8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): February 24, 2017

The Finish Line, Inc.

__________________________________________

(Exact name of registrant as specified in its charter)

Indiana	0-20184	35-1537210
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
3308 North Mitthoeffer Road Indianapolis, Indiana		46235
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 317-899-1022

Not Applicable

______________________________________________

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

The information regarding the Company entering into the Amendment and Transition Services Agreement (as both terms are defined below) set forth in Item 2.01 of this current report on Form 8-K is included by reference into this Item 1.01.

Item 2.01 Completion of Acquisition or Disposition of Assets.

On February 24, 2017, The Finish Line, Inc. (the “Company”) completed the sale of its JackRabbit division to affiliates of CriticalPoint Capital, LLC (collectively, “Buyers”) pursuant to the Membership Interest Purchase Agreement (the “Agreement”) previously disclosed in the Company’s current report on Form 8-K filed with the SEC on February 1, 2017. The transaction took the form of a sale by the Company of its entire membership interest in its affiliated company which owns JackRabbit, a payment of $8,300,000 to the affiliated company as part of pre-closing restructuring, and an additional $700,000 payment to Buyers on or before September 30, 2017, subject to customary working capital and other adjustments set forth in the Agreement. Buyers acquired all JackRabbit assets, inventory, leasehold interests, customary liabilities, intellectual property, and the JackRabbit trademark and name pursuant to the Agreement.

In connection with the completion of the transaction, the Company and Buyers entered into an Amendment to Membership Interest Purchase Agreement (the “Amendment”) on February 24, 2017. The Amendment amends the Agreement by modifying the post-closing working capital adjustment process, modifying the effective time of closing, addressing the replacement of existing letters of credit, and modifying the pre-closing and post-closing restructuring. In addition, pursuant to the Amendment, the Company and Buyers waived the condition to closing in the Agreement that Buyers have a third party asset based/working capital line of credit facility in place prior to the closing in the amount of $10,000,000 from a reputable financial institution. Other than as expressly modified pursuant to the Amendment, the Agreement, which was previously filed as Exhibit 2.1 to the current report on Form 8-K filed by the Company on February 1, 2017, remains in full force and effect as originally executed on January 26, 2017.

Additionally on February 24, 2017, in connection with the closing of the sale of JackRabbit division, the Company and Buyers entered into a Transition Services Agreement (the “Transition Services Agreement”), pursuant to which the Company will provide certain support and warehousing services to Buyers for a limited period of time after the closing on the terms and conditions set forth therein.

A copy of the Agreement is attached as Exhibit 2.1 to the current report on Form 8-K filed by the Company on February 1, 2017 and is incorporated by reference herein. The foregoing description of the Agreement is a summary and is qualified in its entirety by reference to the full Agreement. The representations, warranties, and covenants set forth in the Agreement (i) have been made only for the purposes of the Agreement and solely for the benefit of the parties thereto, (ii) may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Agreement instead of establishing these matters as facts, and (iii) may be subject to standards of materiality applicable to contracting parties that differ from those applicable to investors. Investors should not rely on the representations, warranties, and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of any of the parties or any of their respective affiliated entities.  Moreover, information concerning the subject matter of the representations, warranties, and covenants set forth in the Agreement may have changed after the date of the Agreement, which subsequent information may or may not be fully reflected in public disclosures.

Furthermore, the above descriptions of the Amendment and the Transition Services Agreement are not complete and are qualified in their entirety by reference to copies of the full Amendment and Transition Services Agreement which are filed as Exhibits 10.1 and 10.2, respectively, to this current report on Form 8-K and are incorporated by reference herein.

The unaudited pro forma financial statements of the Company giving effect to the sale of the JackRabbit division are attached hereto as Exhibit 99.1 and incorporated herein by reference. The attachments include an unaudited pro forma condensed consolidated balance sheet as of November 26, 2016, unaudited pro forma consolidated statement of operations for the fiscal year ended February 27, 2016, and unaudited pro forma consolidated statement of operations for the thirty-nine weeks ended November 26, 2016, and present the Company’s results of operations as if the disposition of the JackRabbit division had been

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completed on the first day of the respective periods presented. This pro forma consolidated financial information is unaudited and subject to adjustment in future filings by the Company.

Item 9.01 Financial Statements and Exhibits.

(b) Pro Forma Financial Information

An unaudited pro forma condensed consolidated balance sheet for the Company as of November 26, 2016, unaudited pro forma consolidated statement of operations of the Company for the fiscal year ended February 27, 2016, and unaudited pro forma consolidated statement of operations of the Company for the thirty-nine weeks ended November 26, 2016, giving effect to the disposition of the JackRabbit division, are attached hereto as Exhibit 99.1 to this current report on Form 8-K and incorporated by reference herein.

