Exhibit 10.12

$180,000,000 REVOLVING CREDIT FACILITY

CREDIT AGREEMENT

by and among

UNDER ARMOUR, INC.,

THE LENDERS PARTY HERETO,

PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent,

SUNTRUST BANK, as Syndication Agent

and

COMPASS BANK, as Documentation Agent

Dated as of January 28, 2009

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TABLE OF CONTENTS

 

               Page 1.    CERTAIN DEFINITIONS    1    1.1    Certain Definitions
   1    1.2    Construction    18    1.3    Accounting Principles    19 2.   
REVOLVING CREDIT AND SWING LOAN FACILITIES    19    2.1    Revolving Credit
Commitments    19    2.2    Nature of Lenders’ Obligations with Respect to
Revolving Credit Loans    20    2.3    Commitment Fees    20    2.4    Increase
in Revolving Credit Commitments    20    2.5    Revolving Credit Loan Requests;
Swing Loan Requests    22    2.6    Making Revolving Credit Loans and Swing
Loans; Presumptions by the Administrative Agent; Repayment of Revolving Credit
Loans; Borrowings to Repay Swing Loans    23    2.7    Notes    24    2.8    Use
of Proceeds    24    2.9    Letter of Credit Subfacility    24 3.    INTEREST
RATES    29    3.1    Interest Rate Options    29    3.2    Interest Periods   
30    3.3    Interest After Default    30    3.4    LIBOR Rate Unascertainable;
Illegality; Increased Costs; Deposits Not Available    31    3.5    Selection of
Interest Rate Options    32 4.    PAYMENTS    32    4.1    Payments    32    4.2
   Pro Rata Treatment of Lenders    32    4.3    Sharing of Payments by Lenders
   32    4.4    Presumptions by Administrative Agent    33    4.5    Interest
Payment Dates    33    4.6    Voluntary Prepayments    33    4.7    Mandatory
Prepayments    34    4.8    Receipt and Application of Payment    35    4.9   
Collections; Administrative Agent’s Right to Notify Account Receivable Debtors
   35    4.10    Increased Costs    35    4.11    Taxes    37    4.12   
Indemnity    38    4.13    Settlement Date Procedures    39

 

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5.    REPRESENTATIONS AND WARRANTIES    39    5.1    Representations and
Warranties    39    5.2    Updates to Schedules Upon Borrowing    42 6.   
CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT    42    6.1    First
Loans and Letters of Credit    43    6.2    Each Loan or Letter of Credit    44
7.    COVENANTS    44    7.1    Affirmative Covenants    44    7.2    Negative
Covenants    46    7.3    Reporting Requirements    48 8.    DEFAULT    50   
8.1    Events of Default    50    8.2    Consequences of Event of Default    51
9.    THE ADMINISTRATIVE AGENT    53    9.1    Appointment and Authority    53
   9.2    Rights as a Lender    53    9.3    Exculpatory Provisions    53    9.4
   Reliance by Administrative Agent    54    9.5    Delegation of Duties    54
   9.6    Resignation of Administrative Agent    55    9.7    Non-Reliance on
Administrative Agent and Other Lenders    55    9.8    No Other Duties, etc   
56    9.9    Administrative Agent’s Fee    56    9.10    Authorization to
Release Collateral and Guarantors    56    9.11    No Reliance on Administrative
Agent’s Customer Identification Program    56 10.    MISCELLANEOUS    56    10.1
   Modifications, Amendments or Waivers    56    10.2    No Implied Waivers;
Cumulative Remedies    57    10.3    Expenses; Indemnity; Damage Waiver    57   
10.4    Holidays    58    10.5    Notices; Effectiveness; Electronic
Communication    59    10.6    Severability    59    10.7    Duration; Survival
   59    10.8    Successors and Assigns    60    10.9    Confidentiality    62
   10.10    Counterparts; Integration; Effectiveness    63    10.11    CHOICE OF
LAW; SUBMISSION TO JURISDICTION; WAIVER OF VENUE; SERVICE OF PROCESS; WAIVER OF
JURY TRIAL    63    10.12    USA Patriot Act Notice    64

 

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LIST OF SCHEDULES AND EXHIBITS

 

SCHEDULES

     

SCHEDULE 1.1(A)

   -    PRICING GRID

SCHEDULE 1.1(B)

   -    COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES

SCHEDULE 1.1(C)

   -    QUALIFIED ACCOUNTS RECEIVABLE

SCHEDULE 1.1(D)

   -    QUALIFIED INVENTORY

SCHEDULE 1.1(P)

   -    PERMITTED LIENS

SCHEDULE 5.1.1

   -    QUALIFICATIONS TO DO BUSINESS

SCHEDULE 5.1.2

   -    EXISTING SUBSIDIARIES

SCHEDULE 5.1.5

   -    LITIGATION

SCHEDULE 5.1.10

   -    PATENTS, TRADEMARKS, COPYRIGHTS, LICENSES, ETC.

SCHEDULE 5.1.14

   -    ENVIRONMENTAL DISCLOSURES

SCHEDULE 6.1.1

   -    OPINION OF COUNSEL

SCHEDULE 7.1.3

   -    INSURANCE REQUIREMENTS RELATING TO COLLATERAL

SCHEDULE 7.1.11

   -    POST-CLOSING LANDLORD’S WAIVERS

SCHEDULE 7.2.1

   -    PERMITTED INDEBTEDNESS

EXHIBITS

     

EXHIBIT 1.1(A)

   -    ASSIGNMENT AND ASSUMPTION AGREEMENT

EXHIBIT 1.1(G)(1)

   -    GUARANTOR JOINDER

EXHIBIT 1.1(G)(2)

   -    GUARANTY AGREEMENT

EXHIBIT 1.1(I)(1)

   -    INDEMNITY AGREEMENT

EXHIBIT 1.1(I)(2)

   -    INTERCOMPANY SUBORDINATION AGREEMENT

EXHIBIT 1.1(L)

   -    LOCKBOX AGREEMENT

EXHIBIT 1.1(N)(1)

   -    REVOLVING CREDIT NOTE

EXHIBIT 1.1(N)(2)

   -    SWING LOAN NOTE

EXHIBIT 1.1(P)(2)

   -    PLEDGE AGREEMENT

EXHIBIT 1.1(S)

   -    SECURITY AGREEMENT

EXHIBIT 2.4

   -    LENDER JOINDER

EXHIBIT 2.5

   -    LOAN REQUEST

EXHIBIT 2.5.2

   -    SWING LOAN REQUEST

EXHIBIT 6.1.1(i)

   -    BORROWING BASE CERTIFICATE

EXHIBIT 6.1.1(xiii)

   -    LANDLORD’S WAIVER

EXHIBIT 7.3.4

   -    QUARTERLY COMPLIANCE CERTIFICATE

 

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CREDIT AGREEMENT

THIS CREDIT AGREEMENT (as hereafter amended, the “Agreement”) is dated as of
January 28, 2009 and is made by and among UNDER ARMOUR, INC., a Maryland
corporation (the “Borrower”), each of the GUARANTORS (as hereinafter defined),
the LENDERS (as hereinafter defined), and PNC BANK, NATIONAL ASSOCIATION, in its
capacity as administrative agent for the Lenders under this Agreement
(hereinafter referred to in such capacity as the “Administrative Agent”),
SUNTRUST BANK, as Syndication Agent, and COMPASS BANK, as Documentation Agent.

The Borrower has requested the Lenders to provide a revolving credit facility to
the Borrower in an aggregate principal amount not to exceed $180,000,000. In
consideration of their mutual covenants and agreements hereinafter set forth and
intending to be legally bound hereby, the parties hereto covenant and agree as
follows:

1. CERTAIN DEFINITIONS

1.1 Certain Definitions. In addition to words and terms defined elsewhere in
this Agreement, the following words and terms shall have the following meanings,
respectively, unless the context hereof clearly requires otherwise:

Account Receivable shall mean, individually, a Domestic Account Receivable, a
Domestic Credit Card Account Receivable or a Domestic Royalty Account
Receivable, as applicable. All Accounts Receivable, whether Qualified Accounts
Receivable or not, shall be subject to the Lenders’ Prior Security Interest,
subject to Permitted Liens, if any.

Account Receivable Debtor shall mean any Person who is or who may become
obligated to a Loan Party under, with respect to, or on account of, an Account
Receivable.

Administrative Agent shall mean PNC Bank, National Association, and its
successors and assigns.

Administrative Agent’s Fee shall have the meaning specified in Section 9.9
[Administrative Agent’s Fee].

Administrative Agent’s Letter shall have the meaning specified in Section 9.9
[Administrative Agent’s Fee].

Affiliate as to any Person any other Person (i) which directly or indirectly
controls, is controlled by, or is under common control with such Person,
(ii) which beneficially owns or holds 10% or more of any class of the voting or
other equity interests of such Person, or (iii) 10% or more of any class of
voting interests or other equity interests of which is beneficially owned or
held, directly or indirectly, by such Person. Notwithstanding anything to the
contrary herein, with respect to the Borrower, the term “Affiliate” shall not
include any party identified as beneficially owning or controlling more than 5%
of any class of the voting shares of the Borrower or any Person that directly or
indirectly controls, is controlled by, or is under common control with such
Person; provided, however, that Kevin A. Plank and J. Scott Plank shall
constitute Affiliates of the Borrower.

Anti-Terrorism Laws shall mean any Laws relating to terrorism or money
laundering, including Executive Order No. 13224, the USA Patriot Act, the Laws
comprising or implementing the Bank Secrecy Act, and the Laws administered by
the United States Treasury Department’s Office of Foreign Asset Control (as any
of the foregoing Laws may from time to time be amended, renewed, extended, or
replaced).

Applicable Commitment Fee Rate shall mean the percentage rate per annum based on
the Leverage Ratio then in effect according to the pricing grid on Schedule
1.1(A) below the heading “Commitment Fee”.

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Applicable Letter of Credit Fee Rate shall mean the percentage rate per annum
based on the Leverage Ratio then in effect according to the pricing grid on
Schedule 1.1(A) below the heading “Letter of Credit Fee”.

Applicable Margin shall mean, as applicable:

(A) the percentage spread to be added to the Base Rate applicable to Revolving
Credit Loans under the Base Rate Option based on the Leverage Ratio then in
effect according to the pricing grid on Schedule 1.1(A) below the heading
“Revolving Credit Base Rate Spread”, or

(B) the percentage spread to be added to the LIBOR Rate applicable to Revolving
Credit Loans under the LIBOR Rate Option based on the Leverage Ratio then in
effect according to the pricing grid on Schedule 1.1(A) below the heading
“Revolving Credit LIBOR Rate Spread”.

Approved Fund shall mean any fund that is engaged in making, purchasing, holding
or investing in bank loans and similar extensions of credit in the ordinary
course of business and that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

Assignment and Assumption means an assignment and assumption entered into by a
Lender and an assignee permitted under Section 10.8 [Successors and Assigns], in
substantially the form of Exhibit 1.1(A).

Authorized Officer shall mean, with respect to any Loan Party, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, Treasurer
or Assistant Treasurer of such Loan Party or such other individuals, designated
by written notice to the Administrative Agent from the Borrower, authorized to
execute notices, reports and other documents on behalf of the Loan Parties
required hereunder. The Borrower may amend such list of individuals from time to
time by giving written notice of such amendment to the Administrative Agent.

Base Rate shall mean, for any day, a fluctuating per annum rate of interest
equal to the highest of (a) the Federal Funds Open Rate plus 50 basis points
(0.5%), (b) the Prime Rate, (c) the Daily LIBOR Rate plus 100 basis points
(1.0%), and (iv) 225 basis points (2.25%). Any change in the Base Rate (or any
component thereof) shall take effect at the opening of business on the day such
change occurs. Interest on Loans at the Base Rate shall be calculated based on a
year of 360 days and actual days elapsed.

Base Rate Option shall mean the option of the Borrower to have Loans bear
interest at the rate and under the terms set forth in Section 3.1.1(i)
[Revolving Credit Base Rate Option].

Borrowing Base shall mean at any time the sum of (i) 80% of Qualified Accounts
Receivable (“Accounts Portion”), plus (ii) 50% of Qualified Inventory
(“Inventory Portion”), but in no event shall the Inventory Portion exceed 50% of
the Borrowing Base. Notwithstanding anything to the contrary herein, upon the
occurrence and during the existence of any Material Adverse Change, the Required
Lenders may, in their sole discretion, at any time hereafter, decrease the
advance percentage for Qualified Accounts Receivable and Qualified Inventory, or
increase the level of any reserves or ineligibles, or define or maintain such
other reserves or ineligibles, as the Required Lenders may deem necessary or
appropriate. Any such change shall become effective immediately upon written
notice from the Administrative Agent to the Borrower for the purpose of
calculating the Borrowing Base hereunder.

Borrowing Base Certificate shall mean a certificate in substantially the form of
Exhibit 6.1.1(i).

Borrower shall mean Under Armour, Inc., a corporation organized and existing
under the laws of the State of Maryland.

 

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Borrowing Date shall mean, with respect to any Loan, the date for the making
thereof or the renewal or conversion thereof at or to the same or a different
Interest Rate Option, which shall be a Business Day.

Borrowing Tranche shall mean specified portions of Loans outstanding as follows:
(i) any Loans to which a LIBOR Rate Option applies which become subject to the
same Interest Rate Option under the same Loan Request by the Borrower and which
have the same Interest Period shall constitute one Borrowing Tranche, and
(ii) all Loans to which a Base Rate Option applies shall constitute one
Borrowing Tranche.

Business Day shall mean any day other than a Saturday or Sunday or a legal
holiday on which commercial banks are authorized or required to be closed for
business in Pittsburgh, Pennsylvania and if the applicable Business Day relates
to any Loan to which the LIBOR Rate Option applies, such day must also be a day
on which dealings are carried on in the London interbank market.

Cash Collateral Account shall have the meaning assigned to that term in
Section 4.8.

Change in Law shall mean the occurrence, after the date of this Agreement, of
any of the following: (a) the adoption or taking effect of any Law, (b) any
change in any Law or in the administration, interpretation or application
thereof by any Official Body or (c) the making or issuance of any request,
guideline or directive (whether or not having the force of Law) by any Official
Body.

Change of Control shall mean the occurrence of any of the following: (a) the
failure of Kevin Plank and/or any of the Kevin Plank Family Entities, at any
time, to own and control, directly or indirectly, of record and beneficially,
voting securities or other interests constituting at least fifty-one percent
(51%) of the votes entitled to be cast for the election of directors of the
Borrower; or (b) within a period of twelve (12) consecutive calendar months,
individuals who were directors of the Borrower on the first day of such period
shall cease to constitute a majority of the board of directors of the Borrower
unless such new directors were selected by the then-incumbent directors.

Closing Date shall mean the Business Day on which the first Loan may be made,
which shall be January 28, 2009.

Code shall mean the Internal Revenue Code of 1986, as the same may be amended or
supplemented from time to time, and any successor statute of similar import, and
the rules and regulations thereunder, as from time to time in effect.

Collateral shall mean the collateral under the (i) Security Agreement and
(ii) Pledge Agreement.

Commitment shall mean as to any Lender the aggregate of its Revolving Credit
Commitment and, in the case of the Agent, its Swing Loan Commitment, and
Commitments shall mean the aggregate of the Revolving Credit Commitments and
Swing Loan Commitment of all of the Lenders.

Commitment Fee shall have the meaning specified in Section 2.3 [Commitment
Fees].

Compliance Certificate shall have the meaning specified in Section 7.3.4
[Certificate of the Borrower].

Complying Lender shall mean any Lender which is not a Non-Complying Lender.

Consolidated EBITDA for any period of determination shall mean (a) the sum of
(i) net income (excluding extraordinary items), (ii) depreciation expense,
(iii) amortization expense, (iv) all other non-cash charges to net income,
(v) taxes and (vi) interest expense minus (b) non-cash credits to net income, in
each case of the Borrower and its Subsidiaries for such period determined and
consolidated in accordance with GAAP.

 

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Copyrights shall mean all of the Loan Parties’ present and hereafter acquired
copyrights, copyright registrations, recordings, applications, designs, styles,
licenses, marks, prints and labels bearing any of the foregoing, all reissues
and renewals thereof, all licenses thereof, all other general intangible,
intellectual property and other rights pertaining to any of the foregoing,
together with the goodwill associated therewith, and all income, royalties and
other proceeds of any of the foregoing.

Daily LIBOR Rate shall mean, for any day, the rate per annum determined by the
Administrative Agent by dividing (x) the Published Rate by (y) a number equal to
1.00 minus the LIBOR Reserve Percentage on such day.

Depository shall have the meaning assigned to that term in Section 4.8.

Dollar, Dollars, U.S. Dollars and the symbol $ shall mean lawful money of the
United States of America.

Domestic Account Receivable shall mean any account, contract right, general
intangible, chattel paper, instrument or document representing any right to
payment for goods sold or services rendered, whether or not earned by
performance and whether or not evidenced by a contract, instrument or document,
which is now owned or hereafter acquired by a Loan Party. All Domestic Accounts
Receivable, whether Qualified Accounts Receivable or not, shall be subject to
the Lenders’ Prior Security Interest, subject to Permitted Liens, if any.

Domestic Credit Card Account Receivable shall mean any amounts due to any of the
Loan Parties from Amex, MasterCard, Discover and Visa, in relation to purchases
made by customers using credit cards. All Domestic Credit Card Accounts
Receivable, whether Qualified Accounts Receivable or not, shall be subject to
the Lenders’ Prior Security Interest, subject to Permitted Liens, if any.

Domestic Royalty Account Receivable shall mean any account receivable of any of
the Loan Parties arising from the licensing by the Loan Parties of any
Trademarks owned by any of the Loan Parties. All Domestic Royalty Accounts
Receivable, whether Qualified Accounts Receivable or not, shall be subject to
the Lenders’ Prior Security Interest, subject to Permitted Liens, if any.

Drawing Date shall have the meaning specified in Section 2.9.3 [Disbursements,
Reimbursement].

Environmental Laws shall mean all applicable federal, state, local, tribal,
territorial and foreign Laws (including common law), constitutions, statutes,
treaties, regulations, rules, ordinances and codes and any consent decrees,
settlement agreements, judgments, orders, directives, policies or programs
issued by or entered into with a governmental authority pertaining or relating
to: (i) pollution or pollution control; (ii) protection of human health or the
environment from exposure to regulated substances; (iii) protection of the
environment and/or natural resources; (iv) the presence, use, management,
generation, manufacture, processing, extraction, treatment, recycling, refining,
reclamation, labeling, packaging, sale, transport, storage, collection,
distribution, disposal or release or threat of release of regulated substances;
(v) the presence of contamination; (vi) the protection of endangered or
threatened species; and (vii) the protection of environmentally sensitive areas.

ERISA shall mean the Employee Retirement Income Security Act of 1974, as the
same may be amended or supplemented from time to time, and any successor statute
of similar import, and the rules and regulations thereunder, as from time to
time in effect.

ERISA Affiliate shall mean, at any time, any trade or business (whether or not
incorporated) under common control with the Borrower and are treated as a single
employer under Section 414 of the Code.

 

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ERISA Event means (a) a reportable event (under Section 4043 of ERISA and
regulations thereunder) with respect to a Pension Plan; (b) a withdrawal by
Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of
ERISA during a plan year in which it was a substantial employer (as defined in
Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as
such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by Borrower or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d) the filing of a
notice of intent to terminate, the treatment of a Plan amendment as a
termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e) an event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon Borrower or any ERISA Affiliate.

ERISA Group shall mean, at any time, the Borrower and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control and all other entities which, together with
the Borrower, are treated as a single employer under Section 414 of the Internal
Revenue Code.

Event of Default shall mean any of the events described in Section 8.1 [Events
of Default] and referred to therein as an “Event of Default.”

Excluded Taxes shall mean, with respect to the Administrative Agent, any Lender,
the Issuing Lender or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (a) taxes imposed on or
measured by its overall net income (however denominated), and franchise taxes
imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the Laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender, any withholding tax that is imposed on amounts payable to
such Foreign Lender at the time such Foreign Lender becomes a party hereto (or
designates a new lending office) or is attributable to such Foreign Lender’s
failure or inability (other than as a result of a Change in Law) to comply with
Section 4.11.5 [Taxes – Status of Lenders], except to the extent that such
Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to
Section 4.11.1 [Taxes – Payment Free of Taxes].

Executive Order No. 13224 shall mean the Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001, as the same has been, or shall
hereafter be, renewed, extended, amended or replaced.

Existing Credit Agreement shall mean the Third Amended and Restated Financing
Agreement among CIT Group/Commercial Services, Inc., as Agent, Wachovia Bank,
National Association, as Documentation Agent, SunTrust Bank, as Syndication
Agent and the Lenders that are party thereto and the Borrower dated December 22,
2006.

Existing Credit Obligations shall mean “Obligations” as such term is defined
under the Existing Credit Agreement.

Expiration Date shall mean, with respect to the Revolving Credit Commitments,
January 28, 2012.

Federal Funds Effective Rate for any day shall mean the rate per annum (based on
a year of 360 days and actual days elapsed and rounded upward to the nearest
1/100 of 1%) announced by the

 

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Federal Reserve Bank of New York (or any successor) on such day as being the
weighted average of the rates on overnight federal funds transactions arranged
by federal funds brokers on the previous trading day, as computed and announced
by such Federal Reserve Bank (or any successor) in substantially the same manner
as such Federal Reserve Bank computes and announces the weighted average it
refers to as the “Federal Funds Effective Rate” as of the date of this
Agreement; provided, if such Federal Reserve Bank (or its successor) does not
announce such rate on any day, the “Federal Funds Effective Rate” for such day
shall be the Federal Funds Effective Rate for the last day on which such rate
was announced.

Federal Funds Open Rate shall mean, for any day, the rate per annum (based on a
year of 360 days and actual days elapsed) which is the daily federal funds open
rate as quoted by ICAP North America, Inc. (or any successor) as set forth on
the Bloomberg Screen BTMM for that day opposite the caption “OPEN” (or on such
other substitute Bloomberg Screen that displays such rate), or as set forth on
such other recognized electronic source used for the purpose of displaying such
rate as selected by the Administrative Agent (an “Alternate Source”) (or if such
rate for such day does not appear on the Bloomberg Screen BTMM (or any
substitute screen) or on any Alternate Source, or if there shall at any time,
for any reason, no longer exist a Bloomberg Screen BTMM (or any substitute
screen) or any Alternate Source, a comparable replacement rate determined by the
Administrative Agent at such time (which determination shall be conclusive
absent manifest error); provided, however, that if such day is not a Business
Day, the Federal Funds Open Rate for such day shall be the “open” rate on the
immediately preceding Business Day. The rate of interest charged shall be
adjusted as of each Business Day based on changes in the Federal Funds Open Rate
without notice to the Borrower.

Fixed Charge Coverage Ratio shall mean the ratio of (A) Consolidated EBITDA to
(B) Fixed Charges (i) for the four fiscal quarters then ending if such date is a
fiscal quarter end or (ii) for the four fiscal quarters most recently ended if
such date is not a fiscal quarter end.

Fixed Charges shall mean for any period of determination the sum of interest
expense, income taxes, scheduled principal installments on Indebtedness,
dividends, unfinanced capital expenditures and payments under capitalized
leases, in each case of the Borrower and its Subsidiaries for such period
determined and consolidated in accordance with GAAP.

Foreign Lender shall mean any Lender that is organized under the Laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes.
For purposes of this definition, the United States of America, each State
thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.

Foreign Subsidiary shall mean, with respect to any Person, a Subsidiary of such
Person, which Subsidiary is not incorporated or otherwise organized under the
laws of a state of the United States of America or the District of Columbia.

GAAP shall mean generally accepted accounting principles as are in effect from
time to time, subject to the provisions of Section 1.3 [Accounting Principles],
and applied on a consistent basis both as to classification of items and
amounts.

Guarantor shall mean each of the parties to this Agreement which is designated
as a “Guarantor” on the signature page hereof and each other Person which joins
this Agreement as a Guarantor after the date hereof.

Guarantor Joinder shall mean a joinder by a Person as a Guarantor under the Loan
Documents in the form of Exhibit 1.1(G)(1).

Guaranty of any Person shall mean any obligation of such Person guaranteeing or
in effect guaranteeing any liability or obligation of any other Person in any
manner, whether directly or indirectly, including any agreement to indemnify or
hold harmless any other Person, any performance

 

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bond or other suretyship arrangement and any other form of assurance against
loss, except endorsement of negotiable or other instruments for deposit or
collection in the ordinary course of business.

Guaranty Agreement shall mean the Continuing Agreement of Guaranty and
Suretyship in substantially the form of Exhibit 1.1(G)(2) executed and delivered
by each of the Guarantors.

