, the execution, delivery and performance by the Sellers of this Agreement and the consummation of the transactions contemplated hereby do not require any material consent, waiver, authorization or approval of, or filings with, any Person (including any Governmental Authority) that has not been obtained or is not deemed to be superseded by applicable provisions of the Bankruptcy Code (the matters described in this Section 4.9, collectively referred to as the “Consents”).

4.10 Real Estate. The Sellers do not own any real property. Schedule 4.10 sets forth a list of the Real Property Leases. Except as set forth on Schedule 4.10, the Sellers have, and at Closing, or as of the assignment date pursuant to Section 1.4, shall transfer to the Buyer, a valid leasehold interest in the premises subject to the Assumed Real Property Leases, free and clear of any Liens that have been granted by Sellers (except for Permitted Liens) and Excluded Liabilities.

4.11 Employment and Benefit Matters.

(a) All Employee Plans sponsored or contributed to by the Sellers, covering employees of the Sellers, or for which the Sellers may have any liability are set forth on Schedule 4.11(a), including its 401(k) plan. Schedule 4.11(a) identifies the plan sponsor for each such Employee Plan. Except as provided on Schedule 4.11(a) and except for health continuation


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coverage as required by Section 4980B of the Code or Part 6 of Title I of ERISA, the Sellers do not have any liability for severance, life, health, medical or other welfare benefits to former employees or beneficiaries or dependents thereof that shall affect the Buyer or the Assets.

(b) The Sellers do not have any employment agreements with any of its employees that are not terminable at will without material cost or expense at the election of Sellers, except for those set forth on Schedule 4.11(b).

(c) Within five (5) Business Days prior to the Closing Date, Sellers shall provide to Buyer Schedule 4.11(c) which shall list all employees of Sellers.

(d) All contributions, premiums and expenses to or in respect of each Employee Plan for any period through the Closing Date have been timely made or paid in full or, to the extent not required to be made or paid on or before the Closing Date, and a Schedule of such amounts shall be provided to Buyer within five (5) Business Days prior to the Closing Date.

4.12 Intellectual Property.

(a) Schedule 4.12(a) includes a listing of all of the patents, trademark, service mark and copyright registrations, domain names and the pending patent, trademark and copyright applications for Intellectual Property that are owned by the Sellers.

(b) Schedule 4.12(b) includes a listing of all licenses and other agreements to which any Seller is a party that are material to the operation of the Business and pursuant to which any Seller authorizes any other Person to use any Intellectual Property, and also includes a listing of all licenses and other agreements pursuant to which Intellectual Property that is used in and material to the operation of the Business and owned by Persons other than the Sellers is licensed to the Sellers (excluding in each instance licensed software related to back office systems that is not customized for Sellers and is generally available for purchase or lease).

(c) Each material item of Transferred Intellectual Property owned by the Sellers is valid, subsisting and in full force and effect. The Sellers have taken reasonable measures to protect and maintain all of the Sellers’ rights in the Transferred Intellectual Property.

4.13 Insurance. Schedule 4.13 contains an accurate and complete list of all material policies or binders of property, general liability, workmen’s compensation, automobile liability and pollution legal liability insurance held by or on behalf of the Sellers in connection with the Business.

4.14 Accounts Receivable and Assumed Liabilities. All Transferred Accounts Receivables represent bona fide transactions and have arisen in the ordinary course of business. All of the Assumed Liabilities represent bona fide transactions and have arisen in the ordinary course of business, taking into account the pendency of the Cases.

4.15 Termination of Representations and Warranties Upon Closing. The representations and warranties of the Sellers in this Article 4 shall not survive the Closing Date and shall be null and void ab initio and of no further force or effect immediately after the Closing Date.


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4.16 Disclaimer of Other Representations and Warranties. The representations and warranties set forth in this Article 4 are the only representations and warranties made by the Sellers with respect to the Business, the Assets, the Assumed Liabilities or any other matter relating to the transactions contemplated by this Agreement. Except as specifically set forth in this Article 4: (a) the Sellers are selling the Assets to Buyer “as is” and “where is” and with all faults, and make no warranty, express or implied, as to any matter whatsoever relating to the Business, the Assets, the Assumed Liabilities or any other matter relating to the transactions contemplated by this Agreement including as to (i) merchantability or fitness for any particular use or purpose, (ii) the operation of the Business by Buyer after the Closing in any manner or (iii) the probable success or profitability of the Business after the Closing, and (b) none of the Sellers, any of their Affiliates, or any of their respective officers, directors, employees, agents, representatives, members or managers will have, or will be subject to, any liability or indemnification obligation to Buyer or any other Person resulting from the distribution to Buyer or its Affiliates or representatives of, or the Buyer’s use of, any information relating to the Business including any descriptive memoranda, summary business descriptions or any information, documents or material made available to Buyer or its Affiliates or representatives, whether orally or in writing, in certain “data rooms,” management presentations, functional “break-out” discussions, responses to questions submitted on behalf of Buyer or in any other form in expectation of the transactions contemplated by this Agreement.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF THE BUYER

The Buyer represents and warrants to the Sellers that the following are true and correct as of the date hereof and shall be true and correct at the date of the Closing:

5.1 Organization and Power. The Buyer (a) is a duly organized, validly existing entity under Applicable Laws and in good standing in the State of its organization, (b) has all requisite power and authority to carry on the business in which it is now engaged, and (c) has taken all action required by Applicable Law, and by the Buyer’s organizational documents, to authorize the execution and delivery of this Agreement and the purchase of the Assets and assumption of the Assumed Liabilities in accordance with this Agreement.

5.2 Authority; No Conflicts. The Buyer has the requisite power and authority (including full limited liability company power and authority) to execute this Agreement and each Ancillary Agreement to which the Buyer is a party and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance by the Buyer of this Agreement and each Ancillary Agreement to which the Buyer is a party (a) do not and shall not violate or conflict with any provision of the articles of organization or limited liability company agreement of the Buyer, and (b) do not and shall not violate any provision of any Applicable Law or any order, judgment or decree of any Governmental Entity or any Governmental Authority.

5.3 Execution and Delivery. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary limited liability company action on the part of the Buyer, and the execution and


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performance of each Ancillary Agreement to which the Buyer is a party has been or shall be authorized by all necessary limited liability company action on the part of the Buyer prior to the Closing Date. This Agreement constitutes, and upon execution by the Buyer of each of the Ancillary Agreements to which it is a party, such agreements shall constitute, valid and binding obligations of the Buyer, enforceable against the Buyer in accordance with their respective terms.

5.4 Litigation. There is no claim, litigation, action or legal proceeding before a Governmental Authority or Governmental Entity or, to the Buyer’s knowledge, threatened against the Buyer, adversely affecting the Buyer’s ability to perform its obligations hereunder.

5.5 No Brokers. The Buyer has not utilized the services of or contracted or dealt with a broker or finder in connection with any of the transactions contemplated by this Agreement, including the Buyer’s purchase of the Assets or any portion thereof, and no commission or other compensation is or shall be due or owed from the Buyer to any Person with respect to the purchase and sale of the Assets.

5.6 Termination of Representations and Warranties Upon Closing. The representations and warranties of the Buyer in this Article V shall not survive the Closing Date and shall be null and void ab initio and of no further force or effect immediately after the Closing Date.

ARTICLE 6

COVENANTS OF THE SELLERS

Each Seller covenants and agrees with the Buyer that:

6.1 Access. Prior to the Closing, and on the basis that the Buyer shall have executed a Non-Disclosure Agreement in customary form and otherwise consistent with Section 6.9 hereof, the Sellers shall afford to the authorized representatives of the Buyer reasonable access during normal business hours to the Business, Leased Real Property, facilities, books and records (regardless of form or medium, which shall include source code and related documentation, databases, and other electronic media), and senior management so as to afford the Buyer reasonable opportunity to make such review, examination and investigation of the Business as the Buyer reasonably determine is necessary in connection with the consummation of the transactions contemplated hereby and the financing thereof, and during such period the Sellers shall furnish, as reasonably promptly as practical, to the Buyer and its representatives any information they may reasonably request; provided that (a) the Buyer shall provide the Sellers with sufficient advance notice of such access (which shall be no less than two (2) Business Days) to permit the Sellers to designate a party to accompany the Buyer when they are visiting the Sellers’ facilities should they so desire, and (b) the foregoing right of access shall not be exercisable in such a manner as to interfere in a material way with the normal operations and business of the Sellers. The Buyer shall be permitted to make extracts from or to make copies of such books and records as may be reasonably necessary in connection therewith; provided that in the event that either Seller has executed an agreement with a third party providing that any information in its possession from such third party is covered by confidentiality protections, such


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Seller shall not provide access to such information to the Buyer until such Seller has obtained the necessary waivers from such third party to permit the disclosure to the Buyer of such information and such Seller shall use its reasonable best efforts to obtain such waivers. All requests for information pursuant to this Section 6.1 shall be directed to any of the persons listed on Schedule 6.1 hereto or any other such additional person as may be designated by the Sellers. All information received pursuant to this Section 6.1 shall be governed by the confidentiality provisions of Section 6.9. In addition, the Sellers shall allow the Buyer and its representatives access after the Closing to the Tax records of the Business retained by the Sellers, as specified as an Excluded Asset pursuant to Section 1.3(a), to the extent necessary by the Buyer in its ongoing Tax compliance procedures.

6.2 Reasonable Best Efforts. Each Seller shall use its reasonable best efforts to cause, to the extent within such Seller’s control, the conditions set forth in Article 8 to be satisfied and to facilitate and cause the consummation of the transactions contemplated hereby.

6.3 Notice to the Buyer. Each Seller agrees to promptly notify the Buyer in writing of any information it obtains or becomes aware of that would indicate that a representation and warranty of the Sellers made herein or in any Schedule hereto is not correct in all material respects or that any of the conditions to Closing shall not be satisfied.

6.4 New Commitments. Without the prior written consent of the Buyer (which shall not be unreasonably withheld), no Seller shall prior to the Closing (a) other than in accordance with the Bid Procedures Order, enter into any new agreement or commitment with respect to the Assets or the Business other than in the ordinary course operation of the Business, (b) modify or terminate any existing agreements relating to the Assets other than in the ordinary course operation of the Business, or (c) encumber, sell or otherwise dispose of any of the Assets other than personal property that is replaced by equivalent property or consumed in the normal, ordinary course operation of the Business, except for any commitment as set forth on Schedule 6.4 sought pursuant to motions pending with or approved by the Bankruptcy Court as of the date hereof.

6.5 Maintenance of Interests. The Seller shall use their reasonable best efforts from the date of execution of this Agreement until the Closing to maintain and operate the Business and Assets (or cause the Business and Assets to be maintained and operated) in the ordinary course of business consistent with past practice, in a reasonable and prudent manner, in full compliance with Applicable Law, to maintain insurance now in force with respect to the Assets, and, subject to applicable bankruptcy law, to pay when due all costs and expenses coming due and payable in connection with the employment of employees and normal maintenance and operation of the Assets, including the Employee Plans. Without limiting the generality of the foregoing and without the prior written consent of the Buyer, neither Seller shall, except for the items set forth on Schedule 6.5 which are being sought pursuant to motions pending with or approved by the Bankruptcy Court as of the date hereof: (a) introduce any materially new or different method of maintenance, operation or accounting with respect to the Business and the Assets, (b) incur any liabilities other than in the ordinary course of business, (c) enter into, amend or terminate any employment, bonus, severance or retirement contract or arrangement, nor increase any salary or other form of compensation payable or to become payable to any executives or employees of the Business other than in the ordinary course of business consistent


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with past practice, or (d) sell, lease or otherwise dispose of or agree to sell, lease or otherwise dispose of, any of its assets, properties, rights or claims, except for sales of inventory in the ordinary course of business consistent with past practice.

6.6 Reports and Information. Each Seller shall, promptly on receipt, deliver to the Buyer copies of all notices, reports, demands, claims, appraisals, and similar information supplied by any Person asserting a Lien, or by any Governmental Authority making a claim outside the ordinary course of business, respecting the Assets, or their ownership or operation. Prior to Closing, the Sellers shall deliver to the Buyer monthly financial statements within thirty (30) days of the applicable month-end, which financial statements shall be similar in scope to and shall be prepared on a consistent basis with, the monthly financial statements previously provided to the Buyer.

6.7 Consents and Approvals. The Sellers shall use their reasonable best efforts to obtain all Consents required by the Bankruptcy Code or other Applicable Law to be obtained by the Sellers to effect the transactions contemplated hereby. Without limiting the foregoing, as soon as practicable after the date of this Agreement, the Sellers shall make or cause to be made all such further filings and submissions, and take or cause to be taken such further action, as may reasonably be required in connection therewith on a timely basis.

6.8 Employee and Employee Benefits Obligations. Other than the liabilities and obligations with respect to the Transferred Employees that the Buyer has expressly agreed to assume, perform and become responsible for in accordance with Section 7.4, the Sellers shall retain and be responsible for all liabilities and obligations with respect to its current and former employees and their dependents and beneficiaries, including, without limitation, all liabilities and obligations for wages and all liabilities and obligations arising under any Employee Plan sponsored, maintained or contributed to (or to which there has been an obligation to contribute) at any time by the Sellers.

6.9 Confidentiality. From and after the Closing, the Sellers, on the one hand, and the Buyer, on the other hand, shall, and shall cause their respective directors, officers, employees, agents, brokers, advisors (including attorneys, accountants, lenders, consultants, and any representatives of such advisors), representatives, investment and commercial bankers, and Affiliates (collectively, “Representatives”), to keep confidential all, and not use or divulge to any Person (other than to the other party and its Representatives) any of the trade secrets or private or confidential information relating to the Assets, the Business, or Buyer, including private, secret and confidential information relating to such matters as the finances, methods of operation and competition, marketing plans and strategies, equipment and operational requirements and information concerning personnel, customers, and suppliers of the Sellers or Buyer generally (collectively “Confidential Information”), unless such information (i) is or becomes generally available to the public other than as a result of a disclosure by such party or their respective Representatives, (ii) is legally compelled to be disclosed whether by Applicable Law or order of a Governmental Authority; provided, however that the affected party shall provide to the other with prompt written notice of such legal compulsion so that such other party may seek a protective order or other available remedy. If a protective order or other remedy is not obtained and the affected party does not obtain from the other party a waiver of compliance with this section, the affected party nevertheless may disclose such information that knowledgeable


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counsel advises the affected party in writing must be disclosed lest the affected party stand liable for contempt or other material censure or penalty. The affected party will use their best efforts to obtain reliable assurance that information so disclosed will be treated confidentially by any disclosee. The obligations of non-use and non-disclosure contained in this shall cease to apply as of the third (3rd) anniversary of the Closing Date with respect to any such information that does not constitute a trade secret under Applicable Law. Nothing herein shall be deemed to abridge or lessen any greater or larger protections afforded to trade secrets under applicable Law.

6.10 Update to Disclosure Schedules. From the date hereof until the Closing Date, the Sellers shall disclose to the Buyer in writing (in the form of a supplement to the Disclosure Schedules): (i) Disclosure Schedules which are expressly contemplated to be delivered after the date hereof, or (ii) any newly arising or occurring fact, condition, event or occurrence that will or is reasonably likely to cause any of the representations and warranties contained in Article 4 hereof to be untrue or inaccurate in any material respect at any time from the date hereof until the Closing Date. Such disclosures pursuant to this Section 6.10 shall amend, cure and supplement the appropriate Disclosure Schedules delivered on the date hereof and attached hereto; provided, however, that such disclosures shall not be deemed to amend and supplement the appropriate Disclosure Schedules for purposes of:

(a) the conditions to the Closing set forth in Section 8.1 and Section 8.2 hereof, or

(b) the Buyer’s ability to terminate this agreement pursuant to Section 10.1.

ARTICLE 7

COVENANTS OF THE BUYER

The Buyer covenants and agrees with the Sellers that:

7.1 Reasonable Best Efforts. The Buyer shall use its reasonable best efforts to cause, to the extent within the Buyer’s control, the conditions set forth in Article 8 to be satisfied and to facilitate and cause the consummation of the transactions contemplated hereby.

7.2 Notice to the Sellers. The Buyer agrees to promptly notify the Sellers in writing of any information the Buyer obtains or becomes aware of that would indicate that a representation and warranty of the Buyer made herein or in any Schedule hereto is not correct in all material respects.

7.3 Bankruptcy Court Approval and Related Matters. The Buyer acknowledges and agrees to Article 11 and shall use reasonable best efforts to assist the Sellers in obtaining any Orders necessary to consummate the transactions contemplated hereby and any Orders ancillary hereto and agree to provide the Sellers with information necessary to obtain such Orders.

7.4 Transferred Employees.

(a) At least five (5) days prior to (i) the Closing Date with respect to those Stores or Distribution Centers subject to Assumed Real Property Leases to be assigned to the


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Buyer on the Closing Date or (ii) the expected assignment date with respect to those Stores and Distribution Centers subject to Assumed Real Property Leases to be assigned to the Buyer after the Closing Date in accordance with Section 1.4, the Buyer shall deliver, in writing individually or generally, an offer of employment commencing on the Closing Date or assignment date, as applicable, and contingent upon the Closing or such assignment, on an at-will basis (except to the extent otherwise expressly agreed in a writing signed by the Buyer and such employee), to substantially all of the employees who remain employed by the Sellers and are employed at the applicable Store or Distribution Center. In addition, the Buyer may deliver such offers of employment to other employees of the Sellers, including at the Home Office, at the sole discretion of the Buyer. The Buyer shall extend an offer of employment to employees normally employed at the Stores and Distribution Centers who are on an approved leave of absence for workers compensation, disability, military, family illness or parental leave as of the Closing Date or applicable assignment date to at least the same extent, if any, as such employees would be entitled to reemployment under Applicable Law. The individuals who accept offers of employment extended by the Buyer pursuant to this Section 7.4(a) are hereinafter referred to as the “Transferred Employees.” In supplement of the foregoing, Buyer convenants to offer sufficient offers of employment so as not to trigger any notification obligations under the WARN Act.

(b) The Buyer shall assume and be responsible for the payment of (i) all wages due to the Transferred Employees accrued since the last regular payroll date prior to the Closing Date or assignment date, as applicable, (ii) all amounts due to the Transferred Employees (or to service providers for benefits provided to Transferred Employees or their dependents) under the employment policies and Employee Plans of the Sellers immediately prior to the Closing Date or assignment date, as applicable, with respect to all benefits provided under the Employee Plans, including accrued and unused vacation, sick days and personal days, medical and dental (including incurred but not reported claims and claims reported but not yet paid), (iii) all workers’ compensation liabilities relating to the Transferred Employees (including incurred but not reported claims and claims reported but not yet paid) as shown on Schedule 7.4(b), and (iv) all severance obligations with respect to the Transferred Employees whose employment with the Buyer or its Affiliates terminates for any reason other than cause within 12 months after the Closing Date or assignment date, as applicable. All such liabilities shall be deemed to be Assumed Liabilities. The Buyer shall be responsible for all compensation and benefits payable or provided to the Transferred Employees and any other employees of the Buyer or its Affiliates from and after the Closing Date or applicable assignment date.

(c) Buyer or an entity affiliated with Buyer shall assume the Employee Plans sponsored by Sellers identified on Schedule 4.11(a). The Transferred Employees shall continue participation in all such assumed Employee Plans and in all Employee Plans sponsored by Family Christian Resource Center, Inc. effective as of the Closing Date in accordance with the terms of such Employee Plans.


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ARTICLE 8

CONDITIONS TO CLOSING

8.1 Sellers’ Conditions to Closing. The obligations of the Sellers at the Closing are subject, at the option of the Sellers, to the satisfaction or waiver at or prior to the Closing of the following conditions:

(a) All representations and warranties of the Buyer contained in this Agreement shall be true in all material respects at and as of the Closing and the Buyer shall have performed and satisfied all material obligations in all material respects required by this Agreement to be performed and satisfied by the Buyer at or prior to the Closing. The Buyer shall have provided the Sellers with certificates executed by a responsible officer of the Buyer to such effect;

(b) No stay or injunction shall have been obtained by a court of competent jurisdiction restraining, prohibiting or declaring illegal the purchase and sale contemplated by this Agreement;

(c) The entry by the Bankruptcy Court of the Sale Order; and

(d) The Buyer shall have executed and delivered the documents required to be executed and delivered pursuant to Section 3.3.

8.2 Buyer’s Conditions to Closing. The obligations of the Buyer to consummate the transactions contemplated hereby at the Closing are subject, at the option of the Buyer, to the satisfaction or waiver at or prior to the Closing of the following conditions:

(a) All representations and warranties of the Sellers contained in this Agreement and the Ancillary Agreements shall be true in all material respects at and as of the Closing and the Sellers shall have performed and satisfied in all material respects all obligations required by this Agreement and the Ancillary Agreements to be performed and satisfied by the Sellers at or prior to the Closing. The Sellers shall have provided the Buyer with certificates executed by a responsible officer of the Sellers to such effect;

(b) No stay or injunction shall have been obtained by a court of competent jurisdiction restraining, prohibiting or declaring illegal the purchase and sale contemplated by this Agreement;

(c) The entry by the Bankruptcy Court of the Sale Order and the Sale Order shall be a Final Order;

(d) The book value of the Seller-owned Inventory (net of reserves and other adjustments required under GAAP) as of the Closing Date shall not be less than $42,000,000;

(e) The aggregate amount of Sellers’ Cash and the Cash Component of the Purchase Price shall exceed the aggregate amount of the FC Debt and the Closing Liabilities.


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(f) All material Consents required to be obtained by the Sellers for the Closing shall have been obtained;

(g) The Sellers shall have executed and delivered the documents required to be executed and delivered pursuant to Section 3.2; and

(h) The FC Debt shall be fully, finally and indefensibly paid in full at Closing.

ARTICLE 9

ADDITIONAL OBLIGATIONS AFTER CLOSING

The Parties shall have the following additional obligations after the Closing:

9.1 Execution; Delivery of Instruments and Assistance. The Sellers and the Buyer shall each execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such instruments and take such other actions as may be necessary or advisable to carry out their obligations under this Agreement and under any document, certificate or other instrument delivered pursuant hereto or thereto or required by Applicable Law.

9.2 Name Change. The Sale Order shall require that, promptly after the Closing Date each Seller shall change its name to a name that is not (and that is not confusingly similar to) “Family Christian” or “FCS”, and each Seller shall correspondingly change the caption of each of the Cases to reflect such new names, it being the intent of the Parties that from and after the Closing, the Buyer shall have the sole right to conduct business under such name.

9.3 Access to Records. From and after the Closing Date, the Sellers on the one hand and the Buyer on the other hand shall afford each other and their respective Representatives such access to records in respect of the Sellers’ businesses which, after the Closing, are in the custody or control of the other Party and which such Party reasonably requires, including in order to comply with its obligations under Applicable Law, including, but not limited to, audits by Tax authorities, or which the Buyer reasonably requires to comply with its material obligations under the Assumed Liabilities. Each Party may require the other Party or its Representatives to enter into a confidentiality agreement in customary form in connection with providing access to the records of such Party.

9.4 Accounts Receivable/Collections. The Sellers shall promptly deliver to the Buyer any cash, checks or other property they may receive after the Closing in respect of the Transferred Accounts Receivable, including any credit card receipts.

9.5 Privacy. On or prior to the Closing Date, the Buyer shall adopt a written policy with respect to protection of the confidentially of personally identifiable information regarding the customers and employees of the Business and other Persons not affiliated with the Sellers that initially includes provisions substantially similar to those included in the written privacy policies of the Sellers in effect as of the date of this Agreement. From and after the Closing Date, the Buyer shall comply with such policy, or such successor policies adopted by Buyer from time to time, and Applicable Law with respect to the protection of such personally identifiable information.