(d) Exhibits

Exhibit Number	Description
10.1	Amendment to Membership Interest Purchase Agreement, dated February 24, 2017
10.2	Transition Services Agreement between The Running Specialty Group Acquisitions 1, LLC and The Finish Line, Inc., The Finish Line USA, Inc., and The Finish Line Distribution, Inc., dated February 24, 2017
99.1	The Finish Line, Inc. Unaudited Pro Forma Condensed Consolidated Financial Information

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	The Finish Line, Inc.
Date: March 1, 2017	By:	/s/ Edward W. Wilhelm
	Name:	Edward W. Wilhelm
	Title:	Executive Vice President, Chief Financial Officer

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EX-10.1

Exhibit 10.1

Amendment to Membership Interest Purchase Agreement

This Amendment to Membership Interest Purchase Agreement (the “Amendment”) is made and entered into effective this 24th day of February, 2017 (the “Effective Date”) by and among PROJECT RUNNING SPECIALTIES, INC., a Delaware corporation (“Buyer”), PROJECT RUNNING SPECIALTIES, LLC, a Delaware limited liability company (“IP Buyer”, and collectively with Buyer, the “Buyers”), and THE FINISH LINE, INC., an Indiana corporation (“Seller”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms in the Membership Interest Purchase Agreement dated January 26, 2017 (the “Purchase Agreement”), by and among the Buyer, IP Buyer, and Seller (collectively, the “Parties”).

Recitals

WHEREAS, the Parties executed the Purchase Agreement relating to the sale and purchase of a chain of stand-alone retail running specialty stores currently operated by The Running Specialty Group, LLC and The Running Specialty Group Acquisitions 1, LLC; and

WHEREAS, the Parties desire to make certain amendments to the Purchase Agreement to incorporate the agreement of the Parties to: (a) revise the procedures for the calculation of Closing Net Working Capital; (b) change the effective time of the Closing; (c) waive Buyers’ obligation to obtain the Third Party Financing prior to Closing; and (d) revise the Pre-Closing Restructuring to provide for only two Acquired Companies.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1.Amendments.

a. Closing Net Working Capital Procedures. Section 2.3(b) of the Purchase Agreement is hereby amended and replaced in its entirety with the following:

(b)    Post-Closing Working Capital Adjustment.

(i)    Within forty-five (45) days after the Closing Date, Seller shall deliver to Buyers a consolidated balance sheet of the Acquired Companies (the “Closing Balance Sheet”) and Seller’s calculation (the “Closing Net Working Capital Statement”) of the Net Working Capital as of the Closing Date (the “Closing Net Working Capital”). Buyers shall permit Seller and its Representatives access to the personnel, premises, books and records, and other documents and data of the Buyers, Acquired Companies and RSG Companies in connection with the preparation of the Closing Balance Sheet and Closing Net Working Capital Statement. In conjunction with delivering the Closing Balance Sheet and Closing Net Working Capital Statement, Seller also shall deliver or make available to Buyers such work papers, schedules and detail reports used to support or calculate the Closing Balance Sheet and Closing Net Working Capital Statement. Seller shall also permit Buyers and their Representatives access to the accounting records and accountant work papers (if any) used in connection with the preparation of the Closing Balance Sheet and Closing Net Working Capital Statement.

(ii)    Buyers shall have thirty (30) days after receipt of the Closing Balance Sheet and Closing Net Working Capital Statement (the “Dispute Period”) to examine the same and any work papers and records relating thereto and submit a notice to Seller of its objections (the “Dispute Notice”), if any, to the Closing Net Working Capital Statement. Such notice shall specify each item and amount as to which Buyers disagree (collectively, the “Disputed Items”) and the basis of Buyers’ objections. If Buyers have not given a Dispute Notice to Seller within the Dispute Period, or if Seller and Buyers are able to resolve any objections raised by Buyer through

negotiations, then the Closing Net Working Capital Statement, as revised pursuant to such negotiations, if any, shall be final and binding on the parties. If Seller and Buyer are unable to resolve the Disputed Items within thirty (30) days after delivery of the Dispute Notice, then the Disputed Items, and only the Disputed Items, shall be referred for resolution to Crowe Horwath LLP, and if Crowe Horwath LLP is unable or unwilling to accept the engagement, then to another independent certified public accounting firm mutually acceptable to Buyers and Seller (in any such case, the “Independent Accountants”). The Independent Accountants may not be the regular outside accounting firm of any of the parties hereto. The Independent Accountants shall be instructed to complete their review of Disputed Items and any documentation submitted by the parties with respect thereto and to make a determination within forty-five (45) days after they are engaged, and the decision of the Independent Accountants shall be final and binding on the parties absent manifest error. In resolving any Disputed Items, the Independent Accountants shall not assign a value to any item higher than the highest value for such item claimed by either Seller or Buyers or less than the lowest value for such item claimed by either one. The Independent Accountants shall prepare and forward to Buyers and Seller an explanation of their determination with respect to the Disputed Items identified in the Dispute Notice and a final Closing Balance Sheet and Closing Net Working Capital Statement, including the Closing Net Working Capital. In such an event, the revised Closing Balance Sheet and Closing Net Working Capital Statement and the Closing Net Working Capital determination shall be final and binding on the parties. The costs, expenses and fees of the Independent Accountants shall be borne by the parties based upon the degree to which the Independent Accountants accept the parties’ respective positions.