Increasing Lender shall have the meaning assigned to that term in
Section 2.4(i).

Indebtedness shall mean, as to any Person at any time, any and all indebtedness,
obligations or liabilities (whether matured or unmatured, liquidated or
unliquidated, direct or indirect, absolute or contingent, or joint or several)
of such Person for or in respect of: (i) borrowed money; (ii) amounts raised
under or liabilities in respect of any note purchase or acceptance credit
facility; (iii) reimbursement obligations (contingent or otherwise) under any
currency swap agreement, interest rate swap, cap, collar or floor agreement or
other interest rate management device; (iv) Letter of Credit Obligations;
(v) any other transaction (including forward sale or purchase agreements,
capitalized leases and conditional sales agreements) having the commercial
effect of a borrowing of money entered into by such Person to finance its
operations or capital requirements (but not including trade payables and accrued
expenses incurred in the ordinary course of business which are not represented
by a promissory note or other evidence of indebtedness and which are not more
than sixty (60) days past due); or (vi) any Guaranty of Indebtedness for
borrowed money.

Indemnified Taxes shall mean Taxes other than Excluded Taxes.

Indemnitee shall have the meaning specified in Section 10.3.2 [Indemnification
by the Borrower].

Indemnity shall mean the Indemnity Agreement in the form of Exhibit 1.1(I)(1)
relating to possible environmental liabilities associated with any of the owned
or leased real property of the Loan Parties or their Subsidiaries.

Information shall mean all information made available to the Administrative
Agent or Lenders relating to the Loan Parties or any of such Subsidiaries or any
of their respective businesses, other than any such information that is
available to the Administrative Agent, any Lender or the Issuing Lender on a
non-confidential basis prior to disclosure by the Loan Parties or any of their
Subsidiaries, provided that, in the case of information received from the Loan
Parties or any of their Subsidiaries after the date of this Agreement, such
information is clearly identified at the time of delivery as confidential.

Insolvency Proceeding shall mean, with respect to any Person, (a) a case, action
or proceeding with respect to such Person (i) before any court or any other
Official Body under any bankruptcy, insolvency, reorganization or other similar
Law now or hereafter in effect, or (ii) for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar
official) of any Loan Party or otherwise relating to the liquidation,
dissolution, winding-up or relief of such Person, or (b) any general assignment
for the benefit of creditors, composition, marshaling of assets for creditors,
or other, similar arrangement in respect of such Person’s creditors generally or
any substantial portion of its creditors; undertaken under any Law.

Intercompany Subordination Agreement shall mean a Subordination Agreement among
the Loan Parties in the form attached hereto as Exhibit 1.1(I)(2).

Interest Period shall mean the period of time selected by the Borrower in
connection with (and to apply to) any election permitted hereunder by the
Borrower to have Revolving Credit Loans bear interest under the LIBOR Rate
Option. Subject to the last sentence of this definition, such period shall be
one, two, three or six Months. Such Interest Period shall commence on the
effective date of such Interest Rate Option, which shall be (i) the Borrowing
Date if the Borrower is requesting new Loans, or (ii) the date of renewal of or
conversion to the LIBOR Rate Option if the Borrower is renewing or converting to

 

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the LIBOR Rate Option applicable to outstanding Loans. Notwithstanding the
second sentence hereof: (A) any Interest Period which would otherwise end on a
date which is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day, and
(B) the Borrower shall not select, convert to or renew an Interest Period for
any portion of the Loans that would end after the Expiration Date.

Interest Rate Hedge shall mean an interest rate exchange, collar, cap, swap,
adjustable strike cap, adjustable strike corridor or similar agreements entered
into by the Loan Parties or their Subsidiaries in order to provide protection
to, or minimize the impact upon, the Borrower, the Guarantor and/or their
Subsidiaries of increasing floating rates of interest applicable to
Indebtedness.

Interest Rate Option shall mean any LIBOR Rate Option or Base Rate Option.

Inventory shall mean any and all goods, merchandise and other personal property,
including, without limitation, goods in transit, wheresoever located and whether
now owned or hereafter acquired by any Loan Party which are or may at any time
be held as raw materials, finished goods, work-in-process, supplies or materials
used or consumed in the such Loan Party’s business or held for sale or lease,
including, without limitation, (a) all such property the sale or other
disposition of which has given rise to Accounts Receivable and which has been
returned to or repossessed or stopped in transit by such Loan Party, and (b) all
packing, shipping and advertising materials relating to all or any such
property. All Inventory, whether Qualified Inventory or not, shall be subject to
the Lenders’ Prior Security Interest, subject to Permitted Liens, if any.

IRS shall mean the Internal Revenue Service.

Issuing Lender means PNC Bank, in its individual capacity as issuer of Letters
of Credit hereunder, and any other Lender that Borrower, Administrative Agent
and such other Lender may agree may from time to time issue Letters of Credit
hereunder.

Joint Venture shall mean a corporation, partnership, limited liability company
or other entities in which any Person other than the Loan Parties and their
Subsidiaries holds, directly or indirectly, an equity interest.

Kevin Plank Family Entity shall mean (i) any not-for-profit corporation
controlled by Kevin Plank, his wife or children, or any combination thereof,
(ii) any other corporation if at least 66% of the value and voting power of its
outstanding equity is owned by Kevin Plank, his wife or children, or any
combination thereof; (iii) any partnership if at least 66% of the value and
voting power of its partnership interests are owned by Kevin Plank, his wife or
children, or any combination thereof; (iv) any limited liability or similar
company if at least 66% of the value and voting power of the company and its
membership interests are owned by Kevin Plank, his wife or children; or (v) any
trust the primary beneficiaries of which are Kevin Plank, his wife, children
and/or charitable organizations, which if the trust is a wholly charitable
trust, at least 66% of the trustees of such trust are appointed by Kevin Plank
or his wife.

Law shall mean any law (including common law), constitution, statute, treaty,
regulation, rule, ordinance, opinion, release, ruling, order, injunction, writ,
decree, bond, judgment, authorization or approval, lien or award by or
settlement agreement with any Official Body.

Lender Provided Interest Rate Hedge shall mean an Interest Rate Hedge which is
provided by any Lender or its Affiliate and with respect to which the
Administrative Agent confirms: (i) is documented in a standard International
Swap Dealer Association Agreement, (ii) provides for the method of calculating
the reimbursable amount of the provider’s credit exposure in a reasonable and
customary manner, and (iii) is entered into for hedging (rather than
speculative) purposes. The Administrative Agent agrees to review these promptly
to determine whether (i) applies.

 

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Lenders shall mean the financial institutions named on Schedule 1.1(B) and their
respective successors and assigns as permitted hereunder, each of which is
referred to herein as a Lender. For the purpose of any Loan Document which
provides for the granting of a security interest or other Lien to the Lenders or
to the Administrative Agent for the benefit of the Lenders as security for the
Obligations, “Lenders” shall include any Affiliate of a Lender to which such
Obligation is owed.

Letter of Credit shall have the meaning specified in Section 2.9.1 [Issuance of
Letters of Credit].

Letter of Credit Borrowing shall have the meaning specified in Section 2.9.3
[Disbursements, Reimbursement].

Letter of Credit Fee shall have the meaning specified in Section 2.9.2 [Letter
of Credit Fees].

Letter of Credit Obligation means, as of any date of determination, the
aggregate amount available to be drawn under all outstanding Letters of Credit
on such date (if any Letter of Credit shall increase in amount automatically in
the future, such aggregate amount available to be drawn shall currently give
effect to any such future increase) plus the aggregate Reimbursement Obligations
and Letter of Credit Borrowings on such date.

Letter of Credit Sublimit shall have the meaning specified in Section 2.9.1
[Letter of Credit Subfacility].

Leverage Ratio shall mean, as of the end of any date of determination, the ratio
of (A) Total Debt on such date to (B) Consolidated EBITDA (i) for the four
fiscal quarters then ending if such date is a fiscal quarter end or (ii) for the
four fiscal quarters most recently ended if such date is not a fiscal quarter
end.

LIBOR Rate shall mean, with respect to the Loans comprising any Borrowing
Tranche to which the LIBOR Rate Option applies for any Interest Period, the
interest rate per annum determined by the Administrative Agent by dividing (the
resulting quotient rounded upwards, if necessary, to the nearest 1/100th of
1% per annum) (i) the rate which appears on the Bloomberg Page BBAM1 (or on such
other substitute Bloomberg page that displays rates at which US dollar deposits
are offered by leading banks in the London interbank deposit market), or the
rate which is quoted by another source selected by the Administrative Agent
which has been approved by the British Bankers’ Association as an authorized
information vendor for the purpose of displaying rates at which US dollar
deposits are offered by leading banks in the London interbank deposit market (an
“Alternate Source”), at approximately 11:00 a.m., London time, two (2) Business
Days prior to the commencement of such Interest Period as the London interbank
offered rate for U.S. Dollars for an amount comparable to such Borrowing Tranche
and having a borrowing date and a maturity comparable to such Interest Period
(or if there shall at any time, for any reason, no longer exist a Bloomberg Page
BBAM1 (or any substitute page) or any Alternate Source, a comparable replacement
rate determined by the Administrative Agent at such time (which determination
shall be conclusive absent manifest error)), by (ii) a number equal to 1.00
minus the LIBOR Reserve Percentage. LIBOR may also be expressed by the following
formula:

Average of London interbank offered rates quoted by Bloomberg or appropriate
successor as shown on

 

 

LIBOR =    

  Bloomberg Page BBAM1       1.00 - LIBOR Reserve Percentage  

provided, that in no event shall the LIBOR Rate be less than 125 basis points
(1.25%).

The LIBOR Rate shall be adjusted with respect to any Loan to which the LIBOR
Rate Option applies that is outstanding on the effective date of any change in
the LIBOR Reserve Percentage

 

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as of such effective date. The Administrative Agent shall give prompt notice to
the Borrower of the LIBOR Rate as determined or adjusted in accordance herewith,
which determination shall be conclusive absent manifest error.

LIBOR Rate Option shall mean the option of the Borrower to have Loans bear
interest at the rate and under the terms set forth in Section 3.1.1(ii)
[Revolving Credit LIBOR Rate Option].

LIBOR Reserve Percentage shall mean as of any day the maximum percentage in
effect on such day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the reserve requirements
(including supplemental, marginal and emergency reserve requirements) with
respect to eurocurrency funding (currently referred to as “Eurocurrency
Liabilities”).

Lien shall mean any mortgage, deed of trust, pledge, lien, security interest,
charge or other encumbrance or security arrangement of any nature whatsoever,
whether voluntarily or involuntarily given, including any conditional sale or
title retention arrangement, and any assignment, deposit arrangement or lease
intended as, or having the effect of, security and any filed financing statement
or other notice of any of the foregoing (whether or not a lien or other
encumbrance is created or exists at the time of the filing).

Loan Documents shall mean this Agreement, the Administrative Agent’s Letter, the
Guaranty Agreement, the Indemnity, the Intercompany Subordination Agreement, the
Notes, the Pledge Agreement, the Security Agreement, and any other instruments,
certificates or documents delivered in connection herewith or therewith.

Loan Parties shall mean the Borrower and the Guarantors.

Loan Request shall have the meaning specified in Section 2.5 [Revolving Credit
Loan Requests].

Loans shall mean collectively and Loan shall mean separately all Revolving
Credit Loans and Swing Loans or any Revolving Credit Loan or Swing Loan.

Lockbox Agreement shall mean the Lockbox Agreement in substantially the form
attached hereto as Exhibit 1.1(L) executed and delivered by the applicable Loan
Parties to the Administrative Agent.

Material Adverse Change shall mean any set of circumstances or events which
(a) has or could reasonably be expected to have any material adverse effect
whatsoever upon the validity or enforceability of this Agreement or any other
Loan Document, (b) is or could reasonably be expected to be material and adverse
to the business, properties, assets, financial condition or results of
operations of the Loan Parties taken as a whole, (c) impairs materially or could
reasonably be expected to impair materially the ability of the Loan Parties
taken as a whole to duly and punctually pay or perform its Indebtedness, or
(d) impairs materially or could reasonably be expected to impair materially the
ability of the Administrative Agent or any of the Lenders, to the extent
permitted, to enforce their legal remedies pursuant to this Agreement or any
other Loan Document.

Month, with respect to an Interest Period under the LIBOR Rate Option, shall
mean the interval between the days in consecutive calendar months numerically
corresponding to the first day of such Interest Period. If any LIBOR Rate
Interest Period begins on a day of a calendar month for which there is no
numerically corresponding day in the month in which such Interest Period is to
end, the final month of such Interest Period shall be deemed to end on the last
Business Day of such final month.

Multiemployer Plan shall mean any employee benefit plan which is a
“multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA and to
which the Borrower or any member of the ERISA Group is then making or accruing
an obligation to make contributions or, within the preceding five Plan years,
has made or had an obligation to make such contributions.

 

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New Lender shall have the meaning assigned to that term in Section 2.4(i).

Non-Complying Lender shall mean any Lender which has failed to fund any Loan
which it is required to fund, or pay any other amount which it is required to
pay to the Administrative Agent or any other Lender pursuant to the Loan
Documents, within one (1) Business Day of the due date therefor.

Non-Consenting Lender shall have the meaning specified in Section 10.1
[Modifications, Amendments or Waivers].

Notes shall mean, collectively, the promissory notes in the form of Exhibit
1.1(N)(1) evidencing the Revolving Credit Loans and in the form of Exhibit
1.1(N)(2) evidencing the Swing Loan.

Notices shall have the meaning specified in Section 10.5 [Notices;
Effectiveness; Electronic Communication].

Obligation shall mean any obligation or liability of any of the Loan Parties,
howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, under or in
connection with (i) this Agreement, the Notes, the Letters of Credit, the
Administrative Agent’s Letter or any other Loan Document whether to the
Administrative Agent, any of the Lenders or their Affiliates or other persons
provided for under such Loan Documents, (ii) any Lender Provided Interest Rate
Hedge and (iii) any Other Lender Provided Financial Service Product.

Official Body shall mean the government of the United States of America or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank).

Other Lender Provided Financial Service Product shall mean agreements or other
arrangements under which any Lender or Affiliate of a Lender provides any of the
following products or services to any of the Loan Parties: (a) credit cards,
(b) credit card processing services, (c) debit cards, (d) purchase cards,
(e) ACH Transactions, (f) cash management, including controlled disbursement,
accounts or services, or (g) foreign currency exchange.

Other Taxes shall mean all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.

Participant has the meaning specified in Section 10.8.4 [Participations].

Participation Advance shall have the meaning specified in Section 2.9.3
[Disbursements, Reimbursement].

Patents shall mean all of the Loan Parties’ present and hereafter acquired
patents, patent applications, registrations, all reissues and renewals thereof,
all licenses thereof, all inventions and improvements claimed thereunder, all
general intangible, intellectual property and other rights of any Loan Party
with respect thereto, and all income, royalties and other proceeds of the
foregoing.

Payment Date shall mean the first day of each calendar quarter after the date
hereof and on the Expiration Date or upon acceleration of the Notes.

Payment In Full shall mean payment in full in cash of the Loans and other
Obligations hereunder, termination of the Commitments and expiration or
termination of all Letters of Credit.

PBGC shall mean the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA or any successor.

 

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Pension Plan means any “employee pension benefit plan” (as such term is defined
in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to
Title IV of ERISA and is sponsored or maintained by Borrower or any ERISA
Affiliate or to which Borrower or any ERISA Affiliate contributes or has an
obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has made contributions at any times
during the immediately preceding five plan years.

Permitted Indebtedness shall mean:

(i) Indebtedness under the Loan Documents;

(ii) Existing Indebtedness as of the Closing Date as set forth on Schedule 7.2.1
(including any extensions or renewals thereof); provided there is no increase in
the amount thereof or other significant change in the terms thereof unless
otherwise specified on Schedule 7.2.1;

(iii) Capitalized leases and Indebtedness secured by Purchase Money Security
Interests not exceeding $35,000,000 in the aggregate;

(iv) Indebtedness of a Loan Party to another Loan Party or to a Subsidiary of a
Loan Party;

(v) Any (i) Lender Provided Interest Rate Hedge, (ii) other Interest Rate Hedge
approved by the Administrative Agent or (iii) Indebtedness under any Other
Lender Provided Financial Services Product;

(vi) Guarantee obligations of a Loan Party or any Subsidiary of a Loan Party for
any Indebtedness otherwise permitted by this Agreement;

(vii) Indebtedness of the Borrower or any of its Subsidiaries arising from the
honoring by a bank or other financial institution of a check, draft or similar
instrument inadvertently drawn by the Borrower or such Subsidiary in the
ordinary course of business against insufficient funds, in the maximum amount
outstanding from time to time of $50,000, so long as such Indebtedness is repaid
within five (5) Business Days of the creation of such condition;

(viii) Additional Indebtedness of the Borrower or any of its Subsidiaries in an
aggregate principal amount (for the Borrower and all Subsidiaries) not to exceed
$2,500,000 at any one time outstanding;

(ix) Indebtedness of the Borrower or any of its Subsidiaries in respect of
workers’ compensation claims, property casualty or liability insurance,
take-or-pay obligations in supply arrangements, self-insurance obligations,
performance, bid and surety bonds and completion guaranties, in each case in the
ordinary course of business; and

(x) Indebtedness of any Loan Party or Subsidiary for refinancings, replacements,
modifications, refundings, renewals or extensions of Indebtedness that
constitutes Permitted Indebtedness, provided that (i) there is no increase in
the principal amount (or accrued value) thereof (excluding accrued interest,
fees, discounts, premiums and expenses), (ii) the weighted average life to
maturity of such Indebtedness is greater than or equal to the shorter of (A) the
weighted average life to maturity of the Indebtedness being refinanced and
(B) the weighted average life to maturity that would result if all payments of
principal on the Indebtedness being refinanced that were due on or after the
date that is one year following the Expiration Date were instead due one year
following the Expiration Date, (iii) if the Indebtedness being refinanced,
refunded, modified, renewed or extended is subordinated in right of payment to
the Obligations, such refinancing, refunding, modification, renewal or extension
is subordinated in right of payment to the Obligations on terms at least as
favorable to the Lenders as those contained in the documentation governing the
Indebtedness being refinanced, refunded, modified, renewed or extended, (iv) the
terms and conditions (including, if applicable, as to collateral) of any such

 

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refinanced, refunded, modified, renewed or extended Indebtedness are not
materially less favorable to the Lenders than the terms and conditions of the
Indebtedness being modified, refinanced, refunded, renewed or extended, (v) no
Event of Default shall have occurred and be continuing or no Event of Default or
Potential Default would result from any such refinancing, refunding,
modification, renewal or extension and (vi) with respect to any such
Indebtedness that is secured, no Loan Party shall be an obligor or guarantor of
any such refinancings, replacements, refundings, renewals or extensions except
to the extent that such Person was such an obligor or guarantor in respect of
the applicable Indebtedness on the date hereof.

Permitted Investments shall mean:

(i) marketable direct obligations issued or unconditionally guaranteed by the
United States Government or any state or municipality thereof or the District of
Columbia having maturities of not more than twelve (12) months from the date of
acquisition, and certificates of deposit and time deposits having maturities of
not more than twelve (12) months from the date of acquisition, banker’s
acceptances having maturities of not more than twelve (12) months from the date
of acquisition and overnight bank deposits which at the time of acquisition are
rated A–1 or better by S&P or P–1 or better by Moody’s, or by a Lender;

(ii) investments in negotiable instruments acquired in the ordinary course of
business for collection;

(iii) investments received in settlement of Accounts Receivable arising in the
ordinary course of business or owing to a Loan Party as a result of any dispute
with customers or suppliers or upon the foreclosure or enforcement of any lien
in favor of a Loan Party as security for an Account Receivable, and investments
made in exchange for Accounts Receivable arising in the ordinary course of
business which have not been collected for 120 days and which are, in the good
faith judgment of the Loan Parties, substantially uncollectible, in each case
for so long as any instrument evidencing such investment is, promptly upon
receipt, duly endorsed to the order of and delivered to the Administrative Agent
to be held as security for the Obligations;

(iv) trade credit extended on usual and customary terms in the ordinary course
of business;

(v) advances to employees to meet reasonable expenses incurred by such employees
in the ordinary course of business;

(vi) reasonable loans or advances (including, without limitation, to employees
or suppliers) so long as the aggregate amount of such loans and advances
outstanding by the Loan Party and their Subsidiaries does not exceed the sum of
$2,000,000 at any time;

(vii) loans, advances, capital contributions or investments in other Loan
Parties or their Subsidiaries;

(viii) loans or equity investments not exceeding $10,000,000 in the aggregate to
joint ventures formed by a Loan Party or any Subsidiary to develop, enhance,
research, manufacture or market any new technology or to develop, enhance or
research any new product, process or technology;

(ix) investments in Subsidiaries permitted to be formed by Section 7.2.8 hereof;

(x) any money market or similar fund the assets of which are comprised
exclusively of any of the items specified in clause (i) above and as to which
withdrawals are permitted daily;

(xi) repurchase obligations with a term of not more than thirty (30) days for
underlying securities of the types described in clause (i) above entered into
with any financial institution meeting the qualifications specified in clause
(i); and

 

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(xii) commercial paper having at the time of investment therein or a contractual
commitment to invest therein a rating of A–1 or better by S&P or P–1 or better
by Moody’s, and having a maturity within six (6) months after the date of
acquisition thereof.

Permitted Liens shall mean:

(i) Liens for taxes, assessments, or similar charges, incurred in the ordinary
course of business and which are not yet due and payable;

(ii) Pledges or deposits made in the ordinary course of business to secure
payment of workmen’s compensation, or to participate in any fund in connection
with workmen’s compensation, unemployment insurance, old-age pensions or other
social security programs;

(iii) Liens of mechanics, materialmen, warehousemen, carriers, or other like
Liens, securing obligations incurred in the ordinary course of business that are
not yet due and payable and Liens of landlords securing obligations to pay lease
payments that are not yet due and payable or in default;

(iv) Good-faith pledges or deposits made in the ordinary course of business to
secure performance of bids, tenders, contracts (other than for the repayment of
borrowed money) or leases, not in excess of the aggregate amount due thereunder,
or to secure statutory obligations, or surety, appeal, indemnity, performance or
other similar bonds required in the ordinary course of business;

(v) Encumbrances consisting of zoning restrictions, easements or other
restrictions on the use of real property, none of which materially impairs the
use of such property or the value thereof, and none of which is violated in any
material respect by existing or proposed structures or land use;

(vi) Liens, security interests and mortgages in favor of the Administrative
Agent for the benefit of the Lenders and their Affiliates securing the
Obligations including Other Lender Provided Financial Services Obligations;

(vii) Liens on property leased by any Loan Party or Subsidiary of a Loan Party
under capital leases permitted as Permitted Indebtedness securing obligations of
such Loan Party or Subsidiary to the lessor under such leases and precautionary
Uniform Commercial Code financing statements in respect thereof;

(viii) Any Lien existing on the date of this Agreement and described on Schedule
1.1(P), provided that the principal amount secured thereby is not hereafter
increased, and no additional assets become subject to such Lien;

(ix) Purchase Money Security Interests permitted in clause (iii) of the
definition of Permitted Indebtedness;

(x) The following, (A) if the validity or amount thereof is being contested in
good faith by appropriate and lawful proceedings diligently conducted so long as
levy and execution thereon have been stayed and continue to be stayed or (B) if
a final judgment is entered and such judgment is discharged within thirty
(30) days of entry, and in either case they do not adversely affect the
Collateral or, in the aggregate, materially impair the ability of any Loan Party
to perform its Obligations hereunder or under the other Loan Documents:

(1) Claims or Liens for taxes, assessments or charges due and payable and
subject to interest or penalty; provided that the applicable Loan Party
maintains such reserves or other appropriate provisions as shall be required by
GAAP and pays all such taxes, assessments or charges forthwith upon the
commencement of proceedings to foreclose any such Lien;

(2) Claims, Liens or encumbrances upon, and defects of title to, real or
personal property other than the Collateral, including any attachment of
personal or real property or other legal process prior to adjudication of a
dispute on the merits;

 

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(3) Claims or Liens of mechanics, materialmen, warehousemen, carriers, or other
statutory nonconsensual Liens; or

(4) Liens resulting from final judgments or orders described in Section 8.1.6
[Final Judgments or Orders];

(xi) liens or rights of setoff against credit balances of a Loan Party with any
credit card issuers or processors or amounts owing by credit card issuers or
processors to a Loan Party in the ordinary course of business to secure the
obligations of such Loan Party to such credit card issuer or processor as a
result of any fees and chargebacks; and

(xii) liens or rights of setoff of any bank to secure fees and charges in
connection with returned items or fees and charges in connection with any
deposit account maintained by any Loan Party at such bank up to an aggregate, at
any one time, of $50,000;

(xiii) licenses of Trademarks, Patents and Copyrights in the ordinary course of
business;

(xiv) any liens or rights of setoff of any bank or securities intermediary to
secure fees, charges and commissions in connections with any investment account
maintained by the Loan Parties or their respective subsidiaries up to an
aggregate, at any one time, of $50,000; and

(xv) other liens (except liens securing Taxes) securing indebtedness or
obligations not to exceed $500,000 outstanding at any one time.