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ARTICLE 10

TERMINATION

10.1 Termination. This Agreement may be terminated as follows:

(a) At any time by the mutual written agreement of the Sellers and the Buyer;

(b) By the Buyer, at its sole election, in the event that the Sale Motion has not been filed with the Bankruptcy Court within the time period required in Section 11.1; provided that the Buyer shall not be entitled to terminate this Agreement pursuant to this Section 10.1(b) if the failure to file the Sale Motion within such time period results primarily from the Buyer itself materially breaching any representation, warranty or covenant contained in this Agreement;

(c) Automatically, upon any of the Sellers’ entry into any agreement seeking to consummate any Acquisition Transaction between any of the Sellers and a party other than the Buyer;

(d) By the Buyer, at its sole election, in the event that the Closing shall not have occurred on or before May 4, 2015; provided that the Buyer shall not be entitled to terminate this Agreement pursuant to this Section 10.1(d) if the failure of the Closing to occur on or prior to such date results primarily from the Buyer itself materially breaching any representation, warranty or covenant contained in this Agreement;

(e) By the Sellers, at their sole election, in the event that the Closing shall not have occurred on or before May 4, 2015; provided that the Sellers shall not be entitled to terminate this Agreement pursuant to this Section 10.1(e) if the failure of the Closing to occur on or prior to such date results primarily from the Sellers materially breaching any representation, warranty or covenant contained in this Agreement;

(f) By the Buyer, at its sole election, in the event of a material breach of this Agreement by the Sellers that has not been cured, or if any representation or warranty of the Seller shall have become untrue in any material respect, in either case such that such breach or untruth is incapable of being cured by the later of (i) May 4, 2015 and (ii) fifteen (15) days after written notice of such breach; provided that the Buyer shall not be entitled to terminate this Agreement pursuant to this Section 10.1(f) if such termination right results primarily from the Buyer itself materially breaching any representation, warranty or covenant contained in this Agreement;

(g) By the Sellers, at their sole election, in the event of a material breach of this Agreement by the Buyer that has not been cured, or if any representation or warranty of the Buyer shall have become untrue in any material respect, in either case such that such breach or untruth is incapable of being cured by the later of (i) May 4, 2015 and (ii) fifteen (15) days after written notice of such breach; provided that the Sellers shall not be entitled to terminate this Agreement pursuant to this Section 10.1(g) if such termination right was caused by the Sellers or results primarily from the Sellers materially breaching any representation, warranty or covenant contained in this Agreement;


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(h) By the Buyer, at its sole election, upon the granting of any motion for relief from the automatic stay which would have a Material Adverse Effect, the conversion of any of the Cases to a case under Chapter 7 of the Bankruptcy Code, the dismissal of any of the Cases, the filing of any plan of reorganization by any party in interest that does not incorporate this Agreement or the filing of any motion by a party in interest in any of the Cases to liquidate the Assets or any similar commencement of liquidation proceedings relating to Sellers, other than as contemplated herein;

(i) By the Buyer upon the entry of an order by the Bankruptcy Court for the appointment of a trustee or examiner, other than at the request of the Buyer;

(j) By the Buyer if any of the Sellers breaches or violates any Order entered in any of the Cases authorizing the use of cash collateral or the obtaining of financing, or if any Sellers become prohibited from using cash collateral or financing under any such order;

(k) By Buyer or Sellers if there is in effect a Final Order of a Governmental Authority of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby;

(l) By Buyer if the Bid Procedures Order is not entered by March 11, 2015, or the hearing on the Sale Motion is not concluded by April 14, 2015; or the Sale Order is not entered by April 15, 2015; or

(m) By Buyer, if the Bid Procedures Order is vacated, stayed or reversed, or supplemented, amended, or modified in a manner detrimental to Buyer, in Buyer’s reasonable discretion.

10.2 Effect of Termination. Upon the termination of this Agreement in accordance with Section 10.1, the Parties shall be relieved of any further obligations or liability under this Agreement other than (a) confidentiality obligations contained in Section 6.9, (b) any obligations for material breach of this Agreement occurring prior to such termination, (c) obligations contained in Section 2.6 and (d) any obligations contained in Article 11. Notwithstanding the foregoing, the forfeiture of all of the Deposit shall be the sole and exclusive remedy to the Sellers for any breach by Buyer of this Agreement.

ARTICLE 11

CHAPTER 11 BANKRUPTCY PROCEEDING

11.1 Bankruptcy Court Approval of the Buyer as Initial Bidder. Within five (5) days following the date of the execution of this Agreement, the Sellers shall file a motion with the Bankruptcy Court pursuant to Section 363 and Section 365 of the Bankruptcy Code (the “Sale Motion”) seeking: (i) (a) approval of the provisions of this Agreement and the transactions contemplated hereby and thereby under Section 363 of the Bankruptcy Code, (b) assumption and assignment of the Assumed Real Property Leases and Assumed Contracts from the Sellers to the Buyer under Section 365 of the Bankruptcy Code, and (c) entry of the Sale Order; and (ii) entry of the Bid Procedures Order. The Sale Motion shall seek the designation of the Buyer as the


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stalking horse or “Initial Bidder” for the Assets under the terms of this Agreement and shall seek Bankruptcy Court approval of the provisions set forth in this Agreement.

11.2 Sale Order; Notices to Third Parties.

(a) Sellers shall seek prompt entry of the Sale Order pursuant to the Sale Motion after sufficient notice has been given, which Sale Order shall include, among other things, findings of fact and conclusions of law that the Buyer is not a successor in interest to the Sellers or any Affiliate of Sellers, that the Buyer is a good faith purchaser pursuant to Bankruptcy Code Section 363 and the other findings of fact and conclusions of law set forth in Exhibit B to this Agreement.

(b) The Sellers covenant that, to the extent that they have not done so prior to the date of this Agreement, they shall promptly serve the third parties who are parties to Real Estate Leases and Contracts (such third parties being “Cure Obligees”) with written notice of proposed cures on the Real Estate Leases and Contracts (such notice being the “Proposed Cure Notice”), which Proposed Cure Notice shall be provided to the Buyer within the time periods provided by the Bid Procedures Order. The Proposed Cure Notice shall, as set forth in the Bid Procedures Order, establish a deadline reasonably in advance of the Closing Date by which Cure Obligees must object to respective proposed cures, or any other matters related to the Cure Obligee, or be deemed to have waived any such objection.

(c) The Sellers shall promptly provide Buyer with drafts of all documents, motions, orders, filings, or pleadings that Sellers propose to file with the Bankruptcy Court or any other court or tribunal that relate in any manner, directly or indirectly, to (i) this Agreement or the transactions contemplated hereby; (ii) the Sale Motion, including the form and content of the Bid Procedures Order; or (iii) entry of the Sale Order, and will provide Buyer with at least 48 hours, or as much notice as is possible under the circumstances, to review such documents in advance of their service and filing. The Sellers shall consult and cooperate with Buyer, and consider in good faith the views of Buyer, with respect to all such filings. The Sellers shall not make any disclosures (including any statements or schedules) in connection with the Cases that are inconsistent in any material respect with the representations, warranties or related Disclosure Schedules set forth in or delivered in connection with this Agreement. Seller will give Buyer reasonable advance notice of any hearings regarding the motions required to obtain the issuance of the Sale Order and Buyer will have the right to attend and seek to be heard at any such hearings.

11.3 Requests for Information. From the date of the approval of the Bid Procedures Order (a) if the Sellers supply any information regarding the Business to a potential bidder not heretofore given to the Buyer, the Sellers shall further provide the Buyer with a copy of such information within 24 hours of providing that information to any other potential bidder; and (b) with respect to any bid, term sheet, or written expression of interest by any other party for any asset or assets of any Seller, or any other reorganization proposal, submitted prior to the bid deadline established in the Bid Procedures Order, the Sellers shall provide the Buyer with prompt notice of such proposal and a copy of such proposal within 48 hours of any Sellers’ receipt thereof.


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11.4 Defense of Orders. The Sellers, at their sole cost and expense, shall diligently defend the Bid Procedures Order and the Sale Order in the event that any motion for reconsideration or appeal of either such Order is filed.

ARTICLE 12

GENERAL PROVISIONS

12.1 Notice. All notices hereunder shall be in writing, dated and signed by the Party giving the same. Each notice shall be either (a) delivered in person to the address of the Party for whom it is intended at the address of such Party as shown below, (b) delivered to the United States Postal Service in a secure and sealed envelope or other suitable wrapper addressed to the Party for whom it is intended at the address of such Party as provided below, with sufficient postage affixed, certified or registered mail, return receipt requested, (c) transmitted via telecopy (or other facsimile device) or electronic mail to the number or e-mail address set out below if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid) or (d) delivered to a nationally recognized overnight courier service that traces any such notice. The effective date of such notice shall be the date of delivery in the event of delivery in accordance with (a) or (c), five (5) days after deposit in the U.S. Mail in the event of delivery in accordance with (b), the next Business Day and in the event of delivery in accordance with (d). The address at which any Party hereto is to receive notice may be changed from time to time by such Party by giving notice of the new address to all other parties hereto. The addresses of the Parties, until changed in accordance with the foregoing, are:

The Sellers: Family Christian Holding, LLC

5300 Patterson Ave. SE Grand Rapids, Michigan 49530 Attn: Chuck Bengochea, President Facsimile: 616-554-8608 Email: [email protected]

And copies (which shall not constitute notice) to: Burr & Forman LLP

171 17th Street, NW Suite 1100 Atlanta, GA 30363 Attn: Eric Durlacher, Esq. Facsimile: (404) 817-3244 Email: [email protected]


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The Buyer: FCS Acquisition, LLC

2655 Northwinds Parkway Alpharetta, GA 30009 Attn: Dennis Stockwell, Esq. Facsimile: 678-658-4521 Email: [email protected]

And copies (which shall not constitute notice) to: Kilpatrick Townsend & Stockton LLP

1100 Peachtree St. NE, Suite 2800 Atlanta, Georgia 30309 Attn: David Stockton, Esq. Facsimile: (404) 541-3402 Email: [email protected]

12.2 Amendment. This Agreement may not be amended nor any rights hereunder waived except by an instrument in writing signed by the Parties.

12.3 Payment of Costs. Except as otherwise set forth herein, the Parties shall each pay their own costs incurred in negotiating this Agreement and in consummating the transactions contemplated hereby, including any fees or commission payable to any party representing them in connection with arranging or negotiating this Agreement and transactions contemplated hereby.

12.4 Headings. The headings of the sections of this Agreement are for convenience or reference only and shall not affect any of the provisions of this Agreement.

12.5 References. References made in this Agreement, including use of a pronoun, shall be deemed to include, where applicable, masculine, feminine, singular or plural, individuals, partnerships or corporations.

12.6 Applicable Law. This Agreement and the transactions contemplated hereby shall be construed in accordance with and governed by the laws of the State of Georgia. Each of the Parties agrees that any proceeding brought to enforce the rights and obligations of any Party under this Agreement (including the schedules attached hereto) or any Ancillary Agreement shall be commenced and maintained exclusively in the Bankruptcy Court and that the Bankruptcy Court shall have exclusive jurisdiction over any such proceeding.


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12.7 Entire Agreement. This Agreement, the Disclosure Schedules attached hereto, and the Ancillary Agreements (in each case incorporated herein by this reference) contain the entire agreement and understanding of the Parties hereto with respect to the transactions contemplated hereby, and supersede any and all prior agreement, arrangements, and understandings, whether oral or written, between the Parties.

12.8 Authorization of Parent as Representative of the Sellers.

(a) By entering into and executing this Agreement, the Sellers irrevocably appoint Parent as their agent, effective as of the date hereof, and authorize and empower Parent to fulfill the role of the Sellers’ representative hereunder, and each Seller appoints Parent as such Person’s true and lawful attorney in fact and agent, for all purposes necessary or desirable in order for Parent to take all actions contemplated by this Agreement, with the ability to execute and deliver all instruments, certificates and other documents of every kind incident to the foregoing for all purposes and with the same effect as such Seller could do personally, including to give and receive notices and communications; to object to such deliveries, to agree to, negotiate, enter into settlements and compromises of, and comply with orders of courts with respect to such claims; and to take all actions necessary or appropriate in the judgment of Parent for the accomplishment of the foregoing. The power of attorney granted in this Section 12.8(a) is coupled with an interest and is irrevocable.

(b) The Buyer shall be entitled to rely exclusively upon any communication given or other action taken by Parent pursuant to this Agreement, and shall not be liable for any action taken or not taken in good faith reliance on a communication or other instruction from Parent.

12.9 Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the Parties and, except as otherwise prohibited, their respective successors and assigns. Nothing contained in this Agreement, or implied herefrom, is intended to confer upon any Person other than the Parties any benefits, rights, or remedies.

12.10 Assignment. No Party may assign all or any portion of its respective rights or delegate any portion of its duties hereunder without (a) the approval of the Bankruptcy Court and (b) the written consent of the other Parties; provided that (i) the Buyer may collaterally assign this Agreement to its lenders without the consent of the Sellers, and (ii) the Buyer may assign this Agreement in whole or in part to any Affiliate of the Buyer so long as the Buyer retains its obligations under this Agreement, subject to the terms and conditions hereof, to effect the consummation of the transactions contemplated hereby. All of the terms, provisions and conditions of this Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective successors, assigns and legal representatives.

12.11 Severability. If a court of competent jurisdiction determines that any provision of this Agreement is void, illegal or unenforceable, the other provisions of this Agreement shall remain in full force and effect and the provisions that are determined to be void, illegal or unenforceable shall be limited so that they shall remain in effect to the extent permissible by Applicable Law.


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12.12 Publicity. Prior to the Closing, no Party shall issue any press release or similar public announcement concerning the transactions contemplated hereby or the contents of this Agreement without the prior written consent of the other Parties, which consent shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, nothing in this Section 12.12 shall preclude any Party (or Person controlling such Party) from making disclosures required by Applicable Law or Governmental Authority (or of any applicable stock or securities exchange or otherwise), or appropriate filings with the Bankruptcy Court in connection with the Cases or necessary and proper in conjunction with the filing of any Tax return or other document required to be filed with any Governmental Authority; provided that the Party required to make the release or statement shall allow the other Party reasonable time to comment on such release or statement in advance of such issuance.

12.13 Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local or foreign statute shall be deemed to refer to such statute as amended and to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word “include” or “including” means include or including, without limitation. All references in this Agreement to Sections and Schedules shall be deemed references to Sections of, and Disclosure Schedules to, this Agreement unless the context shall otherwise require.

12.14 Specific Performance. Each Party acknowledges that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by such Party in accordance with their specific terms or were otherwise breached by such Party. Each Party accordingly agrees that, prior to the termination of this Agreement pursuant to Article 10, in addition to any other remedy to which the other Parties are entitled at law or in equity, the other Parties are entitled to injunctive relief to prevent breaches of this Agreement by such Party and otherwise to enforce specifically the provisions of this Agreement against such Party. Each Party expressly waives any requirement that any other Party obtain any bond or provide any indemnity in connection with any action seeking injunctive relief or specific enforcement of the provisions of this Agreement. If the Sellers assert a claim for actual damages against the Buyer based on an alleged breach, the Sellers must bring an action against the Buyer in Bankruptcy Court seeking recovery of actual damages, and the Deposit will be held by the Escrow Agent pending a final resolution of such claims. To the extent required to compensate the Sellers for any actual damages awarded by Final Order of the Bankruptcy Court, the Deposit will be used for such purpose. To the extent not required for the payment of such award, the Deposit or any balance thereof will be returned to the Buyer. Notwithstanding the foregoing, the forfeiture of all of the Deposit shall be the sole and exclusive remedy to the Sellers for any breach by Buyer of this Agreement.

12.15 Applicability of Agreement to Giftco. This Article 12, Section 2.7 and any applicable defined terms in Article 13 shall apply to Giftco.


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ARTICLE 13

DEFINITIONS

“503(b)(9) Claims” shall mean the value of any goods received by the Sellers within 20 days before the date of the commencement of the Cases in which the goods have been sold to the Sellers in the ordinary course of the Sellers’ business, or the amounts in respect thereto as determined by the Bankruptcy Court on or prior to the Closing Date.

“Accounts Receivable” shall mean all accounts and notes receivable of the Sellers.

“Acquisition Transaction” shall mean any sale, transfer or other disposition (not involving the Buyer or its Affiliates), in one transaction or a series of transactions, of all or any substantial portion of the Assets or the Business, whether proposed to be effected pursuant to a merger, consolidation, tender offer, exchange offer, share exchange, amalgamation, stock acquisition, asset acquisition, business combination, restructuring, recapitalization, liquidation, dissolution, joint venture or similar transaction, whether or not proposed or advanced by the Sellers.

“Affiliate” shall mean, with respect to any Person, any direct or indirect subsidiary of such Person, and any other Person that directly, or through one or more intermediaries, controls or is controlled by or is under common control with such first Person.

“Agreement” shall have the meaning set forth in the Preamble.

“Ancillary Agreements” shall mean any ancillary agreements hereto to which each Party is or may be a party.

“Applicable Law” shall mean, with respect to any Person, any federal, state or local law (including common law), statute, code, ordinance, rule, regulation, or other requirement enacted, promulgated, issued or entered by a Governmental Authority, that is applicable to such Person or its business, properties or assets.

“Assets” shall have the meaning set forth in Section 1.2.

“Assignment and Assumption Agreement” shall have the meaning set forth in Section 3.2(b).

“Assumed Contracts” shall have the meaning set forth in Section 1.4(d).

“Assumed Liabilities” shall have the meaning set forth in Section 2.3(a).

“Assumed Real Property Leases” shall have the meaning set forth in Section 1.4(d).

“Avoidance Actions” shall mean any and all actions which a trustee, debtor-in-possession or other appropriate party in interest (including any Person given standing to act for such party in


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interest) may assert on behalf of the Sellers or their estate under applicable state statute or Chapter 5 of the Bankruptcy Code, including actions under one or more provisions of Sections 542, 543, 544, 545, 546, 547, 548, 549, 550, 551 and 553.

“Bankruptcy Code” shall have the meaning set forth in the Recitals.

“Bankruptcy Court” shall have the meaning set forth in the Recitals.

“Bid Procedures Order” shall mean an Order of the Bankruptcy Court that (a) is in substantially the form set forth as Exhibit A to this Agreement or otherwise in a form reasonably satisfactory to the Sellers and acceptable to the Buyer in its sole discretion, (b) approves procedures for the solicitation and consideration of competitive bids for the Assets under the terms and conditions of this Agreement; and (c) approves this Agreement as the stalking horse purchase agreement.

“Business” shall mean the business conducted by the Sellers utilizing the Assets and the Assumed Liabilities.

“Business Day” shall mean any day other than Saturday, Sunday or any day on which banking institutions in the United States are closed either under Applicable Law or action of any Governmental Authority.

“Buyer” shall have the meaning set forth in the Preamble.

“Cases” shall have the meaning set forth in the Recitals.

“Cash” shall mean all cash and cash equivalents (including checks, marketable securities and short-term investments) calculated in accordance with GAAP applied on a basis consistent with the financial statements of the Sellers.

“Cash Component” shall have the meaning set forth in Section 2.1.

“Cash on Premises” shall mean all Cash on the premises of the Stores as of the Closing Time, whether in the cash register, safe, donation box or otherwise.

“Charge” shall have the meaning set forth in Section 2.7(a).

“Closing” shall have the meaning set forth in Section 3.1.

“Closing Date” shall have the meaning set forth in Section 3.1.

“Closing Liabilities” shall have the meaning set forth in Section 2.2(b).

“Closing Time” shall have the meaning set forth in Section 3.1.

“Confidential Information” shall have the meaning set forth in Section 6.9.

“Consents” shall have the meaning set forth in Section 4.9.


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“Contract” shall mean any agreement, arrangement, contract, lease, purchase order, sale order or commitment, or any series of related agreements, arrangements, contracts, leases, purchase orders, sale orders, or commitments.

“Cure Costs” shall mean, in the aggregate, any and all costs and expenses for any available cures (pursuant to Section 365 of the Bankruptcy Code and described in any Order of the Bankruptcy Court relating to such cure liability) of any Assumed Real Property Leases or Assumed Contacts, other than the Closing Liabilities.

“Cure Obligees” shall have the meaning set forth in Section 11.2(b).

“Deposit” shall have the meaning set forth in Section 2.6.

“Designated Contract” shall have the meaning set forth in Section 1.4(b).

“Designated Real Property Lease” shall have the meaning set forth in Section 1.4(b).

“Designation Notice” shall have the meaning set forth in Section 1.4(b).

“Designation Period” shall have the meaning set forth in Section 1.4(b).

“Directors and Officers” shall mean each and every of the past and present officers, directors, shareholders, members, managers, partners, principals, subsidiaries, parent companies, affiliates, agents, employees, successors and predecessors-in-interest, advisors, accountants, attorneys, representatives and assigns of the Sellers.

“Disclosure Schedules” shall mean the schedules of Sellers delivered to the Buyer concurrently with the execution and delivery of this Agreement (as may be updated pursuant to Section 6.10), a copy of which is attached to this Agreement and incorporated by reference.

“Distribution Centers” shall mean the distribution centers operated by the Sellers.

“Employee Plans” shall mean each plan, program, agreement or other arrangement, whether or not set forth in a collective bargaining agreement, providing for employment, compensation, pension, profit-sharing, retirement savings, vacation, sick leave, health, life insurance, scholarship, tuition reimbursement, welfare benefits, deferred compensation, severance, termination pay, performance awards, bonus, commission, incentive compensation, equity or equity-related awards, change in control, retention, or employee benefits, including each “employee benefit plan” within the meaning of Section 3(3) of ERISA.

“Equipment” shall mean (a) the furniture, machinery, equipment, tables, chairs, cash registers, computer equipment and license of related software, display cases, shelves, lights, uniforms, signs, cabinets, racks, ornaments and any similar items used in the Business, and (b) any of the foregoing which are leased by the Sellers.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.


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“Escrow Agent” shall have the meaning set forth in Section 2.6.

“Escrow Agreement” shall have the meaning set forth in Section 2.6.

“Excluded Assets” shall have the meaning set forth in Section 1.3.

“Excluded Contracts” shall have the meaning set forth in Section 1.3(g).

“Excluded Deposits” shall have the meaning set forth in Section 1.2(g).

“Excluded Liabilities” shall have the meaning set forth in Section 2.3(b).

“Excluded Licenses” shall have the meaning set forth in Section 1.2(d).

“Excluded Leased Property” shall mean any Store or Distribution Center that is not a premises subject to an Assumed Real Property Lease. To the extent any such premises becomes subject to an Assumed Real Property Lease after the Closing Date in accordance with Section 1.4, such premises shall cease to be an Excluded Leased Property as of the date of the assignment of such Assumed Real Property Lease to the Buyer pursuant to Section 1.4.

“Excluded Real Property Leases” shall have the meaning set forth in Section 1.3(f).

“Excluded Taxes” shall have the meaning set forth in Section 2.3(b)(ii).

“FC Debt” shall mean all Outstanding Indebtedness as of the Closing Date owed by the Sellers to FC Special Funding, LLC, without offset, as set forth in a payoff letter provided by FC Special Funding, LLC to the Buyer and Sellers no later than three (3) Business Days prior to the Closing Date.

“Final Order” shall mean an order of the Bankruptcy Court or other court of competent jurisdiction: (1) as to which no appeal, notice of appeal, motion to amend or make additional findings of fact, motion to alter or amend judgment, motion for rehearing or motion for new trial, request for stay, motion or petition for reconsideration, application or request for review, or other similar motion, application, notice or request (collectively, a “Challenge”) has been timely filed, or, if any of the foregoing has been timely filed, it has been disposed of in a manner that upholds and affirms the subject order in all respects without the possibility for further Challenge thereon, (2) as to which the time for instituting or filing a Challenge shall have expired, and (3) as to which no stay is in effect. Nothing herein shall prohibit the parties, by mutual written consent, from Closing the transactions contemplated hereby, in the absence of a Final Order, so long as the Sale Order is not then subject to a stay from a Governmental Authority.

“GAAP” shall mean United States generally accepted accounting principles.

“Giftco” shall have the meaning set forth in the Preamble.

“Governmental Approvals” shall mean those approvals, authorizations, confirmations, consents, exemptions and orders from Governmental Authorities and the making of all necessary registrations and filings (including filings with Governmental Authorities) and the taking of all


EXECUTION VERSION

35 6313127V.16

reasonable steps as may be necessary (a) to consummate the transactions contemplated hereby under Applicable Law or (b) for the Buyer to operate the Business after Closing.

“Governmental Authority” shall mean any national, federal, state, provincial, local or foreign government, or any subdivision, agency, instrumentality, authority, department, commission, board or bureau thereof, or any federal, state, provincial, local or foreign court, tribunal, or arbitrator, including the Bankruptcy Court.

“Governmental Entity” shall mean any court, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign.

“Home Office” shall mean the facility located at 5300 Patterson Avenue SE, Grand Rapids, Michigan 49530.

“iDLLC” shall have the meaning set forth in Section 1.2(l).

“iDLLC Obligations” shall have the meaning set forth in Section 2.3(a)(v).

“Initial Assumed Contract” shall have the meaning set forth in Section 1.4(b).

“Initial Assumed Real Property Lease” shall have the meaning set forth in Section 1.4(a).

“Initial Bidder” shall have the meaning set forth in Section 11.1.

“Intellectual Property” shall mean all patents, trademarks, trade names, service marks, trade dress, copyrights, applications for registration of any of the foregoing, and brand names, inventions, processes, know how, trade secrets, all databases, data collections, source code, all domain names and websites and related URLs, any moral and economic rights of authors and inventors, however denominated, throughout the world, and any similar or equivalent rights to any of the foregoing anywhere in the world. Without limiting the generality of the foregoing, the Intellectual Property includes the name and phrase “Family Christian Stores” and “FCS” and derivatives, such as “Family Christian” and all rights to the names and websites set forth on Schedule 4.12(a).

“Inventory” shall mean all inventories in the possession of the Sellers, including all merchandise, as of the Closing Date, including any inventory provided to the Sellers pursuant to a consignment agreement regardless of the enforceability of any such agreement or the priority of such consignment rights.

“IP Assignments” shall have the meaning set forth in Section 3.2(d).

“Knowledge of the Sellers” (or “the Sellers’ Knowledge”) shall mean the actual knowledge of the officers of the Sellers listed on Schedule 13.1, after reasonable inquiry.

“Leased Real Property” shall mean each parcel of real estate leased by the Sellers or in which the Sellers have a leasehold, subleaseholder or other interest, including (a) those on which a Store of the Sellers is located and (b) those used in connection with the Business.


