ONCAP INVESTMENT PARTNERS II L.P.
Exhibit
B
EXECUTION COPY
EXECUTION COPY
ONCAP
INVESTMENT PARTNERS II L.P.
000
Xxx Xxxxxx, 00xx Xxxxx
Xxxxxxx,
XX X0X 0X0
March 15,
2010
c/o ONCAP Investment Partners II L.P.
000 Xxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX X0X 0X0
Gentlemen:
Reference
is made to the Agreement and Plan of Merger, dated as of the date hereof (as
amended, restated, supplemented or otherwise modified from time to time, the
“Merger
Agreement”), by and among Sage Parent Company, Inc., a Delaware
corporation (“Parent”), Sage Merger
Company, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent
(“Sub”), and
Sport Supply Group, Inc., a Delaware corporation (the “Company”).
Capitalized terms used in this letter agreement and not defined herein shall
have the meanings ascribed thereto in the Merger Agreement.
ONCAP
Investment Partners II L.P., an Ontario limited partnership (“ONCAP”), hereby
commits, subject to the terms and conditions set forth herein, to, and to cause
certain of its affiliated investment funds, successors and assigns
(collectively, the “Equity Investor”) to,
purchase shares of capital stock of Parent (the “Equity Interests”)
for an aggregate purchase price of $89,616,369.16 (the “Equity Proceeds”);
provided, that
the amount of the Equity Proceeds shall be reduced: (i) by the aggregate amount
of any Merger Consideration, Restricted Share Consideration and Option
Consideration that would have been payable with respect to the Rollover Shares
and Rollover Options, had such shares or options been converted or exchanged in
the Merger, in each case to the extent actually contributed to Parent
immediately prior to the Effective Time (such aggregate amount, the “Rollover Amount”), if
any, (ii) to the extent provided in Article II of the Merger Agreement, by the
aggregate amount of any Merger Consideration that would have been payable with
respect to any Dissenting Shares and shares of Company Common Stock owned by the
Company, Parent, or Sub, in each case to the extent such shares are issued and
outstanding immediately prior to the Effective Time, and in each case to the
extent such shares had been converted in the Merger, and (iii) by the amount of
any Debt Financing actually funded at Closing that is in excess of fifty percent
(50%) of the sum of the aggregate Merger Consideration, Restricted Share
Consideration and Option Consideration payable at Closing. Parent hereby
commits, immediately following receipt of the Equity Proceeds from the Equity
Investor, to purchase shares of capital stock of Sub for an aggregate purchase
price equal to the amount of the Equity Proceeds (as such amount may be
reduced as provided above). Notwithstanding anything to the contrary
contained in this letter or any other letter or agreement to the contrary, in no
event shall the Equity Investor be obligated under any circumstances to
contribute, or cause to be contributed, any amounts in excess of the Equity
Proceeds (as such amount may be reduced as provided above).
Promptly
following the execution and delivery of this letter, ONCAP and Parent agree to
negotiate, execute and deliver, and to cause the Equity Investor and Sub to
negotiate, execute and deliver, customary definitive documentation in order to
consummate the equity investment contemplated hereby (the “Equity Financing”).
Consummation of the Equity Financing and payment by the Equity Investor of the
Equity Proceeds in consideration for the Equity Interests is subject only to the
satisfaction or waiver, on or before the Closing Date, of all of the conditions
precedent to the obligations of Parent and Sub to consummate the Merger as set
forth in Article VII of the Merger Agreement (other than any condition precedent
not satisfied due solely to the failure of the Equity Investor to consummate the
Equity Financing).
Each
party hereto (and any other person who shall receive a copy hereof as permitted
pursuant hereto) shall keep confidential this letter and all information
obtained by it with respect to the other parties in connection with this letter,
and will use such information solely in connection with the transactions
contemplated hereby, except to the extent required to enforce such party’s
rights under this letter. Notwithstanding the foregoing, (i) any
party hereto and the Company may disclose this letter and its terms and
conditions to any of such party’s respective officers, directors, employees,
Affiliates, financing sources or other Representatives who are involved in the
Transactions, subject to such Person being made aware of the confidentiality
provisions herein and (ii) ONCAP and Parent may provide a copy of this letter to
Sub.
Notwithstanding
anything to the contrary contained in this letter or any other letter or
agreement, no former, current or future directors, officers employees,
Affiliates, general or limited partners, stockholders, managers, members,
financing sources (including parties to the Financing Commitments), assignees,
agents or other Representatives of any party hereto, or any direct or indirect
holder of any equity interests or securities of any such party (collectively,
the “Party
Affiliates”), shall have any liability or obligation of any nature
whatsoever in connection with or under this letter or the transactions
contemplated hereby, and each party hereto hereby waives and releases all claims
against such Party Affiliates for any such liability or obligation.
This
letter may not be amended or modified, and no provision hereof may be
waived, except by a written agreement executed by each party to this
letter.
This
letter will terminate and cease to be of any further force or effect upon the
earlier to occur of (i) the Closing and (ii) the date on which the Merger
Agreement is terminated in accordance with its terms. This letter
shall be governed by and construed in accordance with the laws of the State of
Delaware (without giving effect to choice of law principles thereof that would
result in the application of the Laws of another jurisdiction). Each
of the parties hereto, on behalf of itself and its respective Affiliates, (i)
consents to submit itself to the personal jurisdiction of the Delaware Court of
Chancery or the other courts of the State of Delaware, in each case in
connection with any Action arising out of, in connection with, in respect of, or
in any way relating to the negotiation, execution and performance of this letter
and the transactions contemplated hereby and waives any right to trial by jury
with respect to any such matters. Each party hereto, on behalf of
itself and its Affiliates, irrevocably and unconditionally waives any objection
to the laying of venue of any Action arising out of, in connection with, or in
respect of this letter. This letter may be executed in one or more
counterparts, including via facsimile transmission.
This
letter shall be binding on the undersigned solely for the benefit of the
addressees of this letter, and nothing set forth in this letter shall be
construed to confer upon or give to any person other than the addressees of this
letter any benefits, rights or remedies under or by reason of, or any rights to
enforce or cause such addressee to enforce, the Equity Financing or any
provisions of this letter.
This
letter constitutes the entire agreement, and supersedes all prior agreements and
understandings, both written and oral, among the parties hereto with respect to
the transactions contemplated hereby.
* * * * *
Very truly
yours,
ONCAP INVESTMENT PARTNERS II
L.P.
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By:
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ONCAP
Investment Partners II Inc.,
its
general partner
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By:
/s/ Xxxxxxx
Xxx
Name:
Xxxxxxx Xxx
Title:
Vice President
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Accepted
and agreed as of
the date
first above written:
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By:/s/ Xxxxxxx Xxx
Name:
Xxxxxxx Xxx
Title:
President
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