Person shall mean any individual, corporation, partnership, limited liability
company, association, joint-stock company, trust, unincorporated organization,
joint venture, government or political subdivision or agency thereof, or any
other entity.

Plan shall mean at any time an “employee pension benefit plan” as such term is
defined in Section 3(2) of ERISA (including a multiple employer or other plan
described in Section 4064 of ERISA, but not a Multiemployer Plan) which is
covered by Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Code and either (i) is maintained by any member of the
ERISA Group for employees of any member of the ERISA Group or (ii) has at any
time within the preceding five years been maintained by any entity which was at
such time a member of the ERISA Group for employees of any entity which was at
such time a member of the ERISA Group.

Pledge Agreement shall mean the Pledge Agreement in substantially the form of
Exhibit 1.1(P)(2) executed and delivered by each of the Borrower and its
Subsidiaries pledging 65% of the Subsidiary Equity Interests of each Foreign
Subsidiary held by the Borrower and such Subsidiaries to the Administrative
Agent for the benefit of the Lenders.

PNC Bank shall mean PNC Bank, National Association, its successors and assigns.

Potential Default shall mean any event or condition which with notice or passage
of time, or both, would constitute an Event of Default.

Prime Rate shall mean the interest rate per annum announced from time to time by
the Administrative Agent at its Principal Office as its then prime rate, which
rate may not be the lowest rate then being charged commercial borrowers by the
Administrative Agent.

Principal Office shall mean the main banking office of the Administrative Agent
in Pittsburgh, Pennsylvania.

Prior Security Interest shall mean a valid and enforceable perfected
first-priority security interest under the Uniform Commercial Code in the
Collateral which is subject only to statutory Liens for taxes not yet due and
payable or Purchase Money Security Interests.

 

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Published Rate shall mean the rate of interest published each Business Day in
The Wall Street Journal “Money Rates” listing under the caption “London
Interbank Offered Rates” for a one month period (or, if no such rate is
published therein for any reason, then the Published Rate shall be the
eurodollar rate for a one month period as published in another publication
selected by the Administrative Agent, and the identity of which the
Administrative Agent shall notify Borrower within a reasonable time thereafter).

Purchase Money Security Interest shall mean Liens upon tangible personal
property securing loans to any Loan Party or Subsidiary of a Loan Party or
deferred payments by such Loan Party or Subsidiary for the purchase of such
tangible personal property.

Qualified Accounts Receivable shall mean any Accounts Receivable, which the
Administrative Agent in its sole discretion determines to have met all of the
minimum requirements set forth on Schedule 1.1(C), but shall specifically
exclude Reserves for Sales Returns for Domestic Accounts Receivable.

Qualified Inventory shall mean any Inventory which the Administrative Agent in
its sole discretion determines to have met all of the minimum requirements set
forth on Schedule 1.1(D), but shall specifically exclude (i) all raw materials,
(ii) all work-in-progress Inventory and (iii) all Inventory subject to reserves,
including reserves for obsolescence.

Ratable Share shall mean the proportion that a Lender’s Commitment (excluding
the Swing Loan Commitment) bears to the Commitments (excluding the Swing Loan
Commitment) of all of the Lenders. If the Commitments have terminated or
expired, the Ratable Shares shall be determined based upon the Commitments
(excluding the Swing Loan Commitment) most recently in effect, giving effect to
any assignments.

Reimbursement Obligation shall have the meaning specified in Section 2.9.3
[Disbursements, Reimbursement].

Related Parties shall mean, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents and advisors of such
Person and of such Person’s Affiliates.

Relief Proceeding shall mean any proceeding seeking a decree or order for relief
in respect of any Loan Party or Subsidiary of a Loan Party in a voluntary or
involuntary case under any applicable bankruptcy, insolvency, reorganization or
other similar law now or hereafter in effect, or for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) of any Loan Party or Subsidiary of a Loan Party for any
substantial part of its property, or for the winding-up or liquidation of its
affairs, or an assignment for the benefit of its creditors.

Requested Increase shall have the meaning assigned to that term in
Section 2.4(i).

Required Lenders shall mean (i) if there are no Loans, Reimbursement Obligations
or Letter of Credit Borrowings outstanding, Complying Lenders whose Commitments
(excluding the Swing Loan Commitments) aggregate at least 51% of the Commitments
(excluding the Swing Loan Commitments) of all of the Complying Lenders, or
(ii) if there are Loans, Reimbursement Obligations, or Letter of Credit
Borrowings outstanding, any group of Complying Lenders if the sum of the Loans
(excluding the Swing Loans), Reimbursement Obligations and Letter of Credit
Borrowings of such Lenders then outstanding aggregates at least 51% of the total
principal amount of all of the Loans (excluding the Swing Loans), Reimbursement
Obligations and Letter of Credit Borrowings of all of the Complying Lenders then
outstanding.

Required Share shall have the meaning assigned to such term in Section 4.13.

 

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Reserves for Sales Returns for Domestic Accounts Receivable shall mean the
amount estimated by the Borrower from time to time in a manner consistent with
the disclosures contained in the Borrower’s Forms 10-K and 10-Q as the portion
of Accounts Receivable which may be expected to not be collected as a
consequence of the goods represented therein being returned by the Accounts
Receivable Debtor to the Loan Parties.

Revolving Credit Commitment shall mean, as to any Lender at any time, the amount
initially set forth opposite its name on Schedule 1.1(B) in the column labeled
“Amount of Commitment for Revolving Credit Loans,” as such Commitment is
thereafter assigned or modified and Revolving Credit Commitments shall mean the
aggregate Revolving Credit Commitments of all of the Lenders.

Revolving Credit Loans shall mean collectively and Revolving Credit Loan shall
mean separately all Revolving Credit Loans or any Revolving Credit Loan made by
the Lenders or one of the Lenders to the Borrower pursuant to Section 2.1
[Revolving Credit Commitments] or 2.9.3 [Disbursements, Reimbursement].

Revolving Facility Usage shall mean at any time the sum of (i) the outstanding
Revolving Credit Loans, (ii) the outstanding Swing Loans and (iii) the Letter of
Credit Obligations.

Schedule of Accounts Receivable shall mean an aged trial balance summary report
by account debtor of all then existing Accounts Receivable in form and substance
reasonably satisfactory to Administrative Agent, specifying in each case the
names of, amounts due from, each Account Receivable Debtor obligated on an
Account Receivable so listed and, if requested by the Administrative Agent,
copies of proof of delivery and customer statements and the original copy of all
documents, including, without limitation, repayment histories and present status
reports, and such other matters and information relating to the status of the
Accounts Receivable and/or the Account Receivable Debtors so scheduled as the
Administrative Agent may from time to time reasonably request.

Schedule of Inventory shall mean a current schedule of Inventory in form and
substance reasonably satisfactory to the Administrative Agent, itemizing and
describing the kind, type, quality and quantity of Inventory, as derived from
physical counts, the Loan Parties’ costs therefor and selling price thereof.

Security Agreement shall mean the Security Agreement in substantially the form
of Exhibit 1.1(S) executed and delivered by each of the Loan Parties to the
Administrative Agent for the benefit of the Lenders.

Settlement Date shall mean any Business Day on which the Agent elects to effect
settlement pursuant to Section 4.13.

Significant Subsidiary shall mean a Subsidiary of a Loan Party with total
assets, determined as of the end of the immediately preceding fiscal year, of
more than $1,000,000.

Solvent shall mean, with respect to any Person on a particular date, that on
such date (i) the fair value of the property of such Person is greater than the
total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (ii) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (iii) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (iv) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person’s ability to pay as such debts and liabilities mature, and (v) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person’s property would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which such Person is engaged. In computing the

 

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amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.

Standard & Poor’s shall mean Standard & Poor’s Ratings Services, a division of
The McGraw-Hill Companies, Inc.

Statements shall have the meaning specified in Section 5.1.6(i) [Historical
Statements].

Subsidiary of any Person at any time shall mean any corporation, trust,
partnership, any limited liability company or other business entity (i) of which
50% or more of the outstanding voting securities or other interests normally
entitled to vote for the election of one or more directors or trustees
(regardless of any contingency which does or may suspend or dilute the voting
rights) is at such time owned directly or indirectly by such Person or one or
more of such Person’s Subsidiaries, or (ii) which is controlled or capable of
being controlled by such Person or one or more of such Person’s Subsidiaries.

Subsidiary Equity Interests shall have the meaning specified in Section 5.1.2
[Subsidiaries and Owners; Investment Companies].

Swing Loan Commitment shall mean PNC Bank’s commitment to make Swing Loans to
the Borrower pursuant to Section 2.1.2 hereof in an aggregate principal amount
up to $10,000,000.

Swing Loan Note shall mean the Swing Loan Note of the Borrower in the form of
Exhibit [1.1(N)(2)] evidencing the Swing Loans, together with all amendments,
extensions, renewals, replacements, refinancings or refundings thereof in whole
or in part.

Swing Loan Request shall mean a request for Swing Loans made in accordance with
Section 2.5.2 hereof.

Swing Loans shall mean collectively and Swing Loan shall mean separately all
Swing Loans or any Swing Loan made by PNC Bank to the Borrower pursuant to
Section [2.1.2] hereof.

Taxes shall mean all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Official Body, including any interest, additions to tax or penalties applicable
thereto.

Total Debt for the fiscal quarter then ending shall mean all Indebtedness of the
Borrower and its Subsidiaries (other than inter-company guarantees).

Trademarks shall mean all of the Loan Parties’ present and hereafter acquired
trademarks, trademark registrations, recordings, applications, tradenames, trade
styles, corporate names, business names, service marks, logos and any other
designs or sources of business identities, prints and labels (on which any of
the foregoing may appear), all reissues and renewals thereof, all licenses
thereof, all other general intangible, intellectual property and other rights
pertaining to any of the foregoing, together with the goodwill associated
therewith, and all income, royalties and other proceeds of any of the foregoing.

USA Patriot Act shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.

1.2 Construction. Unless the context of this Agreement otherwise clearly
requires, the following rules of construction shall apply to this Agreement and
each of the other Loan Documents: (i) references to the plural include the
singular, the plural, the part and the whole and the words “include,”

 

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“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”; (ii) the words “hereof,” “herein,” “hereunder,” “hereto” and
similar terms in this Agreement or any other Loan Document refer to this
Agreement or such other Loan Document as a whole; (iii) article, section,
subsection, clause, schedule and exhibit references are to this Agreement or
other Loan Document, as the case may be, unless otherwise specified;
(iv) reference to any Person includes such Person’s successors and assigns;
(v) reference to any agreement, including this Agreement and any other Loan
Document together with the schedules and exhibits hereto or thereto, document or
instrument means such agreement, document or instrument as amended, modified,
replaced, substituted for, superseded or restated; (vi) relative to the
determination of any period of time, “from” means “from and including,” “to”
means “to but excluding,” and “through” means “through and including”; (vii) the
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights,
(viii) section headings herein and in each other Loan Document are included for
convenience and shall not affect the interpretation of this Agreement or such
Loan Document, and (ix) unless otherwise specified, all references herein to
times of day shall be references to Eastern Standard Time.

1.3 Accounting Principles. Except as otherwise provided in this Agreement, all
computations and determinations as to accounting or financial matters and all
financial statements to be delivered pursuant to this Agreement shall be made
and prepared in accordance with GAAP (including principles of consolidation
where appropriate), and all accounting or financial terms shall have the
meanings ascribed to such terms by GAAP; provided, however, that all accounting
terms used in Section 7.2 [Negative Covenants] (and all defined terms used in
the definition of any accounting term used in Section 7.2 [Negative Covenants]
shall have the meaning given to such terms (and defined terms) under GAAP as in
effect on the date hereof applied on a basis consistent with those used in
preparing Statements referred to in Section 5.1.6(i) [Historical Statements]. In
the event of any change after the date hereof in GAAP, and if such change would
affect the computation of any of the financial covenants set forth in
Section 7.2 [Negative Covenants], then the parties hereto agree to endeavor, in
good faith, to agree upon an amendment to this Agreement that would adjust such
financial covenants in a manner that would preserve the original intent thereof,
but would allow compliance therewith to be determined in accordance with the
Borrower’s financial statements at that time, provided that, until so amended
such financial covenants shall continue to be computed in accordance with GAAP
prior to such change therein.

2. REVOLVING CREDIT AND SWING LOAN FACILITIES

2.1 Revolving Credit Commitments.

2.1.1 Revolving Credit Loans.

Subject to the terms and conditions hereof and relying upon the representations
and warranties herein set forth, each Lender severally agrees to make Revolving
Credit Loans to the Borrower at any time or from time to time on or after the
date hereof to the Expiration Date; provided that after giving effect to such
Loan (i) the aggregate amount of Loans from such Lender shall not exceed such
Lender’s Revolving Credit Commitment minus such Lender’s Ratable Share of the
Letter of Credit Obligations and (ii) the Revolving Facility Usage shall not
exceed the lesser of the Revolving Credit Commitments or the Borrowing Base.
Within such limits of time and amount and subject to the other provisions of
this Agreement, the Borrower may borrow, repay and reborrow pursuant to this
Section 2.1.

2.1.2 Swing Loan Commitment.

Subject to the terms and conditions hereof and relying upon the representations
and warranties herein set forth, and in order to facilitate loans and repayments
between Settlement Dates, PNC Bank may, at its option, cancelable at any time
for any reason whatsoever, make swing loans (the “Swing Loans”) to the Borrower
at any time or from time to time after the date hereof to, but not

 

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including, the Expiration Date, in an aggregate principal amount up to but not
in excess of $10,000,000 (the “Swing Loan Commitment”), provided that the
Revolving Facility Usage shall not exceed the lesser of the Revolving Credit
Commitments or the Borrowing Base. Within such limits of time and amount and
subject to the other provisions of this Agreement, the Borrower may borrow,
repay and reborrow pursuant to this Section 2.1.2.

2.2 Nature of Lenders’ Obligations with Respect to Revolving Credit Loans. Each
Lender shall be obligated to participate in each request for Revolving Credit
Loans pursuant to Section 2.5 [Revolving Credit Loan Requests] in accordance
with its Ratable Share. The aggregate of each Lender’s Revolving Credit Loans
outstanding hereunder to the Borrower at any time shall never exceed its
Revolving Credit Commitment minus its Ratable Share of the Letter of Credit
Obligations. The obligations of each Lender hereunder are several. The failure
of any Lender to perform its obligations hereunder shall not affect the
Obligations of the Borrower to any other party nor shall any other party be
liable for the failure of such Lender to perform its obligations hereunder. The
Lenders shall have no obligation to make Revolving Credit Loans hereunder on or
after the Expiration Date.

2.3 Commitment Fees. Accruing from the date hereof until the Expiration Date,
the Borrower agrees to pay to the Administrative Agent for the account of each
Lender according to its Ratable Share, a nonrefundable commitment fee (the
“Commitment Fee”) equal to the Applicable Commitment Fee Rate (computed on the
basis of a year of 360 days and actual days elapsed) times the average daily
difference between the amount of (i) the Revolving Credit Commitments (for
purposes of this computation, PNC Bank’s Swing Loans shall be deemed to be
borrowed amounts under its Revolving Credit Commitment, but only to the extent
any Swing Loans are then outstanding) and the (ii) the Revolving Facility Usage.
All Commitment Fees shall be payable in arrears on each Payment Date.

2.4 Increase in Revolving Credit Commitments.

(i) Increasing Lenders. The Borrower may, at any time after the Closing Date,
request that the current Lenders increase their Revolving Credit Commitments by
providing written notice to the Administrative Agent (the “Requested Increase”).
Each Lender shall have the right at any time within the fifteen (15) day period
following receipt by the Agent of such written request to increase its Revolving
Credit Commitment by its Ratable Share of the Requested Increase (any current
Lender which elects to increase its Revolving Credit Commitment shall be
referred to as an “Increasing Lender”). If Lenders elect to increase their
Revolving Credit Commitment within the 15-day period specified in the preceding
sentence but such increases, in the aggregate, do not equal the Requested
Increase, then the Administrative Agent shall, immediately after the expiration
of such period, send written notice to the Increasing Lenders. Each Increasing
Lender shall have the right to increase its Revolving Credit Commitment by all
or any part of the balance of the Requested Increase. In the event there are two
or more such Increasing Lenders that choose to so increase their Revolving
Credit Commitment, the balance of the Requested Increase shall be allocated to
such Increasing Lenders pro rata based on their Ratable Share. Each Lender
acknowledges and agrees that up to $20,000,000 may be loaned by an additional
Lender within sixty (60) Days of the Closing Date (the “Post-Closing Loan”). The
terms and conditions set forth in this Section 2.4, including, without
limitation, Section 2.4(iii), shall not apply to the Post-Closing Loan, except
that the Borrower shall execute and deliver to such Lender a revolving credit
Note reflecting the amount of such Lender’s Revolving Credit Commitment and such
Lender shall execute a lender joinder in substantially the form of Exhibit 2.4
pursuant to which such Lender shall join and become a party as a “Lender” to
this Agreement and the other Loan Documents with a Revolving Credit Commitment
in the amount set forth in such lender joinder.

(ii) New Lenders. If there is a balance of the Requested Increase remaining
after completion of the process set forth in Section 2.4(i) above, one or more
new lenders (each a “New

 

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Lender”) shall have the right to join this Agreement and provide a Revolving
Credit Commitment hereunder.

(iii) Terms and Conditions Any increases by Increasing Lenders or new Revolving
Credit Commitments by New Lenders, as applicable, are subject to the following
terms and conditions:

(a) No Obligation to Increase. No current Lender shall be obligated to increase
its Revolving Credit Commitment and any increase in the Revolving Credit
Commitment by any current Lender shall be in the sole discretion of such current
Lender.

(b) Defaults. There shall exist no Events of Default or Potential Default on the
effective date of such increase after giving effect to such increase.

(c) Aggregate Revolving Credit Commitments. After giving effect to such
increase, the total Revolving Credit Commitments shall not exceed $250,000,000.

(d) Minimum Revolving Credit Commitments. After giving effect to such increase,
the amount of the Revolving Credit Commitments provided by each of the New
Lenders shall be at least $5,000,000.

(e) Resolutions; Opinion. The Loan Parties shall deliver to the Administrative
Agent on or before the effective date of such increase the following documents
in a form reasonably acceptable to the Administrative Agent: (1) certifications
of their corporate secretaries with attached resolutions certifying that the
increase in the Revolving Credit Commitment has been approved by such Loan
Parties; and (2) an opinion of counsel addressed to the Administrative Agent and
the Lenders addressing the authorization and execution of the Loan Documents by,
and enforceability of the Loan Documents against, the Loan Parties.

(f) Notes. The Borrower shall execute and deliver (1) to each Increasing Lender
a replacement revolving credit Note reflecting the new amount of such Increasing
Lender’s Revolving Credit Commitment after giving effect to the increase (and
the prior Note issued to such Increasing Lender shall be deemed to be terminated
and the original thereof shall be returned by such Increasing Lender to the
Borrower) and (2) to each New Lender a revolving credit Note reflecting the
amount of such New Lender’s Revolving Credit Commitment.

(g) Approval of New Lenders. Any New Lender shall be subject to the approval of
the Borrower and the Administrative Agent.

(h) Increasing Lenders. Each Increasing Lender shall confirm its agreement to
increase its Revolving Credit Commitment pursuant to an acknowledgement in a
form reasonably acceptable to the Administrative Agent, signed by it and the
Borrower and delivered to the Administrative Agent at least five (5) days before
the effective date of such increase.

(i) New Lenders–Joinder. Each New Lender shall execute a lender joinder in
substantially the form of Exhibit 2.4 pursuant to which such New Lender shall
join and become a party as a “Lender” to this Agreement and the other Loan
Documents with a Revolving Credit Commitment in the amount set forth in such
lender joinder.

 

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(iv) Treatment of Outstanding Loans and Letters of Credit.

(a) Repayment of Outstanding Loans; Borrowing of New Loans. On the effective
date of such increase, the Borrower shall repay all Loans then outstanding,
subject to the Borrower’s indemnity obligations under Section 4.12 [Indemnity];
provided that it may borrow new Loans to satisfy in full all Loans outstanding
with such new Loans having a Borrowing Date on such date. Each of the Lenders
shall participate in any new Loans made on or after such date in accordance with
their respective Ratable Shares after giving effect to the increase in Revolving
Credit Commitments contemplated by this Section 2.4.

(b) Outstanding Letters of Credit; Repayment of Outstanding Loans; Borrowing of
New Loans. On the effective date of such increase, each Increasing Lender and
each New Lender (i) will be deemed to have purchased a participation in each
then outstanding Letter of Credit equal to its Ratable Share of such Letter of
Credit and the participation of each other Lender in such Letter of Credit shall
be adjusted accordingly and (ii) will acquire, (and will pay to the
Administrative Agent, for the account of each Lender, in immediately available
funds, an amount equal to) its Ratable Share of all outstanding Participation
Advances.

2.5 Revolving Credit Loan Requests; Swing Loan Requests.

2.5.1 Revolving Credit Loan Requests.

Except as otherwise provided herein, the Borrower may from time to time prior to
the Expiration Date request the Lenders to make Revolving Credit Loans, or renew
or convert the Interest Rate Option applicable to existing Revolving Credit
Loans, by delivering to the Administrative Agent, not later than 10:00 a.m.,
(i) three (3) Business Days prior to the proposed Borrowing Date with respect to
the making of Revolving Credit Loans to which the LIBOR Rate Option applies or
the conversion to or the renewal of the LIBOR Rate Option for any Loans; and
(ii) on the Borrowing Date with respect to the making of a Revolving Credit Loan
to which the Base Rate Option applies or the last day of the preceding Interest
Period with respect to the conversion to the Base Rate Option for any Loan, of a
duly completed request therefor substantially in the form of Exhibit 2.5 or a
request by telephone or electronic mail immediately confirmed in writing by
letter, facsimile or telex in the case of a request by telephone in such form
(each, a “Loan Request”), it being understood that the Administrative Agent may
rely on the authority of any individual making such a telephonic request without
the necessity of receipt of such written confirmation. Each Loan Request shall
be irrevocable and shall specify the aggregate amount of the proposed Loans
comprising each Borrowing Tranche, and, if applicable, the Interest Period,
which amounts shall be in integral multiples of $500,000 and not less than
$1,000,000 for each Borrowing Tranche under the LIBOR Rate Option and shall be
in integral multiples of $100,000 and not less than $500,000 for each Borrowing
Tranche under the Base Rate Option.

2.5.2 Swing Loan Requests.

Except as otherwise provided herein, the Borrower may from time to time prior to
the Expiration Date request PNC Bank to make Swing Loans by delivery to PNC Bank
not later than 12.00 p.m. Pittsburgh time on the proposed Borrowing Date of a
duly completed request therefor substantially in the form of Exhibit 2.5.2
hereto or a request by telephone immediately confirmed in writing by letter,
electronic mail, facsimile or telex (each, a “Swing Loan Request”), it being
understood that the Agent may rely on the authority of any individual making
such a telephonic request without the necessity of receipt of such written
confirmation. Each Swing Loan Request shall be irrevocable and shall specify the
proposed Borrowing Date and the principal amount of such Swing Loan, which shall
be in integral multiples of $100,000 and not less than $100,000.

 

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2.6 Making Revolving Credit Loans and Swing Loans; Presumptions by the
Administrative Agent; Repayment of Revolving Credit Loans; Borrowings to Repay
Swing Loans.

2.6.1 Making Revolving Credit Loans. The Administrative Agent shall, promptly
after receipt by it of a Loan Request pursuant to Section 2.5 [Revolving Credit
Loan Requests], notify the Lenders of its receipt of such Loan Request
specifying the information provided by the Borrower and the apportionment among
the Lenders of the requested Revolving Credit Loans as determined by the
Administrative Agent in accordance with Section 2.2 [Nature of Lenders’
Obligations with Respect to Revolving Credit Loans]. Each Lender shall remit the
principal amount of each Revolving Credit Loan to the Administrative Agent such
that the Administrative Agent is able to, and the Administrative Agent shall, to
the extent the Lenders have made funds available to it for such purpose and
subject to Section 6.2 [Each Loan or Letter of Credit], fund such Revolving
Credit Loans to the Borrower in U.S. Dollars and immediately available funds at
the Principal Office prior to 2:00 p.m., on the applicable Borrowing Date;
provided that if any Lender fails to remit such funds to the Administrative
Agent in a timely manner, the Administrative Agent may elect in its sole
discretion to fund with its own funds the Revolving Credit Loans of such Lender
on such Borrowing Date, and such Lender shall be subject to the repayment
obligation in Section 2.6.2 [Presumptions by the Administrative Agent].