(iii)    Payments in respect of Closing Net Working Capital shall be made as follows:

(aa) if the Closing Net Working Capital is greater than or equal to the Target Net Working Capital, then the Pre-Closing Net Working Capital Adjustment Amount paid by Seller, if any, shall be paid by Buyers, jointly and severally, to Seller; or

(bb) if the Closing Net Working Capital is less than the Target Net Working Capital, then Seller shall pay to Buyers an amount (the “Deficiency”) equal to (1) the difference between the Target Net Working Capital minus Closing Net Working Capital, minus (2) any Pre-Closing Net Working Capital Adjustment Amount previously paid by Seller; and

(cc) Amounts owed by Seller under Section 2.3(b)(iii)(bb), if any, shall be paid as follows: (I) within five (5) days of delivery by Seller of the statements required by Section 2.3(b)(i), Seller shall pay the preliminary Deficiency owing calculated on the basis of Seller’s initial statement of Closing Net Working Capital under Section 2.3(b)(i), and (II) if there are any Disputed Items, within five (5) days of the final determination of Closing Net Working Capital under Section 2.3(b)(ii), Seller shall pay the Deficiency, less any amounts previously paid under Section 2.3(b)(iii)(cc)(I).

(iv)    Any payment required pursuant to this Section 2.3(b) shall be made by wire transfer by Buyers or Seller, as the case may be, of immediately available funds to the account of such other party as may be designated in writing by such other party. Any such payment will be made together with interest at the Prime Rate per annum as quoted in The Wall Street Journal as of the Closing Date, compounded daily beginning on the Closing Date and ending on the date of payment. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of three hundred sixty five (365) days and the actual number of days elapsed.

b. Effective Time of Closing.Section 2.6 of the Purchase Agreement is hereby amended and replaced in its entirety with the following:

Section 2.6Closing. Subject to the terms and conditions of this Agreement, the purchase and sale of the Membership Interests contemplated hereby shall take place at a closing (the “Closing”) to be held at 10:00 a.m., Eastern Time, no later than February 24, 2017 effective as of 11:59 p.m. Eastern Time on such date (the “Closing Date”), at the offices of Seller’s counsel at Barnes & Thornburg LLP, 11 South Meridian Street, Indianapolis, Indiana 46204, or via correspondence and e mail communications, or at such other time and place as the parties may agree.

c. Financing.

i. Section 5.6 of the Purchase Agreement is hereby amended and replaced in its entirety with the following:

Section 5.6Company Financing. Buyers shall work in good faith to obtain a third party asset based/working capital line of credit facility for the RSG Companies in the amount of at least $10,000,000 from a reputable financial institution within a reasonable time after Closing (the “Third Party Financing”).

ii.     Section 5.8(c) of the Purchase Agreement is hereby amended and replaced in its entirety with the following:

Buyers shall replace the existing letters of credit under the RSG Companies’ Real Estate Leases for the Bronxville, New York and Northville, Michigan stores within 45 days after Closing.

iii. Section 5.17 of the Purchase Agreement is hereby amended and replaced in its entirety with the following:

Section 5.17Pre-Closing Restructuring. Buyers and Seller shall, and each shall cause their respective Affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances, and take such further actions as may be reasonably required to carry out immediately prior to Closing the restructuring described in Section 5.17 of the Disclosure Schedules (the “Pre-Closing Restructuring”), including, but not limited to, the signing and delivery of certificates of formations, limited liability company agreements, contribution agreements, assignments and any other instruments or documents. Seller shall also contribute Eight Million Three Hundred Thousand Dollars ($8,300,000) to Buyer, on behalf of the Acquired Company presently identified as “HoldCo” as part of the Pre-Closing Restructuring. Seller agrees to pay an additional Seven Hundred Thousand Dollars ($700,000) (the “Holdback Amount”) to Buyer on behalf of “Holdco” as follows: (i) upon replacement of the letter of credit for the Bronxville, New York stores pursuant to Section 5.8(c), or expiration of the Bronxville lease or letter of credit, Seller shall contribute a portion of the Holdback Amount equal to $167,325.12, (ii) upon replacement of the letter of credit for the Northville, Michigan stores pursuant to Section 5.8(c), or expiration of the Northville lease or letter of credit, Seller shall contribute a portion of the Holdback Amount equal to $ 200,000, (iii) if Buyers obtain a third party consent for any Real Property Lease, then Seller shall release a portion of the Holdback Amount in an amount equal to the reduction in the letter of credit amount required under Section 7.7 arising from the receipt of the consent (for example, if the required letter of credit amount under Section 7.7 was $285,000 and Buyer receives a consent after Closing such that the required letter of credit amount under Section 7.7 would have been reduced to $235,000, then Seller would release $50,000 from the Holdback Amount), (iv) if Buyers satisfy the post-closing covenants set forth in Section 5.8(c) and Section 7.7 by obtaining letters of credit, Seller will release the entire remaining Holdback Amount to Buyer on behalf of “Holdco” and(v)if no landlord has commenced or threatened in writing legal action against Seller on or before August 31, 2017, Seller

will release the entire remaining Holdback Amount to Buyer on behalf of “Holdco,” except that the amount of the Bronxville letter of credit shall be withheld and not disbursed until September 30, 2017 if Buyers fail to replace Seller’s letter of credit for such store before such date.

