EXHIBIT 99.7
[XXXXXXX XXXXX LOGO] CONSENT AGREEMENT
This CONSENT AGREEMENT ("Consent Agreement") is entered into as of this November
18, 2004 by and between XXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC. ("MLBFS")
and COLLEGIATE PACIFIC INC. ("Customer"), XXXXXXX TEAM SPORTS INC. ("Xxxxxxx"),
TOMARK SPORTS INC. ("Tomark") and XXXXX SPORTING GOODS CO., INC. ("Xxxxx," which
together with Xxxxxxx and Tomark shall collectively and individually as
"Guarantor"); individually each of Customer and each Guarantor shall be known
herein as a "Credit Party" and collectively as the "Credit Parties."
WHEREAS, MLBFS and Customer are parties to that certain WCMA Loan and Security
Agreement No. 586-07067 dated as of December 16, 2003, as amended and/or
extended from time to time (as so amended and/or extended, the "Loan
Agreement");
WHEREAS, the Credit Parties have requested that MLBFS consent to the proposed
activity or transactions described herein on the terms and conditions contained
herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the parties hereto, the parties hereto
hereby agree as follows:
SECTION 1. LIMITED CONSENT. From and after the Consent Effective Date, but
subject to the satisfaction of the conditions set forth in Sections 2, 3 and 4
below, MLBFS hereby
(a) consents to Customer's incurrence of debt subordinated to the Loan
and convertible to Customer's stock as outlined in the Confidential
Offering Circular with a V&E Draft date of November 16, 2004 and
delivered to MLBFS on or about November 17, 2004 (the "Draft
Offering Circular"), providing for the issuance of at least
$30,000,000, but no more than $50,000,000 in senior subordinated
debt (the "Subordinated Debt") and
(b) agrees that actions contemplated by clauses (a) above shall not
constitute an Event of Default under the Loan Documents.
The Credit Parties acknowledge and agree that the consent contained in the
foregoing sentence shall not be deemed to be or constitute a consent to any
future action or inaction on the part of the Customer or any other Credit Party
that might result in a Default or Event of Default, and shall not constitute a
waiver of any covenant, term or provision in the Loan Agreement or the other
Loan Documents, or hinder, restrict or otherwise modify the rights and remedies
of MLBFS following the occurrence of any present or future Default or Event of
Default under the Loan Agreement or any other Loan Document.
SECTION 2. EFFECTIVENESS OF CONSENT. The effectiveness of this Consent
Agreement, is subject to receipt by MLBFS of each of the following in form and
substance satisfactory to MLBFS:
(a) counterparts of this Consent Agreement duly executed by each of the
Credit Parties and MLBFS;
(b) payment of all fees, costs and expenses of MLBFS, including without
limitation the fees of MLBFS' counsel incurred in connection with
the negotiation, documentation and closing of this Consent Agreement
and any other outstanding fees and expenses owing by the Customer to
such counsel;
(c) the final Confidential Offering Circular for Convertible Senior
Subordinated Notes due 2009 (the "Offering Circular");
(d) evidence that the final Offering Circular does not differ from the
Draft Offering Circular except in the following:
(1) the amount of the Subordinated Debt is between $30,000,000 and
$50,000,000;
(2) the coupon rate for the Subordinated Debt is less than or
equal to 6% per annum; and
(3) the Customer shall not be permitted to make prepayments on the
Subordinated Debt until after December 31, 2005.
(e) evidence that the Indenture (as such term is described in the
Offering Circular) is consistent with the Description of Notes in
the Offering Circular, including without limitation confirmation
that all payments to the Subordinated Debt holders (including
without limitation scheduled payments and payments in connection
with the Subordinated Debt holder's right to require the Customer to
repurchase the Subordinated Debt upon the occurrence of a
"fundamental change") shall be subordinate to the rights of the
MLBFS to receive payments due under the Loan;
(f) amendment of the Loan Documents to:
(1) change the Maturity Date of the WCMA Line of Credit from
December 31, 2005 to September 30, 2005;
(2) prohibit the Customer from redeeming the notes prior to
December 31, 2005;
(g) the evidence of the Subordinated Debt to confirm the conformity of
the form of the Subordinated Debt to the Offering Circular; and
(h) such other documents, certificates or other confirmations as MLBFS
may reasonably request.
The date upon which all of the conditions set forth in this Section 2 of this
Consent Agreement shall be the.
SECTION 3. REPRESENTATIONS OF THE CREDIT PARTIES. The Credit Parties
represent and warrant to MLBFS that:
(a) Compliance with Laws, Etc. The execution and delivery by the Customer
and the other Credit Parties of this Consent Agreement does not and will not, by
the passage of time, the giving of notice or otherwise: (i) require the approval
of any governmental authority or any other Person (other than those approvals
which have been obtained and remain effective), or violate any applicable law
relating to such Credit Party or (ii) conflict with, result in a breach of or
constitute a default under the organizational documents of any Credit Party, or
any indenture, agreement or other instrument to which such Credit Party is a
party or by which it or any of its properties may be bound.
(b) No Default. As of the date hereof and as of the Consent Effective
Date, no Default or Event of Default has occurred and is continuing, nor will
any exist immediately after giving effect to this Consent Agreement.
(c) Representation and Warranties in Loan Agreement and Other Loan
Documents. All representatives and warranties set forth in the Loan Agreement
and other Loan Documents are true and correct on and as of the date hereof
except for those that expressly relate to a prior date. Without limiting the
generality of the foregoing, the Credit Parties represent and warrant to MLBFS
that all conditions set forth in Section 3.3(k) of the Loan Agreement have been
satisfied.
(d) Due Authorization. The execution, delivery and performance by the
Credit Parties of this Consent Agreement have been duly authorized by all
necessary corporate and other action.
SECTION 4. REAFFIRMATION OF OBLIGATIONS. Each of the Credit Parties hereby
reaffirms its continuing obligations owing to MLBFS under the Loan Document to
which such Person is a party and agrees that the activity or transactions
contemplated by this Consent Agreement shall not in any way affect the validity
and enforceability of any such Loan Document, or reduce, impair or discharge the
obligations or collateral of such Person thereunder.
SECTION 5. GOVERNING LAW. THIS CONSENT AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS.
SECTION 6. EFFECT. Except as expressly herein modified, the terms and
conditions of the Loan Agreement and the other Loan Documents shall remain in
full force and effect.
SECTION 7. COUNTERPARTS. This Consent Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and
shall be binding upon all parties, their successors and assigns.
SECTION 8. DEFINITIONS. All capitalized terms not otherwise defined herein
are used herein with the respective definitions given them in the Loan Agreement
and the other Loan Documents.
SECTION 9. NO NOVATION. Neither this Consent Agreement nor any of the
transactions contemplated hereby shall be deemed to be a novation of any of the
Obligations of the Customer or any other Credit Party under the Loan Agreement
or the other Loan Documents.
[Signatures on Following Pages]
IN WITNESS WHEREOF, the parties hereto have caused this Consent Agreement
to be executed as of the date first above written.
COLLEGIATE PACIFIC INC.:
By: /s/ Xxxx Xxxxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxxxx
Title: Chief Executive Officer
XXXXXXX'X TEAM SPORTS INC.:
By: /s/ Xxxx Xxxxxxxxxx
-------------------------------
Name: Xxxx Xxxxxxxxxx
Title: Chief Executive Officer
TOMARK SPORTS INC.:
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
XXXXX SPORTING GOODS CO., INC.:
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC.:
By: /s/ Xxxxx Xxxxx
-------------------------------
Name: Xxxxx Xxxxx
Title: Vice President