2.6.2 Presumptions by the Administrative Agent. Unless the Administrative Agent
shall have received notice from a Lender prior to the proposed date of any Loan
that such Lender will not make available to the Administrative Agent such
Lender’s share of such Loan, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance with
Section 2.6.1 [Making Revolving Credit Loans] and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Loan
available to the Administrative Agent, then the applicable Lender and the
Borrower severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrower to but excluding the date
of payment to the Administrative Agent, at (i) in the case of a payment to be
made by such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation and (ii) in the case of a payment to be made by the
Borrower, the interest rate applicable to Loans under the Base Rate Option. If
such Lender pays its share of the applicable Loan to the Administrative Agent,
then the amount so paid shall constitute such Lender’s Loan. Any payment by the
Borrower shall be without prejudice to any claim the Borrower may have against a
Lender that shall have failed to make such payment to the Administrative Agent.

2.6.3 Making Swing Loans.

So long as PNC Bank elects to make Swing Loans, PNC Bank shall, after receipt by
it of a Swing Loan Request pursuant to Section 2.5.2, fund such Swing Loan to
the Borrower in U.S. Dollars and immediately available funds at the Principal
Office prior to 2:00 p.m. Pittsburgh time on the Borrowing Date.

2.6.4 Repayment of Revolving Credit Loans. The Borrower shall repay the
Revolving Credit Loans together with all outstanding interest thereon on the
Expiration Date.

2.6.5 Borrowings to Repay Swing Loans.

PNC Bank may, at its option, exercisable at any time for any reason whatsoever,
demand repayment of the Swing Loans, and each Lender shall make a Revolving
Credit Loan in an amount equal to such Lender’s Ratable Share of the aggregate
principal amount of the outstanding Swing Loans, plus, if PNC Bank so requests,
accrued interest thereon, provided that no Lender shall be obligated in any
event to make Revolving Credit Loans in excess of its Revolving Credit
Commitment. Revolving

 

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Credit Loans made pursuant to the preceding sentence shall bear interest at the
Base Rate Option and shall be deemed to have been properly requested in
accordance with Section 2.5.1 without regard to any of the requirements of that
provision. PNC Bank shall provide notice to the Lenders (which may be telephonic
or written notice by letter, facsimile or telex) that such Revolving Credit
Loans are to be made under this Section 2.6.5 and of the apportionment among the
Lenders, and the Lenders shall be unconditionally obligated to fund such
Revolving Credit Loans (whether or not the conditions specified in Section 2.5.1
are then satisfied) by the time PNC Bank so requests, which shall not be earlier
than 3:00 p.m. Pittsburgh time on the Business Day next after the date the
Lenders receive such notice from PNC Bank.

2.7 Notes. The Obligation of the Borrower to repay the aggregate unpaid
principal amount of the Revolving Credit Loans and Swing Loans made to it by
each Lender, together with interest thereon, shall be evidenced by a revolving
credit Note and a swing Note, dated the Closing Date payable to the order of
such Lender in a face amount equal to the Revolving Credit Commitment or Swing
Loan Commitment, as applicable, of such Lender.

2.8 Use of Proceeds. The proceeds of the Loans shall be used to refinance the
Existing Credit Obligations, payment of fees, costs and expenses in connection
with this Agreement and the financing of Borrower’s working capital and for
other general corporate purposes.

2.9 Letter of Credit Subfacility.

2.9.1 Issuance of Letters of Credit. Borrower may at any time prior to the
Expiration Date request the issuance of a standby letter of credit (each a
“Letter of Credit”) on behalf of itself or another Loan Party, or the amendment
or extension of an existing Letter of Credit, by delivering or having such other
Loan Party deliver to the Issuing Lender (with a copy to the Administrative
Agent) a completed application and agreement for letters of credit, or request
for such amendment or extension, as applicable, in such form as the Issuing
Lender may specify from time to time by no later than 10:00 a.m. at least five
(5) Business Days, or such shorter period as may be agreed to by the Issuing
Lender, in advance of the proposed date of issuance. Promptly after receipt of
any letter of credit application, the Issuing Lender shall confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has received a copy of such Letter of Credit application and if not, such
Issuing Lender will provide Administrative Agent with a copy thereof. Unless the
Issuing Lender has received notice from any Lender, Administrative Agent or any
Loan Party, at least one day prior to the requested date of issuance, amendment
or extension of the applicable Letter of Credit, that one or more applicable
conditions in Section 6 [Conditions of Lending and Issuance of Letters of
Credit] is not satisfied, then, subject to the terms and conditions hereof and
in reliance on the agreements of the other Lenders set forth in this
Section 2.9, the Issuing Lender or any of the Issuing Lender’s Affiliates will
issue a Letter of Credit or agree to such amendment or extension, provided that
each Letter of Credit shall (A) have a maximum maturity of twelve (12) months
from the date of issuance, and (B) in no event expire later than the Expiration
Date and provided further that in no event shall (i) the Letter of Credit
Obligations exceed, at any one time, $5,000,000 (the “Letter of Credit
Sublimit”) or (ii) the Revolving Facility Usage exceed, at any one time, the
Revolving Credit Commitments. Each request by the Borrower for the issuance,
amendment or extension of a Letter of Credit shall be deemed to be a
representation by the Borrower that it shall be in compliance with the preceding
sentence and with Section 6 [Conditions of Lending and Issuance of Letters of
Credit] after giving effect to the requested issuance, amendment or extension of
such Letter of Credit. Promptly after its delivery of any Letter of Credit or
any amendment to a Letter of Credit to the beneficiary thereof, the applicable
Issuing Lender will also deliver to Borrower and Administrative Agent a true and
complete copy of such Letter of Credit or amendment.

2.9.2 Letter of Credit Fees. The Borrower shall pay (i) to the Administrative
Agent for the ratable account of the Lenders a fee (the “Letter of Credit Fee”)
equal to the Applicable Letter of

 

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Credit Fee Rate, and (ii) to the Issuing Lender for its own account a fronting
fee equal to 0.25% per annum (in each case computed on the basis of a year of
360 days and actual days elapsed), which fees shall be computed on the daily
average Letter of Credit Obligations and shall be payable quarterly in arrears
on each Payment Date following issuance of each Letter of Credit. The Borrower
shall also pay to the Issuing Lender for the Issuing Lender’s sole account the
Issuing Lender’s then in effect customary fees and administrative expenses
payable with respect to the Letters of Credit as the Issuing Lender may
generally charge or incur from time to time in connection with the issuance,
maintenance, amendment (if any), assignment or transfer (if any), negotiation,
and administration of Letters of Credit.

2.9.3 Disbursements, Reimbursement. Immediately upon the Issuance of each Letter
of Credit, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Issuing Lender a participation in
such Letter of Credit and each drawing thereunder in an amount equal to such
Lender’s Ratable Share of the maximum amount available to be drawn under such
Letter of Credit and the amount of such drawing, respectively.

2.9.3.1 In the event of any request for a drawing under a Letter of Credit by
the beneficiary or transferee thereof, the Issuing Lender will promptly notify
the Borrower and the Administrative Agent thereof. Provided that it shall have
received such notice, the Borrower shall reimburse (such obligation to reimburse
the Issuing Lender shall sometimes be referred to as a “Reimbursement
Obligation”) the Issuing Lender prior to 12:00 noon, Pittsburgh time on each
date that an amount is paid by the Issuing Lender under any Letter of Credit
(each such date, a “Drawing Date”) by paying to the Administrative Agent for the
account of the Issuing Lender an amount equal to the amount so paid by the
Issuing Lender. In the event the Borrower fails to reimburse the Issuing Lender
(through the Administrative Agent) for the full amount of any drawing under any
Letter of Credit by 12:00 noon, Pittsburgh time, on the Drawing Date, the
Administrative Agent will promptly notify each Lender thereof, and the Borrower
shall be deemed to have requested that Revolving Credit Loans be made by the
Lenders under the Base Rate Option to be disbursed on the Drawing Date under
such Letter of Credit, subject to the amount of the unutilized portion of the
Revolving Credit Commitment and subject to the conditions set forth in
Section 6.2 [Each Additional Loan] other than any notice requirements. Any
notice given by the Administrative Agent or Issuing Lender pursuant to this
Section 2.9.3.1 may be oral if immediately confirmed in writing; provided that
the lack of such an immediate confirmation shall not affect the conclusiveness
or binding effect of such notice.

2.9.3.2 Each Lender shall upon any notice pursuant to Section 2.9.3.1 make
available to the Administrative Agent for the account of the Issuing Lender an
amount in immediately available funds equal to its Ratable Share of the amount
of the drawing, whereupon the participating Lenders shall (subject to
Section 2.9.3 [Disbursement; Reimbursement]) each be deemed to have made a
Revolving Credit Loan under the Base Rate Option to the Borrower in that amount.
If any Lender so notified fails to make available to the Administrative Agent
for the account of the Issuing Lender the amount of such Lender’s Ratable Share
of such amount by no later than 2:00 p.m., Pittsburgh time on the Drawing Date,
then interest shall accrue on such Lender’s obligation to make such payment,
from the Drawing Date to the date on which such Lender makes such payment (i) at
a rate per annum equal to the Federal Funds Effective Rate during the first
three (3) days following the Drawing Date and (ii) at a rate per annum equal to
the rate applicable to Loans under the Revolving Credit Base Rate Option on and
after the fourth day following the Drawing Date. The Administrative Agent and
the Issuing Lender will promptly give notice (as described in Section 2.9.3.1
above) of the occurrence of the Drawing Date, but failure of the Administrative
Agent or the Issuing Lender to give any such notice on the Drawing Date or in
sufficient time to enable any Lender to effect such payment on such date shall
not relieve such Lender from its obligation under this Section 2.9.3.2.

2.9.3.3 With respect to any unreimbursed drawing that is not converted into
Revolving Credit Loans under the Base Rate Option to the Borrower in whole or in
part as

 

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contemplated by Section 2.9.3.1, because of the Borrower’s failure to satisfy
the conditions set forth in Section 6.2 [Each Additional Loan] other than any
notice requirements, or for any other reason, the Borrower shall be deemed to
have incurred from the Issuing Lender a borrowing (each a “Letter of Credit
Borrowing”) in the amount of such drawing. Such Letter of Credit Borrowing shall
be due and payable on demand (together with interest) and shall bear interest at
the rate per annum applicable to the Revolving Credit Loans under the Base Rate
Option. Each Lender’s payment to the Administrative Agent for the account of the
Issuing Lender pursuant to Section 2.9.3 [Disbursements, Reimbursement] shall be
deemed to be a payment in respect of its participation in such Letter of Credit
Borrowing (each a “Participation Advance”) from such Lender in satisfaction of
its participation obligation under this Section 2.9.3.

2.9.4 Repayment of Participation Advances.

2.9.4.1 Upon (and only upon) receipt by the Administrative Agent for the account
of the Issuing Lender of immediately available funds from the Borrower (i) in
reimbursement of any payment made by the Issuing Lender under the Letter of
Credit with respect to which any Lender has made a Participation Advance to the
Administrative Agent, or (ii) in payment of interest on such a payment made by
the Issuing Lender under such a Letter of Credit, the Administrative Agent on
behalf of the Issuing Lender will pay to each Lender, in the same funds as those
received by the Administrative Agent, the amount of such Lender’s Ratable Share
of such funds, except the Administrative Agent shall retain for the account of
the Issuing Lender the amount of the Ratable Share of such funds of any Lender
that did not make a Participation Advance in respect of such payment by the
Issuing Lender.

2.9.4.2 If the Administrative Agent is required at any time to return to any
Loan Party, or to a trustee, receiver, liquidator, custodian, or any official in
any Insolvency Proceeding, any portion of any payment made by any Loan Party to
the Administrative Agent for the account of the Issuing Lender pursuant to this
Section in reimbursement of a payment made under the Letter of Credit or
interest or fee thereon, each Lender shall, on demand of the Administrative
Agent, forthwith return to the Administrative Agent for the account of the
Issuing Lender the amount of its Ratable Share of any amounts so returned by the
Administrative Agent plus interest thereon from the date such demand is made to
the date such amounts are returned by such Lender to the Administrative Agent,
at a rate per annum equal to the Federal Funds Effective Rate in effect from
time to time.

2.9.5 Documentation. Each Loan Party agrees to be bound by the terms of the
Issuing Lender’s application and agreement for letters of credit and the Issuing
Lender’s written regulations and customary practices relating to letters of
credit, though such interpretation may be different from such Loan Party’s own.
In the event of a conflict between such application or agreement and this
Agreement, this Agreement shall govern. It is understood and agreed that, except
in the case of gross negligence or willful misconduct, the Issuing Lender shall
not be liable for any error, negligence and/or mistakes, whether of omission or
commission, in following any Loan Party’s instructions or those contained in the
Letters of Credit or any modifications, amendments or supplements thereto.

2.9.6 Determinations to Honor Drawing Requests. In determining whether to honor
any request for drawing under any Letter of Credit by the beneficiary thereof,
the Issuing Lender shall be responsible only to determine that the documents and
certificates required to be delivered under such Letter of Credit have been
delivered and that they comply on their face with the requirements of such
Letter of Credit.

2.9.7 Nature of Participation and Reimbursement Obligations. Each Lender’s
obligation in accordance with this Agreement to make the Revolving Credit Loans
or Participation Advances, as contemplated by Section 2.9.3 [Disbursements,
Reimbursement], as a result of a drawing under a Letter of Credit, and the
Obligations of the Borrower to reimburse the Issuing Lender upon a draw under a
Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be
performed

 

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strictly in accordance with the terms of this Section 2.9 under all
circumstances, including the following circumstances:

(i) any set-off, counterclaim, recoupment, defense or other right which such
Lender may have against the Issuing Lender or any of its Affiliates, the
Borrower or any other Person for any reason whatsoever, or which any Loan Party
may have against the Issuing Lender or any of its Affiliates, any Lender or any
other Person for any reason whatsoever;

(ii) the failure of any Loan Party or any other Person to comply, in connection
with a Letter of Credit Borrowing, with the conditions set forth in Section 2.1
[Revolving Credit Commitments], 2.5 [Revolving Credit Loan Requests], 2.6
[Making Revolving Credit Loans] or 6.2 [Each Additional Loan] or as otherwise
set forth in this Agreement for the making of a Revolving Credit Loan, it being
acknowledged that such conditions are not required for the making of a Letter of
Credit Borrowing and the obligation of the Lenders to make Participation
Advances under Section 2.9.3 [Disbursements, Reimbursement];

(iii) any lack of validity or enforceability of any Letter of Credit;

(iv) any claim of breach of warranty that might be made by any Loan Party or any
Lender against any beneficiary of a Letter of Credit, or the existence of any
claim, set-off, recoupment, counterclaim, crossclaim, defense or other right
which any Loan Party or any Lender may have at any time against a beneficiary,
successor beneficiary any transferee or assignee of any Letter of Credit or the
proceeds thereof (or any Persons for whom any such transferee may be acting),
the Issuing Lender or its Affiliates or any Lender or any other Person, whether
in connection with this Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction between any Loan
Party or Subsidiaries of a Loan Party and the beneficiary for which any Letter
of Credit was procured);

(v) the lack of power or authority of any signer of (or any defect in or forgery
of any signature or endorsement on) or the form of or lack of validity,
sufficiency, accuracy, enforceability or genuineness of any draft, demand,
instrument, certificate or other document presented under or in connection with
any Letter of Credit, or any fraud or alleged fraud in connection with any
Letter of Credit, or the transport of any property or provision of services
relating to a Letter of Credit, in each case even if the Issuing Lender or any
of its Affiliates has been notified thereof;

(vi) payment by the Issuing Lender or any of its Affiliates under any Letter of
Credit against presentation of a demand, draft or certificate or other document
which does not comply with the terms of such Letter of Credit;

(vii) the solvency of, or any acts or omissions by, any beneficiary of any
Letter of Credit, or any other Person having a role in any transaction or
obligation relating to a Letter of Credit, or the existence, nature, quality,
quantity, condition, value or other characteristic of any property or services
relating to a Letter of Credit;

(viii) any failure by the Issuing Lender or any of its Affiliates to issue any
Letter of Credit in the form requested by any Loan Party, unless the Issuing
Lender has received written notice from such Loan Party of such failure within
three Business Days after the Issuing Lender shall have furnished such Loan
Party and the Administrative Agent a copy of such Letter of Credit and such
error is material and no drawing has been made thereon prior to receipt of such
notice;

(ix) any adverse change in the business, operations, properties, assets,
condition (financial or otherwise) or prospects of any Loan Party or
Subsidiaries of a Loan Party;

(x) any breach of this Agreement or any other Loan Document by any party
thereto;

 

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(xi) the occurrence or continuance of an Insolvency Proceeding with respect to
any Loan Party;

(xii) the fact that an Event of Default or a Potential Default shall have
occurred and be continuing beyond any applicable grace or cure period;

(xiii) the fact that the Expiration Date shall have passed or this Agreement or
the Commitments hereunder shall have been terminated; and

(xiv) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing.

2.9.8 Indemnity. The Borrower hereby agrees to protect, indemnify, pay and save
harmless the Issuing Lender and any of its Affiliates that has issued a Letter
of Credit from and against any and all claims, demands, liabilities, damages,
taxes, penalties, interest, judgments, losses, costs, charges and expenses
(including reasonable fees, expenses and disbursements of counsel and allocated
costs of internal counsel) which the Issuing Lender or any of its Affiliates may
incur or be subject to as a consequence, direct or indirect, of the issuance of
any Letter of Credit, other than as a result of (A) the gross negligence or
willful misconduct of the Issuing Lender as determined by a final non-appealable
judgment of a court of competent jurisdiction or (B) the wrongful dishonor by
the Issuing Lender or any of Issuing Lender’s Affiliates of a proper demand for
payment made under any Letter of Credit, except if such dishonor resulted from
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto government or governmental authority.

2.9.9 Liability for Acts and Omissions. As between any Loan Party and the
Issuing Lender, or the Issuing Lender’s Affiliates, such Loan Party assumes all
risks of the acts and omissions of, or misuse of the Letters of Credit by, the
respective beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, the Issuing Lender shall not be responsible for any
of the following, including any losses or damages to any Loan Party or other
Person or property relating therefrom: (i) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for an issuance of any such Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged (even if the Issuing Lender or
its Affiliates shall have been notified thereof); (ii) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) the failure of the beneficiary of
any such Letter of Credit, or any other party to which such Letter of Credit may
be transferred, to comply fully with any conditions required in order to draw
upon such Letter of Credit or any other claim of any Loan Party against any
beneficiary of such Letter of Credit, or any such transferee, or any dispute
between or among any Loan Party and any beneficiary of any Letter of Credit or
any such transferee; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such Letter of Credit or
of the proceeds thereof; (vii) the misapplication by the beneficiary of any such
Letter of Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control of the Issuing
Lender or the its Affiliates, as applicable, including any act or omission of
any governmental authority, and none of the above shall affect or impair, or
prevent the vesting of, any of the Issuing Lender’s or its Affiliates rights or
powers hereunder. Nothing in the preceding sentence shall relieve the Issuing
Lender from liability for the Issuing Lender’s gross negligence or willful
misconduct in connection with actions or omissions described in such clauses
(i) through (viii) of such sentence. In no event shall the Issuing Lender or its
Affiliates be liable to any Loan Party for any indirect, consequential,
incidental, punitive, exemplary or special damages or expenses (including
without

 

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limitation attorneys’ fees), or for any damages resulting from any change in the
value of any property relating to a Letter of Credit.

Without limiting the generality of the foregoing, the Issuing Lender and each of
its Affiliates: (i) may rely on any oral or other communication believed in good
faith by the Issuing Lender or such Affiliate to have been authorized or given
by or on behalf of the applicant for a Letter of Credit; (ii) may honor any
presentation if the documents presented appear on their face substantially to
comply with the terms and conditions of the relevant Letter of Credit; (iii) may
honor a previously dishonored presentation under a Letter of Credit (unless such
dishonor was pursuant to a court order), to settle or compromise any claim of
wrongful dishonor, or otherwise, and shall be entitled to reimbursement to the
same extent as if such presentation had initially been honored, together with
any interest paid by the Issuing Lender or its Affiliate; (iv) may honor any
drawing that is payable upon presentation of a statement advising negotiation or
payment, upon receipt of such statement (even if such statement indicates that a
draft or other document is being delivered separately), and shall not be liable
for any failure of any such draft or other document to arrive, or to conform in
any way with the relevant Letter of Credit; (v) may pay any paying or
negotiating bank claiming that it rightfully honored under the laws or practices
of the place where such bank is located; and (vi) may settle or adjust any claim
or demand made on the Issuing Lender or its Affiliate in any way related to any
order issued at the applicant’s request to an air carrier, a letter of guarantee
or of indemnity issued to a carrier or any similar document (each an “Order”)
and honor any drawing in connection with any Letter of Credit that is the
subject of such Order, notwithstanding that any drafts or other documents
presented in connection with such Letter of Credit fail to conform in any way
with such Letter of Credit.

In furtherance and extension and not in limitation of the specific provisions
set forth above, any action taken or omitted by the Issuing Lender or its
Affiliates under or in connection with the Letters of Credit issued by it or any
documents and certificates delivered thereunder, if taken or omitted in good
faith, shall not put the Issuing Lender or its Affiliates under any resulting
liability to the Borrower or any Lender.

2.9.10 Issuing Lender Reporting Requirements. Each Issuing Lender shall, on the
first business day of each month, provide to Administrative Agent and Borrower a
schedule of the Letters of Credit issued by it, in form and substance
satisfactory to Administrative Agent, showing the date of issuance of each
Letter of Credit, the account party, the original face amount (if any), and the
expiration date of any Letter of Credit outstanding at any time during the
preceding month, and any other information relating to such Letter of Credit
that the Administrative Agent may request.

3. INTEREST RATES

3.1 Interest Rate Options. The Borrower shall pay interest in respect of the
outstanding unpaid principal amount of the Loans as selected by it from the Base
Rate Option or LIBOR Rate Option set forth below applicable to the Loans, it
being understood that, subject to the provisions of this Agreement, the Borrower
may select different Interest Rate Options and different Interest Periods to
apply simultaneously to the Loans comprising different Borrowing Tranches and
may convert to or renew one or more Interest Rate Options with respect to all or
any portion of the Loans comprising any Borrowing Tranche; provided that there
shall not be at any one time outstanding more than six (6) Borrowing Tranches in
the aggregate among all of the Loans; provided further that if an Event of
Default or Potential Default exists and is continuing beyond any applicable cure
period, the Borrower may not request, convert to, or renew the LIBOR Rate Option
for any Loans and the Required Lenders may demand that all existing Borrowing
Tranches bearing interest under the LIBOR Rate Option shall be converted
immediately to the Base Rate Option, subject to the obligation of the Borrower
to pay any indemnity under Section 4.12 [Indemnity] in connection with such
conversion. If at any time the

 

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designated rate applicable to any Loan made by any Lender exceeds such Lender’s
highest lawful rate, the rate of interest on such Lender’s Loan shall be limited
to such Lender’s highest lawful rate.

3.1.1 Revolving Credit Interest Rate Options; Swing Line Interest Rate. The
Borrower shall have the right to select from the following Interest Rate Options
applicable to the Revolving Credit Loans:

(i) Revolving Credit Base Rate Option: A fluctuating rate per annum (computed on
the basis of a year of 360 days and actual days elapsed) equal to the Base Rate
plus the Applicable Margin, such interest rate to change automatically from time
to time effective as of the effective date of each change in the Base Rate; or

(ii) Revolving Credit LIBOR Rate Option: A rate per annum (computed on the basis
of a year of 360 days and actual days elapsed) equal to the LIBOR Rate plus the
Applicable Margin.

Subject to Section 3.3, only the Base Rate Option applicable to Revolving Credit
Loans shall apply to the Swing Loans.

3.1.2 Rate Quotations. The Borrower may call the Administrative Agent on or
before the date on which a Loan Request is to be delivered to receive an
indication of the rates then in effect, but it is acknowledged that such
projection shall not be binding on the Administrative Agent or the Lenders nor
affect the rate of interest which thereafter is actually in effect when the
election is made.