iv. Sections 6.1(i) and 6.2(g) of the Purchase Agreement are hereby deleted in their entirety.

d. Pre-Closing Restructuring.

i. The second “WHEREAS” clause on the first page of the Purchase Agreement is hereby amended and replaced in its entirety with the following:

WHEREAS, Buyers desire to acquire, and Seller desires to sell, the Business and all the membership interests of RSG and RSG1 through the purchase and sale of all the membership interests of two yet-to-be organized limited liability companies (each an “Acquired Company,” and collectively, the “Acquired Companies”) which will be organized pre-closing as part of the Pre-Closing Restructuring.

ii. The Pre-Closing Restructuring set forth on Schedule 5.17 of the Disclosure Schedules is hereby amended to reflect that no “FundsCo” shall be created as part of the Pre-Closing Restructuring and that $8,300,000 shall be contributed by Seller to Buyer on behalf of “HoldCo” at Closing and that an additional $700,000 will be paid by Seller to Buyer in accordance with Section 5.17 of the Purchase Agreement (as amended herein).

2.Acknowledgment. Buyers acknowledge and agree that Seller has received the sufficient number of third-party consents to fully satisfy Section 6.1(h) of the Purchase Agreement, and that Buyers and any Affiliate, successor or assigns of Buyers shall not challenge the validity or enforceability of the third-party consents at any time.

3.Effect. This amendment is intended to be effective as of the Effective Date. All other terms, conditions, provisions, representations and warranties set forth in the Purchase Agreement shall remain unchanged and shall continue in full force and effect.

[Signature page follows]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first written above by their respective officers thereunto duly authorized.

DMS 4703273

EX-10.2

Exhibit 10.2

Transition Services Agreement

This Transition Services Agreement (“Agreement”) is effective at 11:59 p.m. EST on February 24, 2017 (the “EffectiveDate”) by and between The Running Specialty Group Acquisitions 1, LLC, an Indiana limited liability company (“Company”), on the one hand, and The Finish Line, Inc., an Indiana corporation (“TFL”), The Finish Line USA, Inc., an Indiana corporation (“FLUSA”) and The Finish Line Distribution, Inc. (“FLDC”, TFL and FLUSA are each a “Service Provider” and collectively “Service Providers” and together with Company, the “Parties”).

Recitals

The Service Providers are willing to provide certain support and warehousing services to Company on the terms and conditions set forth herein.

Agreement

The Parties agree:

Article 1. Transition Services

Section 1.1 Services. Subject to the terms and conditions of this Agreement, Company hereby engages each Service Provider, on a non-exclusive basis, to provide the services set forth on the attached Exhibit A as amended from time to time (the “Services”) on the terms set forth below during the Term of this Agreement. Each Service Provider is only responsible for providing the Services assigned to that Servicer Provider by TFL; provided that TFL hereby guarantees the performance by Service Provider of the Services and other obligations required under this Agreement.

Section 1.2 Change in the Scope of Services. The occurrence of (a) any event or transaction which significantly increases or decreases the size and/or nature of the operations of Company in a manner that affects the scope, manner, nature or quantity of the Services or (b) any change in any local, state or federal laws, rules or regulations that affects the scope, manner, nature or quantity of the Services shall be considered a change in the scope of services, and the affected Service Provider and Company shall promptly meet to negotiate and execute an equitable adjustment to the terms of this Agreement. Until the adjustment of terms in connection with such change is agreed upon by the affected Service Provider and Company in writing, the Service Provider has no obligation to provide any Services beyond the scope of services that was in effect under this Agreement prior to any change of the type described in either clause (a) or (b) of this Section 1.2.

Article 2. Staff

Section 2.1 Service Provider Personnel. Each of the Service Providers shall provide the personnel required and appropriate to render the Services in accordance with the provisions of this Agreement. All personnel provided by a Service Provider pursuant to this Agreement shall be such Service Provider’s employees, contractors or agents, and in no event shall such personnel be deemed employees or agents of Company. The Service Providers may provide Services using a Service Providers’ permanent employees, contract employees or vendor employees as Service Provider shall deem appropriate for the work being performed.

Section 2.2 Policies and Procedures Regarding Service Providers’ Personnel. Service Provider shall maintain such personnel policies, procedures and other administrative functions for personnel required to render the Services as are generally utilized by the applicable Service Provider in its business. Service Providers shall have full control over and responsibility for the assignment and performance of employees providing the Services to Company

and for the terms and conditions of employment of such employees including hiring, transferring, salary, wages, benefits, work, shift scheduling, disciplining and all other matters related to the terms and conditions of employment.

Section 2.3 Staffing. Service Providers shall make all staffing decisions necessary to perform the Services under this Agreement. Service Providers reserve the right to assign personnel to perform the Services, and to replace or reassign such personnel at any time with reasonable prior notice to Company.