EXECUTION VERSION

36 6313127V.16

“Licenses” shall mean all business licenses, occupancy permits and other permits, authorizations or approvals held by the Sellers.

“Liens” shall mean any and all liens, claims (including those that constitute a "claim" as defined in section 101(5) of the Bankruptcy Code), rights, liabilities, encumbrances and other interests of any kind or nature whatsoever, including, without limitation, any debts arising under or out of, in connection with, or in any way relating to, any acts or omissions, obligations, demands, guaranties, rights, contractual commitments, restrictions, product liability claims, environmental liabilities, employee pension or benefit plan claims, retiree healthcare or life insurance claims of the Sellers, and any transferee or successor liability claims, rights or causes of action (whether in law or in equity, under any law, statute, rule or regulation of the United States, any state, territory, or possession thereof or the District of Columbia), whether arising prior to or subsequent to the commencement of these cases, whether known or unknown, and whether imposed by agreement, understanding, law, equity or otherwise.

“Material Adverse Effect” shall mean with respect to the Sellers, the Assets or the Business, as the context requires, any event or occurrence which shall materially affect the business, operations, properties, Assumed Liabilities, as the case may be, taken in each case as a whole; provided that any (a) change in general economic or industry-wide conditions that does not affect the Business disproportionately, (b) change in law or accounting standards or interpretations thereof that is of general application, or (c) adverse effect that is solely the result of the execution or announcement of this Agreement or the transactions contemplated hereby or the consummation thereof, shall not be taken into account for purposes of determining a Material Adverse Effect hereunder.

“Material Contracts” shall mean (a) any Contract requiring payments by the Sellers, or resulting in receipts or disbursements by the Sellers of amounts, in excess of $50,000.00 during the 2015 fiscal year of the Sellers, (b) any Contract that is material to the operation of the Business, (c) all agreements imposing on the Sellers any non-competition or similar obligation, (d) any employment contract or agreement with any current employee of the Sellers, that is currently in effect, in whole or in part, under which the employment of such employee (i) is not “at will” or requires any payment by the Sellers to such employee on termination of employment or a change of control of the Sellers, or (ii) cannot be cancelled by the Sellers without penalty, (e) each contract or agreement with any retired employee, or consulting contract or agreement which in such case cannot be cancelled by the Sellers without penalty or liability and upon not more than sixty (60) days’ notice, or (f) any joint venture Contract or other Contract that has involved or is expected to involve a sharing of profits with other Persons.

“Operating Taxes” shall mean all collected, accrued or assessed real property Taxes, franchise Taxes, personal property Taxes and sales and use Taxes, in each case as of the Closing Date.

“Order” shall mean any writ, judgment, decree, injunction or similar order, writ, ruling, directive or other requirement of any Governmental Entity (in each case whether preliminary or final).


EXECUTION VERSION

37 6313127V.16

“Outstanding Indebtedness” shall mean (a) all debts, liabilities, losses, bank indebtedness, mortgages and guarantees, (b) all other obligations for borrowed money, (c) all obligations evidenced by bonds, debentures, notes, or other similar instruments, (d) all reimbursement or other obligations in respect of letters of credit, bankers’ acceptances, interest rate swaps, or other financial products, (e) all obligations under capital leases (other than the Assumed Real Property Leases), (f) any other obligation guaranteeing or intended to guarantee any obligation or liability, (g) all obligations of the types described in the foregoing (a) through (d) that are secured by a Lien, or (h) interest, fees, fines, pre-payment penalties or other similar payments related to the foregoing (a) through (g).

“Parent” shall have the meaning set forth in the Preamble.

“Party” and “Parties” shall have the meanings set forth in the Preamble.

“Permits” shall have the meaning set forth in Section 4.8(a).

“Permitted Liens” means (i) statutory Liens for Taxes not yet delinquent or the amount or validity of which is being contested in good faith by appropriate proceedings provided an appropriate reserve is established therefor; (ii) zoning, entitlement and other land use and environmental regulations by any Governmental Authority provided that such regulations have not been violated; and (iii) title of a lessor under a capital or operating lease if such lease is an Assumed Contract; provided that, in the case of each of clauses (i) – (iii), none of such items secures any Outstanding Indebtedness or Excluded Liabilities.

“Person” shall mean any individual, corporation, partnership, joint venture, trust, limited liability company, business association, Governmental Entity or other entity.

“Petition Date” shall have the meaning set forth in the Recitals.

“Post-Closing Occupancy Period” shall have the meaning set forth in Section 1.4(g).

“Post-Petition Lease Payables” shall mean all liabilities and obligations under the Assumed Real Property Leases arising or related to the period between the commencement of the Cases and the Closing Date.

“Post-Petition Operating Expenses” shall mean utilities, license fees, office expenses and other similar accounts payable incurred in the ordinary course of business.

“Post-Petition Trade Accounts Payable” shall mean all bona fide trade accounts payable incurred in the ordinary course of business and first arising, and based upon Inventory delivered to the Sellers, between the commencement of the Cases and the Closing Date.

“Proposed Cure Notice” shall have the meaning set forth in Section 11.2(b).

“Purchase Price” shall have the meaning set forth in Section 2.1.


EXECUTION VERSION

38 6313127V.16

“Real Property Leases” shall mean all agreements or documents under which the Sellers claim or hold a leasehold, subleasehold or other interest or right to the use of the Leased Real Property.

“Released Matter” shall have the meaning set forth in Section 2.7(a).

“Releasing Parties” shall have the meaning set forth in Section 2.7(a).

“Remaining Contract” shall have the meaning set forth in Section 1.4(b).

“Remaining Real Property Lease” shall have the meaning set forth in Section 1.4(a).

“Removed Contract” shall have the meaning set forth in Section 1.4(b).

“Removed Real Property Lease” shall have the meaning set forth in Section 1.4(a).

“Representatives” shall have the meaning set forth in Section 6.9.

“Resulting Claim” shall have the meaning set forth in Section 2.7(c).

“Sale Motion” shall have the meaning set forth in Section 11.1.

“Sale Order” shall mean an Order of the Bankruptcy Court entered pursuant to Bankruptcy Code Sections 363 and 365 that (a) is in substantially the form set forth as Exhibit B to this Agreement or otherwise in a form reasonably satisfactory to the Sellers and satisfactory to the Buyer in its sole discretion, (b) approves the sale of the Assets to the Buyer pursuant to the terms of this Agreement and the provisions of the Bankruptcy Code (including Bankruptcy Code Section 363), and (c) approves the Sellers’ assignment of the Assumed Contracts to the Buyer pursuant to Section 365 of the Bankruptcy Code.

“Seller” or “Sellers” shall have the meaning set forth in the Preamble.

“Stores” shall mean the retail book stores that are operated at the leased premises subject to the Real Property Leases.

“Tax” or “Taxes” shall mean (a) all taxes, charges, fees, levies, penalties or other assessments of any kind whatsoever imposed by an federal, state, local or foreign taxing authority, including, but not limited to, income, excise, property, sales, transfer, franchise, payroll, withholding, social security or other taxes, whether computed on a separate or consolidated, unitary or combined basis or in any other manner, including any interest, penalties or additions attributable thereto or (b) liability for the payment of any amounts of the type described in clause (a) above as a result of being a party to any agreement or any express or implied obligation to indemnify or otherwise succeed to the liability of any other Person.

“Tax Code” shall mean the Internal Revenue Code of 1986, as it has been and may be amended.

“Transferred Accounts Receivable” shall have the meaning set forth in Section 1.2(h).


EXECUTION VERSION

39 6313127V.16

“Transferred Employees” shall have the meaning set forth in Section 7.4(a).

“Transferred Equipment and Improvements” shall have the meaning set forth in Section 1.2(c).

“Transferred Intellectual Property” shall mean all of the interest of the Sellers in Intellectual Property.

“Transferred Inventory” shall have the meaning set forth in Section 1.2(f).

“Transferred Stores” shall mean Stores that are operated at leased premises subject to Assumed Real Property Leases.

“Treasury Regulations” shall mean the federal income Tax regulations promulgated under the Tax Code, as amended, including any temporary and proposed regulations.

“WARN Act” shall mean the Worker Adjustment and Retraining Notification Act of 1988, and any similar Applicable Law.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURES PAGES FOLLOW




Schedules to the Asset Purchase Agreement

Final Seller:

Family Christian Holding, LLCFamily Christian, LLCFCS Giftco, LLC

1.3(o) Excluded Assets1.4(f) Estimated Real Property or Contract Cure Costs

2.3(a)(v) iDLLC Obligations4.5 Ownership of Assets4.6 Taxes4.7 Material Contracts4.9 Third Party Approvals4.10 Real Estate Leases4.11a Employee Benefit Plans4.11b Employment Agreements4.11c Employee Listing4.11d Outstanding Employee Plan Payments4.12a Intellectual Property4.12b Licenses - List all licenses that are material to the operation of Business4.13 Insurance6.1 Recipients of Information Requests6.4 New Commitments6.5 Maintenance of Interest7.4b Transferred Employee Liabilities

February 11, 2014


Schedules to the Asset Purchase AgreementFinal

Seller:Family Christian Holding, LLCFamily Christian, LLCFCS Giftco, LLC

1.3(o) Excluded Assets

None

February 11, 2014




1.4(f) Estimated Real Property or Contract Cure Costs

To be delivered 30 days prior to Sale Hearing

February 11, 2014




2.3(a)(v) iDLLC Obligations

Description F15 P11 F15 P12 Total GC Redemp 17,182.80 1,298.86 18,481.66 This amount represents 25% of iD Gift cards purchased at FC store, we owe 100% Gift Cards 11,254.58 $ - 11,254.58 Physical Gift Card Cost - FC pays for 75% of expensePromo Cards 27,705.00 5,575.00 33,280.00 Amount represents 25% of Promo Card sold at FC

Total 56,142.38 6,873.86 63,016.24

February 11, 2014




4.5 Ownership of Assets

A Consignment Inventory located in Stores and Distribution Center

Vendor Consignment VendorsInventory Balance

01/03/15Inventory Balance

1/31/15

60250 Baker 2,438,159 1,890,926 60094 Bridgestone 1,462,353 1,452,486 62665 Christian Arts 1,341,785 1,354,005 62444 David C Cook Communications 937,928 866,738 60599 Barbour 1,008,036 864,920 63113 Pure Flix Entertainment 714,036 735,249 62430 DS Consignment (Dayspring) 717,342 716,580 62667 Kerusso 579,818 574,523 61512 Hendrickson 670,668 570,318 64200 Strang 633,867 562,359 62639 Word Ent Trax 596,722 532,769 60607 Oasis 519,854 515,723 59782 Destiny Image 487,095 501,452 59751 Howard Pub / Simon & Schuster 1,411,524 450,610 59379 Daywind 475,643 428,082 61730 Kregel 494,491 403,122 59655 Rose Publishing 263,645 367,933 61519 Praise Hymn 431,717 324,256 60608 Vision Video 303,988 314,796 63590 EMI Consignment 140,811 261,633 60600 Cactus Game 218,876 212,516 62386 Wet Cement 223,711 200,942 63264 Echolight Studios 133,267 200,334 62070 Christiano Film 195,501 192,787 61318 Questar 188,702 186,996 63114 Abingdon Press 212,763 175,831 62994 Developmental Solutions Global 171,173 165,554 62054 Crown Video 185,110 161,718 62979 Heartfelt 146,311 155,175 61600 IVP 168,229 148,161 60020 AMG 151,259 147,925 63294 Rullingnet 142,692 142,586

February 11, 2014








1/31/15

February 11, 2014

63106 Rhythm USA 124,262 140,213 63225 WHITAKER CONSIGNMENT 145,656 132,272 60329 Eagle/Harr.Hse 125,406 130,143 62042 CNIC 128,761 129,733 62958 Catholic Book Publishing 113,392 127,300 62996 Central South 123,461 122,731 62981 Dexsa 107,264 120,062 62982 Eagle Wings Consignment 98,035 118,573 63213 Kingstone Media 110,859 115,659 59271 New Leaf 133,654 111,206 63464 iDisciple 115,414 109,683 63042 Brownlow Gifts 96,732 109,549 62873 Send the Light 109,767 105,667 62077 Wescott Mktg 105,522 105,557 63237 Wee Believers 105,752 105,453 63072 Swanson 117,441 104,069 63164 Talicor 106,389 103,995 63387 My Healthy Church 84,793 96,500 63217 Angelstar Inspired Products 99,631 95,495 61561 Universal 102,197 95,042 63007 Mt Rushmore Gold 85,636 92,219 63413 IMI 91,099 90,945 62777 The GoBible 92,543 89,566 61872 GT Luscombe 94,710 85,534 63430 Broadstreet Publishing 80,043 77,012 63144 Casscom Media 128,665 75,684 59808 Associated Publishers Group 74,251 74,633 62932 Koch 83,117 73,328 62703 Left Behind Games 71,223 70,550 63280 Reformation Herigate Books 68,411 69,792 62955 Garden Fire 71,219 68,536 59896 Foundation 68,499 66,202








1/31/15

February 11, 2014

63418 CMD Distribution 61,248 63,433 63320 City On A Hill Studio 71,448 61,628 61580 Ideals 202,086 57,130 59461 Rainbow Pub 57,013 53,781 62903 Outreach 52,010 48,775 62114 Leafwood Publishers 55,462 48,385 61348 Legacy 60,997 41,979 62861 Anchor Distributors 48,493 40,894 63397 Green Egg Media 33,792 40,656 62889 DRC Films 40,386 40,541 60824 Weslyan Publishing 38,704 38,905 62668 Red Letter 9 38,236 38,631 61058 Wm B Eerdmans 55,909 37,760 63117 Legacy Publishing Group Consign 38,794 34,489 59116 Bridge/Logos 35,060 33,668 60698 Jostom 30,666 29,887 63085 Isaac Entertainment 29,270 29,011 61516 Gale Group 53,157 27,683 63342 Parables HD, LLC 27,975 26,130 59472 iExalt/WORDSearch 24,572 24,625 62534 Nest Family LLC. 24,784 24,038 63267 Artbeat of America 27,220 24,034 61800 Beacon Hill 48,292 23,604 62937 Bardin & Marsee Publishing 21,831 22,495 61690 Judson Press 19,556 21,131 63442 Nicole Brayden 19,234 18,875 60630 CLC (Christian Lit Crusade) 23,419 17,959 63389 Catholic Word Pulbishing 12,372 12,345 59185 Biblesoft 12,035 12,167 63046 Blueprint 11,536 11,240 62724 Faith Alive 11,791 10,880 62420 P&R Publishing 8,988 9,207








1/31/15

February 11, 2014

62653 Total Content 9,092 8,920 62945 People of Color (Urban Spirit) 8,302 8,058 60901 ABS 7,731 7,994 63084 Music Creative 8,207 7,977 63082 Slingshot Publishing 7,816 7,925 62629 Tate 7,843 7,748 63432 Shades of Color 9,044 7,658 63127 Randall House 6,819 6,775 62854 3:16 Media & Ent 6,518 6,408 62661 Junkyard Distrib 6,291 6,222 62798 Gold Crest LLC 6,269 5,842 63440 Revelation Products 6,128 5,801 62082 Cross Staff 5,438 5,340 61211 Walk onWater 5,929 5,313 60853 ChristianWorld 5,336 5,294 63090 Tier Toys 5,220 5,120 62631 Triumph Mktg Spck Pjk. 5,074 5,032 59229 Wisdom Tree 4,928 4,886 60247 Fundex 4,408 4,329 61108 Ambassador 4,368 4,109 59508 Parish Service Company 4,369 4,038 62196 New Life Ent 3,940 3,903 63392 Brightpeack Financial 3,727 3,727 63317 Allegro Music Group 17,001 3,671 62604 RGR Inspirationals 3,671 3,644 62310 Fancy Monkey 2,809 2,805 63132 Exclaim 2,735 2,613 62368 Waterfront Ent 2,464 2,412 59087 CSS 2,350 2,355 59451 Alpha Omega Publ 2,260 2,253 62946 Tolle Lege 2,291 2,221 61203 Evangel 1,767 1,754








1/31/15

February 11, 2014

63019 Watercolor 1,754 1,733 62676 Mission City 1,740 1,722 62821 Sampson Resources 1,467 1,467 63292 Fuseic Music Company 1,440 1,410 63134 Red Cloud 1,238 1,238 63453 Crossroads Christian 1,083 61971 His Kids 930 907 62949 Living Water Ministries 856 850 62980 WisenQuest 846 846 63399 Salem Communications 837 819 62680 Donruss 770 751 62844 Winning in Life 696 696 59877 Majestic Media 619 695 61988 Legacy 707 691 62850 Power Publishing 664 664 62049 Entert.Ministry 661 661 60586 Cumberland House 603 601 63228 Mudlark 656 596 62084 McRuffy Pr. 596 596 62900 Eternal Pictures 536 536 62628 Ampelon 530 530 62684 Advantage Books 516 516 60174 Cloud Ten 526 511 62195 Blue Sky 521 499 61534 INSP 436 436 63265 Kevin Downes Productions 416 408 62824 Vision Forum 374 374 62625 Atlas Books 351 351 62792 New Growth Press 390 345 59209 CDI 284 284 59188 Rhinosoft 317 279 63012 Crossway Books & Bibles 246 246








1/31/15

February 11, 2014

61925 Madacy 243 234 63006 Aurex J.T. Healy 229 220 61791 Trib. Force 164 162 63053 Jack Dennis 120 120 62259 Visual Bible 112 112 61873 Betty Lukens 89 89 62926 Living Waters 87 87 62043 Lawson Falle 81 77 62610 Legends Ranch 60 60 62225 Cathedral Record 59 59 60979 Galilee 34 34 62954 413 Strength Gear 32 32 63052 God is Good 28 28 66341 Watercolor 15 15 62331 21st Century Press (43) 5 60458 Findex 37 - 66334 Steelroots - - 62191 Navpress (3) (3) 62976 Tyndale 48,524 (2,085)

22,579,760 20,202,612




4.6 Taxes

Shipping & Handling charges on Internet Sales into the State of Illinois-

February 11, 2014

Illinois False Claims Act Complaint - State of Illinois ex rel . Stephen B. Diamond, P.C. (Plaintiff), vs. Family Christian, LLC, A Georgia limited liability company (Defendant)




4.7 Material Contracts

V Num CONTRACT / AMENDMENTDATE OF

CONTRACT TERM RENEWAL OPTION NOTICE (60-90 days)94729 UPS Addendum K to Carrier Agreement 8/10/2013 4 Years 30 day written notice94499 Fry Communications Catalog Printing Contract 5/1/2014 3 year mn-to-mn 90 days written notice

94195 CardFact LTD95782 Facility Source, Inc. Services Agreement 7/28/2006 2 mns-pilot/3 Yrs 3 Years term w/90 days notice

98295 Cybera, Inc. 9/26/2008 2 years yes 30 days written notice

92097 E. Besler & Co. Customs Power of Attry 1/25/2013 2 Years N/A98207 Office Max Sales Agreement 1/1/2012 2 Years Yes-1 Yr. 30 day written notice94284 Aon Risk Services Engagement Ltr 4/15/2014 1 Year 1 yr periods 90 days written notice

93580 Foremost Communications Serv Agr 4/1/2013 1 Year mn-to-mn 30 day written notice

91368 Delta Dental Authorization Agreement 1/1/2014 3 Years N/ALiberty Mutual (Life, STD, LTD, EAP) 1/1/2015

97775 CDW Direct, LLC SOW 12/4/2012 until completed N/A 14 days written notice

93573 UPS Addendum J to Carrier Agreement 8/12/201391734 Integra Printing 1/25/2008 2 Year 1 Year90190 Crowe Horwath Ltr Agr-Audit Services 5/2/2013 3 Years N/A95093 GE Fleet Services (Vehicle Lease) 11/14/201296909 Contract Datascan Second Amendment 1/1/2014 2 Years94390 WilandDirect Database Agr 8/5/2013 Ongoing N/A 30 days written notice

91971 US Signal Internet Access Service Agr 5/30/2013 3 year mn-to-mn 30 days written notice

93924 AppleCustomer Agr & Credit Application 6/12/2013 8 months 12 mns cons. 90 days written notice

95205 Impact Business Group Ltr Agr 9/26/2012 3 months N/A 5 day written notice94560 Resurgence Financial Services Ltr Agr 10/8/2014 ongoing N/A

SPS CommerceNexcess

World Vision, Inc.-Letter Agreement 2/3/2013 2 yrs. 7 mns. No 30 days written notice

iDisciple Joint Promo, Mktg & Merch Agr 2/2/2014 4 years N/A 90 days written notice

With Reference to:Real Estate Leases identified in 4.10Employee Benefit Plans identified in 4.11(a)Employment Agreements identified in 4.11(b)All Licenses identified in 4.12(b)All Insurance Policies identified in 4.14

February 11, 2014




4.7 Material Contracts - Consignment Vendors

V# Ven # Addr1 Addr2 City St Zip

62665 CHRISTIAN ART GIFTS - CONSIGNMENT 359 LONGVIEW DR - BLOOMINGDALE IL 6010863113 PURE FLIX ENTERTAINMENT 15300 N 90TH ST STE 900 SCOTTSDALE AZ 8526062430 DS CONSIGNMENT 21154 HIGHWAY 16 EAST - SILOAM SPRINGS AR 7276160250 BAKER BOOK HOUSE-CONSIGNMENT ATTN: BILL SHADY 6030 E FULTON ADA MI 49301-628760599 BARBOUR PUBLISHING INC PO BOX 719 - UHRICHSVILLE OH 4468362444 DAVID C COOK - CONSIGNED ATTN: ACCOUNTS RECEIVABLE DEPT 4050 LEE VANCE RD COLORADO SPRINGS CO 8091862667 KERUSSO INC - CONSIGNMENT 402 HWY 62 SPUR - BERRYVILLE AR 7261660094 BRIDGESTONE GROUP/ALPHA OMEGA 810 N 2ND AVE E - ROCK RAPIDS IA 5124661512 HENDRICKSON PUBL ATTN: KRIS ORLANDO 137 SUMMIT ST PEABODY MA 196059751 SIMON & SCHUSTER 100 FRONT ST - RIVERSIDE NJ 807564200 CHARISMA HOUSE 600 RINEHART RD - LAKE MARY FL 3274661730 KREGEL PUBLICATIONS ATTN: DAVID HILL 2450 OAK INDUSTRIAL DR NE GRAND RAPIDS MI 49505-602062639 WORD ENTERTAINMENT - CONSIGNMENT ATTN: COLLEEN CARSON 25 MUSIC SQUARE WEST NASHVILLE TN 3720359782 DESTINY IMAGE INC PO BOX 310 167 WALNUT BOTTOM RD SHIPPENSBURG PA 17257031059379 DAYWIND ATTN: JERE MILLER 126 SHIVEL DR HENDERSONVILLE TN 3707563072 SWANSON - CONSIGNMENT 1200 PARK AVE - MURFREESBORO TN 3712960607 OASIS AUDIO LLC 34041 EAGLE WAY - CHICAGO IL 60678134059655 ROSE PUBLISHING 4733 TORRANCE BLVD #259 - TORRANCE CA 90503411061519 PRAISE HYMN MUSIC GROUP/PROVIDENT 741 COOL SPRINGS BLVD - FRANKLIN TN 3706761580 IDEALS PUBLICATIONS- GUIDEPOSTS CO ATTN: DEBBIE FELT 2630 ELM HILL PIKE - STE 100 NASHVILLE TN 3721463042 BROWNLOW GIFTS CONSIGNMENT 6309 AIRPORT FREEWAY - FORT WORTH TX 7611761872 G.T. LUSCOMBE CO INC - CONSIGNMENT 106 KANSAS ST PO BOX 722 FRANKFORT IL 6042363069 COTTAGE GARDEN INC - CONSIGNMENT 7796 NORTH CR 100 EAST - BAINBRIDGE IN 4610562981 DEXSA CONSIGNMENT 1501 LIVINGSTONE RD PO BOX 109 HUDSON WI 5401661561 UNIVERSAL DESIGNS INC CONSIGNMENT 855 WEST NEW YORK AVE - DELAND FL 3272060608 VISION VIDEO 2030 WENTZ CHURCH RD ATTN: DENISE WORCESTER PA 1949063225 WHITAKER CONSIGNMENT 1030 HUNT VALLEY CIRCLE - NEW KENSINGTON PA 15068-707560329 HARRISON HOUSE ATTN ACCOUNTING 2761 E SKELLY DR STE 703 TULSA OK 7410562994 DEVELOPMENT SOLUTIONS GLOBAL INC 256 EAGLEVIEW BLVD STE 303 EXTON PA 1934162979 CHRISTIAN BRANDS CONSIGNMENT 1013 VETERANS DR - LEWISBURG TN 3709163106 RHYTHM USA INC - CONSIGNMENT 8601 DUNWOODY PLACE SUITE 150 ATLANTA GA 3035059896 FOUNDATION PUBLICATIONS INC 900 S EUCLID ST - LA HABRA CA 9063162982 EAGLES WINGS CONSIGNMENT 2101 OLD HICKORY TREE ROAD - ST CLOUD FL 3477260020 AMG PUBLISHERS ATTN: DALE ANDERSON 6815 SHALLOWFORD RD CHATTANOOGA TN 37421175563590 CAPITOL CHRISTIAN DIST CONSIGN PO BOX 88980 - CHICAGO IL 606951980