3.2 Interest Periods. At any time when the Borrower shall select, convert to or
renew a LIBOR Rate Option, the Borrower shall notify the Administrative Agent
thereof at least three (3) Business Days prior to the effective date of such
LIBOR Rate Option by delivering a Loan Request. The notice shall specify an
Interest Period during which such Interest Rate Option shall apply.
Notwithstanding the preceding sentence, the following provisions shall apply to
any selection of, renewal of, or conversion to a LIBOR Rate Option:

3.2.1 Amount of Borrowing Tranche. Each Borrowing Tranche of Loans under the
LIBOR Rate Option shall be in integral multiples of $500,000 and not less than
$1,000,000; and

3.2.2 Renewals. In the case of the renewal of a LIBOR Rate Option at the end of
an Interest Period, the first day of the new Interest Period shall be the last
day of the preceding Interest Period, without duplication in payment of interest
for such day. For the elimination of any doubt, in the case of the renewal of a
LIBOR Rate Option at the end of an Interest Period, interest shall be deemed to
accrue for the last day of the preceding Interest Period only, and shall not be
deemed to accrue for the first day of the new Interest Period.

3.3 Interest After Default. To the extent permitted by Law, upon the occurrence
of an Event of Default and until such time such Event of Default shall have been
cured or waived:

3.3.1 Letter of Credit Fees, Interest Rate. The Letter of Credit Fees and the
rate of interest for each Loan otherwise applicable pursuant to Section 2.9.2
[Letter of Credit Fees] or Section 3.1 [Interest Rate Options], respectively,
shall be increased by 2.0% per annum;

3.3.2 Other Obligations. Each other Obligation hereunder if not paid when due
shall bear interest at a rate per annum equal to the sum of the rate of interest
applicable under the Revolving Credit Base Rate Option plus an additional
2.0% per annum from the time such Obligation becomes due and payable and until
it is paid in full; and

3.3.3 Acknowledgment. The Borrower acknowledges that the increase in rates
referred to in this Section 3.3 reflects, among other things, the fact that such
Loans or other amounts have become a substantially greater risk given their
default status and that the Lenders are entitled to additional

 

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compensation for such risk; and all such interest shall be payable by Borrower
upon demand by Administrative Agent.

3.4 LIBOR Rate Unascertainable; Illegality; Increased Costs; Deposits Not
Available.

3.4.1 Unascertainable. If on any date on which a LIBOR Rate would otherwise be
determined, the Administrative Agent shall have reasonably determined that:

(i) adequate and reasonable means do not exist for ascertaining such LIBOR Rate,
or

(ii) a contingency has occurred which materially and adversely affects the
London interbank eurodollar market relating to the LIBOR Rate, then the
Administrative Agent shall have the rights specified in Section 3.4.3
[Administrative Agent’s and Lender’s Rights].

3.4.2 Illegality; Increased Costs; Deposits Not Available. If at any time any
Lender shall have reasonably determined that:

(i) the making, maintenance or funding of any Loan to which a LIBOR Rate Option
applies has been made impracticable or unlawful by compliance by such Lender in
good faith with any Law or any interpretation or application thereof by any
Official Body or with any request or directive of any such Official Body
(whether or not having the force of Law), or

(ii) such LIBOR Rate Option will not adequately and fairly reflect the cost to
such Lender of the establishment or maintenance of any such Loan, or

(iii) after making all reasonable efforts, deposits of the relevant amount in
Dollars for the relevant Interest Period for a Loan, or to banks generally, to
which a LIBOR Rate Option applies, respectively, are not available to such
Lender with respect to such Loan, or to banks generally, in the interbank
eurodollar market, then the Administrative Agent shall have the rights specified
in Section 3.4.3 [Administrative Agent’s and Lender’s Rights].

3.4.3 Administrative Agent’s and Lender’s Rights. In the case of any event
specified in Section 3.4.1 [Unascertainable] above, the Administrative Agent
shall promptly so notify the Lenders and the Borrower thereof, and in the case
of an event specified in Section 3.4.2 [Illegality; Increased Costs; Deposits
Not Available] above, such Lender shall promptly so notify the Administrative
Agent and endorse a certificate to such notice as to the specific circumstances
of such notice, and the Administrative Agent shall promptly send copies of such
notice and certificate to the other Lenders and the Borrower. Upon such date as
shall be specified in such notice (which shall not be earlier than the date such
notice is given), the obligation of (A) the Lenders, in the case of such notice
given by the Administrative Agent, or (B) such Lender, in the case of such
notice given by such Lender, to allow the Borrower to select, convert to or
renew a LIBOR Rate Option shall be suspended until the Administrative Agent
shall have later notified the Borrower, or such Lender shall have later notified
the Administrative Agent, of the Administrative Agent’s or such Lender’s, as the
case may be, determination that the circumstances giving rise to such previous
determination no longer exist. If at any time the Administrative Agent makes a
determination under Section 3.4.1 [Unascertainable] and the Borrower has
previously notified the Administrative Agent of its selection of, conversion to
or renewal of a LIBOR Rate Option and such Interest Rate Option has not yet gone
into effect, such notification shall be deemed to provide for selection of,
conversion to or renewal of the Base Rate Option otherwise available with
respect to such Loans. If any Lender notifies the Administrative Agent of a
determination under Section 3.4.2 [Illegality; Increased Costs; Deposits Not
Available], the Borrower shall, subject to the Borrower’s indemnification
Obligations under Section 4.12 [Indemnity], as to any Loan of the Lender to
which a LIBOR Rate Option

 

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applies, on the date specified in such notice either convert such Loan to the
Base Rate Option otherwise available with respect to such Loan or prepay such
Loan in accordance with Section 4.6 [Voluntary Prepayments]. Absent due notice
from the Borrower of conversion or prepayment, such Loan shall automatically be
converted to the Base Rate Option otherwise available with respect to such Loan
upon such specified date.

3.5 Selection of Interest Rate Options. If the Borrower fails to select a new
Interest Period to apply to any Borrowing Tranche of Loans under the LIBOR Rate
Option at the expiration of an existing Interest Period applicable to such
Borrowing Tranche in accordance with the provisions of Section 3.2 [Interest
Periods], the Borrower shall be deemed to have converted such Borrowing Tranche
to the Revolving Credit Base Rate Option commencing upon the last day of the
existing Interest Period.

4. PAYMENTS

4.1 Payments. All payments and prepayments to be made in respect of principal,
interest, Commitment Fees, Letter of Credit Fees, Administrative Agent’s Fee or
other fees or amounts due from the Borrower hereunder shall be payable prior to
11:00 a.m. on the date when due without presentment, demand, protest or notice
of any kind, all of which are hereby expressly waived by the Borrower, and
without set-off, counterclaim or other deduction of any nature, and an action
therefor shall immediately accrue. Such payments shall be made to the
Administrative Agent at the Principal Office for the account of PNC Bank with
respect to the Swing Loans and for the ratable accounts of the Lenders with
respect to the Revolving Credit Loans in U.S. Dollars and in immediately
available funds, and the Administrative Agent shall promptly distribute such
amounts to the Lenders in immediately available funds; provided that in the
event payments are received by 11:00 a.m. by the Administrative Agent with
respect to the Loans and such payments are not distributed to the Lenders on the
same day received by the Administrative Agent, the Administrative Agent shall
pay the Lenders the Federal Funds Effective Rate with respect to the amount of
such payments for each day held by the Administrative Agent and not distributed
to the Lenders. The Administrative Agent’s and each Lender’s statement of
account, ledger or other relevant record shall, in the absence of manifest
error, be conclusive as the statement of the amount of principal of and interest
on the Loans and other amounts owing under this Agreement and shall be deemed an
“account stated.”

4.2 Pro Rata Treatment of Lenders. Each borrowing shall be allocated to each
Lender according to its Ratable Share, and each selection of, conversion of or
renewal of any Interest Rate Option and each payment or prepayment by the
Borrower with respect to principal, interest, Commitment Fees, Letter of Credit
Fees, or other fees (except for the Administrative Agent’s Fee) or amounts due
from the Borrower hereunder to the Lenders with respect to the Loans, shall
(except as provided in Section 3.4.3 [Administrative Agent’s and Lender’s
Rights] in the case of an event specified in Section 3.4 [LIBOR Rate
Unascertainable; Etc.] or 4.6.2 [Replacement of a Lender] or 4.10 [Increased
Costs; Indemnity]) be made in proportion to the applicable Loans outstanding
from each Lender and, if no such Loans are then outstanding, in proportion to
the Ratable Share of each Lender. Notwithstanding any of the foregoing, each
borrowing or payment or prepayment by the Borrower of principal, interest, fees
or other amounts from the Borrower with respect to Swing Loans shall be made by
or to PNC Bank according to Section 2.6.5.

4.3 Sharing of Payments by Lenders. If any Lender shall, by exercising any right
of setoff, counterclaim or banker’s lien, by receipt of voluntary payment, by
realization upon security, or by any other non-pro rata source, obtain payment
in respect of any principal of or interest on any of its Loans or other
obligations hereunder resulting in such Lender’s receiving payment of a
proportion of the aggregate amount of its Loans and accrued interest thereon or
other such obligations greater than its Ratable Share thereof as provided
herein, then the Lender receiving such greater proportion shall (a) notify the
Administrative Agent of such fact, and (b) purchase (for cash at face value)
participations in the Loans

 

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and such other obligations of the other Lenders, or make such other adjustments
as shall be equitable, so that the benefit of all such payments shall be shared
by the Lenders ratably in accordance with the aggregate amount of principal of
and accrued interest on their respective Loans and other amounts owing them,
provided that:

(i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, together with
interest or other amounts, if any, required by Law (including court order) to be
paid by the Lender or the holder making such purchase; and

(ii) the provisions of this Section 4.3 shall not be construed to apply to
(x) any payment made by the Loan Parties pursuant to and in accordance with the
express terms of the Loan Documents or (y) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans or Participation Advances to any assignee or participant, other than to
the Borrower or any Subsidiary thereof (as to which the provisions of this
Section 4.3 shall apply).

Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable Law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against each
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of each Loan Party in the
amount of such participation.

4.4 Presumptions by Administrative Agent. Unless the Administrative Agent shall
have received notice from the Borrower prior to the date on which any payment is
due to the Administrative Agent for the account of the Lenders or the Issuing
Lender hereunder that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders or the Issuing Lender, as the case may be, the amount
due. In such event, if the Borrower has not in fact made such payment, then each
of the Lenders or the Issuing Lender, as the case may be, severally agrees to
repay to the Administrative Agent forthwith on demand the amount so distributed
to such Lender or the Issuing Lender, with interest thereon, for each day from
and including the date such amount is distributed to it to but excluding the
date of payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.

4.5 Interest Payment Dates. Interest on Loans to which the Base Rate Option
applies shall be due and payable in arrears on each Payment Date. Interest on
Loans to which the LIBOR Rate Option applies shall be due and payable on the
last day of each Interest Period for those Loans and, if such Interest Period is
longer than three (3) Months, also on the 90th day of such Interest Period.
Interest on mandatory prepayments of principal under Section 4.7 [Mandatory
Prepayments] shall be due on the date such mandatory prepayment is due. Interest
on the principal amount of each Loan or other monetary Obligation shall be due
and payable on demand after such principal amount or other monetary Obligation
becomes due and payable (whether on the stated Expiration Date, upon
acceleration or otherwise).

4.6 Voluntary Prepayments.

4.6.1 Right to Prepay. The Borrower shall have the right at its option from time
to time to prepay the Loans in whole or part without premium or penalty (except
as provided in Section 4.6.2 [Replacement of a Lender] below, in Section 4.10
[Increased Costs] and Section 4.12 [Indemnity]). Whenever the Borrower desires
to prepay any part of the Loans, it shall provide a prepayment notice to the
Administrative Agent by 1:00 p.m. at least one (1) Business Day prior to the
date of prepayment of the Revolving Credit Loans or no later than 12:00 noon,
Pittsburgh time, on the date of prepayment of Swing Loans, setting forth the
following information:

 

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(x) the date, which shall be a Business Day, on which the proposed prepayment is
to be made;

(y) a statement indicating the application of the prepayment between the
Revolving Credit Loans and Swing Loans; and

(z) the total principal amount of such prepayment, which shall not be less than
$100,000 for any Swing Loan or $500,000 for any Revolving Credit Loan.

All prepayment notices shall be irrevocable. The principal amount of the Loans
for which a prepayment notice is given, together with interest on such principal
amount except with respect to Loans to which the Base Rate Option applies, shall
be due and payable on the date specified in such prepayment notice as the date
on which the proposed prepayment is to be made. Except as provided in
Section 3.4.3 [Administrative Agent’s and Lender’s Rights], if the Borrower
prepays a Loan but fails to specify the applicable Borrowing Tranche which the
Borrower is prepaying, the prepayment shall be applied first to Loans to which
the Base Rate Option applies, then to Loans to which the LIBOR Rate Option
applies. Any prepayment hereunder shall be subject to the Borrower’s Obligation
to indemnify the Lenders under Section 4.12 [Indemnity].

4.6.2 Replacement of a Lender. In the event (a) PNC Bank resigns as
Administrative Agent pursuant to Section 9.6 [Resignation of Administrative
Agent] or (b) any Lender (i) gives notice under Section 3.4 [LIBOR Rate
Unascertainable, Etc.], (ii) requests compensation under Section 4.10 [Increased
Costs], or requires the Borrower to pay any additional amount to any Lender or
any Official Body for the account of any Lender pursuant to Section 4.11
[Taxes], (iii) is a Non-Complying Lender or otherwise, (iv) becomes subject to
the control of an Official Body (other than normal and customary supervision),
or (v) is a Non-Consenting Lender referred to in Section 10.1 [Modifications,
Amendments or Waivers] then in any such event the Borrower may, at its sole
expense, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in, and consents required by,
Section 10.8[Successors and Assigns]), all of its interests, rights and
obligations under this Agreement and the related Loan Documents to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment), provided that:

(i) the Borrower shall have paid to the Administrative Agent the assignment fee
specified in Section 10.8 [Successors and Assigns];

(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and Participation Advances, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and under
the other Loan Documents (including any amounts under Section 4.12 [Indemnity])
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts);

(iii) in the case of any such assignment resulting from a claim for compensation
under Section 4.10.1 [Increased Costs Generally] or payments required to be made
pursuant to Section 4.11 [Taxes], such assignment will result in a reduction in
such compensation or payments thereafter; and

(iv) such assignment does not conflict with applicable Law.

Except in the case of an assignment required by Section 9.6 [Resignation of
Administrative Agent], a Lender shall not be required to make any such
assignment or delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.

4.7 Mandatory Prepayments. Whenever the outstanding principal balance of
Revolving Credit Loans by the Lenders plus the aggregate undrawn face amount of
outstanding Letters of Credit

 

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issued pursuant to Section 2.9 plus the outstanding principal balance of the
Swing Loans exceed the Borrowing Base, the Borrower shall make, within one
(1) Business Day after the Borrower learns of such excess and whether or not the
Administrative Agent has given notice to such effect, a mandatory prepayment of
principal equal to the excess of the outstanding principal balance of the
Revolving Credit Loans plus the aggregate undrawn face amount of outstanding
Letters of Credit plus the outstanding principal balance of the Swing Loans over
the Borrowing Base, together with accrued interest on such principal amounts.

4.8 Receipt and Application of Payment. If an Event of Default shall have
occurred and be continuing beyond any applicable grace or cure period, and upon
three (3) Business Days prior written notice to the Borrower from the
Administrative Agent, the Borrower shall notify all Account Receivable Debtors
to make all payments due from them to the Borrower directly to a lockbox for
collection pursuant to the Lockbox Agreement (the “Cash Collateral Account”). In
the event the Borrower (or any of its Affiliates, shareholders, directors,
officers, employees, Administrative Agents or those Person acting for or in
concert with the Borrower) shall receive any cash, checks, notes, drafts or
other similar items of payment relating to or constituting the Collateral (or
proceeds thereof), no later than the first Business Day following receipt
thereof, the Borrower shall (i) deposit or cause the same to be deposited, in
kind, in the Cash Collateral Account established by the Borrower with the
Administrative Agent or such other depository as may be designated in writing by
the Administrative Agent (the “Depository”), from which account the
Administrative Agent alone shall have sole power of withdrawal, and with respect
to which the Depository shall waive any rights of set off, and (ii) forward to
the Administrative Agent on a daily basis, a collection report in form and
substance reasonably satisfactory to the Administrative Agent and, at the
Administrative Agent’s request, copies of all such items and deposit slips
related thereto. All cash, notes, checks, drafts or similar items of payment by
or for the account of the Borrower shall be the sole and exclusive property of
the Lenders immediately upon the earlier of the receipt of such items by the
Administrative Agent or the Depository or the receipt of such items by the
Borrower; provided, however, that for the purpose of computing interest
hereunder such items shall be deemed to have been collected and shall be applied
by the Administrative Agent on account of the Loans one (1) Business Day after
receipt by the Administrative Agent (subject to correction for any items
subsequently dishonored for any reason whatsoever). All funds in the Cash
Collateral Account, including all payments made by or on behalf of and all
credits due the Borrower, may be applied and reapplied in whole or in part to
any of the Loans to the extent and in the manner the Administrative Agent deems
advisable.

4.9 Collections; Administrative Agent’s Right to Notify Account Receivable
Debtors. The Borrower hereby authorizes the Administrative Agent, now and at any
time or times hereafter, to (i) after the occurrence and during the continuation
of any Event of Default and beyond any applicable grace or cure period, notify
any or all Account Receivable Debtors that the Accounts Receivable have been
assigned to the Lenders and that the Lenders have a security interest therein,
and (ii) direct such Account Receivable Debtors to make all payments due from
them to the Borrower upon the Accounts Receivable directly to the Administrative
Agent or to a lockbox designated by the Administrative Agent. The Administrative
Agent shall promptly furnish the Borrower with a copy of any such notice sent.
Any such notice, in the Administrative Agent’s sole discretion, may be sent on
the Borrower’s stationery, in which event the Borrower shall co-sign such notice
with the Administrative Agent. To the extent that any Law or custom or any
contract or agreement with any Account Receivable Debtor requires notice to or
the approval of the Account Receivable Debtor in order to perfect such
assignment of a security interest in Accounts Receivable, the Borrower agrees to
give such notice or use commercially reasonable efforts to obtain such approval.

4.10 Increased Costs.

4.10.1 Increased Costs Generally. If any Change in Law shall:

 

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(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except any reserve requirement reflected in the LIBOR Rate) or the Issuing
Lender;

(ii) subject any Lender or the Issuing Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any participation in a
Letter of Credit or any Loan under the LIBOR Rate Option made by it, or change
the basis of taxation of payments to such Lender or the Issuing Lender in
respect thereof (except for Indemnified Taxes or Other Taxes covered by
Section 4.11 [Taxes] and the imposition of, or any change in the rate of, any
Excluded Tax payable by such Lender or the Issuing Lender); or

(iii) impose on any Lender or the Issuing Lender or the London interbank market
any other condition, cost or expense affecting this Agreement or Loan under the
LIBOR Rate Option made by such Lender or any Letter of Credit or participation
therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Loan under the LIBOR Rate Option (or of
maintaining its obligation to make any such Loan), or to increase the cost to
such Lender or the Issuing Lender of participating in, issuing or maintaining
any Letter of Credit (or of maintaining its obligation to participate in or to
issue any Letter of Credit), or to reduce the amount of any sum received or
receivable by such Lender or the Issuing Lender hereunder (whether of principal,
interest or any other amount) in each case, in an amount deemed to be material
by such Lender or Issuing Lender, then, upon request of such Lender or the
Issuing Lender, the Borrower will pay to such Lender or the Issuing Lender, as
the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Lender, as the case may be, for such additional costs
incurred or reduction suffered.

4.10.2 Capital Requirements. If any Lender or the Issuing Lender reasonably
determines that any Change in Law affecting such Lender or the Issuing Lender or
any lending office of such Lender or such Lender’s or the Issuing Lender’s
holding company, if any, regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender’s or the Issuing Lender’s
capital or on the capital of such Lender’s or the Issuing Lender’s holding
company, if any, as a consequence of this Agreement, the Commitments of such
Lender or the Loans made by, or participations in Letters of Credit held by,
such Lender, or the Letters of Credit issued by the Issuing Lender, to a level
below that which such Lender or the Issuing Lender or such Lender’s or the
Issuing Lender’s holding company could have achieved but for such Change in Law
(taking into consideration such Lender’s or the Issuing Lender’s policies and
the policies of such Lender’s or the Issuing Lender’s holding company with
respect to capital adequacy), in each case, in an amount deemed to be material
by such Lender or Issuing Lender, then from time to time the Borrower will pay
to such Lender or the Issuing Lender, as the case may be, such additional amount
or amounts as will compensate such Lender or the Issuing Lender or such Lender’s
or the Issuing Lender’s holding company for any such reduction suffered.

4.10.3 Certificates for Reimbursement; Repayment of Outstanding Loans; Borrowing
of New Loans. A certificate of a Lender or the Issuing Lender reasonably setting
forth in sufficient detail for calculation the amount or amounts necessary to
compensate such Lender or the Issuing Lender or its holding company, as the case
may be, as specified in Sections 4.10.1 [Increased Costs Generally] or 4.10.2
[Capital Requirements] and delivered to the Borrower shall be conclusive absent
manifest error. In determining such amounts, a Lender or Issuing Lender may use
reasonable averaging or attribution methods. The Borrower shall pay such Lender
or the Issuing Lender, as the case may be, the amount shown as due on any such
certificate within ten (10) days after receipt thereof.

4.10.4 Delay in Requests. Failure or delay on the part of any Lender or the
Issuing Lender to demand compensation pursuant to this Section shall not
constitute a waiver of such Lender’s or

 

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the Issuing Lender’s right to demand such compensation, provided that the
Borrower shall not be required to compensate a Lender or the Issuing Lender
pursuant to this Section for any increased costs incurred or reductions suffered
more than nine (9) months prior to the date that such Lender or the Issuing
Lender, as the case may be, notifies the Borrower of the Change in Law giving
rise to such increased costs or reductions and of such Lender’s or the Issuing
Lender’s intention to claim compensation therefor (except that, if the Change in
Law giving rise to such increased costs or reductions is retroactive, then the
nine (9) month period referred to above shall be extended to include the period
of retroactive effect thereof).

4.11 Taxes.

4.11.1 Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes; provided that if the Borrower shall be required by
applicable Law to deduct any Indemnified Taxes (including any Other Taxes) from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, each
Lender or Issuing Lender, as the case may be, receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall timely pay the full
amount deducted to the relevant Official Body in accordance with applicable Law.

4.11.2 Payment of Other Taxes by the Borrower. Without limiting the provisions
of Section 4.11.1 [Payments Free of Taxes] above, the Borrower shall timely pay
any Other Taxes to the relevant Official Body in accordance with applicable Law.

4.11.3 Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent, each Lender and the Issuing Lender, within ten (10) days
after demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by the Administrative
Agent, such Lender or the Issuing Lender, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Official Body. A certificate as to the
amount of such payment or liability and reasonably describing the basis for such
determination delivered to the Borrower by a Lender or the Issuing Lender (with
a copy to the Administrative Agent), or by the Administrative Agent on its own
behalf or on behalf of a Lender or the Issuing Lender, shall be conclusive
absent manifest error.

4.11.4 Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Official Body, the
Borrower shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Official Body evidencing such payment, a copy
of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

4.11.5 Status of Lenders. Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the Law of the jurisdiction in which
the Borrower is resident for tax purposes, or any treaty to which such
jurisdiction is a party, with respect to payments hereunder or under any other
Loan Document shall deliver to the Borrower (with a duplicate original or copy
as requested by the Administrative Agent), at the time or times prescribed by
applicable Law or reasonably requested by the Borrower or the Administrative
Agent, such properly completed and executed documentation prescribed by
applicable Law as will permit such payments to be made without withholding or at
a reduced rate of withholding. Notwithstanding the submission of a such
documentation claiming a reduced rate of or exemption from U.S. withholding tax,
the Administrative Agent shall be entitled to withhold United States federal
income taxes at the full 30% withholding rate if in its reasonable judgment

 

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it is required to do so under the due diligence requirements imposed upon a
withholding agent under § 1.1441-7(b) of the United States Income Tax
Regulations. Further, the Administrative Agent is indemnified under §
1.1461-1(e) of the United States Income Tax Regulations against any claims and
demands of any Lender or assignee or participant of a Lender for the amount of
any tax it deducts and withholds in accordance with regulations under § 1441 of
the Internal Revenue Code. In addition, any Lender, if requested by the Borrower
or the Administrative Agent, shall deliver such other documentation prescribed
by applicable Law or reasonably requested by the Borrower or the Administrative
Agent as will enable the Borrower or the Administrative Agent to determine
whether or not such Lender is subject to backup withholding or information
reporting requirements.