Section 2.4 Company and Service Provider Representatives. Company shall, at all times when a Service Provider is providing the Services, designate a representative or representatives of Company available by either telephone, pager, or in person to receive communications from a Service Provider regarding the Services, as well as any other information. Company will vest its representative with sufficient responsibility and authority for necessary decisions or expenditures to facilitate the timely, responsible and effective rendering of the Services by a Service Provider in accordance with the provisions of this Agreement and Service Providers shall rely on Company’s representative having such responsibility and authority. Similarly, each Service Provider shall, at all times when Service Provider is providing the Services, designate a representative or representatives for such Service Provider available either by telephone, a pager or in person to receive communications from Company regarding the Services, as well as any other information. Each Service Provider will vest the Service Provider’s representative with sufficient responsibility and authority for necessary decisions or expenditures to facilitate the timely, responsible and effective rendering of the Services by a Service Provider in accordance with the provisions of this Agreement and Company shall rely on such Service Provider’s representative having such responsibility and authority.

Article 3. Company’s Responsibilities

Section 3.1 Decisions of Company. Company will be responsible for making all decisions regarding whether to follow any recommendations made by a Service Provider in providing the Services. In the event that Company instructs a Service Provider that Company desires to follow any recommendation made by Service Provider, then the Service Provider shall use commercially reasonable efforts to implement such decision in accordance with Service Provider’s recommendation and Company’s instruction.

Section 3.2 Responsibilities of Company. The responsibilities and obligations of Company under and pursuant to this Agreement include, but are not limited to, the following:

(a)Legality and Liability of Transactions. The legality of all transactions with third parties will remain the responsibility of Company, except for transactions entered into as a direct result of decisions made solely by a Service Provider without Company’s knowledge. The Service Providers assume no responsibility for the performance either by third party suppliers of goods and services to Company or by Company under contracts or agreements, formal or informal, between Company and third parties. Each of the Service Providers and their affiliates assume no liability for the performance or quality of any product or service purchased on behalf of Company and Company shall have no recourse against any of Service Providers with regard to such products and services. Company shall retain all legal or equitable rights and remedies available to it as against any third party.

(b)Cooperation. The Company shall cooperate with Service Provider in connection with the performance of the Services hereunder, including producing on a timely basis all information that is reasonably requested with respect to the performance of Services, the provision of equipment, hardware or software not owned by the Company which may be required to appropriately render the Services, and the transition of Services at the end of the applicable Term or any extension thereof from Service Provider to the Company.

(c)Taxes and Interests. Company shall pay all taxes and interest related to or arising from transactions for which the Services are performed. In addition, Company shall be solely responsible for the payment of any taxes and duties based upon the facilities, assets, Services and/or products provided by a Service Provider.

Section 3.3 Access. A Service Provider shall provide the Services from Service Provider’s place of business. To the extent Company needs access to any facilities of a Service Provider in order to receive the Services, such Service Provider shall provide Company with reasonable access to its facilities for such purpose.

Article 4. Service Fees and Payment

Section 4.1 Fees. The fees for the Services shall be as set forth on the attached Exhibit A, as amended from time to time (the “Fees”).

Section 4.2 Invoices. Commencing as of the month in which the Services commence and continuing with each calendar month thereafter during the Term (each, a “Billing Period”) with respect to which payment or reimbursement by Company is due under the terms of this Agreement, Service Providers shall send to Company an invoice for Services rendered or expenses incurred during the Billing Period. Company shall pay the applicable Service Provider any amount payable not later than thirty (30) days after the end of the Billing Period for which such amount is due.

Section 4.3 Disputed Charges. If Company fails to pay the amount payable within the thirty (30) day period, and a Service Provider provides written notice of such failure to pay, then if such failure to pay is not remedied within fifteen (15) days following such written notice, the Service Providers shall have the right to discontinue providing Services under this Agreement and shall be relieved of any further obligation to provide the Services until such failure to pay is cured; provided that if within the fifteen (15) day period, Company (i) gives the Service Providers written notice of a good faith dispute with respect to any amount due, (ii) describes the dispute in reasonable detail, and (iii) pays all undisputed amounts then due, Company shall not be considered in default of such disputed amount.

Article 5. Term

Section 5.1 Term. This Agreement shall become effective on the Effective Date and shall continue in force for no more than one hundred twenty days (120) days (the “Term”); however, Company shall have a one-time option to extend the Term for an additional consecutive sixty (60) days in the event that Company’s secured lender requires the Company to extend the Term.

Article 6. Termination

Section 6.1 Termination for Convenience. Company may terminate this Agreement at any time upon prior written notice to the Service Providers; provided, however, that Company shall remain liable for any Fees accrued but not yet paid prior to the discontinuation of the Services.

Section 6.2 Termination for Cause. During the term of the Agreement, if either a Service Provider or Company breaches any material obligation hereunder and such breach is not cured within ten (10) days after receipt by the breaching Party of written notice from the non-breaching Party of its occurrence, the non-breaching Party to the Agreement may immediately terminate this Agreement as to it and the breaching Party; provided, however, that Company shall remain liable for any Fees accrued but not yet paid to a Service Provider prior to the discontinuation of the Services.