February 11, 2014




4.7 Material Contracts - Consignment Vendors

V# Ven # Addr1 Addr2 City St Zip

February 11, 2014

62054 CROWN ENTERTAINMENT 15397 117TH AVENUE - EDMONTON AB T5M 3X463114 ABINGDON - CONSIGNMENT 201 EIGHTH AVE SOUTH - NASHVILLE TN 3720262958 CATHOLIC BOOK PUBLISHING - CONSIGN 77 WEST END ROAD - TOTOWA NJ 751260600 CACTUS GAME DESIGN INC 751 TUSQUITTEE ST - HAYESVILLE NC 2890462070 CHRISTIANO FILM GROUP INC PO BOX 553 - LAKE FOREST CA 92609-055363264 ECHOLIGHT STUDIOS 1200 LAKESIDE PARKWAY BUILDING 1 FLOWER MOUND TX 7502862077 WESSCOTT MARKETING INC 7900 EXCELSIOR BLVD 110.00 HOPKINS MN 5534361600 INTER VARSITY PRESS 430 E PLAZA DR - WESTMONT IL 6055962386 RISING STAR STUDIOS 5251 W 73RD ST SUITE C EDINA MN 5543961318 QUESTAR INC 307 N MICHIGAN AVENUE 5TH FLOOR SUITE 500 CHICAGO IL 6060162191 NAVPRESS 3820 N 30TH ST - COLORADO SPRINGS CO 8090462932 E1 ENTERTAINMENT CONSIGNMENT 22 HARBOR PARK DR - PORT WASHINGTON NY 1105062042 CNIC-CHRISTIAN NETWORK % INTERNATIONAL CONSIGNMENT 5584 MT VIEW RD ANTIOCH TN 3701362955 GARDENFIRE CONSIGNMENT 822 W ENTERPRISE LN - NIXA MO 6571459271 NEW LEAF PRESS AND MASTER BOOKS PO BOX 726 - GREEN FOREST AR 7263861348 LEGACY PRESS O BOX 261129 - SAN DIEGO CA 9219663217 ANGELSTAR INSPIRED PRODUCTS CONSIGN 195 MAST ST #100 - MORGAN HILL CA 95037




4.9 Third Party Approvals

None

February 11, 2014




4.10 Real Estate Leases

NAME OF CTR STORE ADDRESS STORE CITY STORE STATE STORE ZIPCENTRAL PARK 701 N GREEN RIVER RD EVANSVILLE IN 47715-2477SPEEDWAY VILLAGE 2286 W INTERNATIONAL SPEEDWDAYTONA BEACH FL 32114-1124Hammock Landing 205 Palm Bay Rd. Suite 137 West Melbourne FL 32904Orland Park Retail Center 15121 S La Grange Road ORLAND PARK IL 60462-3708SHOPKO PLAZA SHOPPING CTR 8085 FAIRVIEW AVE BOISE ID 83704-8424GENESEE CROSSING SHOPPING CENTERG3577 MILLER RD STE 5 FLINT MI 48507-1272

2820C S HIGHLAND AVE LOMBARD IL 60148-7140FAMILY GALLERIA AT WESTSHORE 3155 WESTSHORE DR HOLLAND MI 49424-7509FOX RIVER COMMONS SHOPPING CENTE 936 S STATE RTE 59 NAPERVILLE IL 60540-9530THE GALLERIA 1848 GALLERIA BLVD STE B CHARLOTTE NC 28270-2476UNNAMED CENTER 120 BYRON AVE ALTOONA PA 16602-4106North Point Market Center 6350 N Point Pkwy Ste 610 ALPHARETTA GA 30022-3009MAIN STREET AT TOWN CENTER 440 EARNEST W BARRETT PARKKENNESAW GA 30144-4918HOLIDAY CENTER 3747 WILLIAM PENN HWY SPACEMONROEVILLE PA 15146-2125SATELLITE SHOPS II 3330 SATELLITE BLVD DULUTH GA 30096-8600REX CENTRE 2742 N FAIRFIELD RD BEAVERCREEK OH 45431-1779ALPINE SUMMIT 3165 Alpine Ave NW GRAND RAPIDS MI 49544FAYETTE PLACE SHOPPING CENTER 127 W TIVERTON WAY STE 128 LEXINGTON KY 40503-4488FASHION SQUARE WEST 4721 BAY RD SAGINAW MI 48604-2527Greenery Mall 7710 N Kendall Dr MIAMI FL 33156-7523ERSKINE VILLAGE SHOPPING CENTER 1290 E IRELAND ROAD STE 500 SOUTH BEND IN 46614-3462LAKEVIEW SHOPPING CENTER 204 LAKEVIEW CENTER STE 9 PARKERSBURG WV 26101-1053PRINCETON CLUB COURT 1746 EAGAN RD MADISON WI 53704-3748PRESTIGE PLAZA 1 PRESTIGE PLAZA MIAMISBURG OH 45342-3767LIBERTY PLAZA 4559 LINCOLN HWY MATTESON IL 60443-2318NORTH COUNTY FESTIVAL 10807 W FLORISSANT AVE ST LOUIS MO 63136-2405BARTLETT TOWNE CENTER 6025 STAGE RD STE 36 BARTLETT TN 38134-8313CLINTON VALLEY SHOPPING CTR 44943 SCHOENHERR RD STERLING HEIGHTS MI 48313-1141MERRILLVILLE PLAZA 1932 EAST 80TH MERRILLVILLE IN 46410-5735

February 11, 2014





NAME OF CTR STORE ADDRESS STORE CITY STORE STATE STORE ZIP

February 11, 2014

3120 28TH ST SE STE B GRAND RAPIDS MI 49512-16293727 S BOLGER RD INDEPENDENCE MO 64055-3971

STRATFORD RIDGE SHOPPING CENTER 1608 S STRATFORD RD STE 612BWINSTON-SALEM NC 27103-2924CHESTERFIELD COMMONS EAST 74 THF Blvd CHESTERFIELD MO 63005-1150

6243 UNIVERSITY DR NW HUNTSVILLE AL 35806-1700SANDHILL STATION 715 FASHION DR STE 6 COLUMBIA SC 29229MICHAEL'S AURORA PLAZA 15241 E MISSISSIPPI AVE #2531 AURORA CO 80012-3747THE FESTIVAL ON JEFFERSON CT 4649 OUTER LOOP LOUISVILLE KY 40219-3970CHERRY TREE PLAZA 9985 E WASHINGTON ST INDIANAPOLIS IN 46229-3039EASTGATE MALL CROSSING 4530 EASTGATE BLVD CINCINNATI OH 45245-1256OLYMPIA SQUARE SHOPPING CENTER 3315 PACIFIC AVE SE STE B2 OLYMPIA WA 98501-2171VILLAGE AT JORDAN CREEK 7105 MILLS CIVIC PKWY STE 160 WEST DES MOINES IA 50266-8023DEER PLAZA 3930 38TH AVE MOLINE IL 61265-6471CENTURY SQUARE 2365 MOUNTAIN VIEW DR WEST MIFFLIN PA 15122-2435Central Texas Marketplace 2704 W Loop 340, Suite D10 WACO TX 76711COLDWATER CROSSING CENTER 5509 COLDWATER RD FORT WAYNE IN 46825-5448CENTRAL PARK 1879 Carl D Silver Pkwy FREDERICKSBURG VA 22401-4969TOWNE MALL 3461 TOWNE BLVD FRANKLIN OH 45005-5530HUNTINGTON MALL Huntington Mall Unit 405 BARBOURSVILLE WV 25504-1828GREENWOOD COURTYARD 2425 SCOTTSVILLE RD STE 100 BOWLING GREEN KY 42104-4457NORTHTOWN SHOPPING CENTER 102 E KIMBERLY RD DAVENPORT IA 52806-5922

7165 N Academy Blvd COLORADO SPRINGS CO 80920-3186KILLEEN SATELLITE CENTER 1801 E CENTRAL TEXAS EXPY KILLEEN TX 76543-5347PALM SPRINGS SHOPPING CENTER 515 E ALTAMONTE DR STE 7 ALTAMONTE SPRINGS FL 32701-4732OLD COUNTRY PLAZA 4365 STARKEY RD #5&6 ROANOKE VA 24014-2810

5116 196TH ST STE 203ES LYNNWOOD WA 98036-6148CROWN CENTER 811 SE EVERETT MALL WAY EVERETT WA 98208-3736JOLLY-CEDAR PLAZA 5132 S CEDAR ST LANSING MI 48911-3801FAIR OAKS MALL 11749U FAIR OAKS MALL STE J20FAIRFAX VA 22033-3303






February 11, 2014

THE SHOPPES AT WOODRUFF 1451 Woodruff Rd #20 GREENVILLE SC 29607-5781THE TOWNE CENTER AT BROOKHILL 6925 W 88TH AVE BROOMFIELD CO 80021-6483MONTGOMERY VILLAGE SHOPPING CENT18302 CONTOUR RD UNIT 3 GAITHERSBURG MD 20877-2614Washington Crossing 2907 WASHINGTON ROAD AUGUSTA GA 30909THE SHOPS AT NORTHGATE 1720 GUESS RD #85 DURHAM NC 27701-1165WEST OAKS II 43520 WEST OAKS DR NOVI MI 48377-3302CORDOVA PLACE 1520 AIRPORT BLVD STE#2 PENSACOLA FL 32504-8735Millenia Plaza 4644 Millenia Plaza Way Orlando FL 32839MALL ROAD SHOPPES OF FLORENCE 7901 MALL RD FLORENCE KY 41042-1409THE SHOPS AT BOARDMAN PARK 463 BOARDMAN-POLAND ROAD BOARDMAN TWP OH 44512CHESAPEAKE SQUARE MALL 4200 PORTSMOUTH BLVD CHESAPEAKE VA 23321-2135Lakeland Commons 344 Ridge Way FLOWOOD MS 39232-3306CHESTERFIELD TOWNE CENTER 11500 MIDLOTHIAN TURNPIKE RICHMOND VA 23235-4761ROBINSON TOWN CENTRE 1120 PARK MANOR STE 102 PITTSBURGH PA 15205-4801NORTHWOODS MALL 2150 NORTHWOODS BLVD NORTH CHARLESTON SC 29406-4006NORTHGATE MALL 9577 COLERAIN AVE STE 220 CINCINNATI OH 45251-2005NORTHWEST FASHION SQUARE 8653 W BROWN DEER RD MILWAUKEE WI 53224-2114CROWN PLAZA SHOPPING CENTER 461 US ROUTE 46 FAIRFIELD NJ 07004-1911THE SAVANNAH MALL 14045 ABERCORN ST STE 34 SAVANNAH GA 31419-1960PORTSMOUTH STATION SHOP CENTER 10404 PORTSMOUTH RD MANASSAS VA 20109-8032MARC'S/BED, BATH & BEYOND PLAZA 449 MIDWAY BLVD ELYRIA OH 44035-2440Louis Joliet Mall 3340 Mall Loop Drive, No. 1154 JOLIET IL 60431CROSSROADS PLAZA SHOPPING CENTER301 CROSSROADS BLVD CARY NC 27518-6894SOUTHSIDE SQUARE SHOPPING CENTER 9041 SOUTHSIDE BLVD STE 138AJACKSONVILLE FL 32256-6741ACADIANA MALL 103 ACADIANA MALL CIR LAFAYETTE LA 70503-5326PANAMA CITY MALL 2256 MARTIN LUTHER KING JR B PANAMA CITY FL 32405-5321HARBISON SHOPPING CENTER 275 HARBISON BLVD STE B COLUMBIA SC 29212-2222ST. CHARLES TOWNE CENTER 11110 MALL CIRCLE #1025 WALDORF MD 20603-6054THE VILLAGE CENTRE 550 E 162ND ST SOUTH HOLLAND IL 60473-2392






February 11, 2014

STONE MOUNTAIN SQUARE SC 5370 STONE MTN HWY STE 1120 STONE MOUNTAIN GA 30087-3575MERIDIAN TOWN CENTER 4926 MARSH RD OKEMOS MI 48864-1153THE SHOPPES AT RIVERGATE 2162 N GALLATIN RD MADISON TN 37115-2204GREELEY MALL 1936 GREELEY MALL GREELEY CO 80631-8520Keystone Plaza 13601 Biscayne Blvd MIAMI FL 33181-1649

3560 MERIDIAN ST #101 BELLINGHAM WA 98225-1731FAIRWAY CENTER 1712 FRONT ST LYNDEN WA 98264-2101TOTEM LAKE SHOPPING CENTER 12602 TOTEM LAKE BLVD KIRKLAND WA 98034-7206PIEDMONT MALL 325 PIEDMONT DR DANVILLE VA 24540-4028PLAINFIELD COMMONS III 401 PLAINFIELD COMMONS DR PLAINFIELD IN 46168-2761HEIGHTS PLAZA SHOPPING CENTER 1848 UNION AVE NATRONA HEIGHTS PA 15065-2201SCOTT PLAZA 5203 CORTEZ RD W BRADENTON FL 34210-3148WESTNEDGE CORNERS SHOPPING CTR 4413 S WESTNEDGE AVE KALAMAZOO MI 49008-3209PECANLAND VILLAGE SC 4709 PECANLAND MALL DR MONROE LA 71203-7005

2804 MITCHELL ST GREENVILLE TX 75402-8939HOLIDAY VILLAGE MALL 1200 10TH AVE S GREAT FALLS MT 59405-4413RIVER BEND MARKETPLACE 129 Bleachery Blvd Ste 1 ASHEVILLE NC 28805-8209THE FAMILY CENTER 1230 S DECATUR BLVD LAS VEGAS NV 89102-8502SPRING CREEK CENTRE 637 EAST JOYCE BLVD FAYETTEVILLE AR 72703-6189CHARLESTON TOWN CENTER 2116 CHARLESTON TOWN CENT CHARLESTON WV 25389-0007EASTGATE SHOPPING CENTER 9801 GATEWAY BLVD W EL PASO TX 79925-7513Destination 08 Center 40038 10th St. W Palmdale CA 93551-3008SANTA FE SQUARE SHOPPING CENTER 3950 E 42ND ST ODESSA TX 79762-5940

815 SE 3RD ST BEND OR 97702-1750Canton Marketplace 4534 S Scatterfield Road ANDERSON IN 46013-2904

1980 W FOOTHILL BLVD UPLAND CA 91786-8407PAVILLIONS SHOPPING CENTER 31835 PACIFIC HWY S STE A FEDERAL WAY WA 98003-5643BRIDGER PEAKS TOWN CENTER 1707 OAK ST STE A BOZEMAN MT 59715-2125SPRINGFIELD COMMONS 1400 S HOLLAND-SYLVANIA RD HOLLAND OH 43528-9594






February 11, 2014

CORNERS SHOPPING CENTER 4015 SECOR RD TOLEDO OH 43623-426315821 INTERSTATE 10 E CHANNELVIEW TX 77530-43092525 N MAYFAIR RD STE 201 WAUWATOSA WI 53226-1403

BALDWIN COMMONS 4826 S BALDWIN RD LAKE ORION MI 48359-2115OAK MALL PLAZA 6747 W NEWBERRY RD GAINESVILLE FL 32605-4312ROUND ROCK CROSSING 3021 S IH 35, SUITE 150 ROUND ROCK TX 78664THE SHOPPES AT PARK PLACE 7348 US HWY 19 NORTH PINELLAS PARK FL 33781-4600WEST ACRES SHOPPING CENTER 3902 13TH AVE SW STE 713 FARGO ND 58103-3370PALOMAR TROLLEY SHOPPING CENTER 610 PALOMAR STE 1501 CHULA VISTA CA 91911-7134SANTEE TOWN CENTER PROMENADE 214 TOWN CENTER PARKWAY SANTEE CA 92071-5803WESTBROOK SQUARE 662 DAWSONVILLE HWY GAINESVILLE GA 30501-2612TRI-CITY MALL 184 ALLENDALE DR FOREST CITY NC 28043-2874SAN JUAN VILLAGE SC 3030 E MAIN ST STE G1 FARMINGTON NM 87402-7639BIRCH GROVE PLAZA 4351 24TH AVE STE 5 FORT GRATIOT MI 48059-3907PRESCOTT VALLEY CENTER 3088 N GLASSFORD HILL STE 102PRESCOTT VALLEY AZ 86314-1246WATERFORD PARK SOUTH 1020 VETERANS PKWY STE 700 CLARKSVILLE IN 47129-2390POMPANO MARKETPLACE 1161 S FEDERAL HWY POMPANO BEACH FL 33062-7066MINGES BROOK MALL 5700 BECKLEY RD STE B2 BATTLE CREEK MI 49015-4184

23380 Eureka Rd TAYLOR MI 48180-5215NEW TOWNE PLAZA 44412 FORD RD CANTON MI 48187-2942COMP USA PAD 300 N SUNRISE AVE STE 100 ROSEVILLE CA 95661-2806AVENUE SHOPS 2790 SANTA ROSA AVE STE G SANTA ROSA CA 95407-6211CHICO MALL 1950 EAST 20TH ST CHICO CA 95928VACAVILLE COMMONS SHOP CTR 2041A HARBISON DR VACAVILLE CA 95687-3904CONCORD MALL SHOPPING CENTER 3701 S MAIN ST ELKHART IN 46517-3106GRAPE & DAY PLAZA 4110 GRAPE RD STE A MISHAWAKA IN 46545-2610PARKWAY POINTE SHOPPING CENTER 3435 FREEDOM DR SPRINGFIELD IL 62704-6517MARKETPLACE ON FIRST 4701 FIRST AVE SE STE 10 CEDAR RAPIDS IA 52402-3211RANCHO SAN DIEGO TOWN & COUNTRY C2518 JAMACHA RD, SUITE 301 EL CAJON CA 92019-3201






February 11, 2014

TRAIL CREEK CROSSING SHOPPING CENT1310 E BIDWELL STREET FOLSOM CA 95630-3524CANTON MARKETPLACE 1810 CUMMING HWY STE 1380 CANTON GA 30114-8606FAYETTE PAVILION 119 PAVILLION PKWY STE C FAYETTEVILLE GA 30214-4098

2019 CROSSROADS BLVD WATERLOO IA 50702-4403BOYNTON TOWN CTR 1100 N CONGRESS AVE STE 130 BOYNTON BEACH FL 33426-3335APPLEWOOD SHOPPING CENTER 225 APPLEWOOD CENTER PLAC SENECA SC 29678-0917Valencia Marketplace 25860 The Old Road STEVENSON RANCH CA 91381

4301 W WILLIAMSBURG BLVD MUNCIE IN 47304-5523CARILLON PLACE 5042 AIRPORT PULLING RD N NAPLES FL 34105-2407WHITNEY RANCH CENTER 657 N STEPHANIE ST HENDERSON NV 89014-2634CENTRAL COURT SHOPPING CENTER 5250 PHILADELPHIA ST STE N CHINO CA 91710-2483CITADEL CROSSING SHOPPING CENTER 687 N ACADEMY BLVD COLORADO SPRINGS CO 80909-8304PLEASANT RUN TOWNE CROSSING 707 N HIGHWAY 67 STE 170 CEDAR HILL TX 75104-2177COLLIN CREEK SC 601 W PLANO PKWY #153 PLANO TX 75075-8968SUNSET VALLEY MARKETFAIR 5400 BRODIE LN STE 740 SUNSET VALLEY TX 78745-2526BROOKWOOD SQUARE SHOPPING CENTE3999 AUSTELL RD STE 407 AUSTELL GA 30106-1100SUNSET PLAZA 4112 SUNSET DR SAN ANGELO TX 76904-5614THE MARKETPLACE 1821 E VENTURA BLVD OXNARD CA 93036-1819TOWN CENTER LAKESIDE 1959 LAKESIDE PLAZA DR SUGAR LAND TX 77479-4226THORNTON TOWN CENTER 9927 GRANT ST THORNTON CO 80229-2157Humblewood Shopping Center 10008 FM 1960 Bypass Rd 2 HUMBLE TX 77338-3516SYCAMORE VILLAGE 2986 COCHRAN ST SIMI VALLEY CA 93065-2773CLEARWATER MALL 2613 GULF TO BAY BLVD STE 165CLEARWATER FL 33759-4939COLORADO MILLS 14500 W Colfax Avenue Unit 474 LAKEWOOD CO 80401-3246ESCONDIDO TOWN & COUNTRY SHOPPIN1356 W VALLEY PKWY STE A13 ESCONDIDO CA 92029-2138REGENCY SQUARE SHOPPING CENTER 2454 W BRANDON BLVD BRANDON FL 33511-4717La Quinta Shops 78920 Highway 111 La Quinta CA 92253North Mountain Village 3401 W Thunderbird Rd Phoenix AZ 85053-5602STONEGATE PLAZA SHOPPING CENTER 111 HYDE PARK BLVD STE 300 CLEBURNE TX 76033-4582






February 11, 2014

PEOPLES PLAZA 600 PEOPLES PLAZA NEWARK DE 19702-56001400A W COLLEGE AVE APPLETON WI 54914-4951

KINGS PLAZA CENTER 2916 LONDON RD EAU CLAIRE WI 54701RIVERTOWN CENTER 3819 RIVERTOWN PKWY SW STEGRANDVILLE MI 49418-3071OLIVER CREEK CROSSING 6507 ATLANTA HWY MONTGOMERY AL 36117-4226UNNAMED CENTER 4314 VIRGINIA BEACH BLVD VIRGINIA BEACH VA 23452EDGEWOOD SHOPPING CTR 5308 S 56TH ST STE A LINCOLN NE 68516-1833CROSSROADS AT TOLLESON 9897 W McDowell Rd Ste 310 TOLLESON AZ 85353MENTOR CITY CENTER 7633 MENTOR AVE MENTOR OH 44060-5409

104 E MAIN CLINTON NC 28328-4029DOUGLAS PAVILION 2838 CHAPEL HILL RD DOUGLASVILLE GA 30135-1706SHOPPES OF THE ACORN 5541 SUNSET BLVD LEXINGTON SC 29072-1962ORCHARD CORNERS SHOPPING CENTER 9580 QUIVIRA RD LENEXA KS 66215-1670SOUTH LAKE CENTRE 125 GOODMAN RD W, STE D SOUTHAVEN MS 38671-9481COLONIAL PROMENADE 5899 TRUSSVILLE CROSS PKWY BIRMINGHAM AL 35235-8613HIGHLAND AVENUE PLAZA, LLC 4060 HIGHLAND AVE STE B HIGHLAND CA 92346-2637WESTWOOD PLAZA SHOPPING CENTER 7765 AIRPORT BLVD STE 410 MOBILE AL 36608-5036QUINTARD MALL 700 S QUINTARD DR STE 54 OXFORD AL 36203-1855NORTH COUNTY PLAZA 1842 MARRON RD STE G CARLSBAD CA 92008-1172ALANO PLAZA 2300 NORTH RAINBOW BLVD #11LAS VEGAS NV 89108-7350MISSION HILLS PLAZA 10340 SEPULVEDA BLVD MISSION HILLS CA 91345-2422

1422 W BROAD AVE ALBANY GA 31707-4346HOT SPRINGS MARKET PLACE 4043 CENTRAL AVE STE E HOT SPRINGS AR 71913-7341BURLINGTON STATION 1429 UNIVERSITY DR BURLINGTON NC 27215-8792Marketview Shopping Center 41 E MARKETVIEW DR CHAMPAIGN IL 61820-7832CHURCHMANS ROAD SHOP CTR 1105 CHURCHMANS RD #1107 NEWARK DE 19713-2112MISSION RIDGE PLAZA SHOPPING CENTE1015 S MAIN ST MANTECA CA 95337-5703MARKET SQUARE EAST SHOP CTR 1621 E MARKET SE HARRISONBURG VA 22801-5105COLONIAL MALL STAUNTON 90 LEE JACKSON HWY STE 1257 STAUNTON VA 24401-5585






February 11, 2014

SEMINOLE SQUARE SHOP CTR 204 ZAN RD CHARLOTTESVILLE VA 22901-2885ALTON SQUARE SHOPPING CENTER 118 ALTON SQUARE ALTON IL 62002-5917WEST OAKS PLAZA 9567 W COLONIAL DR OCOEE FL 34761-6948THE CARPENTER VILLAGE 2828 SEPULVEDA BLVD TORRANCE CA 90505-2803