Without limiting the generality of the foregoing, in the event that the Borrower
is resident for tax purposes in the United States of America, any Foreign Lender
shall deliver to the Borrower and the Administrative Agent (in such number of
originals or copies as shall be requested by the recipient) on or prior to the
date on which such Foreign Lender becomes a Lender under this Agreement (and
from time to time thereafter upon the request of the Borrower or the
Administrative Agent, but only if such Foreign Lender is legally entitled to do
so), whichever of the following is applicable:

(i) duly completed copies of IRS Form W-8BEN claiming eligibility for benefits
of an income tax treaty to which the United States of America is a party,

(ii) duly completed copies of IRS Form W-8ECI,

(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not (A) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower
within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled
foreign corporation” described in section 881(c)(3)(C) of the Code and (y) duly
completed copies of IRS Form W-8BEN, or

(iv) any other form prescribed by applicable Law as a basis for claiming
exemption from or a reduction in United States Federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by
applicable Law to permit the Borrower to determine the withholding or deduction
required to be made.

4.12 Indemnity. In addition to the compensation or payments required by
Section 4.10 [Increased Costs] or Section 4.11 [Taxes], the Borrower shall
indemnify each Lender against all liabilities, losses or expenses (including
loss of margin, any loss or expense incurred in liquidating or employing
deposits from third parties and any loss or expense incurred in connection with
funds acquired by a Lender to fund or maintain Loans subject to a LIBOR Rate
Option) which such Lender sustains or incurs as a consequence of any:

(i) payment, prepayment, conversion or renewal of any Loan to which a LIBOR Rate
Option applies on a day other than the last day of the corresponding Interest
Period (whether or not such payment or prepayment is mandatory, voluntary or
automatic and whether or not such payment or prepayment is then due),

(ii) attempt by the Borrower to revoke (expressly, by later inconsistent notices
or otherwise) in whole or part any Loan Requests under Section 2.5 [Revolving
Credit Loan Requests] or Section 3.2 [Interest Periods] or notice relating to
prepayments under Section 4.6 [Voluntary Prepayments], or

(iii) default by the Borrower in the performance or observance of any covenant
or condition contained in this Agreement or any other Loan Document, including
any failure of the Borrower

 

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to pay when due (by acceleration or otherwise) any principal, interest,
Commitment Fee or any other amount due hereunder.

If any Lender sustains or incurs any such loss or expense, it shall from time to
time notify the Borrower of the amount determined in good faith by such Lender
(which determination may include such assumptions, allocations of costs and
expenses and averaging or attribution methods as such Lender shall deem
reasonable) to be necessary to indemnify such Lender for such loss or expense.
Such notice shall set forth in reasonable detail the basis for such
determination and shall be conclusive and binding absent manifest error. Such
amount shall be due and payable by the Borrower to such Lender ten (10) Business
Days after such notice is given.

4.13 Settlement Date Procedures. In order to minimize the transfer of funds
between the Lenders and the Agent, the Borrower may borrow, repay and reborrow
Swing Loans and PNC Bank may make Swing Loans as provided in Section 2.1.2
hereof during the period between Settlement Dates. Not later than 1:00 p.m. on
each Settlement Date, the Agent shall notify each Lender of its Ratable Share of
the total of the Revolving Credit Loans and the Swing Loans (each a “Required
Share”). Prior to 2:00 p.m., Pittsburgh time, on such Settlement Date, each
Lender shall pay to the Agent the amount equal to the difference between its
Required Share and its Revolving Credit Loans, and the Agent shall pay to each
Lender its Ratable Share of all payments made by the Borrower to the
Administrative Agent with respect to the Revolving Credit Loans. The
Administrative Agent shall also effect settlement in accordance with the
foregoing sentence on the proposed Borrowing Dates for Revolving Credit Loans
and on dates of repayment pursuant to Section 4.7 [Mandatory Prepayments] and
may at its option effect settlement on any other Business Day. These settlement
procedures are established solely as a matter of administrative convenience, and
nothing contained in this Section 4.13 shall relieve the Lender of their
obligations to fund Revolving Credit Loans on dates other than a Settlement Date
pursuant to Section 2.1.2. The Agent may at any time at its option for any
reason whatsoever require each Lender to pay immediately to the Agent such
Lender’s Ratable Share of the outstanding Revolving Credit Loans and each Lender
may at any time require the Agent to pay immediately to such Lender its Ratable
Share of all payments made by the borrower to the Agent with respect to the
Revolving Credit Loans.

5. REPRESENTATIONS AND WARRANTIES

5.1 Representations and Warranties. The Loan Parties, jointly and severally,
represent and warrant to the Administrative Agent and each of the Lenders as
follows:

5.1.1 Organization and Qualification; Power and Authority; Compliance With Laws;
Title to Properties; Event of Default. Each Loan Party and each Subsidiary of
each Loan Party (i) is a corporation, partnership or limited liability company
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, (ii) has the lawful power to own or lease its
properties and to engage in the business it presently conducts or proposes to
conduct, (iii) is duly licensed or qualified and in good standing in each
jurisdiction listed on Schedule 5.1.1 and in all other jurisdictions where the
property owned or leased by it or the nature of the business transacted by it or
both makes such licensing or qualification necessary, (iv) has full power to
enter into, execute, deliver and carry out this Agreement and the other Loan
Documents to which it is a party, to incur the Indebtedness contemplated by the
Loan Documents and to perform its Obligations under the Loan Documents to which
it is a party, and all such actions have been duly authorized by all necessary
proceedings on its part, (v) is in compliance in all material respects with all
applicable Laws (other than Environmental Laws which are specifically addressed
in Section 5.1.14 [Environmental Matters]) in all jurisdictions in which any
Loan Party or Subsidiary of any Loan Party is presently or will be doing
business except where the failure to do so would not constitute a Material
Adverse Change, and (vi) has good and marketable title to or valid leasehold
interest in all properties, assets and other rights which it purports to own or
lease or which are

 

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reflected as owned or leased on its books and records, free and clear of all
Liens and encumbrances except Permitted Liens. No Event of Default or Potential
Default exists or is continuing.

5.1.2 Subsidiaries and Owners; Investment Companies. Schedule 5.1.2 states
(i) the name of each of the Borrower’s Subsidiaries, its jurisdiction of
organization and the amount, percentage and type of equity interests in such
Subsidiary (the “Subsidiary Equity Interests”), and (ii) any options, warrants
or other rights outstanding to purchase any such equity interests referred to in
clause (i). The Borrower and each Subsidiary of the Borrower has good and
marketable title to all of the Subsidiary Equity Interests it purports to own,
free and clear in each case of any Lien and all such Subsidiary Equity Interests
been validly issued, fully paid and nonassessable. None of the Loan Parties or
Subsidiaries of any Loan Party is an “investment company” registered or required
to be registered under the Investment Company Act of 1940 or under the “control”
of an “investment company” as such terms are defined in the Investment Company
Act of 1940 and shall not become such an “investment company” or under such
“control.”

5.1.3 Validity and Binding Effect. This Agreement and each of the other Loan
Documents (i) has been duly and validly executed and delivered by each Loan
Party, and (ii) constitutes, or will constitute, legal, valid and binding
obligations of each Loan Party which is or will be a party thereto, enforceable
against such Loan Party in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors’ rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law) and the implied covenants of good faith and fair dealing.

5.1.4 No Conflict; Material Agreements; Consents. Neither the execution and
delivery of this Agreement or the other Loan Documents by any Loan Party nor the
consummation of the transactions herein or therein contemplated or compliance
with the terms and provisions hereof or thereof by any of them will conflict
with, constitute a default under or result in any breach of (i) the terms and
conditions of the certificate of incorporation, bylaws, certificate of limited
partnership, partnership agreement, certificate of formation, limited liability
company agreement or other organizational documents of any Loan Party or
(ii) any Law or any material agreement or instrument or order, writ, judgment,
injunction or decree to which any Loan Party or any of its Subsidiaries is a
party or by which it or any of its Subsidiaries is bound or to which it is
subject, or result in the creation or enforcement of any Lien, charge or
encumbrance whatsoever upon any property (now or hereafter acquired) of any Loan
Party or any of its Subsidiaries (other than Liens granted under the Loan
Documents). There is no default under such material agreement (referred to
above) and none of the Loan Parties or their Subsidiaries is bound by any
contractual obligation, or subject to any restriction in any organization
document, or any requirement of Law which could result in a Material Adverse
Change. No consent, approval, exemption, order or authorization of, or a
registration or filing with, any Official Body or any other Person is required
by any Law or any agreement in connection with the execution, delivery and
carrying out of this Agreement and the other Loan Documents.

5.1.5 Litigation. Except as set forth in Schedule 5.1.5, there are no actions,
suits, proceedings or investigations pending or, to the actual knowledge of any
Loan Party, threatened in writing against such Loan Party or any Subsidiary of
such Loan Party at law or in equity before any Official Body which individually
or in the aggregate may reasonably be expected to result in any Material Adverse
Change. None of the Loan Parties or any Subsidiaries of any Loan Party is in
violation of any order, writ, injunction or any decree of any Official Body
which may reasonably be expected to result in any Material Adverse Change.

5.1.6 Financial Statements.

(i) Historical Statements. The Borrower has delivered to the Administrative
Agent copies of its audited consolidated year-end financial statements for and
as of the end of the three (3)

 

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fiscal years ended December 31, 2007. In addition, the Borrower has delivered to
the Administrative Agent copies of its unaudited consolidated interim financial
statements for the fiscal year to date and as of the end of the fiscal quarter
ended September 30, 2008 (all such annual and interim statements being
collectively referred to as the “Statements”). The Statements were compiled from
the books and records maintained by the Borrower’s management, are correct and
complete and fairly represent, in all material respects, the consolidated
financial condition of the Borrower and its Subsidiaries as of the respective
dates thereof and the results of operations for the fiscal periods then ended
and have been prepared in accordance with GAAP consistently applied, subject (in
the case of the interim statements) to normal year-end audit adjustments.

(ii) Accuracy of Financial Statements. Neither the Borrower nor any Subsidiary
of the Borrower has any liabilities, contingent or otherwise, or forward or
long-term commitments that are not disclosed in the Statements or in the notes
thereto, and except as disclosed therein there are no unrealized or anticipated
losses from any commitments of the Borrower or any Subsidiary of the Borrower
which may cause a Material Adverse Change. Since December 31, 2007, no Material
Adverse Change has occurred.

5.1.7 Margin Stock. None of the Loan Parties or any Subsidiaries of any Loan
Party engages or intends to engage principally, or as one of its important
activities, in the business of extending credit for the purpose, immediately,
incidentally or ultimately, of purchasing or carrying margin stock (within the
meaning of Regulation U, T or X as promulgated by the Board of Governors of the
Federal Reserve System). No part of the proceeds of any Loan has been or will be
used, immediately, incidentally or ultimately, to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock or which is inconsistent with the provisions of the regulations
of the Board of Governors of the Federal Reserve System. None of the Loan
Parties or any Subsidiary of any Loan Party holds or intends to hold margin
stock in such amounts that more than 25% of the reasonable value of the assets
of any Loan Party or Subsidiary of any Loan Party are or will be represented by
margin stock.

5.1.8 Full Disclosure. Neither this Agreement nor any other Loan Document, nor
any certificate, statement, agreement or other documents furnished to the
Administrative Agent or any Lender in connection herewith or therewith, contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein and therein, in light
of the circumstances under which they were made, not misleading.

5.1.9 Taxes. All federal, state, local and other tax returns required to have
been filed with respect to each Loan Party and each Subsidiary of each Loan
Party have been filed, and payment or adequate provision has been made for the
payment of all taxes, fees, assessments and other governmental charges which
have or may become due pursuant to said returns or to assessments received,
except to the extent that such taxes, fees, assessments and other charges are
being contested in good faith by appropriate proceedings diligently conducted
and for which such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made.

5.1.10 Patents, Trademarks, Copyrights, Licenses, Etc. Except as disclosed on
Schedule 5.1.10, each Loan Party and each Subsidiary of each Loan Party owns or
possesses all the material Patents, Trademarks, service marks, trade names,
Copyrights, licenses, registrations, franchises, permits and rights necessary to
own and operate its properties and to carry on its business as presently
conducted and planned to be conducted by such Loan Party or Subsidiary, without
actually known possible, alleged or actual material conflict with the rights of
others.

5.1.11 Liens in the Collateral. Except to the extent disclosed on Schedule
1.1(P) and subject to Permitted Liens, the Liens in the Collateral granted to
the Administrative Agent for the benefit of the Lenders pursuant to the Pledge
Agreement and the Security Agreement (collectively, the

 

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“Collateral Documents”) constitute and will continue to constitute first
priority perfected Liens. All filing fees and other expenses in connection with
the perfection of such Liens have been or will be paid by the Borrower.

5.1.12 Insurance. The properties of each Loan Party and each of its Subsidiaries
are insured pursuant to policies and other bonds which are valid and in full
force and effect and which provide adequate coverage from reputable and
financially sound insurers in amounts sufficient to insure the assets and risks
of each such Loan Party and Subsidiary in accordance with prudent business
practice in the industry of such Loan Parties and Subsidiaries.

5.1.13 ERISA Compliance. (i) Each Plan is in compliance in all material respects
with the applicable provisions of ERISA, the Code and other federal or state
Laws. Each Plan that is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS or an application for
such a letter is currently being processed by the IRS with respect thereto and,
to the best knowledge of Borrower, nothing has occurred which would prevent, or
cause the loss of, such qualification. Borrower and each ERISA Affiliate have
made all required contributions to each Plan subject to Section 412 of the Code,
and no application for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Code has been made with respect to any
Plan.

(ii) No ERISA Event has occurred or is reasonably expected to occur; (a) no
Pension Plan has any unfunded pension liability (i.e. excess of benefit
liabilities over the current value of that Pension Plan’s assets, determined in
accordance with the assumptions used for funding the Pension Plan for the
applicable plan year); (b) neither Borrower nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA
with respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA); (c) neither Borrower nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Sections 4201 or 4243 of ERISA with respect to a
Multiemployer Plan; and (d) neither Borrower nor any ERISA Affiliate has engaged
in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA.

5.1.14 Environmental Matters. Each Loan Party is and, to the actual knowledge of
each respective Loan Party, each of its Subsidiaries is and has been in
compliance in all material respects with applicable Environmental Laws except as
disclosed on Schedule 5.1.14; provided that such matters so disclosed could not
in the aggregate result in a Material Adverse Change.

5.2 Updates to Schedules Upon Borrowing. Should any of the information or
disclosures provided on any of the Schedules attached hereto become outdated or
incorrect in any material respect, the Borrower shall provide the Administrative
Agent in writing with such revisions or updates to such Schedule as may be
reasonably necessary or appropriate to update or correct same together with any
request for a Revolving Credit Loan, a request for a Swing Line Loan, a request
for a Letter of Credit or the delivery of any Compliance Certificate; provided,
however, that no Schedule shall be deemed to have been amended, modified or
superseded by any such correction or update, nor shall any breach of warranty or
representation resulting from the inaccuracy or incompleteness of any such
Schedule be deemed to have been cured thereby, unless and until the Required
Lenders, in their reasonable discretion, shall have accepted in writing such
revisions or updates to such Schedule.

6. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT

The obligation of each Lender to make Loans and of the Issuing Lender to issue
Letters of Credit hereunder is subject to the performance by each of the Loan
Parties of its Obligations to be performed hereunder at or prior to the making
of any such Loans or issuance of such Letters of Credit and to the satisfaction
of the following further conditions:

 

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6.1 First Loans and Letters of Credit.

6.1.1 Deliveries. On the Closing Date, the Administrative Agent shall have
received each of the following in form and substance satisfactory to the
Administrative Agent:

(i) A Borrowing Base Certificate prepared as of the last Business Day of the
month immediately preceding the Closing Date, showing total unused availability
under the Revolving Credit Commitments, after giving effect to the Loans to be
made on the Closing Date and consummation of the transactions contemplated
hereby.

(ii) A certificate of each of the Loan Parties signed by an Authorized Officer,
dated the Closing Date stating that: (a) the representations and warranties
hereunder are true and correct in all material respects; (b) the Loan Parties
are in compliance with each of the covenants and conditions hereunder; (c) no
Event of Default or Potential Default exists; and (d) no Material Adverse Change
has occurred since the date of the last audited financial statements of the
Borrower delivered to the Administrative Agent.

(iii) A certificate dated the Closing Date and signed by the Secretary or an
Assistant Secretary of each of the Loan Parties, certifying as appropriate as
to: (a) all action taken by each Loan Party in connection with this Agreement
and the other Loan Documents; (b) the names of the Authorized Officers
authorized to sign the Loan Documents and their true signatures; and (c) copies
of its organizational documents as in effect on the Closing Date certified by
the appropriate state official where such documents are filed in a state office
together with certificates from the appropriate state officials as to the
continued existence and good standing of each Loan Party in each state where
organized or qualified to do business.

(iv) This Agreement and each of the other Loan Documents signed by an Authorized
Officer and all appropriate financing statements and appropriate stock powers
and certificates evidencing the pledged Collateral.

(v) A written opinion of counsel for the Loan Parties, dated the Closing Date
and as to the matters set forth in Schedule 6.1.1.

(vi) Evidence that adequate insurance required to be maintained under this
Agreement is in full force and effect, with additional insured, mortgagee and
lender loss payable special endorsements attached thereto in form and substance
satisfactory to the Administrative Agent and its counsel naming the
Administrative Agent as additional insured, mortgagee and lender loss payee.

(vii) A duly completed Compliance Certificate as of the last day of the fiscal
quarter of Borrower most recently ended prior to the Closing Date, signed by an
Authorized Officer of Borrower.

(viii) Evidence that (a) the Existing Credit Agreement has been terminated,
(b) all Existing Credit Obligations have been paid and (c) all Liens securing
such Existing Credit Obligations have been released.

(ix) All fees and expenses of the Lenders and the Agent required to be paid by
the Loan Parties, including, without limitation, those fees set forth in the
Administrative Agent’s Letter.

(x) Certification that no claim, litigation, suit or other proceeding has been
made in writing against Borrower which, in the opinion of the Borrower is in an
amount in excess of $2,000,000 other than as previously disclosed to the
Administrative Agent.

(xi) Evidence in form and substance satisfactory to the Administrative Agent and
its counsel as to the amount and nature of all Tax, ERISA, employee retirement
benefit and other contingent liabilities to which the Borrower and its
Subsidiaries may be subject.

 

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(xii) Financial projections in form and substance reasonably satisfactory to the
Administrative Agent for the period beginning January 1, 2009 and ending on the
Expiration Date.

(xiii) An executed Landlord’s Waiver in substantially the form of Exhibit
6.1.1(xiii) from the lessor for each leased Collateral location required under
the Security Agreement.

(xiv) Such other documents in connection with such transactions as the
Administrative Agent or its counsel may reasonably request.

6.1.2 Payment of Fees. The Borrower shall have paid all fees payable on or
before the Closing Date.

6.2 Each Loan or Letter of Credit. At the time of making any Loans or issuing
any Letters of Credit and after giving effect to the proposed extensions of
credit the Administrative Agent shall have received each of the following:

(i) A Borrowing Base Certificate, in form and substance satisfactory to the
Administrative Agent, prepared as of the last Business Day of the month
immediately preceding the month in which the request is made, showing total
unused availability under the Revolving Credit Commitments, after giving effect
to the Loans to be made or the Letters of Credit to be issued.

(ii) Satisfaction of the conditions set forth in Section 6.1.1(ii), (ix),
(x) and (xi).

(iii) The making of the Loans or issuance of such Letter of Credit shall not
contravene any Law applicable to any Loan Party or Subsidiary of any Loan Party
or any of the Lenders.

(iv) A duly executed and completed Loan Request or to the Issuing Lender an
application for a Letter of Credit, as the case may be, each in a form and
substance satisfactory to the Administrative Agent.

(v) Any update to Schedules required by Section 5.2 [Updates to Schedules Upon
Borrowing].

7. COVENANTS

The Loan Parties, jointly and severally, covenant and agree that until Payment
in Full, the Loan Parties shall comply at all times with the following
covenants:

7.1 Affirmative Covenants.

7.1.1 Preservation of Existence, Etc. Subject to Schedule 7.2.8, each Loan Party
shall, and shall cause each of its Significant Subsidiaries to, maintain its
legal existence as a corporation, limited partnership or limited liability
company and its license or qualification and good standing in each jurisdiction
in which its ownership or lease of property or the nature of its business makes
such license or qualification necessary, except as otherwise expressly permitted
in Section 7.2.5 [Liquidations, Mergers, Etc.].

7.1.2 Payment of Liabilities, Including Taxes, Etc. Each Loan Party shall, and
shall cause each of its Subsidiaries to, duly pay and discharge all liabilities
to which it is subject or which are asserted against it, promptly as and when
the same shall become due and payable, including all taxes, assessments and
governmental charges upon it or any of its properties, assets, income or
profits, prior to the date on which penalties attach thereto, except to the
extent that such liabilities, including taxes, assessments or charges, are being
contested in good faith and by appropriate and lawful proceedings diligently
conducted and for which such reserve or other appropriate provisions, if any, as
shall be required by GAAP shall have been made.

7.1.3 Maintenance of Insurance. Each Loan Party shall, and shall cause each of
its Subsidiaries to, insure its properties and assets against loss or damage by
fire and such other insurable

 

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hazards as such assets are commonly insured (including fire, extended coverage,
property damage, workers’ compensation, public liability and business
interruption insurance) and against other risks in such amounts as such party
reasonably deems appropriate with reputable and financially sound insurers,
including self-insurance to the extent customary, all subject to the reasonable
discretion of the Administrative Agent. The Loan Parties shall comply with the
covenants and provide the endorsement set forth on Schedule 7.1.3 relating to
property and related insurance policies covering the Collateral.

7.1.4 Maintenance of Properties and Leases. Each Loan Party shall, and shall
cause each of its Subsidiaries to, maintain in good repair, working order and
condition (ordinary wear and tear excepted) in accordance with the general
practice of other businesses of similar character and size, all of those
properties useful or necessary to its business, and from time to time, such Loan
Party will make or cause to be made all appropriate repairs, renewals or
replacements thereof.

7.1.5 Visitation Rights. Each Loan Party shall, and shall cause each of its
Subsidiaries to, permit any of the officers or authorized employees or
representatives of the Administrative Agent or any of the Lenders to visit and
inspect any of its properties and to examine and make excerpts from its books
and records and discuss its business affairs, finances and accounts with its
officers, all in such detail and at such times during customary business hours
and as often as any of the Lenders may reasonably request, provided that each
Lender shall provide the Borrower and the Administrative Agent with reasonable
notice prior to any visit or inspection. In the event any Lender desires to
conduct an audit of any Loan Party, such Lender shall make a reasonable effort
to conduct such audit contemporaneously with any audit to be performed by the
Administrative Agent.

7.1.6 Keeping of Records and Books of Account. The Borrower shall, and shall
cause each Subsidiary of the Borrower to, maintain and keep proper books of
record and account which enable the Borrower and its Subsidiaries to issue
financial statements in accordance with GAAP and as otherwise required by
applicable Laws of any Official Body having jurisdiction over the Borrower or
any Subsidiary of the Borrower, and in which full, true and correct entries
shall be made in all material respects of all its dealings and business and
financial affairs.

7.1.7 Compliance with Laws; Use of Proceeds. Each Loan Party shall, and shall
cause each of its Subsidiaries to, comply with all applicable Laws, including
all Environmental Laws, in all material respects; provided that it shall not be
deemed to be a violation of this Section 7.1.7 if any failure to comply with any
Law would not result in fines, penalties, remediation costs, other similar
liabilities or injunctive relief which in the aggregate would constitute a
Material Adverse Change. The Loan Parties will use the Letters of Credit and the
proceeds of the Loans only in accordance with Section 2.8 [Use of Proceeds] and
as permitted by applicable Law.

7.1.8 Further Assurances. Each Loan Party shall, from time to time, at its
expense, faithfully preserve and protect the Administrative Agent’s Lien on and
Prior Security Interest, subject to Permitted Liens, if any, in the Collateral
whether now owned or hereafter acquired as a continuing first priority perfected
Lien, subject only to Permitted Liens, and shall do such other acts and things
as the Administrative Agent in its sole discretion may deem necessary or
advisable from time to time in order to preserve, perfect and protect the Liens
granted under the Loan Documents and to exercise and enforce its rights and
remedies thereunder with respect to the Collateral.