Section 6.3 No Waiver of Other Rights or Remedies. The exercise of any right of termination under this Article 6 shall not constitute a waiver of any other rights or remedies available to the Party for violation of the terms of this Agreement under this Agreement or under applicable law.

Article 7. Indemnification

Section 7.1 Indemnification by Company. Company agrees to indemnify, defend, and hold harmless each Service Provider from all claims, demands, actions, lawsuits, proceedings, damages, losses, liabilities, costs and expenses (including reasonable attorneys’ fees), by reason of, or arising from any actual or alleged (i) acts or omissions of Company (including its officers, directors, employees, subcontractors or agents), (ii) performance or non-performance of Company’s obligations and responsibilities under this Agreement and (iii) violation of any law, rule, regulation or authority by Company (including its officers, directors, employees, or agents).

Section 7.2 Indemnification by Service Provider. Each Service Provider agrees to indemnify, defend, and hold harmless Company from all claims, demands, actions, lawsuits, proceedings, damages, losses, liabilities, costs and expenses (including reasonable attorneys’ fees), by reason of, or arising from any actual or alleged (i) acts or omissions of Service Provider (including its officers, directors, employees, subcontractors or agents), (ii) performance or non-performance of Service Provider’s obligations and responsibilities under this Agreement and (iii) violation of any law, rule, regulation or authority by Service Provider (including its officers, directors, employees, or agents).

Section 7.3 Indemnification Procedures. The Party entitled to indemnification under this Article 7 (the “Indemnified Party”) shall reasonably and promptly, after the receipt of notice of any legal action or claim against such Indemnified Party in respect of which indemnification may be sought pursuant to this Article 7, notify the other Party (the “Indemnifying Party”) of such action or claim. The Indemnifying Party shall not be obligated to indemnify the Indemnified Party with respect to any such action or claim if the Indemnified Party knowingly fails to notify the Indemnifying Party thereof in accordance with the provisions of this Article 7 in sufficient time to permit the Indemnifying Party to defend against such matter and to make a timely response thereto, including, without limitation, any responsive motion or answer to a complaint, petition, notice or other legal, equitable, or administrative process relating to the action or claim, but only in so far as such knowing failure to notify the Indemnifying Party has actually resulted in prejudice or damage to the Indemnifying Party. In case any such action or claim shall be made or brought against the Indemnified Party, the Indemnifying Party may, or if so requested by the Indemnified Party shall, assume the defense thereof with counsel of its selection reasonably acceptable to the Indemnified Party and which shall be reasonably competent and experienced to defend the Indemnified Party. In such circumstances, the Indemnified Party shall (i) at no costs or expense to the Indemnified Party, cooperate with the Indemnifying Party and provide the Indemnifying Party with such information and assistance as the Indemnifying Party shall reasonably request in connection with such action or claim and (ii) at its own expense, have the right to participate and be represented by counsel of its own choice in any such action or with respect to any such claim. If the Indemnifying Party assumes the defense of the relevant claim or action (i) the Indemnifying Party shall not be liable for any settlement thereof which is made without its consent and (ii) the Indemnifying Party shall control the settlement of such action or claim; provided, however, that the Indemnifying Party shall not conclude any settlement which requires any action or forbearance from action or payment or admission by the Indemnified Party or any of its affiliates without the prior written approval of the Indemnified Party. The obligations of an Indemnifying Party shall not extend to any loss, damage or expense of whatever kind or nature (including all related costs and expenses) to the extent the same results from the taking by the Indemnified Party of any action (unless required by law or applicable legal process) that prejudices the successful defense of the action or claim without, in any such case, the prior written consent of the Indemnifying Party (such consent not to be required in a case where the Indemnifying Party has not assumed the defense of the action or claim). The Indemnified Party agrees to afford the Indemnifying Party and its counsel the opportunity to be present at, and to participate in, conferences with all persons, including governmental authorities.

Article 8. Records Retention

Section 8.1 General. During the Term of this Agreement and for not less than five (5) years thereafter, Company and Service Providers shall retain adequate books and records of all transactions arising under this Agreement, maintained in accordance with generally accepted standards of recordkeeping.

Section 8.2 Inspections. During ordinary business hours and with at least seventy-two (72) hours’ notice to a Service Provider, Company may inspect all documents, records, reports, books, files, procedures and other materials related to this Agreement.

Article 9. Miscellaneous

Section 9.1 Relationship of the Parties. Company and Service Providers agree that Company and each Service Provider are independent contractors. Nothing herein shall be construed to place Company and a Service Provider in an employer-employee relationship or a relationship of partners or joint venturers and this Agreement does not make either Company or any Service Provider the agent or legal representative of the other for any purpose whatsoever. Company and Service Provider further agree that no representation shall be made by any Party that would create an

apparent agency, employment, partnership or joint venture. Neither Company nor a Service Provider shall have the power, expressed or implied, to obligate or bind the other in any manner whatsoever.

Section 9.2 Transfer of Rights. This Agreement and all of its provisions, rights and obligations shall be binding upon and shall inure to the benefit of the Parties hereto and their respective permitted successors and assigns. This Agreement may not be assigned (including by operation of law) by any Party without the prior written consent of the other Party, and any purported assignment, unless so consented to, shall be void and without effect.