3700 US HIGHWAY 98 N LAKELAND FL 33809-3809CRANBERRY COMMONS SHOPPING CENT1717 ROUTE 228 STE H CRANBERRY PA 16066-6499FREEMAN PLAZA 106 E MEIGHAN BLVD GADSDEN AL 35903-1045HARBOR PROMENADE SHOP CTR 3701 S HARBOR BLVD STE C SANTA ANA CA 92704-7902FAYETTEVILLE PAVILLION 2043 SKIBO RD STE 2 FAYETTEVILLE NC 28314-2231COLLEGE SQUARE SHOPPING CENTER 1119 W MARCH LANE STOCKTON CA 95207-6212HICKORY RIDGE SHOPPING CENTER 1916 CATAWBA VALLEY BLVD SEHICKORY NC 28602-4146REGENCY COURT SHOPPING CENTER 9310 ARLINGTON EXPWY JACKSONVILLE FL 32225-8213LAKEPORT COMMONS 5001 SERGEANT RD STE 290 SIOUX CITY IA 51106-4773NORTHWESTERN SQUARE SHOPPING CE 3333 WURZBACH RD SAN ANTONIO TX 78238-4042FORUM AT OLYMPIA PARKWAY 8124 AGORA PARKWAY STE 100 SELMA TX 78154-1317COLONIAL PROMENADE 3471 LOWERY PKWY STE 115 FULTONDALE AL 35068-1677AMI WINEPRESS SHOPPING CENTER 3072 WEST SHAW AVE FRESNO CA 93711-3217Eastgate Plaza Shopping Center 8113 E. Kellogg Wichita KS 67207HOLLYWOOD HILLS PLAZA 3251 HOLLYWOOD BLVD STE 230HOLLYWOOD FL 33021-6906

8401 PIONEER BLVD WHITTIER CA 90606-2947FRISCO VILLAGE SHOPPING CENTER 2930 PRESTON RD STE 300 FRISCO TX 75034-9439DULLES TOWN CROSSING SHOPPING CEN45591 DULLES EASTERN PLAZA STERLING VA 20166-8923WATERFORD LAKES TOWN CENTER 745 N ALAFAYA TRAIL ORLANDO FL 32828-7047FAMILY LAKES CROSSINGS 5506 HARVEY ST STE A MUSKEGON MI 49444-8765SPRINGDALE PLAZA 403 EAST KEMPER RD SPRINGDALE OH 45246-3228

9938 WATERSTONE BLVD CINCINNATI OH 45249-8295TEAL PLAZA 3555 STATE ROAD 38 E STE D LAFAYETTE IN 47905-5130JEFFERSON POINTE 4220 W JEFFERSON BLVD STE OFORT WAYNE IN 46804-6865DELAWARE MARKETPLACE 2310 SE DELAWARE AVE STE R ANKENY IA 50021-4767






February 11, 2014

NEW MARKET SQUARE 2241 N MAIZE RD STE 105 WICHITA KS 67205-7340THE VINEYARD 1201 N LOOP 1604 W STE 105 SAN ANTONIO TX 78258-4597713 E CARMEL DR 715 E CARMEL DR CARMEL IN 46032-2817WOLF RANCH 1013 W UNIV AVE STE 195 GEORGETOWN TX 78628-5343Algonquin Commons 2215 S. Randall Road Algonquin IL 6010226127 LORAIN RD 26127 LORAIN RD NORTH OLMSTED OH 44070-2741OUTBACK PLAZA 4840 S 76TH ST GREENFIELD WI 53220-4304CITY BASE LANDING 3158 SE Military Dr STE 102 SAN ANTONIO TX 78223-3977ARLINGTON HEIGHTS PROMENADE 349 E RAND RD ARLINGTON HEIGHTS IL 60004-3103

8684 E RAINTREE DR STE 101 SCOTTSDALE AZ 85260-2614LEDGEWOOD PLAZA 17100 ROYALTON RD STE B STRONGSVILLE OH 44136-4441TENHOLDER PLAZA 140 S County Center Way ST. LOUIS MO 63129-1087GATEWAY OVERLOOK 6630 MARIE CURIE DR STE A ELKRIDGE MD 21075-6456BATAVIA COMMONS 135 N RANDALL RD BATAVIA IL 60510-9209GULF COAST TOWN CENTER 9924 GULF COAST MAIN STE A12FORT MYERS FL 33913-8956MID RIVERS CENTRE 167 MID RIVERS MALL DR ST PETERS MO 63376-4309Poyner Place Shopping Center 5950 Poyner Village Pkwy Raleigh NC 27616BOWIE TOWN CENTER STRIP 15451 EXCELSIOR DR SPC H03 BOWIE MD 20716-2208OAKLAND PLAZA 302 JOHN R TROY MI 48083-4542VIRGINIA CENTER STATION 1080 VIRGINIA CENTER PARKWAGLEN ALLEN VA 23059-4677BANDERA POINTE NORTH 11643 BANDERA RD SAN ANTONIO TX 78250-6818SUPERSTITION GATEWAY 1826 S SIGNAL BUTTE ROAD STEMESA AZ 85209-2227SHARYLAND TOWNE CROSSING 2505 E EXPRESSWAY 83 STE 500MISSION TX 78572-6697

8925 MADISON AVE A&B INDIANAPOLIS IN 46227-6309HAWTHORNE HILLS FASHION SQUARE 700 N MILWAUKEE AVE STE 139 VERNON HILLS IL 60061-1595

106 W RUARK DR SALISBURY MD 21801-2231Crossroads Towne Center 143 East Germann Rd. GILBERT AZ 85296Whitehall Crossing Shopping Center 140 N. Gates Drive BLOOMINGTON IN 47408Frederick Crossing Suite 7272 Guilford Dr. Frederick MD 21702






February 11, 2014

Village Crossroads 562 N. Highway 27/441 Lady Lake FL 32159Forest Plaza 6249 East State Rockford IL 61108Whiteland Towne Center Shopping Ctr. 197 W. Lincoln Highway Exton PA 19341East Hills Mall 3702 Frederick Ave St. Joseph MO 64506Oracle Wetmore 4336 North Oracle Road Tucson AZ 85705

Office Building 5300 Patterson Ave SE Grand Rapids MI 49530MAIN Distribution Center 4480 44TH STREET GRAND RAPIDS MI 49530




4.11a Employee Benefit Plans

Plan Sponsor Plan Type

MEDICAL: Family Christian Resource Centers, Inc. BCBSM High Deductible Health Plan-HSAQFamily Christian Resource Centers, Inc. BCBSM PPO Plan

PRESCRIPTION: Family Christian Resource Centers, Inc. MEDCO HEALTH

DENTAL: Family Christian Resource Centers, Inc. DELTA DENTAL OF MICHIGAN

VISION: Family Christian Resource Centers, Inc. EYEMED VISION CARE

FLEXIBLE SPENDING ACCOUNT: Family Christian Resource Centers, Inc. DISCOVERY BENEFITS

HEALTH SAVINGS ACCOUNT: Family Christian Resource Centers, Inc. THE BANCORP through HEALTHY BLUE H.S.A

TELE-MEDICINE: Family Christian Resource Centers, Inc. TELADOC

401(k): Family Christian Resource Centers, Inc. FIDELITY INVESTMENTS

LIFE INSURANCE AND AD& D: Family Christian Resource Centers, Inc. LIBERTY MUTUAL

SHORT-TERM DISABILITY Family Christian Resource Centers, Inc. LIBERTY MUTUAL

LONG-TERM DISABILITY Family Christian Resource Centers, Inc. LIBERTY MUTUALBERKSHIRE LIFE THROUGH GUARDIAN FOR LT

EMPLOYEE ASSISTANCE PROGRAM Family Christian Resource Centers, Inc. MY LIBERTY ASSIST

SeveranceCraig Klamer Family Christian, LLC Employment agreementMichael Jardina Family Christian, LLC Company policy

COBRA - Medical for Retirees Family Christian, LLCOPEB Family Christian, LLC

Accrued PTO / Vacation Family Christian, LLC

February 11, 2014

8 Employees at time of 1994 split from Zondervan, elligible for lifetime benefits through the company if elected




4.11b Employment Agreements

Chuck BengocheaPaul Neitzel

February 11, 2014




4.11c Employee Listing

February 11, 2014

Current listing of employees of Family Christian, LLC to be provided five business days prior to the Closing Date




4.11d Outstanding Employee Plan Payments

To be provided five days prior to the Closing Date.

February 11, 2014




4.12a Intellectual Property

Mark Country Reg. # Reg. Dt App. Dt App. # Status Classes Code Goods/ServicesFAMILY BOOKSTORES United States 1433364 3/17/1987 4/3/1986 73591356 Registered 42 (1) TYPED

DRAWINGRetail Store services in the field of Religious and inspirational merchandise, including books, gifts, arts and crafts, printed music, audio and video tapes, sound recordings, greeting cards, stationary, and church supplies.

PASTORS PERKS United States 1949128 1/16/1996 3/6/1995 74/642872 Registered 42 (1) TYPED DRAWING

Retail store services at discounted pricing in the field of religious and inspirational products.

FAMILY PERKS United States 1951280 1/23/1996 3/2/1995 74/641334 Registered 42 (1) TYPED DRAWING

Retail store services at discounted pricing in the field of religious and inspirational products.

FAMILY CHRISTIAN STORES United States 2213785 12/29/1998 3/3/1997 75/250655 Registered 35 (1) TYPED DRAWING

Retail store services in the field of religious and inspirational merchandise, namely, printed and recorded books, printed and recorded music, gifts, cards, videos, children's products, stationery, church supplies, toys and games, textiles, jewelry, figurines, software, calendars, novelties, wall hangings, pictures, posters and gift wrap.

FAMILY CHRISTIAN PRESS United States 2272886 8/24/1999 8/1/1997 75/334827 Registered 9, 16 (1) TYPED DRAWING

Audio cassette tapes and CDs featuring prerecorded music, books on tapes and stories. Books; namely, bible references, Christian living, and fiction.

FAMILY PERKS United States 2547676 3/12/2002 8/19/1998 75539267 Registered 16 (1) TYPED DRAWING

Printed award certificates. [Note: This mark was transferred to FCS by agreement dated July 25, 2007]

FAMILY CHRISTIAN United States 2597684 7/23/2002 6/4/2001 76/266035 Registered 35 (1) TYPED DRAWING

Retail store services featuring religious and inspirational merchandise, namely, printed and recorded books, printed and recorded music, gifts, cards, videos, infant and children's products, stationery, church supplies, toys and games, textiles, jewelry, figurines, software, calendars, novelties, wall hangings, pictures, posters and gift wrap.

FAMILY CHRISTIAN United States 4334322 5/14/2013 9/11/2012 85/725463 Registered 35 STYLIZED AND/OR WITH DESIGN

Retail store services featuring religious and inspirational merchandise, namely, printed and recorded books, printed and recorded music, gifts, cards, videos, infant and children's products, stationery, church supplies, toys and games, textiles, jewelry, figurines, software, calendars, novelties, wall hangings, pictures, posters and gift wrap.

FAMILY CHRISTIAN STORES (Stylized)

United States 3533722 11/18/2008 4/3/2008 77438845 Registered 35 (3) DESIGN PLUS WORDS, LETTERS, AND/OR NUMBERS

Retail store services featuring religious and inspirational merchandise in class 35. To protect color scheme.

February 11, 2014





Mark Country Reg. # Reg. Dt App. Dt App. # Status Classes Code Goods/Services

February 11, 2014

GREATER GOODS United States 4311330 4/2/2013 4/11/2011 85295850 Registered 14, 35 (4) STANDARD CHARACTER MARK

Retail store services in the field of religious and inspirational merchandise, namely gifts, textiles, jewelry, figurines and clothing. For electronic retailing services in the field of Christian market.

GREATER GOODS United States 4311331 4/2/2013 4/11/2011 85295317 Registered 14, 35 (3) DESIGN PLUS WORDS, LETTERS, AND/OR NUMBERS

Retail store services in the field of religious and inspirational merchandise, namely gifts, textiles, jewelry, figurines and clothing. For electronic retailing services in the field of Christian market.





Domain Names

127rewards.com familychristianministries.com goodtogomissions.com127rewards.org familychristianministries.net goodtogomissions.netamen.com familychristianministries.org goodtogotravels.netbuildingacourageoushome.com familychristianministry.org heartoftheartist.netcommunity127.com familychristianrental.com inspiredheart.netcommunity127.org familychristianrentals.com jamesfund.infocourageousgiftcard.com familychristianresourcecenters.org jamesfund.netcourageoushome.com familychristianstore.com jamesfund.orgfamily127.com familychristianstores.com markacrossamerica.orgfamily127.org familyperks.com markgoestomexico.comfamilycatholicstores.com familytimetogether.com prayercirclefriends.comfamilychristian.biz goodgoers.com prayercirclefriends.netfamilychristian.com goodgoers.net prayercirclefriends.orgfamilychristian.info goodgoers.org veggietalestore.comfamilychristiancoupons.com goodtogoadventures.com wisdomhuntersdevotional.comfamilychristianmail.com goodtogoadventures.net

February 11, 2014




4.12b Licenses - List all licenses that are material to the operation of Business

Vendor CONTRACT / AMENDMENT NOTESACI ACI Software & Service Mstr Agr Payment Switch BCD BCD Presto License Agreement Store portal BCD BCD Software Services Agr & SOW Catapult - AS 400 Reporting BSI Business Software Addendum to Agr Payroll Tax Software IBM Cognos Corporation (IBM company) Finance - Planning Infor Epiphany, Inc. Software Lic & Services Marketing Customer ManagementInfor Addendum-Lawson Software Lic Agr Payroll and GLInMotion inMotion Master Services Agreement Soft Proofing JDA JDA Software, Inc. MMS, WMS, POS, WFMMagento Magento Software License Agreement eCommerce platform Microsoft Microsoft License Agreement OS, Database, MS OfficeOracle Oracle Ordering Document Recruiting, Onboarding SAS Dataflux Software Customer data Cleansing StrongView StrongMail Systems, Inc. License Agr. Email Marketing Websense Websense Security Subscription Agr Web SecurityBIT9 Bit9, Inc. Master Term Agreement POS Security Data Strategy Data Strategy Master Services Agr Software, Maintenance & ServiceHelp Systems AS400 Operations Software License AS400 Job Scheduling Software

February 11, 2014




4.13 Insurance

Coverage Carrier Policy NumberEffective

DateExpiration

Date

A. Run-Off ProgramDirectors & Officers, Employment Practices Liability & Crime

National Union Fire Ins. Co. of Pittsburgh, PA 01-297-04-96 09/30/12 09/30/20

B. Go Forward Programs:Directors & Officers/ Employment Practices Liability

Westchester Fire Ins. Co. (ACE) G25767287-001 10/01/14 10/01/15

Fiduciary Westchester Fire Ins. Co. (ACE) G25767287-001 10/01/14 10/01/15

Crime

National Union Fire Ins. Co. of Pittsburgh, PA (AIG) 01-614-88-85 10/01/14 10/01/15

Special Risk

National Union Fire Ins. Co. of Pittsburgh, PA (AIG) 45-849-722 10/01/14 10/01/15

Property Axis Insurance Company MCB769765-14 10/01/14 10/01/15

Cargo Indemnity Ins. Co. of N.A. N01188707 10/01/14 continuous

AutomobileLiberty Mutual Fire Ins. Co. AS2-641-444468-044 10/01/14 10/01/15

General LiabilityLiberty Mutual Fire Ins. Co. TB2-641-444468-034 10/01/14 10/01/15

Worker's Compensation

All Other StatesLiberty Insurance Corporation WC7-64D-444468-024 10/01/14 10/01/15

WisconsinLiberty Insurance Corporation WA7-641-444468-014 10/01/14 10/01/15

February 11, 2014

I. Executive Risk

II. Property/Cargo

III. Casualty




4.13 Insurance

Coverage Carrier Policy NumberEffective

DateExpiration

Date

February 11, 2014

Foreign Liability ACE American Insurance C PHFD37560121 003 10/01/14 10/01/15

UmbrellaLiberty Insurance Corporation TH7-641-444468-054 10/01/14 10/01/15

Blanket Special Risk

National Union Fire Ins. Co. of Pittsburgh, PA (AIG) C11695DBG-MI 12/31/14 12/31/15

Cyber - Digital Risk Lloyds of London MEDTE130049044501 03/17/14 03/17/15




6.1 Recipients of Information Requests

Amy V. Forrestal, as Managing DirectorBROOKWOOD ASSOCIATES, L.L.C.3575 Piedmont Road15 Piedmont Center - Suite 820Atlanta, GA 30305404.874.7433 (P)

February 11, 2014




6.4 New Commitments

To be delivered five days prior to Closing Date

February 11, 2014




6.5 Maintenance of Interest

To be delivered five days prior to Closing Date

February 11, 2014




7.4b Transferred Employee Liabilities

Plan Plan Type Amount DueBilling

Recurrence

MEDICAL CLAIMS: BCBSM High Deductible Health Plan-HSAQ 5,000.00$ Weekly Company PayBCBSM PPO Plan 25,000.00$ Weekly Company Pay

ADMIN: BCBSM 61,835.50$ Monthly Company Pay

PRESCRIPTION: MEDCO HEALTH 50,000.00$ Biweekly Company Pay

DENTAL: DELTA DENTAL OF MICHIGAN 25,000.00$ Monthly Company Pay ADMIN: 1,900.00$ Monthly Company Pay

VISION: EYEMED VISION CARE 3,000.00$ Monthly Company Pay ADMIN: 250.00$ Monthly Company Pay

FLEXIBLE SPENDING ACCOUNT: DISCOVERY BENEFITS 3,000.00$ Biweekly Employee paid

HEALTH SAVINGS ACCOUNT: THE BANCORP through HEALTHY BLUE H.S.A/ER Portion 1,000.00$ Biweekly Company PayEmployee portion 9,000.00$ Biweekly Employee pay

TELE-MEDICINE: TELADOC 500.00$ Monthly Company Pay

401(k): FIDELITY INVESTMENTS Employer Match 16,000.00$ Biweekly Company PayEmployee Contribution 25,000.00$ Biweekly Employee pay

LIFE INSURANCE AND AD& D: LIBERTY MUTUAL 1,967.45$ Monthly Company Pay Retiree Life 1.17$ Monthly Company Pay Dependent Life 33.60$ Monthly Company Pay

SHORT-TERM DISABILITY LIBERTY MUTUAL 1,138.50$ Monthly Company Pay

LONG-TERM DISABILITY LIBERTY MUTUAL 5,123.54$ Monthly Company PayBERKSHIRE LIFE THROUGH GUARDIAN FOR LT 16,652.00$ Annually Company Pay

EMPLOYEE ASSISTANCE PROGRAM MY LIBERTY ASSIST 455.00$ Monthly Company Pay

February 11, 2014


SeveranceCraig Klamer BiweeklyMichael Jardina Biweekly

COBRA - Medical for Retirees 524.01$ Monthly Employee PaidOPEB 8 Employees at time of 1994 split from Zondervan, eligible

for lifetime benefits


22841173 v1 2

EXHIBIT "B"

proposed

Bidding Procedures Order


US2008 6331606 3 22786182 v6


In re: FAMILY CHRISTIAN, LLC et al.1 Debtors.

/

CHAPTER 11 CASE NO. 15-00643 (Joint Administration Proposed) HON. JOHN T. GREGG

ORDER (A) APPROVING BIDDING PROCEDURES FOR THE SALE OF SUBSTANTIALLY ALL OF THE DEBTORS’ ASSETS, (B) SCHEDULING

A FINAL SALE HEARING AND APPROVING THE FORM AND MANNER OF NOTICE THEREOF AND (C) GRANTING RELATED RELIEF

This matter coming before the Court on the Debtors' Motion for (I) an Order (A)

Approving Bidding Procedures for the Sale of Substantially All of the Debtors’ Assets and (B)

Scheduling a Final Sale Hearing and Approving the Form and Manner of Notice Thereof; and

(II) an Order (A) Authorizing the Sale of Substantially All of the Debtors’ Assets Free and Clear

of Liens, Claims, Interests and Encumbrances, (B) Authorizing the Assumption and Assignment

of Certain Executory Contracts and Leases in Connection Therewith and (C) Granting Related

Relief (the "Sale Motion").2 In the Sale Motion, the Debtors requested, pursuant to sections 105,

362, 363 and 365 of the Bankruptcy Code, Bankruptcy Rules 2002, 6004 and 6006, entry of

(i) an order: (a) authorizing procedures for the marketing and sale of the Assets (collectively, the

“Bidding Procedures Relief”), including, but not limited to, (i) approving the procedures that are

attached hereto as Schedule 1 (the "Bidding Procedures") and (ii) approving the conduct of an

auction for the sale of the Assets (the "Auction"); (b) scheduling a hearing (the "Sale Hearing")

to consider approving (1) the sale of substantially all of the Assets of the Debtors and (2) the

1 The Debtors are: Family Christian, LLC; Family Christian Holding, LLC; and FCS Giftco, LLC. 2 Capitalized terms used but not otherwise defined shall have the meanings given to them in the Sale Motion.


terms of the assumption and assignment of certain related executory contracts and unexpired

leases to which the Debtors are a party (any such contract or lease, a "Seller Contract"); and

(c) authorizing and approving the form and manner of the Debtors' proposed notice of the

Auction and the Sale Hearing; and (ii) an order authorizing and approving the Sale (as such term

is defined below) to the Successful Bidder in accordance with the Successful Bid (as such terms

are defined in the Bidding Procedures) (the "Sale Order").

The Court (a) having reviewed the Sale Motion, the "Declaration of Chuck

Bengochea In Support Of Chapter 11 Petition And First Day Motions;" (b) having conducted a

hearing on ______, 2015 to consider the Bidding Procedures Relief requested in the Sale Motion

(the "Hearing"); and (c) having considered the record and statements of counsel and the evidence

presented at the Hearing; IT IS HEREBY FOUND AND DETERMINED THAT:

A. The Debtors have articulated good and sufficient reasons for, and the best

interests of their estates will be served by, this Court granting the Bidding Procedures Relief

requested in the Sale Motion relating to (1) the stalking horse Asset Purchase Agreement

(including all exhibits, schedules and ancillary agreements related thereto, the "Purchase

Agreement") by and between the Debtors and FCS Acquisition, LLC (the "Buyer"), dated as of

February 11, 2015, which proposes the sale of the Assets to the Buyer (the "Sale"), and (2) the

procedures described below for the determination of the amounts necessary to cure defaults

under the Seller Contracts (the "Cure Costs") so as to permit the assumption and assignment

under section 365 of the Bankruptcy Code of the Seller Contracts that may be assumed and

assigned to the Buyer and (3) the forms of the Sale Notice, Publication Notice and Cure Notice

attached with the exhibits to the Sale Motion.


B. The Debtors have articulated good and sufficient reasons for, and the best

interests of their estates will be served by, this Court scheduling a subsequent Sale Hearing to

consider granting other relief requested in the Sale Motion, including approval of the Sale and

the transfer of the Assets to the Successful Bidder free and clear of all liens, claims,

encumbrances and other interests pursuant to section 363(f) of the Bankruptcy Code.

IT IS HEREBY ORDERED THAT:

1. The Bidding Procedures Relief requested in the Sale Motion is

GRANTED to the extent set forth herein.

2. The Bidding Procedures, which are attached hereto as Exhibit 1, are

hereby approved and shall govern all bids and bid proceedings relating to the sale of the Assets.

The Debtors shall be represented by their CEO, Chuck Bengochea, the Debtors' court-appointed

investment banker and business broker, Brookwood Associates, LLC, and the Debtors' court-

appointed financial advisor, Resurgence Financial Services, LLC (collectively the “Debtor

Auction Team”) for all purposes in implementing and effectuating the Bidding Procedures,

including publicizing the Sale, evaluating bids and generally guiding the course of the auction

process, and the Debtors are authorized to take any and all actions necessary to carry out the

purposes and intentions of this order and the Bidding Procedures.

3. The Good Faith Deposits of the Buyer and any other Potential Bidder shall

be held in escrow by the Deposit Agent and shall not become property of the Debtors'

bankruptcy estates unless and until released from escrow to the Debtors pursuant to the terms of

the applicable escrow agreement.

4. The deadline for submitting a Qualified Bid (as such term is defined in the

Bidding Procedures) shall be 5:00 p.m. (Prevailing Eastern Time) on April 8, 2015 (the "Bid

Deadline").


5. As further described in the Bidding Procedures, the Debtors shall conduct

the Auction at 10:00 a.m. (Prevailing Eastern Time) on April 13, 2015 if more than one

Qualified Bid for the Assets is timely received. If no other Qualifying Bids are received, no

Auction shall be necessary.

6. The Court shall conduct the Sale Hearing on April 14, 2015 at __:00 __.m.

(Prevailing Eastern Time), at which hearing the Court will consider approval of the Sale to the

Successful Bidder.

7. The form of the Sale Notice attached hereto as Schedule 2 is hereby

approved in all respects, and the Debtors are authorized to advertise a publishable form thereof

(the "Publication Notice") as set forth herein.