7.1.9 Anti-Terrorism Laws. None of the Loan Parties is or shall be (i) a Person
with whom any Lender is restricted from doing business under Executive Order
No. 13224 or any other Anti-Terrorism Law, (ii) engaged in any business involved
in making or receiving any contribution of funds, goods or services to or for
the benefit of such a Person or in any transaction that evades or avoids, or has
the purpose of evading or avoiding, the prohibitions set forth in any
Anti-Terrorism Law, or (iii) otherwise in violation of any Anti-Terrorism Law.
The Loan Parties shall provide to the Lenders any

 

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certifications or information that a Lender reasonably requests to confirm
compliance by the Loan Parties with Anti-Terrorism Laws.

7.1.10 Pledge of equity Interest in Under Armour Europe BV and Under Armour
France S.a.r.l. Within thirty (30) days of the Closing Date, the Borrower shall
cause sixty-five percent (65%) of the issued and outstanding equity interests,
whether capital stock, shares, securities, member interests or partnership
interests, of each of Under Armour Europe BV and Under Armour France S.a.r.l to
be pledged to the Administrative Agent for the benefit of the Lenders to secure
the Obligations.

7.1.11 Landlord’s Waiver. Within thirty (30) days of the Closing Date, the
Borrower shall deliver, or cause to be delivered, to the Administrative Agent, a
Landlord’s Waiver for each of the leased locations set forth on Schedule 7.1.11.

7.2 Negative Covenants.

7.2.1 Indebtedness. Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Indebtedness, except Permitted Indebtedness.

7.2.2 Liens. Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, at any time create, incur, assume or suffer to exist any Lien
on any of its property or assets, tangible or intangible, now owned or hereafter
acquired, or agree or become liable to do so (specifically including, for the
avoidance of doubt, all of the Trademarks of the Loan Parties), except Permitted
Liens.

7.2.3 Guaranties. Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, at any time, directly or indirectly, become or be liable
in respect of any Guaranty, or assume, guarantee, become surety for, endorse or
otherwise agree, become or remain directly or contingently liable upon or with
respect to any obligation or liability of any other Person, except for
(i) Guaranties of Indebtedness of the Loan Parties permitted hereunder and
(ii) guarantees of indebtedness or other obligations of any other Loan Parties
or Subsidiaries of Loan Parties otherwise permitted hereunder.

7.2.4 Loans and Investments. Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, at any time make or suffer to remain
outstanding any loan or advance to, or purchase, acquire or own any stock,
bonds, notes or securities of, or any partnership interest (whether general or
limited) or limited liability company interest in, or any other investment or
interest in, or make any capital contribution to, any other Person, or agree,
become or remain liable to do any of the foregoing, except Permitted
Investments.

7.2.5 Liquidations, Mergers, Consolidations, Acquisitions. Each of the Loan
Parties shall not, and shall not permit any of its Subsidiaries to, dissolve,
liquidate or wind-up its affairs, or become a party to any merger or
consolidation, or acquire by purchase, lease or otherwise all or substantially
all of the assets or capital stock of any other Person; provided that any Loan
Party other than the Borrower may consolidate or merge into another Loan Party
which is wholly-owned by one or more of the other Loan Parties. By way of
clarification, a Loan Party may merge with and into the Borrower.

7.2.6 Dispositions of Assets or Subsidiaries. Each of the Loan Parties shall
not, and shall not permit any of its Subsidiaries to, sell, convey, assign,
lease, abandon or otherwise transfer or dispose of, voluntarily or
involuntarily, any of its properties or assets, tangible or intangible
(including sale, assignment, discount or other disposition of accounts, contract
rights, chattel paper, equipment or general intangibles with or without recourse
or of capital stock, shares of beneficial interest, partnership interests or
limited liability company interests of a Subsidiary of such Loan Party), except:

(i) transactions involving the sale or other disposition of inventory in the
ordinary course of business;

 

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(ii) any sale, transfer, lease, or other disposition of assets in the ordinary
course of business which are no longer necessary or required in the conduct of
such Loan Party’s or such Subsidiary’s business;

(iii) any sale, transfer or lease of assets by any wholly owned Subsidiary of
such Loan Party to another Loan Party; provided that the documents necessary to
grant and perfect Prior Security Interests, subject to Permitted Liens, if any,
to the Administrative Agent for the benefit of the Lenders in the equity
interests of, and Collateral held by, such wholly owned Subsidiary are executed
by the Loan Party to whom the assets are being transferred;

(iv) any sale, transfer or lease of assets in the ordinary course of business
which are replaced by substitute assets acquired or leased within the parameters
of Permitted Indebtedness; provided such substitute assets are subject to the
Lenders’ Prior Security Interest, subject to Permitted Liens, if any; or

(v) provided no Potential Default or Event of Default exists, transfers to one
or more Foreign Subsidiaries of a Loan Party of those Trademarks of the Loan
Parties solely used in connection with sales of such Foreign Subsidiaries
outside of the United States of America; provided, that simultaneously with such
transfer, the Loan Parties shall cause the applicable Foreign Subsidiaries to
grant to the Administrative Agent, for the benefit of the Lenders, a license to
use the transferred Trademarks on the same basis as set forth in Section 8.2.4.

7.2.7 Affiliate Transactions. Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, enter into or carry out any transaction
(including purchasing property or services from or selling property or services
to any Affiliate of any Loan Party or other Person) with an Affiliate of such
Person unless such transaction is not otherwise prohibited by this Agreement, is
entered into in the ordinary course of business upon fair and reasonable
arm’s-length terms and conditions and is in accordance with all applicable Law.

7.2.8 Subsidiaries. Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to own or create directly or indirectly any Subsidiaries
other than (i) any Subsidiary which has joined this Agreement as Guarantor on
the Closing Date; (ii) any Subsidiary formed after the Closing Date which,
within thirty (30) days of formation, joins this Agreement as a Guarantor by
delivering to the Administrative Agent (A) a signed Guarantor Joinder;
(B) documents in the forms described in Section 6.1 [First Loans] modified as
appropriate; and (C) documents necessary to grant and perfect Prior Security
Interests, subject to Permitted Liens, if any, to the Administrative Agent for
the benefit of the Lenders in the equity interests of, and Collateral held by,
such Subsidiary, and (iii) subsidiaries not formed under the state or federal
laws of the United States, 65% of whose Subsidiary Equity Interests are pledged
to the Administrative Agent for the benefit of the Lenders within thirty
(30) days of its formation pursuant to the Pledge Agreement.

7.2.9 Continuation of or Change in Business. Each of the Loan Parties shall not,
and shall not permit any of its Subsidiaries to, engage in any business other
than the design, development, marketing, sale and distribution of branded
performance products and related businesses, substantially as conducted and
operated by such Loan Party or Subsidiary during the present fiscal year, and
such Loan Party or Subsidiary shall not permit any material change in such
business.

7.2.10 Fiscal Year. The Borrower shall not, and shall not permit any Subsidiary
of the Borrower to, change its fiscal year from the twelve-month period
beginning January 1 and ending December 31; provided, however, that any
Subsidiary formed pursuant to Section 7.2.8 may, if permitted by applicable Law,
extend its first taxable year beyond December 31 of the year in which it was
formed and into the next year, so long as its fiscal year shall end on
December 31 of the next succeeding year and every year thereafter.

 

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7.2.11 Changes in Organizational Documents. Each of the Loan Parties shall not,
and shall not permit any of its Subsidiaries to, amend in any respect its
certificate of incorporation (including any provisions or resolutions relating
to capital stock), by-laws, certificate of limited partnership, partnership
agreement, certificate of formation, limited liability company agreement or
other organizational documents in any way that would be adverse to the Lenders
as determined by the Administrative Agent in its reasonable discretion without
obtaining the prior written consent of the Administrative Agent; provided,
however, that a change of the name of a Loan Party or a Subsidiary shall not be
considered adverse to the Lenders hereunder unless and until such Loan Party or
Subsidiary fails to give notice thereof to the Administrative Agent within ten
(10) Business Days of any such change.

7.2.12 Minimum Fixed Charge Coverage Ratio. The Loan Parties shall not permit
the Fixed Charge Coverage Ratio, calculated as of the end of each fiscal quarter
for the fiscal quarter then ended, to be less than 1.25 to 1.0.

7.2.13 Maximum Leverage Ratio. The Loan Parties shall not at any time permit the
Leverage Ratio to exceed 2.5 to 1.0.

7.3 Reporting Requirements. The Loan Parties will furnish or cause to be
furnished to the Administrative Agent and each of the Lenders.

7.3.1 Borrowing Base Certificates, Schedules of Accounts Receivable and
Inventory. Within twenty (20) calendar days after the end of each calendar month
so long as any Loan is outstanding or each fiscal quarter if no Loan is
outstanding, (a) a Borrowing Base Certificate as of the last day of the
immediately preceding month in the form of Exhibit 6.1.1(i) hereto,
appropriately completed, executed and delivered by an Authorized Officer; (b) a
Schedule of Accounts Receivable and Schedule of Inventory as of the end of the
immediately preceding month; and (c) the Schedule of Payables.

7.3.2 Quarterly Financial Statements. As soon as available and in any event
within forty-five (45) calendar days after the end of each of the first three
fiscal quarters in each fiscal year, financial statements of the Borrower,
consisting of a consolidated and consolidating balance sheet as of the end of
such fiscal quarter and related consolidated and consolidating statements of
income, stockholders’ equity and cash flows for the fiscal quarter then ended
and the fiscal year through that date, all in reasonable detail and certified
(subject to normal year-end audit adjustments) by any of the Chief Executive
Officer, Chief Operating Officer or Chief Financial Officer of the Borrower as
having been prepared in accordance with GAAP, consistently applied, and setting
forth in comparative form the respective financial statements for the
corresponding date and period in the previous fiscal year.

7.3.3 Annual Financial Statements. As soon as available and in any event within
ninety (90) days after the end of each fiscal year of the Borrower, financial
statements of the Borrower consisting of a consolidated and consolidating
balance sheet as of the end of such fiscal year (which consolidating balance
sheets are unaudited but derived from the audited consolidated statements), and
related consolidated and consolidating statements of income, stockholders’
equity and cash flows for the fiscal year then ended (which consolidating
statements of income, stockholders’ equity and cash flows are unaudited but
derived from the audited consolidated statements), all in reasonable detail and
setting forth in comparative form the financial statements as of the end of and
for the preceding fiscal year, and, in the case of consolidated statements only,
certified by independent certified public accountants of nationally recognized
standing satisfactory to the Administrative Agent. The certificate or report of
accountants shall include any management letters submitted to the Borrower by
such independent accountants in connection with the audit and shall be free of
qualifications (other than any consistency qualification that may result from a
change in the method used to prepare the financial statements as to which such
accountants concur) and shall not indicate the occurrence or existence of any
event, condition or contingency which would materially impair the prospect of
payment or performance of any covenant, agreement or duty of any Loan Party
under any of the Loan Documents.

 

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7.3.4 Certificate of the Borrower. Concurrently with the financial statements of
the Borrower furnished to the Administrative Agent and to the Lenders pursuant
to Sections 7.3.2 [Quarterly Financial Statements] and 7.3.3 [Annual Financial
Statements], a certificate (each a “Compliance Certificate”) of the Borrower
signed by any of the Chief Executive Officer, Chief Operating Officer or Chief
Financial Officer of the Borrower, in the form of Exhibit 7.3.4.

7.3.5 Notices

7.3.5.1 Default. Promptly after any officer of any Loan Party has learned of the
occurrence of an Event of Default or Potential Default, a certificate signed by
an Authorized Officer setting forth the details of such Event of Default or
Potential Default and the action which such Loan Party proposes to take with
respect thereto.

7.3.5.2 Litigation. Promptly after the commencement thereof, written notice of
all actions, suits, proceedings or investigations before or by any Official Body
or any other Person against any Loan Party or Subsidiary of any Loan Party which
relate to the Collateral, involve a claim or series of claims in excess of
$5,000,000 or which if adversely determined would constitute a Material Adverse
Change.

7.3.5.3 Organizational Documents. Within ten (10) Business Days of any amendment
to the organizational documents of any Loan Party.

7.3.5.4 Erroneous Financial Information. Immediately in the event that the
Borrower or its accountants conclude or advise that any previously issued
financial statement, audit report or interim review should no longer be relied
upon or that disclosure should be made or action should be taken to prevent
future reliance.

7.3.5.5 ERISA Event. Immediately upon the occurrence of any ERISA Event.

7.3.5.6 Qualified Accounts Receivable. Promptly after any Accounts Receivable
have been determined by the Administrative Agent not to meet the requirements
set forth on Schedule 1.1(C)(ii)(d), the Borrower shall provide to each of the
Lenders the Schedule of Accounts Receivable and other documentation providing
the basis for such determination and the anticipated concentration level of the
Accounts Receivable owed by such individual Account Debtor for the six
(6) months following the date of such determination.

7.3.5.7 Other Reports. Promptly upon their becoming available to the Borrower:

(i) Annual Budget. The annual budget and any forecasts or projections of the
Borrower, to be supplied not later than thirty (30) days prior to commencement
of the fiscal year to which any of the foregoing may be applicable;

(ii) Management Letters. Any reports including management letters submitted to
the Borrower by independent accountants in connection with any annual, interim
or special audit;

(iii) SEC Reports; Shareholder Communications. Reports, including Forms 10-K,
10-Q and 8-K, registration statements and prospectuses and other shareholder
communications, filed by the Borrower with the Securities and Exchange
Commission; and

(iv) Other Information. Such other reports and information as any of the Lenders
may from time to time reasonably request.

 

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8. DEFAULT

8.1 Events of Default. An Event of Default shall mean the occurrence or
existence of any one or more of the following events or conditions (whatever the
reason therefor and whether voluntary, involuntary or effected by operation of
Law):

8.1.1 Payments Under Loan Documents. The Borrower shall fail to pay any
principal of any Loan (including scheduled installments, mandatory prepayments
or the payment due at maturity), Reimbursement Obligation or Letter of Credit or
Obligation or any interest on any Loan , Reimbursement Obligation or Letter of
Credit Obligation or any other amount owing hereunder or under the other Loan
Documents within five (5) Business Days of the date on which such principal,
interest or other amount becomes due in accordance with the terms hereof or
thereof;

8.1.2 Breach of Warranty. Any representation or warranty made at any time by any
of the Loan Parties herein or by any of the Loan Parties in any other Loan
Document, or in any certificate, other instrument or statement furnished
pursuant to the provisions hereof or thereof, shall prove to have been false or
misleading in any material respect as of the time it was made or furnished;

8.1.3 Breach of Negative Covenants. Any of the Loan Parties shall default in the
observance or performance of any covenant contained in Section 7.2 [Negative
Covenants];

8.1.4 Breach of Other Covenants. Any of the Loan Parties shall default in the
observance or performance of any other covenant, condition or provision hereof
or of any other Loan Document and such default shall continue unremedied for a
period of thirty (30) days beyond written notice of same by the Administrative
Agent;

8.1.5 Defaults in Other Agreements or Indebtedness. A material default or event
of default shall occur at any time under the terms of any other agreement
involving borrowed money or the extension of credit or any other Indebtedness
under which any Loan Party or Subsidiary of any Loan Party may be obligated as a
borrower or guarantor in excess of $2,000,000 in the aggregate, and such breach,
default or event of default consists of the failure to pay (beyond any period of
grace permitted with respect thereto, whether waived or not) any Indebtedness
when due (whether at stated maturity, by acceleration or otherwise) or such
breach or default permits or causes the acceleration of any Indebtedness or the
termination of any commitment to lend;

8.1.6 Final Judgments or Orders. Any final judgments or orders for the payment
of money in excess of $5,000,000 in the aggregate (other than a judgment which
is covered by effective insurance) shall be entered against any Loan Party by a
court having jurisdiction in the premises, which judgment is not discharged,
vacated, bonded or stayed pending appeal within a period of thirty (30) days
from the date of entry (or, if stayed pending appeal, shall not have been
discharged within thirty (30) days after the entry of a final order of
affirmance on appeal);

8.1.7 Loan Document Unenforceable. Any of the Loan Documents shall cease to be
legal, valid and binding agreements enforceable against the party executing the
same or such party’s successors and assigns (as permitted under the Loan
Documents) in accordance with the respective terms thereof or shall in any way
be terminated (except in accordance with its terms) or become or be declared
ineffective or inoperative or shall in any way be challenged or contested or
cease to give or provide the respective Liens, security interests, rights,
titles, interests, remedies, powers or privileges intended to be created
thereby, provided, however, that this Section 8.1.7 shall not apply if such Loan
Document ceases to be legal, valid and binding due to action of an Official Body
of general application;

8.1.8 Uninsured Losses; Proceedings Against Assets. There shall occur any
material uninsured damage to or loss, theft or destruction (other than in the
ordinary course of business or the write down or write off of assets, inventory
or accounts receivable in the ordinary course of business) of any of the
Collateral in excess of $5,000,000 or the Collateral or any other of the Loan
Parties’ or any of their

 

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Subsidiaries’ material assets are attached, seized, levied upon or subjected to
a writ or distress warrant; or such come within the possession of any receiver,
trustee, custodian or assignee for the benefit of creditors and the same is not
cured within thirty (30) days thereafter;

8.1.9 Events Relating to Plans and Benefit Arrangements. (i) An ERISA Event
occurs with respect to a Pension Plan or Multiemployer Plan which has resulted
or could reasonably be expected to result in liability of Borrower under Title
IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate
amount in excess of $1,000,000, or (ii) Borrower or any ERISA Affiliate fails to
pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$1,000,000, and such condition remains uncured for a period of thirty (30) days
from the date of occurrence;

8.1.10 Change of Control. A Change of Control shall have occurred; and

8.1.11 Relief Proceedings.

(i) A Relief Proceeding shall have been instituted against any Loan Party or
Subsidiary of a Loan Party and such Relief Proceeding shall remain undismissed
or unstayed and in effect for a period of thirty (30) consecutive days or such
court shall enter a decree or order granting any of the relief sought in such
Relief Proceeding, (ii) any Loan Party or Subsidiary of a Loan Party institutes,
or takes any action in furtherance of, a Relief Proceeding, or (iii) any Loan
Party or any Significant Subsidiary of a Loan Party ceases to be Solvent or
admits in writing its inability to pay its debts as they mature.

8.2 Consequences of Event of Default.

8.2.1 Events of Default Other Than Bankruptcy, Insolvency or Reorganization
Proceedings. If an Event of Default specified under Sections 8.1.1 through
8.1.10 shall occur and be continuing beyond any applicable grace or cure period,
the Lenders and the Administrative Agent shall be under no further obligation to
make Loans and the Issuing Lender shall be under no obligation to issue Letters
of Credit and the Administrative Agent may, and upon the request of the Required
Lenders, shall (i) by written notice to the Borrower, declare the unpaid
principal amount of the Notes then outstanding and all interest accrued thereon,
any unpaid fees and all other Indebtedness of the Borrower to the Lenders
hereunder and thereunder to be forthwith due and payable, and the same shall
thereupon become and be immediately due and payable to the Administrative Agent
for the benefit of each Lender without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived, and (ii) require
the Borrower to, and the Borrower shall thereupon, deposit in a
non-interest-bearing account with the Administrative Agent, as cash collateral
for its Obligations under the Loan Documents, an amount equal to the maximum
amount currently or at any time thereafter available to be drawn on all
outstanding Letters of Credit, and the Borrower hereby pledges to the
Administrative Agent and the Lenders, and grants to the Administrative Agent and
the Lenders a security interest in, all such cash as security for such
Obligations; and

8.2.2 Bankruptcy, Insolvency or Reorganization Proceedings. If an Event of
Default specified under Section 8.1.11 [Relief Proceedings] shall occur and
continue beyond any applicable grace or cure period, the Lenders shall be under
no further obligations to make Loans hereunder and the Issuing Lender shall be
under no obligation to issue Letters of Credit and the unpaid principal amount
of the Loans then outstanding and all interest accrued thereon, any unpaid fees
and all other Indebtedness of the Borrower to the Lenders hereunder and
thereunder shall be immediately due and payable, without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived; and

8.2.3 Set-off. If an Event of Default shall have occurred and be continuing
beyond any applicable grace or cure period, each Lender, the Issuing Lender, and
each of their respective Affiliates

 

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and any participant of such Lender or Affiliate which has agreed in writing to
be bound by the provisions of Section 4.3 [Sharing of Payments] is hereby
authorized at any time and from time to time, to the fullest extent permitted by
applicable Law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and
other obligations (in whatever currency) at any time owing by such Lender, the
Issuing Lender or any such Affiliate or participant to or for the credit or the
account of any Loan Party against any and all of the Obligations of such Loan
Party now or hereafter existing under this Agreement or any other Loan Document
to such Lender, the Issuing Lender, Affiliate or participant, irrespective of
whether or not such Lender, Issuing Lender, Affiliate or participant shall have
made any demand under this Agreement or any other Loan Document and although
such Obligations of the Borrower or such Loan Party may be contingent or
unmatured or are owed to a branch or office of such Lender or the Issuing Lender
different from the branch or office holding such deposit or obligated on such
Indebtedness. The rights of each Lender, the Issuing Lender and their respective
Affiliates and participants under this Section are in addition to other rights
and remedies (including other rights of setoff) that such Lender, the Issuing
Lender or their respective Affiliates and participants may have. Each Lender and
the Issuing Lender agrees to notify the Borrower and the Administrative Agent
promptly after any such setoff and application; provided that the failure to
give such notice shall not affect the validity of such setoff and application;
and

8.2.4 Limited License. Regardless of whether the Administrative Agent’s security
interests in any of the Patents and Copyrights have attached or are perfected,
each of the Loan Parties hereby irrevocably grants to the Administrative Agent,
for the benefit of the Lenders, for use solely by the Administrative Agent (and
its agents and representatives) during the existence and continuation of any
Event of Default beyond any applicable grace or cure period, or during the
existence and continuation of any subsequent Event(s) of Default beyond any
applicable grace or cure period, a limited royalty-free, non-exclusive license
to use such Loan Party’s Trademarks, Copyrights, Patents and other proprietary
and intellectual property rights, solely in connection with the
(i) advertisement for sale, and the sale or other disposition of, any finished
goods Inventory by the Administrative Agent in accordance with the provisions of
Section 8 of this Agreement, and (ii) the manufacture, assembly, completion and
preparation for sale of any unfinished Inventory by the Administrative Agent in
accordance with this Agreement. Notwithstanding the foregoing, the limited
license granted pursuant to this Section 8.2.4 shall not be transferable or
sub-licensable by the Administrative Agent; provided that the Administrative
Agent may sublicense such limited license to any contractor for the sole purpose
of performing the actions permitted to be performed by the Administrative Agent
pursuant to clauses (i) and (ii) above. In exercising its rights pursuant to the
foregoing clause (ii), the Administrative Agent shall use commercially
reasonable efforts to ensure that the quality of the Inventory that is finished
by the Administrative Agent is commensurate with the quality of the other
Inventory of the Loan Parties. Any improvement or changes to such Trademarks,
Copyrights, Patents or other proprietary and intellectual property rights
resulting from actions taken by Administrative Agent pursuant to subsections
(i) and (ii) of this Section shall inure to the benefit of the respective Loan
Party holding title to the impacted right.

8.2.5 Application of Proceeds. From and after the date on which the
Administrative Agent has taken any action pursuant to this Section 8.2 and until
all Obligations of the Loan Parties have been paid in full, any and all proceeds
received by the Administrative Agent for the ratable account of the Lenders and
other holders of the Obligations from any sale or other disposition of the
Collateral, or any part thereof, or the exercise of any other remedy by the
Administrative Agent, shall be applied as follows:

(i) first, to reimburse the Administrative Agent and the Lenders for
out-of-pocket costs, expenses and disbursements, including reasonable attorneys’
and paralegals’ fees and legal expenses, incurred by the Administrative Agent or
the Lenders in connection with realizing on the Collateral or collection of any
Obligations of any of the Loan Parties under any of the Loan Documents,
including advances made by the Lenders or any one of them or the Administrative
Agent for the

 

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reasonable maintenance, preservation, protection or enforcement of, or
realization upon, the Collateral, including advances for taxes, insurance,
repairs and the like and reasonable expenses incurred to sell or otherwise
realize on, or prepare for sale or other realization on, any of the Collateral;

(ii) second, to the payment of that portion of the Obligations constituting
accrued and unpaid interest on the Loans and other Obligations, in such manner
as the Administrative Agent may determine in its discretion;

(iii) third, to the payment of that portion of the Obligations constituting
unpaid principal of the Loans;

(iv) fourth, to the payment of that portion of the Obligations constituting
accrued and unpaid fees and expenses;

(v) fifth, to the Administrative Agent for the account of the Issuing Lender to
cash collateralize that portion of the Letter of Credit Obligations, if any,
comprised of the aggregate undrawn amount of Letters of Credit;

(vi) sixth, to the repayment of all Obligations then due and unpaid incurred
under Other Lender Provided Financial Service Products or any Lender Provided
Interest Rate Hedge, in such manner as the Administrative Agent may determine in
its discretion; and

(vii) the balance, if any, as required by Law.