Section 9.3 Amendments; Waiver. Except as otherwise provided herein, this Agreement may not be modified or altered except by written instrument duly executed by all Parties. This Agreement may be amended, superseded, canceled, renewed or extended only by a written instrument signed by the Parties hereto. The provisions hereof may only be waived in writing by the Parties hereto. No delay on the part of any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor any single or partial exercise of any such right, power or privilege, preclude any further exercise thereof or the exercise of any other such right, power or privilege. Except as otherwise provided herein, the rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies that any Party may otherwise have at law or in equity.

Section 9.4 Survival. The provisions of Article 7, Article 8, Article 9 and Company’s obligation to pay any Fees shall survive the termination of this Agreement for any reason.

Section 9.5 Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally by hand or by recognized overnight courier, as follows:

If to Company, then to: The Running Specialty Group Acquisitions 1, LLC c/o Critical Point, LLC 1230 Rosecrans Avenue, Suite 170 Manhattan Beach, CA 90266 Attn: Matt Young	If to a Service Provider, then to: The Finish Line, Inc. 3308 North Mitthoeffer Road Indianapolis, Indiana 46235 Attn: President
With a copy to: Cypress LLP 11111 Santa Monica Boulevard, Suite 500 Los Angeles, CA 90025 Attention: Brent Bradley	With a copy to: Barnes & Thornburg LLP 11 South Meridian Street Indianapolis, Indiana 46204 Attn: Joshua P. Hollingsworth

Section 9.6 Headings. Article and Section headings are for reference purposes only and shall not control or alter the meaning of this Agreement as set forth in the text.

Section 9.7 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall continue in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any term, provision, covenant or restriction is invalid, void or unenforceable, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible.

Section 9.8 Multiple Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together constitute one and the same instrument.

Section 9.9 Governing Law and Venue. This Agreement and performance hereunder will be construed in accordance with the laws of the State of Indiana without regard to the principles of conflict of laws. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement shall be brought in the courts of the State of Indiana, County of Marion or the United States District Court for the Southern District of Indiana- Indianapolis Division, and each of the Parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any of the Parties anywhere in the world.

Section 9.10 Entire Agreement. This Agreement, including all attached Exhibits, is the complete and exclusive statement of agreement between the Parties regarding Services and supersedes all prior proposals, understandings and all other agreements, oral and written, between the Parties relating to the subject matter of this Agreement.

[signature page immediately following]

This Transition Services Agreement is effective as of the date first set forth above.

EX-99.1

Exhibit 99.1

Unaudited Pro Forma Condensed Consolidated Financial Statements

The following unaudited pro forma financial data reflects The Finish Line, Inc.’s (the “Company”) historical results as adjusted on a pro forma basis to give effect to the disposition of the JackRabbit business (“JackRabbit”). The Company began accounting for the disposition as a discontinued operation in its consolidated financial statements for the period ended November 26, 2016.

The unaudited pro forma condensed consolidated balance sheet as of November 26, 2016 presents the financial position of the Company assuming the disposition of JackRabbit had been completed on that date. The unaudited pro forma consolidated statements of operations for the fiscal year ended February 27, 2016 and for the thirty-nine weeks ended November 26, 2016 present the Company’s results of operations assuming that the disposition of JackRabbit had been completed on the first day of these respective periods presented. The adjustments set forth in the “Pro Forma Adjustments” column are described in the Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.

The unaudited pro forma condensed consolidated balance sheet and consolidated statements of operations for the periods presented do not purport to represent what the Company’s consolidated results of operations actually would have been had the disposition of JackRabbit occurred on the dates noted above, or to project our consolidated results of operations for any future periods. The pro forma adjustments are based upon available information and certain assumptions that management believes are reasonable under the circumstances. The pro forma results should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended February 27, 2016 and the Company’s Quarterly Report on Form 10-Q for the quarterly period ended November 26, 2016.

About The Finish Line, Inc.

The Finish Line, Inc. is a premium retailer of athletic shoes, apparel and accessories. Headquartered in Indianapolis, Finish Line has approximately 970 Finish Line branded locations primarily in U.S. malls and shops inside Macy’s department stores and employs more than 14,000 sneakerologists who help customers every day connect with their sport, their life and their style. Online shopping is available at www.finishline.com and www.macys.com. Mobile shopping is available at m.finishline.com. Follow Finish Line on Twitter at Twitter.com/FinishLine or Twitter.com/FinishLineNews and “like” Finish Line on Facebook at Facebook.com/FinishLine. Track loyalty points and find store and product information with the free Finish Line app downloadable for iOS and Android customers.

Forward-Looking Statements

The unaudited pro forma financial statements include information, statements, and assumptions that are or may be considered “forward-looking” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally can be identified by the use of words or phrases such as “believe,” “expect,” “future,” “anticipate,” “intend,” “plan,” “foresee,” “may,” “should,” “will,” “estimates,” “outlook,” “potential,” “optimistic,” “confidence,” “continue,” “evolve,” “expand,” “growth” or words and phrases of similar meaning. Statements that describe objectives, plans, or goals also are forward-looking statements.