8. All parties in interest shall receive or be deemed to have received good

and sufficient notice of all relief sought in the Sale Motion, including but not limited to the Sale

Hearing, the proposed Sale Order, the proposed sale of the Assets and the Cure Costs as well as

the proposed assumption and assignment of the Seller Contracts if, as promptly as practically

possible upon the entry of this Order, but no later than thirty (30) days prior to the Sale Hearing

(the "Mailing Deadline"), the Debtors (a) publish the Publication Notice one time in The Wall

Street Journal or such other suitable publication as the Debtor Auction Team may determine;

(b) serve a copy of the Sale Notice upon (i) all of the Debtors' creditors that have filed proofs of

claim in the Debtors' chapter 11 cases or whose claims are listed by the Debtors in their

schedules of liabilities, (ii) any party who, in the past year, expressed in writing to the Debtors

an interest in the Assets or the Debtors' other assets; (iii) nondebtor parties to the executory

contracts and unexpired leases identified as being assumed and assigned pursuant to the Purchase

Agreement; (iv) all parties who are known or reasonably believed to have asserted a lien,


encumbrance, claim or other interest in any of the Debtors’ assets; (v) the Securities and

Exchange Commission; (vi) the Internal Revenue Service; (vii) all of pension plans to which any

of the Debtors is a contributor; (viii) applicable state and local taxing authorities; and (ix) the

United States Attorney for the Western District of Michigan.

9. The deadline for objecting to approval of the Sale for any reason (other

than for objections to any proposed Cure Costs or the provision of adequate assurance of future

performance under Seller Contracts by the Successful Bidder), including the sale of the Assets

free and clear of liens, claims, encumbrances and other interests pursuant to section 363(f) of the

Bankruptcy Code shall be 4:00 p.m. (Prevailing Eastern Time) on ____________ ____, 2015

(the "Sale Objection Deadline").

10. Except as provided in paragraph 12 below, to be considered, objections to

the Sale or any of the related relief sought therein must (a) be in writing, (b) state the basis of

such objection with specificity, (c) conform to the Federal Rules of Bankruptcy Procedure and

the Local Rules of the United States Bankruptcy Court for the Western District of Michigan and

(d) be filed with the Bankruptcy Court and served in accordance with the rules of the Bankruptcy

Court upon: (i) Debtors c/o Family Christian, LLC, Attn. Chuck Bengochea, CEO, 5300

Patterson Avenue, SE, Grand Rapids, MI 49530, (ii) Debtors' counsel, Keller & Almassian,

PLC, 230 East Fulton St., Grand Rapids, MI 49503 (Attn: A. Todd Almassian, Esq.) and Burr

Forman LLP, 171 17th St., NW, Suite 1100, Atlanta, GA 30363 (Attn: Erich Durlacher, Esq. and

Brad Baldwin, Esq.]; (iii) [ committee counsel - to be inserted ]]; (iv) counsel to FC Special

Funding, LLC [ to be inserted ]]; (v) counsel to Credit Suisse AG, Cayman Islands Branch

[Credit Suisse's counsel ]; and (vi) counsel to the Buyer, Kilpatrick Townsend & Stockton LLP,

Suite 2800, 1100 Peachtree Street, Atlanta, Georgia 30309-4528 (Attn: Todd C. Meyers, Esq.


and Paul M. Rosenblatt, Esq.) (collectively, the "Notice Parties"), so as to be actually received no

later than the Sale Objection Deadline.

11. The form of the Cure Notice attached hereto as Schedule 3 is hereby

approved in all respects. Not less than thirty (30) days prior to the Sale Hearing, the Debtors

shall file with the Court a schedule of cure obligations for the Seller Contracts that are being

made available to the Buyer for potential assumption and assignment (a "Contract and Cure

Schedule"), and shall include the same with the service of the Cure Notice. The Contract and

Cure Schedule shall include a description of each Seller Contract to potentially be assumed and

assigned under the Purchase Agreement and the Cure Costs, if any, necessary to cure such Seller

Contracts pursuant to section 365 of the Bankruptcy Code. A copy of the Cure Notice, together

with the Contract and Cure Schedule, shall be served by first-class mail on each of the nondebtor

parties listed on the Contract and Cure Schedule. As soon as practicable after the receipt of a

Qualified Bid (which is due by 5 p.m. Prevailing Eastern Time on April 8, 2015) seeking the

assumption and assignment of an executory contract or unexpired lease of the Debtors not listed

on the Contract and Cure Schedule (any such contracts, "Alternative Bidder Contracts"), the

Debtors shall file notice of such change with the Court and serve upon each affected

counterparty of the applicable Alternative Bidder Contracts the Cure Notice and the amount of

any Cure Costs associated with such Alternative Bidder Contracts.

12. Any objections to any proposed Cure Costs for any Seller Contract (any

such objection, a "Cure Objection", and any such disputed costs, "Disputed Cure Costs") or to

the provision of adequate assurance of future performance under any Seller Contracts (an

"Adequate Assurance Objection"), must be in writing and filed with the Court and served on the

Notice Parties so as to be received no later than 4:00 p.m. (Prevailing Eastern Time) on


_________________ ___, 2015; provided, however, counterparties to Alternative Bidder

Contracts shall have until the start of the Sale Hearing to file and serve any objections to the

assumption and assignment of an Alternative Bidder Contract.

13. If no timely Cure Objection or Adequate Assurance Objection is filed and

served with respect to a Seller Contract or Alternate Bidder Contract, then (a) the Cure Costs

identified in the Contract and Cure Schedule with respect to the Seller Contracts will be the only

amounts necessary under section 365(b) of the Bankruptcy Code to cure all monetary defaults

under such Seller Contracts or Alternate Bidder Contract if the Buyer (or other Successful

Bidder) ultimately decides to have the applicable Seller Contract or Alternate Bidder Contract

assumed and assigned to it; (b) the Successful Bidder will be deemed to have provided adequate

assurance of future performance under the applicable Seller Contract in accordance with section

365(f)(2)(B) of the Bankruptcy Code if the Buyer (or other Successful Bidder) ultimately decides

to have the applicable Seller Contract assumed and assigned to it; and (c) the party failing to

timely file a Cure Objection or Adequate Assurance Objection shall be forever barred from

asserting such objections against the Debtors, their estates or the Successful Bidder.

14. If a timely Cure Objection or Adequate Assurance Objection is received

and any such objection cannot otherwise be resolved by the parties, such objection shall be

resolved at the Sale Hearing or at a subsequent hearing set by the Court.

15. Except as may otherwise be agreed to by the parties to a Seller Contract,

the defaults under the Seller Contracts that need to be cured in accordance with section 365(b) of

the Bankruptcy Code shall be cured by cash payments made by the Buyer in accordance with the

provisions of the Purchase Agreement (or any other Successful Bidder as determined at the

conclusion of the Auction).


16. Notwithstanding any provision in this Order, the Purchase Agreement or

the Bidding Procedures, this Order does not satisfy, and the Court has not yet determined if the

Debtors have satisfied, the requirements of section 365 of the Bankruptcy Code for any

particular Seller Contract, including those relating to the cure of any existing default or providing

adequate assurance of future performance. No Seller Contract will be deemed assumed and

assigned until the Court has entered an order authorizing the assumption and assignment of a

particular Seller Contract and the Sale pertaining to such Seller Contract is closed. The

Successful Bidder will have no rights in and to any particular Seller Contract until such time as

the particular Seller Contract is assumed and assigned to the Successful Bidder.

17. The failure of any objecting person or entity to timely file its objection to

the Sale and related relief shall be a bar to the assertion, at the Sale Hearing or thereafter, of any

objection to the Motion, or to the consummation and performance of the Sale contemplated by

the Purchase Agreement or any Marked Agreement, including the transfer of the Assets to the

Successful Bidder free and clear of all liens, claims, encumbrances and other interests.

18. The Court shall retain exclusive jurisdiction over any matter or dispute

arising from or relating to the implementation of this Order.

END OF ORDER

Prepared and submitted by:

A. Todd Almassian (P55467) Greg J. Ekdahl (P67768) Keller & Almassian, PLC 230 East Fulton Street Grand Rapids, MI 49503 (616) 364-2100 [email protected] -- and – Erich Durlacher (Ga Bar No. 235563)


Brad Baldwin (Ga Bar No. 034220) Burr Forman LLP 171 17th Street, N.W. - Suite 1100 Atlanta, Georgia 30363 Telephone: (404) 815-3000 Proposed Attorneys To The Debtors


-1- 22786183 v8

SCHEDULE 1 TO BIDDING PROCEDURES ORDER

BIDDING PROCEDURES1

These bidding procedures (the "Bidding Procedures") set forth the terms by which debtor Family Christian, LLC and its debtor affiliates (the "Debtors") may effectuate a sale (the "Sale") of substantially all of their assets (the "Assets") as further defined in a certain Asset Purchase Agreement (including all exhibits, schedules and ancillary agreements related thereto, the "Purchase Agreement") between the Debtors and FCS Acquisition, LLC ("Buyer"). These Bidding Procedures were approved by an order (the "Bidding Procedures Order") entered _____________ ____, 2015 by the U.S. Bankruptcy Court for the Western District of Michigan (the "Bankruptcy Court") in the following proceeding: In re Family Christian, LLC et al. Case No. 15-00643.

For all purposes in implementing and carrying out the purposes of these Bidding Procedures, including publicizing the Sale, evaluating bids and generally guiding the course of the auction process, the Debtors shall be represented by the Debtors' Broker (defined below), the Operating Debtor’s CEO, Chuck Bengochea, and the Debtors' financial advisor, Gary Murphey (collectively the “Debtor Auction Team”).

I. Important Dates, Contact Information, and Terms

The following dates and deadlines apply to the proposed Sale.

Bid Deadline: April 8, 2015 at 5 pm (prevailing ET) Auction: April 13, 2015 at 10 am (prevailing ET) Sale Hearing: April 14, 2015 at ____ (prevailing ET)

Parties interested in the Assets or a copy of the Purchase Agreement may contact the Debtors through Brookwood Associates LLC, their court-appointed business broker and investment banker (the "Broker") by contacting: Amy Forrestal, Managing Directors, Brookwood Associates, 3575 Piedmont Road, 15 Piedmont Center Suite 820, Atlanta, GA 30305 Telephone: (404) 874-7433.

"Consultation Parties" means, collectively, the Debtors and their professional advisors, the official committee of unsecured creditors appointed in the Debtors' chapter 11 cases (the "Creditors' Committee"), and the Debtors' secured lenders: FC Special Funding, LLC, and Credit Suisse AG, Cayman Islands Branch.

1 Capitalized terms not otherwise defined herein have the meanings given to them in the Bidding Procedures

Order or the Sale Motion as defined therein. The Debtors are: Family Christian, LLC; Family Christian Holding, LLC; and FCS Giftco, LLC.


-2- 22786183 v8

II. Due Diligence and Participation

Each person or entity interested in purchasing the Assets (each an "Interested Party") must deliver the following to the Debtors' Broker:

(A) an executed confidentiality agreement in form and substance reasonably satisfactory to the Debtors;

(B) a statement and other factual support demonstrating to the Debtors' reasonable satisfaction, after consultation with the Consultation Parties, that the Interested Party has a bona fide interest in purchasing the Assets or some subset of the Assets; and

(C) sufficient information, as determined by the Debtors in consultation with the Consultation Parties, to confirm that the Interested Party has the financial wherewithal and any required corporate, legal or other authorization necessary to close the Sale, including, but not limited to, a form of financial disclosure acceptable to the Debtors in their discretion.

Upon satisfactory receipt of the items above, as determined by the Debtors in consultations with the Consultation Parties, then such Interested Party will be deemed a "Potential Bidder," and the Debtors will deliver to such Potential Bidder: (A) an information package containing information and financial data with respect to the Assets, including the Purchase Agreement if not previously provided (the "Information Package"); and (B) access information for the Debtors' confidential electronic data room concerning the Assets (the "Data Room"). The identity of each Potential Bidder may be disclosed to Buyer and any other Potential Bidders.

Until the Bid Deadline, Debtors will provide any Potential Bidder such due diligence access or additional information as the Debtors determine to be reasonably requested and appropriate under the circumstances. In the event that any such due diligence material is in written form and has not previously been provided to any other Potential Bidder, the Debtors will provide such materials to all Potential Bidders to the extent practicable, as well as to the Consultation Parties and the Buyer.

Unless otherwise determined by the Debtors, the availability of additional due diligence to a Potential Bidder will cease if (A) the Potential Bidder does not become a Qualified Bidder or (B) the Bidding Process is terminated in accordance with its terms. Except as provided above with respect to the Information Package, the Purchase Agreement and access to the Data Room, or as to Buyer only as provided in the Purchase Agreement, neither the Debtors nor their representatives will be obligated to furnish any information of any kind whatsoever relating to the Assets to any party.

A party may participate in the Bidding Process by submitting a bid to purchase less than all of the Assets.


-3- 22786183 v8

III. Bid Deadline

A Potential Bidder that desires to make a bid shall deliver written and electronic copies of its bid in both PDF and WORD format to the Notice Parties listed below so as to be received no later than 5:00 p.m. (prevailing Eastern Time) on April 8, 2015 (the "Bid Deadline").

The "Notice Parties" means each of the following: (i) Debtors c/o Family Christian, LLC, Attn. Chuck Bengochea, CEO, 5300 Patterson Avenue, SE, Grand Rapids, MI 49530, (ii) Debtors' counsel, Keller & Almassian, PLC, 230 East Fulton St., Grand Rapids, MI 49503 (Attn: A. Todd Almassian, Esq.) and Burr Forman LLP, 171 17th St., NW, Suite 1100, Atlanta, GA 30363 (Attn: Erich Durlacher, Esq. and Brad Baldwin, Esq.]; (iii) [ Committee counsel - to be inserted ]]; (iv) counsel to FC Special Funding, LLC [ to be inserted ]]; (v) counsel to Credit Suisse AG, Cayman Islands Branch [to be inserted ]; and (vi) counsel to the Buyer, Kilpatrick Townsend & Stockton LLP, Suite 2800, 1100 Peachtree Street, Atlanta, Georgia 30309-4528 (Attn: Todd C. Meyers, Esq. and Paul M. Rosenblatt, Esq.)

IV. Qualified Bids

A bid is a signed document from a Potential Bidder that complies with the following terms or conditions:

(A) the bid clearly states the terms of the offer and the amount or form of consideration being offered;

(B) the Potential Bidder offers to purchase the Assets (or some subset of the Assets) and to assume the relevant Assumed Liabilities (as such term is defined in the Purchase Agreement) at the purchase price and upon the terms and conditions set forth in a copy of an asset purchase agreement enclosed therewith, marked to show any proposed amendments and modifications to the Purchase Agreement (the "Marked Agreement");

(C) the Potential Bidder will pay any cure costs associated with the assumption of any executory contracts and unexpired leases;

(D) the bid is formal, binding and unconditional (except for those conditions expressly set forth in the applicable Marked Agreement, including expressly stating any conditions relating to the assumption and assignment of contracts and leases) and is not subject to any due diligence or financing contingency and is irrevocable until the 1st business day after the conclusion of the Sale Hearing;

(E) does not entitle a bidder to any breakup fee, termination fee, expense reimbursement or similar type of payment or reimbursement and includes a waiver of any substantial contribution administrative expense claim under section 503(b) of the Bankruptcy Code related to bidding for the Assets;

(F) if the purchase of all or substantially all of the Assets is contemplated, the consideration set forth in such bid is higher or better than the consideration provided by the Purchase Agreement, taking into account the Minimum Overbid;


-4- 22786183 v8

(G) is accompanied by the Good Faith Deposit (defined below); and

(H) is a bid received by the Bid Deadline.

In the event that a Potential Bidder asserts a bid for less than all of the Assets, the Debtors, after consultation with the Consultation Parties, shall determine that such bid is not a Qualified Bid if the consideration provided in such bid, when combined with the consideration provided by other bids for less than all of the Assets, is not higher or better than the consideration provided by the Purchase Agreement, taking into account the Minimum Overbid.

The Debtors shall provide to the Consultation Parties copies of all bids received. The Debtors, after consultation with the Consultation Parties, will have the right to determine that a bid is not a Qualified Bid if either of the following conditions are satisfied:

(A) If the bid includes a credit bid, such bid does not include assumption or other appropriate treatment of, or a cash component sufficient to pay in full all claims for which there are liens on Assets that are senior to those of the party seeking to credit bid, including any statutory or property tax liens accruing through the latest possible closing date for the Sale set forth in the Marked Agreement; or

(B) The terms of the bid are materially more burdensome or conditional than the terms of the Purchase Agreement and are not offset by a material increase in purchase price, which determination may take into consideration:

(i) whether the bid requires any indemnification of such Qualified Bidder on terms that are materially more burdensome than the terms of the Purchase Agreement;

(ii) whether the bid does not provide sufficient cash consideration to pay transfer taxes, cure costs or other cash costs of the transaction;

(iii) whether the bid includes a non-cash instrument or similar consideration that is not freely marketable; and

(iv) any other factors the Debtors, after consultation with the Consultation Parties, may deem relevant.

A Potential Bidder shall accompany its bid with: (A) written evidence of available cash, a commitment for financing (not subject to any conditions other than those expressly set forth in the applicable Marked Agreement) and such other evidence of ability to consummate the transaction contemplated by the applicable Marked Agreement as the Debtors may reasonably request; (B) a copy of a board resolution or similar document demonstrating the authority of the Potential Bidder to make a binding and irrevocable bid on the terms proposed; (C)if the purchase price includes non-cash consideration or fewer contingencies than are in the Purchase Agreement, a detailed analysis of the value of the non-cash consideration and sufficient back-up documentation that demonstrates that the bid is a higher and better offer than the transaction contemplated by the Purchase Agreement; and (D) if the Qualified Bid includes an asset


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purchase agreement that is not executed, a signed statement that such bid is irrevocable until the first business day following the closing of the Sale.

A Potential Bidder must deposit with either the Broker or an escrow agent selected by the Debtors (the "Deposit Agent") a deposit equal to the greater of $1,000,000 and three and one half (3.5%) percent of the cash purchase price set forth in the Marked Agreement (any such deposit, a "Good Faith Deposit"). The Good Faith Deposit must be made by wire transfer and will be held by the Deposit Agent.

If a bid is received and, in the Debtors' judgment, after consultation with the Consultation Parties, it is not clear whether the bid is a Qualified Bid, the Debtors may consult with the Potential Bidder and seek additional information in an effort to establish whether or not a bid is a Qualified Bid.

A bid received from a Potential Bidder that is determined by the Debtors, after consultation with the Consultation Parties, to meet the above requirements will be considered a "Qualified Bid," and each Potential Bidder that submits a Qualified Bid will be considered a "Qualified Bidder." For purposes hereof, Buyer is a Qualified Bidder and the Purchase Agreement executed by Buyer is a Qualified Bid. A Qualified Bid and bids at the Auction may be valued by the Debtors, after consultation with the Consultation Parties, based upon factors such as: (A) the purported amount of the Qualified Bid, including any benefit to the Debtors' bankruptcy estates from any assumption of liabilities, the waiver of liabilities through a credit bid and an analysis of other non-cash consideration; (B) the value to be provided to the Debtors under the Qualified Bid, including the net economic effect upon the Debtors' estates; (C) contingencies with respect to the Sale and the ability to close the proposed Sale without delay, and any incremental costs to the Debtors in closing delays; (D) the ability to obtain any and all necessary antitrust approvals for the proposed transaction; and (E) any other factors the Debtors, after consultation with the Consultation Parties, may deem relevant.

The Debtors, in consultation with the Consultation Parties, reserve the right to impose additional terms and conditions with respect to all Qualified Bidders. With respect to the Buyer, the terms of the Purchase Agreement (as may be consensually modified at any Auction) and not the terms of this paragraph shall control.

V. Baseline Bid

Qualified Bidders that have submitted Qualified Bids are eligible to participate in the Auction. The Debtors, after consultation with the Consultation Parties, will select what they determine to be the highest or best Qualified Bid (or collection of Qualified Bids) for the Assets (the "Baseline Bid") to serve as the starting point at the Auction. As soon as practicable, the Debtors will identify the Baseline Bid and provide to all Qualified Bidders copies of all Qualified Bids (with such distribution permissible by electronic means, including posting to the Data Room).

VI. Auction

If more than one Qualified Bid is received by the Bid Deadline, the Debtors will conduct an auction (the "Auction") to take place at 10:00 a.m. (prevailing ET) on April 13, 2015, at the


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offices of Keller & Almassian, PLC, 230 East Fulton Street, Grand Rapids, Michigan 49503, or such other time as the Debtors, after consultation with the Consultation Parties, may notify Qualified Bidders who have submitted Qualified Bids.

Only a Qualified Bidder who has submitted a Qualified Bid will be eligible to participate at the Auction, subject to such limitations as the Debtors may impose in good faith. Professionals and/or other representatives of the Consultation Parties will be able to attend and observe the Auction.

At the Auction, participants (including Buyer) will be permitted to increase their bids. Bidding on the Assets will start at the purchase price and terms proposed in the Baseline Bid, and will proceed thereafter in increments of $100,000 (the "Minimum Overbid").

The Debtors may adopt rules, after consultation with the Consultation Parties, for the Auction at any time that the Debtors determine to be appropriate to promote the goals of the Bidding Process and are not inconsistent with these Bidding Procedures, including auctioning subsets of the Assets first but making any "winning bid" on a subset of the Assets contingent upon the outcome of the Auction of all of the Assets. Any Auction rules adopted by the Debtors will not modify any of the terms of the Purchase Agreement (as may be consensually modified at any Auction) without the consent of the Buyer. The Debtors are permitted, but not required, to ascribe a liquidation value to certain assets to assist the Debtors in comparing bids for a subset of the Assets against bids for all of the Assets. If the Debtors believe that such value would be overly speculative under the circumstances, however, they may decline to assign any such liquidation values. Any rules developed by the Debtors will provide that all bids will be made and received in one room, on an open basis, and all other bidders will be entitled to be present for all bidding with the understanding that the true identity of each bidder will be fully disclosed to all other bidders and that all material terms of each Qualified Bid submitted in response to the Baseline Bid or to any successive bids made at the Auction will be fully disclosed to all other bidders throughout the entire Auction, and each Qualified Bidder will be permitted what the Debtors determine to be an appropriate amount of time to respond to the previous bid at the Auction.

The Debtors reserve the right to and may, after consultation with the Consultation Parties, reject at any time before entry of the relevant Sale Order any bid that, in the Debtors' judgment, is: (A) inadequate or insufficient; (B) not in conformity with the requirements of the Bankruptcy Code, these Bidding Procedures or the terms and conditions of the Sale; or (C) contrary to the best interests of the Debtors and their estates. In doing so, the Debtors may take into account the factors set forth above regarding the contents of a Qualified Bid. No attempt by the Debtors to reject a bid by the Buyer under this paragraph will modify any rights of the Debtors or the Buyer under the Purchase Agreement (as may be consensually modified at any Auction).

Prior to the conclusion of the Auction, the Debtors, after consultation with the Consultation Parties, will: (A) review and evaluate each bid made at the Auction on the basis of financial and contractual terms and other factors relevant to the sale process, including those factors affecting the speed and certainty of consummating the Sale; (B) identify the highest or otherwise best offer or collection of offers (the "Successful Bid"); (C) determine which Qualified Bid is the Successful Bid and which is the next highest or otherwise best bid (the "Next Highest


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Bid") for the Assets; and (D) notify all Qualified Bidders participating in the Auction, prior to its adjournment, of the successful bidder (the "Successful Bidder"), the amount and other material terms of the Successful Bid and the identity of the party that submitted the Next Highest Bid (the "Next Highest Bidder"). In the event Buyer's bid is the only Qualified Bid received by the Debtors by the Bid Deadline, no Auction will be conducted, and Buyer will be the Successful Bidder. At the Sale Hearing, the Debtors will present the Successful Bid to the Bankruptcy Court for approval.

VII. Acceptance of Qualified Bids

The Debtors presently intend to consummate the Sale with the Successful Bidder. However, the Debtors' presentation of the Successful Bid to the Bankruptcy Court for approval does not constitute the Debtors' acceptance of such bid. The Debtors will be deemed to have accepted the Successful Bid only when such bid has been approved by the Sale Order.

If for any reason the Successful Bidder fails to consummate the purchase of the Assets, or any subset thereof, the Next Highest Bid may be deemed by the Debtors (after consultation with the Consultation Parties) to be the highest or best bid, and the Debtors and the Next Highest Bidder will thereafter effect the sale of the Assets to the Next Highest Bidder as soon as is commercially reasonable. If such failure to consummate the purchase is the result of a breach by the Successful Bidder, the Debtors shall have the right to retain the Good Faith Deposit until required to return it by an order of the Bankruptcy Court and shall reserve the right to seek all available damages from the Successful Bidder, including, but not limited to, with respect to the Good Faith Deposit. With respect to the Buyer and the Purchase Agreement, the terms of the Purchase Agreement (as may be consensually modified at any Auction) and not the terms of this paragraph shall control.

VIII. The Sale Hearing

On April 14, 2015, subject to any continuance or postponement by the Bankruptcy Court, the Bankruptcy Court shall conduct a hearing (the "Sale Hearing") to determine whether to approve the Sale of Assets free and clear of all liens, claims, interests and encumbrances, including the assumption and assignment of certain executory contracts and unexpired leases as described in the Purchase Agreement.

At the Sale Hearing, the Debtors will seek the entry of an order in the form of the order attached as Exhibit C to the Sale Motion, inter alia, authorizing and approving the Sale (the "Sale Order") (A) if no other Qualified Bid with respect to any of the Assets is received by the Debtors, to Buyer pursuant to the terms and conditions set forth in the Purchase Agreement, or (B) if another Qualified Bid is received by the Debtors with respect to any of the Assets, to Buyer and/or such other Qualified Bidder(s) as the Debtors, in the exercise of their reasonable business judgment and, after consultation with the Consultation Parties, determine to have made the highest or otherwise best offer to purchase the Assets, consistent with the Bidding Procedures. After consultation with the Consultation Parties, the Sale Hearing may be adjourned or rescheduled without notice or with limited and shortened notice to parties other than the Consultation Parties, including by (A) an announcement of such adjournment at the Sale Hearing


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or at the Auction or (B) the filing of a notice of adjournment with the Bankruptcy Court prior to the commencement of the Sale Hearing.

IX. "As Is, Where Is"

Any Sale will be on an "as is, where is" basis and without representations or warranties of any kind, nature or description by the Debtors, their agents or the Debtors' chapter 11 estates, whether written or verbal, whether express, implied or by operation of law, except and solely to the extent expressly set forth in the Purchase Agreement or Marked Agreement of the Successful Bidder. Each Qualified Bidder shall be deemed to acknowledge and represent that it has had an opportunity to conduct any and all due diligence regarding the Assets that are the subject of the Auction prior to making its bid, that it has relied solely upon its own independent review and investigation in making its bid. Except as otherwise provided in the Purchase Agreement or Marked Agreement of the Successful Bidder, all of the Debtors' right, title and interest in the Assets shall be sold free and clear of liens, claims, interests and encumbrances as proposed in the form of sale order attached to the Motion (collectively, "Liens"), with any Liens to attach to the proceeds of the Sale as provided in the proposed form of sale order.

X. Modification of Bidding Procedures

The Debtors may, after consultation with the Consultation Parties, amend these Bidding Procedures or the Bidding Process at any time and from time to time in any manner that they determine will best promote the goals of the Bidding Process, including extending or modifying any of the dates described herein, provided, however, that any such amendment will not modify any of the terms of the Purchase Agreement (as may be consensually modified at any Auction) without the consent of the Buyer.

XI. Return of Good Faith Deposit

The Good Faith Deposits of all Qualified Bidders, including Buyer, will be held in escrow by the Deposit Agent and while held in escrow will not become property of the Debtors' bankruptcy estates unless released from escrow pursuant to terms of the applicable escrow agreement or pursuant to further order of the Bankruptcy Court. The Deposit Agent will retain the Good Faith Deposits of the Successful Bidder and the Next Highest Bidder until the closing of the Sale unless otherwise ordered by the Bankruptcy Court. The Good Faith Deposits of the other Qualified Bidders will be returned within four business days of the entry of the Sale Order. At the closing of the Sale contemplated by the Successful Bid, the Successful Bidder will be entitled to a credit for the amount of its Good Faith Deposit. The Good Faith Deposit of the Next Highest Bidder will be released by the Debtors four (4) business days after the closing of the Sale. Upon the return of the Good Faith Deposits, their respective owners will receive any and all interest that will have accrued thereon. With respect to the Buyer and the Purchase Agreement, the terms of the Purchase Agreement (as may be consensually modified at any


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auction) and not the terms of this paragraph shall control the Buyer's rights relative to the Good Faith Deposit.

XII. Consultation with Consultation Parties

In the event that any Consultation Party or an affiliate of any of the foregoing, submits a Qualified Bid, any obligation of the Debtors to consult with the affected party established under these Bid Procedures will be without further action waived, discharged and released; provided, however, that the affected party will have the same rights as any other Potential Bidder set forth above, and will retain any rights it has under existing orders regarding debtor in possession financing and/or use of cash collateral.

For the avoidance of doubt, if a member of the Creditors' Committee submits a Qualified Bid, the Creditors' Committee will continue to have Consultation Rights; provided, however, that the Creditors' Committee shall exclude such member from any discussions or deliberations regarding the sale of the Assets and shall not provide any information regarding the sale of the Assets to such member.

XIII. No Modification to Cash Collateral Order

Nothing herein is intended to or shall be deemed to vary, modify, alter or supersede in any way the terms of any order(s) entered by the Bankruptcy Court respecting the Debtors' use of "cash collateral."


22811010 v3


UNITED STATES BANKRUPTCY COURT

WESTERN DISTRICT OF MICHIGAN


/


NOTICE OF (1) BIDDING PROCEDURES AND AUCTION SALE AND (2) SALE HEARING

PLEASE TAKE NOTICE OF THE FOLLOWING:

1. On February 12, 2015, Family Christian, LLC d/b/a Family Christian stores and

its debtor affiliates (the "Debtors") filed with the U.S. Bankruptcy Court for the Western District of Michigan (the "Bankruptcy Court") the following motion (the "Sale Motion")2: Debtors' Motion for (I) an Order (A) Approving Bidding Procedures for the Sale of Substantially All of the Debtors’ Assets and (B) Scheduling a Final Sale Hearing and Approving the Form and Manner of Notice Thereof; and (II) an Order (A) Authorizing the Sale of Substantially All of the Debtors’ Assets Free and Clear of Liens, Claims, Interests and Encumbrances, (B) Authorizing the Assumption and Assignment of Certain Executory Contracts and Leases in Connection Therewith and (C) Granting Related Relief.

2. The Sale Motion seeks authority to consummate a stalking horse "Asset Purchase

Agreement" (the "Purchase Agreement") between the Debtors and FCS Acquisition, LLC (the "Buyer"), subject to higher and better bids at an auction, for the purchase of substantially all of the assets of the Debtors (as more specifically defined in the Purchase Agreement, the "Assets").

3. On ____, 2015, the Bankruptcy Court entered an order approving the bidding

procedures attached hereto (the "Bidding Procedures") pursuant to which the Debtors may solicit bids for the Assets from interested parties.

4. BID DEADLINE & AUCTION: In the event the Debtors receive a Qualified Bid

(as defined in the Bidding Procedures) on or before April 8, 2015 at 5 p.m. (prevailing ET) (the "Bid Deadline"), the Debtors will conduct an auction for the sale of the Assets (the "Auction")



beginning on April 13, 2015 at 10:00 am (prevailing ET) at the offices of Keller & Almassian, PLC, 230 East Fulton Street, Grand Rapids, Michigan 49503. All parties interested in submitting a bid for the Assets and attending the Auction must read carefully the Bidding Procedures and comply with the terms thereof.

5. SALE HEARING. A hearing (the "Sale Hearing") to consider the Sale Motion, including the Debtors' assumption and assignment of the Contracts, the sale of the Assets to the Buyer (or potential higher bidder) and the other related relief, will be held on April 14, 2015, at _________ a.m. (prevailing ET), at Courtroom ____ United States Bankruptcy Court, One Division Avenue North, Grand Rapids, Michigan 49503.

6. OBJECTION DEADLINE. Objections, if any, to the Sale Motion, including any

objections to the proposed assumption and assignment of the Seller Contracts, the calculation of the Cure Amounts, or the adequate assurance of future performance by the Buyer must be made in writing, set forth the specific bases for such objection(s) and (a) be filed with the Clerk of the Bankruptcy Court at the following address: Clerk of the U.S. Bankruptcy Court, One Division Avenue N., Room 200, Grand Rapids, Michigan, 49503, and (b) a copy of such objection must be mailed to the Notice Parties listed below, so as to be received no later than ___________ , 2015 (the "Objection Deadline"). The "Notice Parties" are: (i) Debtors c/o Family Christian, LLC, Attn. Chuck Bengochea, CEO, 5300 Patterson Avenue, SE, Grand Rapids, MI 49530, (ii) Debtors' counsel, Keller & Almassian, PLC, 230 East Fulton St., Grand Rapids, MI 49503 (Attn: A. Todd Almassian, Esq.) and Burr Forman LLP, 171 17th St., NW, Suite 1100, Atlanta, GA 30363 (Attn: Erich Durlacher, Esq. and Brad Baldwin, Esq.]; (iii) [ committee counsel - to be inserted]]; (iv) counsel to FC Special Funding, LLC [ to be inserted]; (v) counsel to Credit Suisse AG, Cayman Islands Branch [ to be inserted ]; and (vi) counsel to the Buyer, Kilpatrick Townsend & Stockton LLP, Suite 2800, 1100 Peachtree Street, Atlanta, Georgia 30309-4528 (Attn: Todd C. Meyers, Esq. and Paul M. Rosenblatt, Esq.).

7. All accepted offers and bids are subject to approval of the Bankruptcy Court at the

Sale Hearing. The Debtors reserve the right to reject any bids they determine do not represent the highest and best offers obtainable.

Dated: February ____, 2015

KELLER & ALMASSIAN, PLC /s/ A. Todd Almassian A. Todd Almassian (P55467) Greg J. Ekdahl (P67768) 230 East Fulton Street Grand Rapids, MI 49503 (616) 364-2100 [email protected]


-- and – Erich Durlacher (Ga Bar No. 235563) Brad Baldwin (Ga Bar No. 034220) Burr Forman LLP 171 17th Street, N.W. - Suite 1100 Atlanta, Georgia 30363 Telephone: (404) 815-3000 Attorneys To The Debtors


US2008 6331606 3 22786617 v3




/


NOTICE TO CERTAIN CONTRACT PARTIES OF: (I) PROPOSED SALE OF DEBTORS' ASSETS,

(II) PROPOSED ASSUMPTION AND ASSIGNMENT OF DEBTORS' CONTRACTS (III) DEADLINE FOR OBJECTING TO CURE COSTS, AND

(IV) HEARING ON THE REQUESTED APPROVAL THEREOF

TO THE CONTRACT PARTIES LISTED ON THE ATTACHED SCHEDULE: THIS IS A NOTICE OF POSSIBLE ASSUMPTION AND ASSIGNMENT OF ONE OR MORE CONTRACTS TO WHICH YOU MAY BE A PARTY

1. PLEASE TAKE NOTICE THAT on February 12, 2015, Family Christian, LLC and its debtor affiliates (the "Debtors") filed with the U.S. Bankruptcy Court for the Western District of Michigan (the "Bankruptcy Court") the following motion (the "Sale Motion"): Debtors' Motion for (I) an Order (A) Approving Bidding Procedures for the Sale of Substantially All of the Debtors’ Assets and (B) Scheduling a Final Sale Hearing and Approving the Form and Manner of Notice Thereof; and (II) an Order (A) Authorizing the Sale of Substantially All of the Debtors’ Assets Free and Clear of Liens, Claims, Interests and Encumbrances, (B) Authorizing the Assumption and Assignment of Certain Executory Contracts and Leases in Connection Therewith and (C) Granting Related Relief (the "Sale Motion").2



2. The Sale Motion seeks authority to consummate a stalking horse "Asset Purchase Agreement" (the "Purchase Agreement") between the Debtors and FCS Acquisition, LLC (the "Buyer"), subject to higher and better bids at an auction, for the purchase of substantially all of the assets of the Debtors (as more specifically defined in the Purchase Agreement, the "Assets").

3. Pursuant to the proposed Purchase Agreement, the Debtors seek to assume and

assign to Buyer certain executory contracts and unexpired leases (the "Contracts") of the Debtors. Prior to Closing of the proposed Purchase Agreement, the Buyer reserves the option to decline assuming one or more of the Contracts.

4. In connection with the consummation of the proposed Purchase Agreement, the

Debtors will cure, to the extent legally required, all defaults currently outstanding under the Contracts (the "Cure Amounts"). Schedule A attached hereto identifies (a) the Contracts that may be assumed and assigned by the Debtors pursuant to the Purchase Agreement, (b) the counterparty to each such Contract, and (c) the Debtors' calculation of the applicable Cure Amount for such Contract. You may be a party to one or more of the identified Contracts which the Debtors seek to assume and assign to Buyer.

5. A hearing (the "Sale Hearing") to consider the Sale Motion, including the Debtors'

assumption and assignment of the Contracts and the sale of the Assets to the Buyer (or potential higher bidder) will be held on [ ____ ], 2015, at _________ a.m., at Courtroom ____ United States Bankruptcy Court, One Division Avenue North, Grand Rapids, Michigan 49503.

6. PLEASE NOTE that OBJECTIONS, if any, to the Sale Motion, including any

objections to the proposed assumption and assignment of the Contracts, the calculation of the Cure Amounts, or the adequate assurance of future performance by the Buyer must be made in writing, set forth the specific bases for such objection(s) and (a) filed with the Clerk of the Bankruptcy Court at the following address: , and (b) a copy of such objections must be mailed to the Notice Parties listed below, so as to be received no later than ___________ , 2015 (the "Objection Deadline").

A copy of your objection must be delivered to each of the following (the "Notice

Parties"): (i) Debtors c/o Family Christian, LLC, Attn. Chuck Bengochea, CEO, 5300 Patterson Avenue, SE, Grand Rapids, MI 49530, (ii) Debtors' counsel, Keller & Almassian, PLC, 230 East Fulton St., Grand Rapids, MI 49503 (Attn: A. Todd Almassian, Esq.) and Burr Forman LLP, 171 17th St., NW, Suite 1100, Atlanta, GA 30363 (Attn: Erich Durlacher, Esq. and Brad Baldwin, Esq.]; (iii) [ committee counsel - to be inserted]; (iv) counsel to FC Special Funding, LLC [to be inserted]; (v) counsel to Credit Suisse AG, Cayman Islands Branch [Credit Suisse's counsel ]; and (vi) counsel to the Buyer, Kilpatrick Townsend & Stockton LLP, Suite 2800, 1100 Peachtree Street, Atlanta, Georgia 30309-4528 (Attn: Todd C. Meyers, Esq. and Paul M. Rosenblatt, Esq.).

7. Any party failing to timely file an objection by the Objection Deadline to the

assumption and assignment of the Contracts, including any objection to the applicable Cure


Amount(s) listed in the attached schedule, shall be forever barred from asserting such objections against the Debtors, their estates, the Buyer (or any higher and better bidder).

8. Copies of the Sale Motion and the Purchase Agreement may be obtained upon

written request to Debtor's counsel: Keller & Almassian, PLC, 230 East Fulton St., Grand Rapids, MI 49503 (Attn: A. Todd Almassian, Esq.) Telephone: (616) 364-2100.

This Notice issued with authorization from the Bankruptcy Court.

Dated: February ____, 2015

KELLER & ALMASSIAN, PLC /s/ A. Todd Almassian A. Todd Almassian (P55467) Greg J. Ekdahl (P67768) 230 East Fulton Street Grand Rapids, MI 49503 (616) 364-2100 [email protected] -- and – Erich Durlacher (Ga Bar No. 235563) Brad Baldwin (Ga Bar No. 034220) Burr Forman LLP 171 17th Street, N.W. - Suite 1100 Atlanta, Georgia 30363 Telephone: (404) 815-3000 Attorneys To The Debtors


SCHEDULE 1

Contracts and Cure Amounts

[to be added]


22841173 v1 3

EXHIBIT "C"

proposed

Sale Order


US2008 6331608 5



/


ORDER (I) AUTHORIZING THE SALE OF SUBSTANTIALLY ALL OF THE DEBTORS’ ASSETS FREE AND CLEAR OF LIENS, CLAIMS,

INTERESTS AND ENCUMBRANCES, (II) AUTHORIZING THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND LEASES

IN CONNECTION THEREWITH AND (III) GRANTING RELATED RELIEF

This matter coming before the Court on the Debtors' Motion for (I) an Order (A)

Approving Bidding Procedures for the Sale of Substantially All of the Debtors’ Assets and (B)

Scheduling a Final Sale Hearing and Approving the Form and Manner of Notice Thereof; and

(II) an Order (A) Authorizing the Sale of Substantially All of the Debtors’ Assets Free and Clear

of Liens, Claims, Interests and Encumbrances, (B) Authorizing the Assumption and Assignment

of Certain Executory Contracts and Leases in Connection Therewith and (C) Granting Related

Relief (Docket No. [[ _____ ]]) (the "Sale Motion")2, filed by the above-captioned debtors and

debtors in possession (the "Debtors") seeking, among other things, the entry of an order (the

"Sale Order"), pursuant to sections 105, 362, 363 and 365 of the United States Code, 11 U.S.C.

§§ 101, et seq. (the "Bankruptcy Code"), Rules 2002, 6004, 6006 and 9019 of the Federal Rules

of Bankruptcy Procedure (the "Bankruptcy Rules") and the Local Bankruptcy Rules for the

1 The Debtors are: Family Christian, LLC; Family Christian Holding, LLC; and FCS Giftco, LLC. 2 Capitalized terms used herein but not otherwise defined have the meanings given to them in the Purchase

Agreement (as defined below) or, if not defined in the Purchase Agreement, the meanings given to them in the Sale Motion.


-2- US2008 6331608 5

United States Bankruptcy Court for the Western District of Michigan (the "Local Bankruptcy

Rules"), authorizing and approving the sale of substantially all assets (the "Assets") of the

Debtors and authorizing the assumption and assignment of certain executory contracts and

unexpired leases of the Debtors in connection therewith; and the Court having taken into

consideration this Court's prior order, dated ___________ ____, 2015 (Docket

No. ___________) (the "Bidding Procedures Order"), approving competitive bidding procedures

for the Assets (the "Bidding Procedures"); FCS Acquisition, LLC having submitted a bid for the

Assets; [[ Buyer's bid being the only Qualified Bid, as determined by the Debtors in consultation

with the Consultation Parties pursuant to the Bidding Procedures Order, that was received by the

Debtors by the Bid Deadline ]]; Buyer having been chosen by the Debtors as the Successful

Bidder; the Court having conducted a hearing on the Sale Motion on March ____, 2015

(the "Sale Hearing"), at which time all interested parties were offered an opportunity to be heard

with respect to the Sale Motion; the Court having reviewed and considered (i) the Sale Motion

and the exhibits thereto, (ii) the Asset Purchase Agreement, dated as of February ____, 2015

(the "Purchase Agreement"), substantially in the form attached hereto as Exhibit A, by and

among Buyer and the Debtors, whereby the Debtors have agreed, among other things, to sell the

Assets to Buyer (the "Sale Transaction") and to assume and assign to Buyer certain executory

contracts and unexpired leases of the Debtors in connection with the Sale Transaction

(collectively, the "Debtor Contracts"), (iii) the Declaration of [[ debtor representative ]] in

Support of the Sale Motion, (iv) the Declaration of [[ investment banker ]] in Support of the Sale

Motion, (v) all objections to the Sale Transaction filed in accordance with the Bidding

Procedures Order and (vi) the arguments of counsel made, and the evidence proffered or

adduced, at the Sale Hearing; and it appearing that due notice of the Sale Motion, the Bidding


-3- US2008 6331608 5

Procedures Order, and the form of order proposed by the Debtors to be entered granting the Sale

Motion, approving the sale of the Assets, authorizing the assumption and assignment of certain

executory contracts and unexpired leases and granting other relief (the "Proposed Sale Order")

has been provided in accordance with the Bidding Procedures Order; and it appearing that the

relief requested in the Sale Motion is in the best interests of the Debtors, their estates and

creditors and all parties in interest in these bankruptcy cases; and upon the record of the Sale

Hearing and these cases; and after due deliberation thereon; and good cause appearing therefor, it

is hereby FOUND AND DETERMINED THAT:

JURISDICTION, FINAL ORDER AND STATUTORY PREDICATES

A. This Court has jurisdiction over the Sale Motion, the transactions

contemplated by the Purchase Agreement and any other ancillary documents and agreements

related thereto pursuant to 28 U.S.C. §§ 157(b)(1) and 1334(a). This matter is a core proceeding

pursuant to 28 U.S.C. § 157(b)(2)(A), (N) and (O). Venue of these cases and the Sale Motion in

this District is proper under 28 U.S.C. §§ 1408 and 1409.

B. This Sale Order constitutes a final and appealable order within the

meaning of 28 U.S.C. § 158(a).

C. The statutory and other legal predicates for the relief sought in the Sale

Motion are sections 105(a), 362, 363(b), (f), (m) and (n) and 365(a), (b) and (f) of the

Bankruptcy Code, Bankruptcy Rules 2002, 6004, 6006 and 9019 and applicable Local

Bankruptcy Rules.

SOUND BUSINESS PURPOSE

D. The Debtors seek to convey the Assets, all of which are more fully

described in the Purchase Agreement.


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E. The Debtors have (1) demonstrated good, sufficient, and sound business

purposes and justifications for the Sale Transaction, (2) appropriately exercised their business

judgment by entering into the Sale Transaction and (3) demonstrated compelling circumstances

for entry into the Sale Transaction pursuant to section 363(b) of the Bankruptcy Code prior to,

and outside of, a plan in that, among other things, the value of the Assets would be harmed by

any delay of the Sale Transaction. Business justifications for the Sale Transaction include the

facts that (i) the Purchase Agreement constitutes the highest and best offer received for the

Assets; (ii) the Purchase Agreement presents the best opportunity to maximize the value of the

Assets.; the (iii) Purchase Agreement provides for the preservation of a substantial number of

jobs; and (iv) [[ insert additional findings from Sale Hearing ]] .

HIGHEST AND BEST OFFER

F. The Bidding Procedures provided a full, fair and reasonable opportunity

for any entity to make an offer to purchase the Assets. The Debtors, by and through the Debtor

Auction Team, conducted the Auction and have complied with the Bidding Procedures Order.

Buyer complied with the Bidding Procedures Order in all respects.

G. As demonstrated by the testimony and other evidence proffered or

adduced at the Sale Hearing, (1) the Debtors have adequately marketed the Assets; (2) the

Purchase Agreement constitutes the highest and best offer for the Assets and provides fair and

reasonable consideration therefor; (3) the consideration to be paid by Buyer under the Purchase

Agreement constitutes reasonably equivalent value and fair consideration for the Assets under

the Bankruptcy Code and under applicable state laws.

H. Buyer was the Successful Bidder for the Assets in accordance with the

Bidding Procedures and Bidding Procedures Order. The process conducted by the Debtors


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pursuant to the Bidding Procedures obtained the highest and best value for the Assets for the

Debtors and their estates.

I. Buyer has provided the Debtors with a deposit in an amount equal to

$1,000,000 of the initial cash consideration contemplated by the Purchase Agreement (such

amount, the "Good Faith Deposit"), which Good Faith Deposit is currently being held by [[

_________________ ]] (the "Escrow Agent") in an interest-bearing account.

BEST INTEREST OF CREDITORS

J. Approval of the Purchase Agreement and the consummation of the Sale

Transaction with Buyer at this time are in the best interests of the Debtors, their creditors, their

estates and all parties in interest.

GOOD FAITH

K. The Purchase Agreement and each of the transactions contemplated

therein were negotiated, proposed and entered into by the Debtors and Buyer in good faith,

without collusion and from arm's-length bargaining positions. Buyer is a "good faith purchaser"

within the meaning of section 363(m) of the Bankruptcy Code and, as such, is entitled to all the

protections afforded thereby. Neither the Debtors nor Buyer have engaged in any conduct that

would cause or permit the Purchase Agreement to be avoided or costs and damages to be

imposed under section 363(n) of the Bankruptcy Code.

NOTICE OF THE SALE MOTION AND THE CURE AMOUNTS

L. As evidenced by the certificates of service filed with the Court, (1) proper,

timely, adequate and sufficient notice of the Sale Motion, the Sale Hearing, and the Proposed

Sale Order was provided by the Debtors; (2) such notice was good, sufficient and appropriate

under the particular circumstances; and (3) no other or further notice of the Sale Motion, the

proposed Sale Transaction, the Bidding Procedures, the Sale Hearing or the Proposed Sale Order


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is or shall be required. A reasonable opportunity to object or be heard with respect to the Sale

Motion and the relief requested therein was afforded to all interested persons and entities,

including, but not limited to:

(i) the Office of the UST;

(ii) counsel for the Debtors' lenders;

(iii) counsel for the Creditors' Committee;

(iv) all entities who have requested service pursuant to Bankruptcy Rule 2002 in the Debtors' bankruptcy cases;

(v) any party who, in the past year, expressed in writing to the Debtors an interest in the Assets or the Debtors' other assets;

(vi) nondebtor parties to the executory contracts and unexpired leases listed on [[ Schedule ___________ ]] to the Purchase Agreement;

(vii) all parties who are known or reasonably believed to have asserted a lien, encumbrance, claim or other interest in the Assets;

(viii) all of the Debtors' creditors that have filed proofs of claim in the Debtors' chapter 11 cases or whose claims are listed by the Debtors in their schedules of liabilities filed with the Court;

(ix) the Securities and Exchange Commission;

(x) the Internal Revenue Service;

(xi) all pension plans to which any of the Debtors is or was a contributor;

(xii) all applicable state attorneys general and local environmental enforcement agencies;

(xiii) all applicable state and local taxing authorities;

(xiv) the Federal Trade Commission;

(xv) the United States Attorney General/Antitrust Division of Department of Justice; and

(xvi) the United States Attorney.

M. In accordance with the provisions of the Bidding Procedures Order, the

Debtors have served prior to the Sale Hearing notice of their intent, subject to the terms of the


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Purchase Agreement, to assume and assign the Debtor Contracts and of the related proposed

Cure Costs (the "Contract and Cure Schedule") upon each nondebtor counterparty to the Debtor

Contracts. The service of such notice was good, sufficient and appropriate under the

circumstances and no further notice need be given with respect to the Cure Costs for the Debtor

Contracts listed in the Contract and Cure Schedule and the assumption and assignment of the

Debtor Contracts. All nondebtor parties to the Debtor Contracts have had a reasonable

opportunity to object to both the Cure Costs listed in the Contract and Cure Schedule and the

assumption and assignment of the Debtor Contracts.