All of these forward-looking statements are subject to risks, management assumptions and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. The principal risk factors that could cause actual performance and future actions to differ materially from the forward-looking statements include, but are not limited to, the company’s reliance on a few key vendors for a majority of its merchandise purchases (including a significant portion from one key vendor); the availability and timely receipt of products; the ability to timely fulfill and ship products to customers; fluctuations in oil prices causing changes in gasoline and energy prices, resulting in changes in consumer spending as well as increases in utility, freight and product costs; product demand and market acceptance risks; deterioration of macroeconomic and business conditions; the inability to locate and obtain or retain acceptable lease terms for the company’s stores; the effect of competitive products and pricing; loss of key employees; execution of strategic growth initiatives (including actual and potential mergers and acquisitions and other components of the company’s capital allocation strategy); cybersecurity risks, including breach of customer data; a major failure of technology and information systems; risks associated with any strategic alternatives carried out with respect to JackRabbit, including any sale or similar transaction; and the other risks detailed in the company’s Securities and Exchange Commission filings. Readers are urged to consider these factors carefully in evaluating the forward-looking

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statements. The forward-looking statements included herein are made only as of the date of this report and Finish Line undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.

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	The Finish Line, Inc. Pro Forma Consolidated Statements of Operations For the Year Ended February 27, 2016 (In thousands, except per share data)
	Historical			Pro Forma Adjustments [A]			Pro Forma (unaudited)
Net sales	$	1,888,888		$	(89,906	)	$	1,798,982
Cost of sales (including occupancy costs)	1,305,896			(62,936		)	1,242,960
Gross profit	582,992			(26,970		)	556,022
Selling, general, and administrative expenses	503,660			(33,824		)	469,836
Impairment charges and store closing costs	48,692			(5,055		)	43,637
Operating income	30,640			11,909			42,549
Interest expense, net	(65		)	—			(65		)
Income from continuing operations before income taxes	30,575			11,909			42,484
Income tax expense	8,779			4,783			13,562
Net income from continuing operations	21,796			7,126			28,922
Net loss attributable to redeemable noncontrolling interest	96			(96		)	—
Net income attributable to The Finish Line, Inc.	$	21,892		$	7,030		$	28,922
Earnings per share attributable to The Finish Line, Inc. shareholders:
Basic	$	0.49					$	0.64
Diluted	$	0.48					$	0.64
Weighted average shares outstanding:
Basic	44,565						44,565
Diluted	44,787						44,787

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	The Finish Line, Inc. Unaudited Pro Forma Consolidated Statements of Operations For the Thirty-Nine Weeks Ended November 26, 2016 (In thousands, except per share data)
	Historical			Pro Forma Adjustments [A]			Pro Forma
Net sales	$	1,356,002		$	(69,061	)	$	1,286,941
Cost of sales (including occupancy costs)	952,778			(52,087		)	900,691
Gross profit	403,224			(16,974		)	386,250
Selling, general, and administrative expenses	375,074			(22,881		)	352,193
Impairment charges and store closing costs	44,464			(44,282		)	182
Operating income	(16,314		)	50,189			33,875
Interest expense, net	(178		)	—			(178		)
Income from continuing operations before income taxes	(16,492		)	50,189			33,697
Income tax (benefit) expense	(7,755		)	18,596			10,841
Net income	$	(8,737	)	$	31,593		$	22,856
Earnings per share attributable to The Finish Line, Inc. shareholders:
Basic	$	(0.21	)				$	0.55
Diluted	$	(0.21	)				$	0.54
Weighted average shares outstanding:
Basic	41,075						41,075
Diluted	41,234						41,234

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	The Finish Line, Inc. Unaudited Pro Forma Condensed Consolidated Balance Sheets as of November 26, 2016 (In thousands)
	Historical		Pro Forma Adjustments				Pro Forma
ASSETS
Cash and cash equivalents	$	33,297	$	(9,000	)	[B]	$	24,297
Merchandise inventories, net	427,742		(26,214		)	[C]	401,528
Other current assets	48,576		(887		)	[C]	47,689
Property and equipment, net	262,305		(3,992		)	[C]	258,313
Other assets, net	9,716		(842		)	[C]	8,874
Total assets	781,636		(40,935		)		740,701
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities, excluding the revolving credit facility	$	243,584	$	(13,347	)	[C]	$	230,237
Revolving credit facility	17,000		—			[C]	17,000
Deferred credits from landlords	34,376		(1,975		)	[C]	32,401
Other long-term liabilities	21,008		(22		)	[C]	20,986
Shareholders’ equity	465,668		(25,591		)	[B][C]	440,077
Total liabilities and shareholders’ equity	781,636		(40,935		)		740,701

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Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

Pro Forma Adjustments

Pro Forma adjustments reflect those adjustments which are directly attributable to the disposition and include the following:

[A] Eliminates the results of operations of JackRabbit.

[B] Reflects the $8.3 million paid by the Company to its affiliated entity which owns JackRabbit and $700,000 payable to affiliates of CriticalPoint Capital, LLC.

[C] Eliminates the financial position of JackRabbit.

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