SECTION 363(F) REQUIREMENTS MET FOR FREE AND CLEAR SALE

N. The Debtors may sell the Assets free and clear of all liens, claims

(including those that constitute a "claim" as defined in section 101(5) of the Bankruptcy Code),

rights, liabilities, encumbrances and other interests of any kind or nature whatsoever, including,

without limitation, any debts arising under or out of, in connection with, or in any way relating

to, any acts or omissions, obligations, demands, guaranties, rights, contractual commitments,

consignment agreements, restrictions, product liability claims, environmental liabilities,

employee pension or benefit plan claims, retiree healthcare or life insurance claims of the

Debtors, and any transferee or successor liability claims, rights or causes of action (whether in

law or in equity, under any law, statute, rule or regulation of the United States, any state,

territory, or possession thereof or the District of Columbia), whether arising prior to or

subsequent to the commencement of these cases, whether known or unknown, and whether

imposed by agreement, understanding, law, equity or otherwise, and all Excluded Liabilities

(collectively, "Claims"), except for any Assumed Liabilities and Permitted Liens, because, in

each case, one or more of the standards set forth in section 363(f)(1)-(5) of the Bankruptcy Code

have been satisfied. Without limiting the generality of the foregoing, "Claims" shall include any


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and all liabilities or obligations whatsoever arising under or out of, in connection with, or in any

way relating to: (1) any of the Employee Benefit Plans (including any Claims related to unpaid

contributions); (2) the Worker Adjustment and Retraining Notification Act of 1988, or (3) any of

the Debtors' current and former employees. Those holders of Claims who did not object (or who

ultimately withdrew their objections, if any) to the Sale Transaction or the Sale Motion are

deemed to have consented pursuant to section 363(f)(2) of the Bankruptcy Code. Those holders

of Claims who did object that have an interest in the Assets fall within one or more of the other

subsections of section 363(f) of the Bankruptcy Code and are therefore adequately protected by

having their Claims that constitute interests in the Assets, if any, attach solely to the proceeds of

the Sale Transaction ultimately attributable to the property in which they have an interest, in the

same order of priority and with the same validity, force and effect that such holders had prior to

the Sale Transaction, subject to any defenses of the Debtors. All persons having Claims of any

kind or nature whatsoever against the Debtors or the Assets shall be forever barred, estopped and

permanently enjoined from pursuing or asserting such Claims against Buyer or any of its assets,

property, Affiliates, successors, assigns, or the Assets (other than Assumed Liabilities and

Permitted Liens).

O. Buyer would not have entered into the Purchase Agreement and would not

consummate the transactions contemplated thereby, thus adversely affecting the Debtors and

their estates and their creditors, if the sale of the Assets was not free and clear of all Claims,

other than Assumed Liabilities and Permitted Liens, or if Buyer would, or in the future could, be

liable for any such Claims, including, as applicable, certain liabilities related to the Debtor's

business that will not be assumed by Buyer, as described in the Purchase Agreement.


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ASSUMPTION AND ASSIGNMENT OF THE DEBTOR CONTRACTS

P. The assumption and assignment of the Debtor Contracts are integral to the

Purchase Agreement, are in the best interests of the Debtors and their estates, and represent the

reasonable exercise of the Debtors' sound business judgment.

Q. With respect to each of the Debtor Contracts, the Debtors have met all

requirements of section 365(b) of the Bankruptcy Code. Further, Buyer has provided all

necessary adequate assurance of future performance under the Debtor Contracts in satisfaction of

sections 365(b) and 365(f) of the Bankruptcy Code. Accordingly, the Debtor Contracts may be

assumed by the Debtors and assigned to Buyer, as provided for in the Purchase Agreement.

VALIDITY OF THE TRANSFER

R. As of the effective time of the consummation of the Sale Transaction

pursuant to the Purchase Agreement (the "Closing"), the transfer of the Assets to Buyer will be a

legal, valid and effective transfer of the Assets, and will vest Buyer with all right, title and

interest of the Debtors in and to the Assets, free and clear of all Claims, other than Assumed

Liabilities and Permitted Liens.

S. The Debtors (1) have full corporate power and authority to execute the

Purchase Agreement and all other documents contemplated thereby, and the Sale Transaction has

been duly and validly authorized by all necessary corporate action of the Debtors, (2) have all of

the corporate power and authority necessary to consummate the transactions contemplated by the

Purchase Agreement, and (3) upon entry of this Sale Order, other than any consents identified in

the Purchase Agreement, need no consent or approval from any other person to consummate the

Sale Transaction.


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NOW THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED

THAT:

GENERAL PROVISIONS

1. The Sale Motion is granted as set forth herein, and the Sale Transaction is

approved as set forth in this Sale Order.

2. The findings of fact set forth above and conclusions of law stated herein

shall constitute this Court's findings of fact and conclusions of law pursuant to Bankruptcy

Rule 7052, made applicable to this proceeding pursuant to Bankruptcy Rule 9014. To the extent

any finding of fact later shall be determined to be a conclusion of law, it shall be so deemed, and

to the extent any conclusion of law later shall be determined to be a finding of fact, it shall be so

deemed.

3. All objections [[ (except for Cure Objections or Adequate Assurance

Objections that have been adjourned with the consent of Buyer), if any, ]] to the Sale Motion or

the relief requested therein that have not been withdrawn, waived or settled as announced to the

Court at the Sale Hearing or by stipulation filed with the Court, and all reservations of rights

included therein, are hereby overruled on the merits.

4. Notice of the Sale Hearing was fair and equitable under the circumstances

and complied in all respects with section 102(1) of the Bankruptcy Code and Bankruptcy

Rules 2002, 6004 and 6006.

5. The consideration provided by Buyer under the Purchase Agreement is

fair and reasonable, and the sale to Buyer of the Assets shall be deemed for all purposes to

constitute a transfer in exchange for reasonably equivalent value and fair consideration under the

Bankruptcy Code and any other applicable law.


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APPROVAL OF THE PURCHASE AGREEMENT

6. The Purchase Agreement, all transactions contemplated therein and all of

the terms and conditions thereof are hereby approved.

7. Pursuant to sections 105, 363 and 365 of the Bankruptcy Code, the

Debtors are authorized to perform their obligations under and comply with the terms of the

Purchase Agreement and consummate the Sale Transaction, pursuant to and in accordance with

the terms and conditions of the Purchase Agreement and this Sale Order.

8. The Debtors, as well as their Affiliates, officers, employees and agents,

are authorized to execute and deliver, and authorized to perform under, consummate and

implement, the Purchase Agreement, in substantially the same form as attached hereto as

Exhibit A, together with all additional instruments and documents that may be reasonably

necessary or desirable to implement the Purchase Agreement and to take all further actions as

may be (a) reasonably requested by Buyer for the purpose of assigning, transferring, granting,

conveying and conferring to Buyer, or reducing to possession, the Assets or (b) necessary or

appropriate to the performance of the obligations contemplated by the Purchase Agreement, all

without further order of the Court.

TRANSFER OF ASSETS FREE AND CLEAR

9. Pursuant to sections 105(a), 363(b), 363(f) and 365 of the Bankruptcy

Code, the Debtors are authorized to transfer the Assets in accordance with the terms of the

Purchase Agreement. The Assets shall be transferred to Buyer, and upon consummation of the

Purchase Agreement, such transfer shall (a) be valid, legal, binding and effective; (b) vest Buyer

with all right, title and interest of the Debtors in the Assets; and (c) be free and clear of all

Claims, except for Assumed Liabilities and Permitted Liens, with all Claims that represent

interests in property to attach to the net proceeds of the Sale Transaction, in the order of their


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priority and with the same validity, force and effect which they now have against the Assets,

subject to any claims and defenses the Debtors may possess with respect thereto.

10. Except as otherwise provided in the Purchase Agreement, all persons and

entities (and their respective successors and assigns) including, without limitation, all debt

security holders, equity security holders, governmental, tax and regulatory authorities, lenders,

employees, former employees, pension plans, trade creditors and any other creditors holding

Claims, except for Assumed Liabilities and Permitted Liens, are hereby forever barred, estopped

and permanently enjoined from asserting or pursuing such Claims against Buyer, its Affiliates,

successors or assigns, its property or the Assets, including, without limitation, taking any of the

following actions with respect to a Claim (other than an Assumed Liability or Permitted Lien):

(a) commencing or continuing in any manner any action or other proceeding against Buyer, its

Affiliates, successors or assigns, assets or properties; (b) enforcing, attaching, collecting or

recovering in any manner any judgment, award, decree, or order against Buyer, its Affiliates,

successors or assigns, assets, or properties; (c) creating, perfecting, or enforcing any liens,

claims, encumbrances or other interests against Buyer, its successors or assigns, assets or

properties; (d) asserting a Claim as a setoff, right of subrogation or recoupment of any kind

against any obligation due Buyer or its successors or assigns; or (e) commencing or continuing

any action in any manner or place that does not comply, or is inconsistent, with the provisions of

this Sale Order or the agreements or actions contemplated or taken in respect thereof. No such

persons or entities shall assert or pursue against Buyer or its Affiliates, successors or assigns any

such Claim, except for Assumed Liabilities and Permitted Liens.

11. This Sale Order (a) shall be effective as a determination that, as of the

Closing, all Claims, other than Assumed Liabilities and Permitted Liens, have been


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unconditionally released, discharged and terminated as to Buyer and the Assets, and that the

conveyances and transfers described herein have been effected, and (b) is and shall be binding

upon and govern the acts of all entities, including all filing agents, filing officers, title agents,

title companies, recorders of mortgages, recorders of deeds, registrars of deeds, administrative

agencies, governmental departments, secretaries of state, federal and local officials and all other

persons and entities who may be required by operation of law, the duties of their office, or

contract, to accept, file, register or otherwise record or release any documents or instruments, or

who may be required to report or insure any title or state of title in or to any lease; and each of

the foregoing persons and entities is hereby directed to accept for filing any and all of the

documents and instruments necessary and appropriate to consummate the transactions

contemplated by the Purchase Agreement.

12. If any person or entity that has filed financing statements, mortgages,

mechanic's liens, lis pendens or other documents or agreements evidencing Claims against or in

the Debtors or the Assets shall not have delivered to the Debtors prior to the Closing of the Sale

Transaction, in proper form for filing and executed by the appropriate parties, termination

statements, instruments of satisfaction, releases of all interests which the person or entity has

with respect to the Debtors or the Assets or otherwise, then with regard to the Assets that are

purchased by Buyer pursuant to the Purchase Agreement and this Sale Order (a) the Debtors are

hereby authorized and directed to execute and file such statements, instruments, releases and

other documents on behalf of the person or entity with respect to the Assets and (b) Buyer is

hereby authorized to file, register or otherwise record a certified copy of this Sale Order, which,

once filed, registered or otherwise recorded, shall constitute conclusive evidence of the release of

all Claims against the Assets other than the Assumed Liabilities and Permitted Liens. This Sale


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Order is deemed to be in recordable form sufficient to be placed in the filing or recording system

of each and every federal, state or local government agency, department or office.

13. Following the Closing of the Sale Transaction, no holder of any Claim

(except for any Assumed Liability or Permitted Lien) shall interfere with Buyer's title to or use

and enjoyment of the Assets based on or related to any such Claim or based on any actions the

Debtors may take in their chapter 11 cases.

14. Except as expressly set forth in the Purchase Agreement, Buyer and its

successors and assigns shall have no liability for any Claim. By virtue of the Sale Transaction,

Buyer shall not be deemed to: (a) be a legal successor, or otherwise be deemed a successor to

any of the Debtors; (b) have, de facto or otherwise, merged with or into any or all Debtors; or

(c) be a mere continuation or substantial continuation of any or all Debtors or the enterprise or

operations of any or all Debtors. Further, except for Assumed Liabilities and Permitted Liens,

Buyer shall have no liability for any Claim, whether known or unknown as of the Closing Date,

now existing or hereafter arising, whether fixed or contingent, whether as a successor,

vicariously, or otherwise, of any kind, nature or character whatsoever, including Claims arising

under, without limitation: (i) any employment agreements; (ii) any pension, welfare,

compensation or other employee benefit plans, agreements, practices and programs, including,

without limitation, any pension plan of or related to any of the Debtors or any Debtor's Affiliates

or predecessors or any current or former employees of any of the foregoing, including, without

limitation, the Employee Benefit Plans and any other agreements related to the Employee Benefit

Plans, (iii) any employee, worker's compensation, occupational disease or unemployment or

temporary disability related law, including, without limitation, claims that might otherwise arise

under or pursuant to (a) the Employee Retirement Income Security Act of 1974, as amended,


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(b) the Fair Labor Standards Act, (c) Title VII of the Civil Rights Act of 1964, (d) the Federal

Rehabilitation Act of 1973, (e) the National Labor Relations Act, (f) the Worker Adjustment and

Retraining Notification Act of 1988, (g) the Age Discrimination and Employee Act of 1967 and

Age Discrimination in Employment Act, as amended, (h) the Americans with Disabilities Act of

1990, (i) the Consolidated Omnibus Budget Reconciliation Act of 1985, (j) state discrimination

laws, (k) state unemployment compensation laws or any other similar state laws, (l) state

workers' compensation laws or (m) any other state or federal employee benefit laws, regulations

or rules or other state or federal laws, regulations or rules relating to employment with any or all

Debtors or any predecessors; (iv) any antitrust laws; (v) any product liability or similar laws,

whether state or federal or otherwise; (vi) any environmental laws, rules, or regulations,

including, without limitation, under the Comprehensive Environmental Response,

Compensation, and Liability Act, 42 U.S.C. §§ 9601, et seq., or similar state statutes; (vii) any

bulk sales or similar laws; (viii) any tax statutes or ordinances, including, without limitation, the

Internal Revenue Code of 1986, as amended; (xi) any common law doctrine of de facto merger

or successor or transferee liability, successor-in-interest liability theory or any other theory of or

related to successor liability; (x) or from the Debtors' business operations or the cessation

thereof; and (xi) or from any litigation involving one or more of the Debtors.

“CONSIGNMENT” INVENTORY

15. The Assets sold by the Sellers to the Buyer pursuant to this Order include

any and all Inventory that as of the commencement of these chapter 11 cases was delivered to, or

in the possession of, the Sellers pursuant to any type of consignment arrangement or that was

listed in Schedule 4.5 to the Purchase Agreement, and as set forth herein, such Assets shall

transfer to the Buyer free and clear of all Claims.


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16. Any Inventory transferred to the Buyer at Closing that was delivered to the

Sellers after the commencement of these chapter 11 cases pursuant to a consignment

arrangement shall be transferred to the Buyer free and clear of all Claims (including any Claims

relating to consignment sales prior to the Closing); provided, however, that with respect to any

such Inventory, the Buyer after Closing will recognize the consignment arrangement applicable

to such Inventory, but only to the extent of, and with respect to, such Inventory actually

transferred to the Buyer and not with respect to any Claims (including for items not transferred to

the Buyer or that were previously sold or otherwise disposed of by the Sellers).

ASSUMPTION AND ASSIGNMENT OF DEBTOR CONTRACTS

17. The Debtors are hereby authorized in accordance with sections 105(a)

and 365 of the Bankruptcy Code to assume and assign the Debtor Contracts to Buyer free and

clear of all Claims, and to execute and deliver to Buyer such documents or other instruments as

may be necessary to assign and transfer the Debtor Contracts to Buyer as provided in the

Purchase Agreement.

18. The Debtor Contracts shall be transferred to, and remain in full force and

effect for the benefit of, Buyer in accordance with their respective terms, including all

obligations of Buyer as the assignee of the Debtor Contracts, notwithstanding any provision in

any such Debtor Contracts (including, without limitation, those of the type described in

sections 365(e)(1) and (f) of the Bankruptcy Code) that prohibits, restricts or conditions such

assignment or transfer. There shall be no rent accelerations, escalations, assignment fees,

increases or any other fees charged to Buyer or the Debtors as a result of the assumption or

assignment of the Debtor Contracts.

19. All Cure Costs shall be paid in cash by Buyer in accordance with the terms

of the Purchase Agreement. Payment of the Cure Costs shall be in full satisfaction and cure of


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any and all defaults under the Debtor Contracts, whether monetary or non-monetary. Each

nondebtor party to a Debtor Contract is forever barred, estopped and permanently enjoined from

asserting against the Debtors or Buyer, their successors or assigns or the property of any of them,

any default existing as of the date of the Sale Hearing if such default was not raised or asserted

prior to or at the Sale Hearing.

20. The failure of the Debtors or Buyer to enforce at any time one or more

terms or conditions of any Debtor Contract shall not be a waiver of such terms or conditions, or

of the Debtors' and Buyer's rights to enforce every term and condition of the Debtor Contracts.

21. Upon the Closing of the Sale Transaction, Buyer shall be fully and

irrevocably vested with all right, title and interest of the Debtors under the Initial Assumed Real

Property Leases and the Initial Assumed Contracts.

22. The contract and lease designation procedures set forth in Section 1.4 of

the Purchase Agreement are authorized and approved in their entirety. As of the date of delivery

from Buyer to Sellers of an applicable Designation Notice for each of the Designated Real

Property Leases and Designated Contracts, the Sellers shall assume and assign to the Buyer such

Assumed Real Property Leases and Assumed Contracts effective as of such date of delivery, and

the Buyer shall be fully and irrevocably vested with all right, title and interest of the Debtors

under the such Assumed Real Property Leases and Assumed Contracts.

23. As of the Closing Date in the case of the Removed Real Property Leases

and the Removed Contracts, and as of the date of delivery of an applicable Designation Notice

pursuant to Section 1.4(b) for each of the subsequently designated Removed Property Leases and

Removed Contracts, or in either case if applicable, upon the conclusion of the Post-Closing


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Occupancy Period, Sellers shall be deemed to have rejected such Removed Real Property Leases

and Removed Contracts in accordance with Section 365 of the Bankruptcy Code.

RELEASE

24. Upon the Closing Date, each Seller, along with any Person acting for,

derivatively, on behalf of, or claiming through them, including but not limited to any committee

appointed in any of the Cases, and any trustee or examiner whether appointed in any of the Cases

or any subsequent case, for themselves and their respective past and present officers, directors,

shareholders, partners, principals, subsidiaries, parent companies, affiliates, agents, employees,

successors and predecessors-in-interest, advisors, accountants, attorneys, representatives, and

assigns (“Releasing Parties”) irrevocably and unconditionally forever releases, acquits and

forever discharges each of the Directors and Officers (and their properties) of and from any and

all past, present and future legal actions, choses in action, causes of action, rights, demands,

suits, claims, liabilities, encumbrances, lawsuits, adverse consequences, amounts paid in

settlement, costs, fees, damages, debts, deficiencies, diminution in value, disbursements,

expenses, losses and other obligations of any kind, character or nature whatsoever, whether in

law, equity or otherwise (including, without limitation, those arising under Chapter 5 of the

Bankruptcy Code and applicable non-bankruptcy law, and interest or other costs, penalties, legal,

accounting and other professional fees and expenses, and incidental, consequential and punitive

damages payable to third parties), whether known or unknown, fixed or contingent, direct,

indirect, or derivative, asserted or unasserted, foreseen or unforeseen, suspected or unsuspected,

now existing, heretofore existing or which may heretofore accrue (collectively, a “Charge”)

against any of the Directors and Officers, whether held in a personal or representative capacity

occurring from the beginning of time to and including the date of the release including, but not


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limited to, in any way, directly or indirectly arising out of, connected with or relating to any or

all of the Sellers, their estates or the Cases (collectively, the “Released Matters”). Further,

notwithstanding anything contained herein to the contrary, this release is not intended to, nor

shall it have the effect of releasing, any claim or cause of action, if any, arising under this

Agreement or precluding the Releasing Parties from offering into evidence the fact and/or terms

of this Agreement in connection with any action to enforce the same, provided that the fact of the

negotiation of this Agreement shall not be admissible in any action and shall not form the basis

for any claim or recovery therein.

25. Upon the Closing Date, the Releasing Parties, and each of them, further

covenant and agree that neither they, nor any of them, will assert, initiate, institute, prosecute,

participate in or maintain, or will instigate, abet or encourage any other person or entity to assert,

initiate, institute, prosecute, participate in or maintain, any Charge, currently or in the future,

against the Directors and Officers, or any of them, with respect to any of the Released Matters.

26. Without in any way limiting the scope of the above release, each

Releasing Party severally agrees that such Releasing Party shall not commence, assert, maintain,

continue or pursue any claim, demand or cause of action of any type or nature that such

Releasing Party may have, claim to have or assert to have, of any type or nature, (including any

such claims, demands and causes of action that have not been discharged that may hereafter

accrue or arise or which they may in the future acquire in any way) against any third Party, that

seeks damages, contribution, indemnity, right of set off or any other economic benefit or

recovery with respect to in any way, directly or indirectly, arising out of, connected with or

relating to any or all of the Sellers and their estates and the Cases, if such claim, demand or cause

of action (a “Resulting Claim”) would result in any liability or an indemnity or any payment


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obligation of any type or nature on the part of any of the Directors and Officers (or a good faith

claim, demand, action or proceeding for such liability, indemnity or payment obligation), unless

such Releasing Party shall have executed an indemnity in favor of, and in form and substance

satisfactory to, the Directors and Officers, as applicable, for payment (not collection) of any

liability, payment obligations and costs (including, without limitation, advancement of attorneys’

and other litigation advisory fees and expenses) that may be incurred in connection with such

Resulting Claim.

ADDITIONAL PROVISIONS

27. This Court shall retain exclusive jurisdiction to, among other things,

interpret, enforce and implement the terms and provisions of this Sale Order and the Purchase

Agreement, all amendments thereto, any waivers and consents thereunder (and of each of the

agreements executed in connection therewith in all respects), to adjudicate disputes related to this

Sale Order or the Purchase Agreement, and to enforce the injunctions set forth herein.

28. All entities that are currently in possession of some or all of the Assets are

hereby directed to surrender possession of such assets to Buyer as of the Closing.

29. No bulk sales law, or similar law of any state or other jurisdiction shall

apply in any way to the transactions contemplated by the Purchase Agreement, the Sale Motion

and this Sale Order.

30. The transactions contemplated by the Purchase Agreement are undertaken

by Buyer in good faith, as that term is used in section 363(m) of the Bankruptcy Code, and

accordingly, the reversal or modification on appeal of the authorization provided herein of the

Sale Transaction shall neither affect the validity of the Sale Transaction nor the transfer of the

Assets to Buyer, free and clear of Claims, unless such authorization is duly stayed before the

Closing pending such appeal.


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31. The terms and provisions of the Purchase Agreement and this Sale Order

shall be binding in all respects upon, or shall inure to the benefit of, the Debtors, their estates and

their creditors, Buyer, and their respective Affiliates, successors and assigns, and any affected

third parties including all persons asserting Claims, notwithstanding any subsequent appointment

of any trustee, examiner or receiver under any chapter of the Bankruptcy Code or any other law,

and all such provisions and terms shall likewise be binding on such trustee, examiner or receiver

and shall not be subject to rejection or avoidance by the Debtors, their estates, their creditors or

any trustee, examiner or receiver.

32. The failure specifically to include any particular provision of the Purchase

Agreement in this Sale Order shall not diminish or impair the effectiveness of such provision, it

being the intent of the Court that the Purchase Agreement be authorized and approved in its

entirety.

33. The Purchase Agreement, and any related agreements, documents or other

instruments, may be modified, amended or supplemented by the parties thereto, in a writing

signed by both parties, and in accordance with the terms thereof, without further order of the

Court, provided that any such modification, amendment or supplement does not materially

change the terms of the Purchase Agreement.

34. In the event that there is a direct conflict between the terms of this Sale

Order and the terms of (i) the Purchase Agreement, or (ii) any other order of this Court, the terms

of this Sale Order shall control. Nothing contained in any chapter 11 plan hereinafter confirmed

in these chapter 11 cases shall conflict with or derogate from the provisions of the Purchase

Agreement or the terms of this Sale Order.


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35. Each and every federal, state and local governmental agency, department

or official is hereby directed to accept any and all documents and instruments necessary and

appropriate to consummate the transactions contemplated by the Purchase Agreement.

36. Promptly after the Closing Date each Seller shall change its name to a

name that is not (and that is not confusingly similar to) “Family Christian” or “FCS”, and each

Seller shall correspondingly change the caption of each of the Debtor’s cases to reflect such new

names.

37. Upon the Closing, the FC Debt shall be fully, finally and indefensibly paid

in full.


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Dated: ___________ ____, 2015 Grand Rapids, Michigan

HONORABLE ______________________ UNITED STATES BANKRUPTCY JUDGE


US2008 6331608 4 22786184 v4

EXHIBIT A

Purchase Agreement

(without exhibits)


Documents

UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT …media.publishersmarketplace.com/wp-content/uploads/2015/02/FCSFiling.pdfseveral hundred thousand “shoe box” gifts and gospel