9. THE ADMINISTRATIVE AGENT

9.1 Appointment and Authority. Each of the Lenders and the Issuing Lender hereby
irrevocably appoints PNC Bank to act on its behalf as the Administrative Agent
hereunder and under the other Loan Documents and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms hereof or thereof, together
with such actions and powers as are reasonably incidental thereto. The
provisions of this Section 9 are solely for the benefit of the Administrative
Agent, the Lenders and the Issuing Lender, and neither the Borrower nor any
other Loan Party shall have rights as a third party beneficiary of any of such
provisions.

9.2 Rights as a Lender. The Person serving as the Administrative Agent hereunder
shall have the same rights and powers in its capacity as a Lender as any other
Lender and may exercise the same as though it were not the Administrative Agent
and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated
or unless the context otherwise requires, include the Person serving as the
Administrative Agent hereunder in its individual capacity. Such Person and its
Affiliates may accept deposits from, lend money to, act as the financial advisor
or in any other advisory capacity for and generally engage in any kind of
business with the Borrower or any Subsidiary or other Affiliate thereof as if
such Person were not the Administrative Agent hereunder and without any duty to
account therefor to the Lenders.

9.3 Exculpatory Provisions. The Administrative Agent shall not have any duties
or obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, the Administrative
Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Potential Default or Event of Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents); provided that the Administrative Agent
shall not be required to

 

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take any action that, in its opinion or the opinion of its counsel, may expose
the Administrative Agent to liability or that is contrary to any Loan Document
or applicable Law; and

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its Affiliates that
is communicated to or obtained by the Person serving as the Administrative Agent
or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.1 [Modifications, Amendments or
Waivers] and 8.2 [Consequences of Event of Default]) or (ii) in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Potential Default or Event of Default
unless and until notice describing such Potential Default or Event of Default is
given to the Administrative Agent by the Borrower, a Lender or the Issuing
Lender.

The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Potential Default or Event of
Default, (iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan Document or any other agreement, instrument or
document or (v) the satisfaction of any condition set forth in Section 6
[Conditions of Lending and Issuance of Letters of Credit] or elsewhere herein,
other than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

9.4 Reliance by Administrative Agent. The Administrative Agent shall be entitled
to rely upon, and shall not incur any liability for relying upon, any notice,
request, certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper Person. The Administrative Agent also may
rely upon any statement made to it orally or by telephone and believed by it to
have been made by the proper Person, and shall not incur any liability for
relying thereon. In determining compliance with any condition hereunder to the
making of a Loan, or the issuance of a Letter of Credit, that by its terms must
be fulfilled to the satisfaction of a Lender or the Issuing Lender, the
Administrative Agent may presume that such condition is satisfactory to such
Lender or the Issuing Lender unless the Administrative Agent shall have received
notice to the contrary from such Lender or the Issuing Lender prior to the
making of such Loan or the issuance of such Letter of Credit. The Administrative
Agent may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.

9.5 Delegation of Duties. The Administrative Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Section 9 shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

 

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9.6 Resignation of Administrative Agent. The Administrative Agent may at any
time give notice of its resignation to the Lenders, the Issuing Lender and the
Borrower. Upon receipt of any such notice of resignation, the Required Lenders
shall have the right, with approval from the Borrower (so long as no Event of
Default has occurred and is continuing), to appoint a successor, such approval
not to be unreasonably withheld or delayed. If no such successor shall have been
so appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Administrative Agent gives notice of
its resignation, then the retiring Administrative Agent may on behalf of the
Lenders and the Issuing Lender, appoint a successor Administrative Agent meeting
the qualifications set forth above; provided that if the Administrative Agent
shall notify the Borrower and the Lenders that no qualifying Person has accepted
such appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (i) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the
Administrative Agent on behalf of the Lenders or the Issuing Lender under any of
the Loan Documents, the retiring Administrative Agent shall continue to hold
such collateral security until such time as a successor Administrative Agent is
appointed) and (ii) all payments, communications and determinations provided to
be made by, to or through the Administrative Agent shall instead be made by or
to each Lender and the Issuing Lender directly, until such time as the Required
Lenders appoint a successor Administrative Agent as provided for above in this
Section 9.6. Upon the acceptance of a successor’s appointment as Administrative
Agent hereunder, such successor shall succeed to and become vested with all of
the rights, powers, privileges and duties of the retiring (or retired)
Administrative Agent, and the retiring Administrative Agent shall be discharged
from all of its duties and obligations hereunder or under the other Loan
Documents (if not already discharged therefrom as provided above in this
Section). The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the retiring Administrative
Agent’s resignation hereunder and under the other Loan Documents, the provisions
of this Section 9 and Section 10.3 [Expenses; Indemnity; Damage Waiver] shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while the retiring Administrative Agent
was acting as Administrative Agent.

If PNC Bank resigns as Administrative Agent under this Section 9.6, PNC Bank
shall also resign as an Issuing Lender, [subject to PNC Bank’s satisfaction of
the requirements of Section 4.6.2 [Replacement of a Lender], for which Borrower
is deemed to have provided such notice hereby.] Upon the appointment of a
successor Administrative Agent hereunder, such successor shall (i) succeed to
all of the rights, powers, privileges and duties of PNC Bank as the retiring
Issuing Lender and Administrative Agent and PNC Bank shall be discharged from
all of its respective duties and obligations as Issuing Lender and
Administrative Agent under the Loan Documents, and (ii) issue letters of credit
in substitution for the Letters of Credit issued by PNC Bank, if any,
outstanding at the time of such succession or make other arrangement
satisfactory to PNC Bank to effectively assume the obligations of PNC Bank with
respect to such Letters of Credit.

9.7 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the
Issuing Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender and
the Issuing Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any other Loan Document or
any related agreement or any document furnished hereunder or thereunder.

 

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9.8 No Other Duties, etc. Anything herein to the contrary notwithstanding,
neither the Lenders, the Administrative Agent, the Syndication Agent nor the
Documentation Agent listed on the cover page hereof shall have any powers,
duties or responsibilities under this Agreement or any of the other Loan
Documents, except in their capacity, as applicable, as the Administrative Agent,
the Syndication Agent, the Documentation Agent, a Lender or the Issuing Lender
hereunder.

9.9 Administrative Agent’s Fee. The Borrower shall pay to the Administrative
Agent a nonrefundable fee (the “Administrative Agent’s Fee”) under the terms of
a letter (the “Administrative Agent’s Letter”) between the Borrower and
Administrative Agent, as amended from time to time.

9.10 Authorization to Release Collateral and Guarantors. The Lenders and Issuing
Lenders authorize the Administrative Agent to release (i) any Collateral
consisting of assets or equity interests sold or otherwise disposed of in a sale
or other disposition or transfer permitted under Section 7.2.6 [Disposition of
Assets or Subsidiaries] or 7.2.5 [Liquidations, Mergers, Consolidations,
Acquisitions], and (ii) any Guarantor from its obligations under the Guaranty
Agreement if the ownership interests in such Guarantor are sold or otherwise
disposed of or transferred to persons other than Loan Parties or Subsidiaries of
the Loan Parties in a transaction permitted under Section 7.2.6 [Disposition of
Assets or Subsidiaries] or 7.2.5 [Liquidations, Mergers, Consolidations,
Acquisitions].

9.11 No Reliance on Administrative Agent’s Customer Identification Program. Each
Lender acknowledges and agrees that neither such Lender, nor any of its
Affiliates, participants or assignees, may rely on the Administrative Agent to
carry out such Lender’s, Affiliate’s, participant’s or assignee’s customer
identification program, or other obligations required or imposed under or
pursuant to the USA Patriot Act or the regulations thereunder, including the
regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the
“CIP Regulations”), or any other Anti-Terrorism Law, including any programs
involving any of the following items relating to or in connection with any of
the Loan Parties, their Affiliates or their agents, the Loan Documents or the
transactions hereunder or contemplated hereby: (i) any identity verification
procedures, (ii) any recordkeeping, (iii) comparisons with government lists,
(iv) customer notices or (v) other procedures required under the CIP Regulations
or such other Laws.

10. MISCELLANEOUS

10.1 Modifications, Amendments or Waivers. With the written consent of the
Required Lenders, the Administrative Agent, acting on behalf of all the Lenders,
and the Borrower, on behalf of the Loan Parties, may from time to time enter
into written agreements amending or changing any provision of this Agreement or
any other Loan Document or the rights of the Lenders or the Loan Parties
hereunder or thereunder, or may grant written waivers or consents hereunder or
thereunder. Any such agreement, waiver or consent made with such written consent
shall be effective to bind all the Lenders and the Loan Parties; provided, that
no such agreement, waiver or consent may be made which will:

10.1.1 Increase of Commitment. Increase the amount of the Revolving Credit
Commitment of any Lender hereunder without the consent of such Lender;

10.1.2 Extension of Payment; Reduction of Principal Interest or Fees;
Modification of Terms of Payment. Whether or not any Loans are outstanding,
extend the Expiration Date or the time for payment of principal or interest of
any Loan (excluding the due date of any mandatory prepayment of a Loan), the
Commitment Fee or any other fee payable to any Lender, or reduce the principal
amount of or the rate of interest borne by any Loan or reduce the Commitment Fee
or any other fee payable to any Lender, the Commitment Fee or any other fee
payable to any Lender, without the consent of each Lender directly affected
thereby;

10.1.3 Release of Collateral or Guarantor. Except for sales of assets permitted
by Section 7.2.6 [Disposition of Assets or Subsidiaries], release any of the
Collateral or any Guarantor from its Obligations under the Guaranty Agreement
without the consent of all Complying Lenders; or

 

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10.1.4 Miscellaneous. (i) Amend (A) the definition of “Borrowing Base” or the
definitions or calculations contained therein in a manner that results in an
increase to the Borrowing Base, (B) the definition of “Non-Complying Lender”,
(C) the definition of “Complying Lender”, (D) Section 4.2 [Pro Rata Treatment of
Lenders], (E) Section 9.3 [Exculpatory Provisions, Etc.], (F) Section 4.3
[Sharing of Payments by Lenders] or (G) this Section 10.1, (ii) alter any
provision regarding the pro rata treatment of the Lenders or requiring all
Lenders to authorize the taking of any action or (iii) reduce any percentage
specified in the definition of Required Lenders, in each case without the
consent of all of the Complying Lenders;

provided that no agreement, waiver or consent which would modify the interests,
rights or obligations of the Administrative Agent or the Issuing Lender without
the written consent of such Administrative Agent or Issuing Lender, as
applicable, and provided, further, that, if in connection with any proposed
waiver, amendment or modification referred to in Sections 10.1.1 through 10.1.4
above, the consent of the Required Lenders is obtained but the consent of one or
more of such other Lenders whose consent is required is not obtained (each a
“Non-Consenting Lender”), then the Borrower shall have the right to replace any
such Non-Consenting Lender with one or more replacement Lenders pursuant to
Section 4.6.2 [Replacement of a Lender].

10.2 No Implied Waivers; Cumulative Remedies. No course of dealing and no delay
or failure of the Administrative Agent or any Lender in exercising any right,
power, remedy or privilege under this Agreement or any other Loan Document shall
affect any other or future exercise thereof or operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any further exercise
thereof or of any other right, power, remedy or privilege. The rights and
remedies of the Administrative Agent and the Lenders under this Agreement and
any other Loan Documents are cumulative and not exclusive of any rights or
remedies which they would otherwise have.

10.3 Expenses; Indemnity; Damage Waiver.

10.3.1 Costs and Expenses. The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates
(including all accounting, appraisal, environmental, audit, and professional
search services fees and the reasonable fees, charges and disbursements of
counsel for the Administrative Agent), and shall pay all reasonable fees and
reasonable time charges and reasonable disbursements for attorneys who may be
employees of the Administrative Agent, in connection with the syndication of the
credit facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Lender in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder, (iii) all reasonable
out-of-pocket expenses incurred by the Administrative Agent, any Lender or the
Issuing Lender (including the reasonable fees, reasonable charges and reasonable
disbursements of any counsel for the Administrative Agent, any Lender or the
Issuing Lender), and shall pay all reasonable fees and reasonable time charges
for attorneys who may be employees of the Administrative Agent, any Lender or
the Issuing Lender, in connection with the enforcement or protection of its
rights (A) in connection with this Agreement and the other Loan Documents,
including its rights under this Section, or (B) in connection with the Loans
made or Letters of Credit issued hereunder, including all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect
of such Loans or Letters of Credit, and (iv) all reasonable out-of-pocket
expenses of the Administrative Agent’s regular employees and agents engaged
periodically to perform audits of the Loan Parties’ books, records and business
properties.

10.3.2 Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and the Issuing
Lender, and each Related

 

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Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses (including the
reasonable fees, reasonable charges and reasonable disbursements of any counsel
for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from
all reasonable fees and reasonable time charges and reasonable disbursements for
attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or
asserted against any Indemnitee by any third party or by the Borrower or any
other Loan Party arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, (ii) any Loan
or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the Issuing Lender to honor a demand for payment under
a Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) breach of
representations, warranties or covenants of the Borrower under the Loan
Documents, or (iv) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, including any such items or losses
relating to or arising under Environmental Laws or pertaining to environmental
matters, whether based on contract, tort or any other theory, whether brought by
a third party or by the Borrower or any other Loan Party, and regardless of
whether any Indemnitee is a party thereto; provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses (x) are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee or (y) result from
a claim brought by the Borrower or any other Loan Party against an Indemnitee
for breach in bad faith of such Indemnitee’s obligations hereunder or under any
other Loan Document, if the Borrower or such Loan Party has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction.

10.3.3 Reimbursement by Lenders. To the extent that the Borrower for any reason
fails to indefeasibly pay any amount required under Sections 10.3.1 [Costs and
Expenses] or 10.3.2 [Indemnification by the Borrower] to be paid by it to the
Administrative Agent (or any sub-agent thereof), the Issuing Lender or any
Related Party of any of the foregoing, each Lender severally agrees (without
limiting the Borrower’s obligation to do so) to pay to the Administrative Agent
(or any such sub-agent), the Issuing Lender or such Related Party, as the case
may be, such Lender’s Ratable Share (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount, provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent (or any such sub-agent) or the Issuing
Lender in its capacity as such, or against any Related Party of any of the
foregoing acting for the Administrative Agent (or any such sub-agent) or Issuing
Lender in connection with such capacity.

10.3.4 Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable Law, the Borrower shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof.

10.3.5 Payments. All amounts due under this Section shall be payable not later
than ten (10) days after demand therefor.

10.4 Holidays. Whenever payment of a Loan to be made or taken hereunder shall be
due on a day which is not a Business Day such payment shall be due on the next
Business Day (except as provided in Section 3.2 [Interest Periods]) and such
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fees, except that the Loans shall be due on the Business Day preceding the
Expiration Date if the Expiration Date is not a Business Day. Whenever any
payment or action to be made or taken hereunder (other than payment of the
Loans) shall be stated to be due on a day which is not a Business Day, such
payment or action shall be made or taken on the next following Business Day, and
such extension of time shall not be included in computing interest or fees, if
any, in connection with such payment or action.

10.5 Notices; Effectiveness; Electronic Communication.

10.5.1 Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
Section 10.5.2 [Electronic Communications]), all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopier (i) if to a Lender, to it at its address set forth in its
administrative questionnaire, or (ii) if to any other Person, to it at its
address set forth on Schedule 1.1(B).

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient). Notices delivered through electronic communications to the extent
provided in Section 10.5.2 [Electronic Communications], shall be effective as
provided in such Section.

10.5.2 Electronic Communications. Notices and other communications to the
Lenders and the Issuing Lender hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent; provided that the
foregoing shall not apply to notices to any Lender or the Issuing Lender if such
Lender or the Issuing Lender, as applicable, has notified the Administrative
Agent that it is incapable of receiving notices under such Article by electronic
communication. The Administrative Agent or the Borrower may, in its discretion,
agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or communications. Unless
the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement); provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

10.5.3 Change of Address, Etc. Any party hereto may change its address or
telecopier number for notices and other communications hereunder by notice to
the other parties hereto.

10.6 Severability. The provisions of this Agreement are intended to be
severable. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.

10.7 Duration; Survival. All representations and warranties of the Loan Parties
contained herein or made in connection herewith shall survive the execution and
delivery of this Agreement, the completion of the transactions hereunder and
Payment In Full. All covenants and agreements of the Borrower contained herein
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compensation or expenses and indemnification, including those set forth in the
Notes, Section 4 [Payments] and Section 10.3 [Expenses; Indemnity; Damage
Waiver], shall survive Payment in Full. All other covenants and agreements of
the Loan Parties shall continue in full force and effect from and after the date
hereof and until Payment in Full.

10.8 Successors and Assigns.

10.8.1 Successors and Assigns Generally. The provisions of this Agreement shall
be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns permitted hereby, except that neither the
Borrower nor any other Loan Party may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the
Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an assignee in
accordance with the provisions of Section 10.8.2 [Assignments by Lenders],
(ii) by way of participation in accordance with the provisions of Section 10.8.4
[Participations], or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of Section 10.8.6 [Certain Pledges; Successors and
Assigns Generally] (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in Section 10.8.4 [Participations] and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

10.8.2 Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to
it); provided that any such assignment shall be subject to the following
conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum
amount need be assigned; and

(B) in any case not described in clause (i)(A) of this Section 10.8.2, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the principal outstanding balance of the Loans of the assigning Lender subject
to each such assignment (determined as of the date the Assignment and Assumption
Agreement with respect to such assignment is delivered to the Administrative
Agent or, if “Trade Date” is specified in the Assignment and Assumption
Agreement, as of the Trade Date) shall not be less than $5,000,000, in the case
of any assignment in respect of the Revolving Credit Commitment of the assigning
Lender, unless each of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower otherwise consents (each
such consent not to be unreasonably withheld or delayed).

(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loan or the Commitment
assigned.

(iii) Required Consents. No consent shall be required for any assignment except
for the consent of the Administrative Agent (which shall not be unreasonably
withheld or delayed) and:

 

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(A) the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (x) an Event of Default has occurred and is
continuing at the time of such assignment or (y) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund;

(B) the consent of the Issuing Lender (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment that increases the
obligation of the assignee to participate in exposure under one or more Letters
of Credit (whether or not then outstanding).

(iv) Assignment and Assumption Agreement. The parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption
Agreement, together with a processing and recordation fee of $3,500, and the
assignee, if it is not a Lender, shall deliver to the Administrative Agent an
administrative questionnaire provided by the Administrative Agent.

(v) No Assignment to Borrower. No such assignment shall be made to the Borrower
or any of the Borrower’s Affiliates or Subsidiaries.

(vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to Section 10.8.3 [Register], from and after the effective date specified in
each Assignment and Assumption Agreement, the assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption Agreement, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption Agreement, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption Agreement covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto) but shall continue to be entitled to the benefits of Sections 3.4
[LIBOR Rate Unascertainable; Illegality; Increased Costs; Deposits Not
Available], 4.10 [Increased Costs] and 10.3 [Expenses, Indemnity; Damage Waiver]
with respect to facts and circumstances occurring prior to the effective date of
such assignment. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this Section 10.8.2 shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section 10.8.4
[Participations].

10.8.3 Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain a record of the names and addresses of the
Lenders, and the Commitments of, and principal amounts of the Loans owing to,
each Lender pursuant to the terms hereof from time to time. Such register shall
be conclusive, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is in such register pursuant to the terms hereof as
a Lender hereunder for all purposes of this Agreement, notwithstanding notice to
the contrary. Such register shall be available for inspection by the Borrower
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.

10.8.4 Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person or the Borrower or any of the Borrower’s
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans owing to it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative Agent
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Lenders, Issuing Lender shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement.

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver with respect to Sections 10.1.1
[Increase of Commitment, Etc.], 10.1.2 [Extension of Payment, Etc.], or 10.1.3
[Release of Collateral or Guarantor]). Subject to Section 10.8.5 [Limitations
upon Participant Rights Successors and Assigns Generally], the Borrower agrees
that each Participant shall be entitled to the benefits of Sections 3.4 [LIBOR
Rate Unascertainable; Illegality; Increased Costs; Deposits Not Available] and
4.10 [Increased Costs] to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Section 10.8.2 [Assignments by
Lenders]. To the extent permitted by Law, each Participant also shall be
entitled to the benefits of Section 8.2.3 [Setoff] as though it were a Lender;
provided such Participant agrees to be subject to Section 4.3 [Sharing of
Payments by Lenders] as though it were a Lender.

10.8.5 Limitations upon Participant Rights Successors and Assigns Generally. A
Participant shall not be entitled to receive any greater payment under Sections
4.10 [Increased Costs], 4.11 [Taxes] or 10.3 [ Expenses; Indemnity; Damage
Waiver] than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent. A Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of Section 4.11 [Taxes] unless the Borrower is
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 4.11.5 [Status
of Lenders] as though it were a Lender.

10.8.6 Certain Pledges; Successors and Assigns Generally. Any Lender may at any
time pledge or assign a security interest in all or any portion of its rights
under this Agreement to secure obligations of such Lender, including any pledge
or assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

10.9 Confidentiality.

10.9.1 General. Each of the Administrative Agent, the Lenders and the Issuing
Lender agrees to maintain the confidentiality of the Information, except that
Information may be disclosed (i) to its Affiliates and to its and its
Affiliates’ respective partners, directors, officers, employees, agents,
advisors and other representatives (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (ii) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (iii) to the extent required by
applicable Laws or regulations or by any subpoena or similar legal process,
provided, however, that the recipient of such process shall immediately notify
the Borrower of such process and provide Borrower and its Affiliates with
reasonable support should such party choose to contest such process, (iv) to any
other party hereto, (v) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (vi) subject to an agreement containing provisions
substantially the same as those of this Section, to (A) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (B) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (vii) with the consent of the Borrower or
(viii) to

 

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the extent such Information (Y) becomes publicly available other than as a
result of a breach of this Section or (Z) becomes available to the
Administrative Agent, any Lender, the Issuing Lender or any of their respective
Affiliates on a nonconfidential basis from a source other than the Borrower or
the other Loan Parties. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.

10.9.2 Sharing Information With Affiliates of the Lenders. Each Loan Party
acknowledges that from time to time financial advisory and other services may be
offered or provided to the Borrower or one or more of its Affiliates in
connection with this Agreement by any Lender or by one or more Subsidiaries or
Affiliates of such Lender and each of the Loan Parties hereby authorizes each
Lender to share for such purpose any information delivered to such Lender by
such Loan Party and its Subsidiaries pursuant to this Agreement to any such
Subsidiary or Affiliate subject to the provisions of Section 10.9.1 [General].

10.10 Counterparts; Integration; Effectiveness.

10.10.1 Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Loan Documents,
and any separate letter agreements with respect to fees payable to the
Administrative Agent, constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof including
any prior confidentiality agreements and commitments. Except as provided in
Section 6 [Conditions Of Lending And Issuance Of Letters Of Credit], this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto. Delivery of an executed counterpart of a signature
page of this Agreement by telecopy or via electronic mail shall be effective as
delivery of a manually executed counterpart of this Agreement.

10.11 CHOICE OF LAW; SUBMISSION TO JURISDICTION; WAIVER OF VENUE; SERVICE OF
PROCESS; WAIVER OF JURY TRIAL.

10.11.1 Governing Law This Agreement shall be deemed to be a contract under the
Laws of the Commonwealth of Pennsylvania without regard to its conflict of laws
principles. Each standby Letter of Credit issued under this Agreement shall be
subject either to the rules of the Uniform Customs and Practice for Documentary
Credits, as most recently published by the International Chamber of Commerce
(the “ICC”) at the time of issuance (“UCP”) or the rules of the International
Standby Practices (ICC Publication Number 590) (“ISP98”), as determined by the
Issuing Lender, and each trade Letter of Credit shall be subject to UCP, and in
each case to the extent not inconsistent therewith, the Laws of the Commonwealth
of Pennsylvania without regard to is conflict of laws principles.

10.11.2 SUBMISSION TO JURISDICTION. THE BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF MARYLAND SITTING IN
BALTIMORE COUNTY AND OF THE NORTHERN DIVISION OF THE UNITED STATES DISTRICT
COURT FOR THE STATE OF MARYLAND LOCATED IN BALTIMORE CITY, AND ANY APPELLATE
COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT
OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT

 

- 63 -

--------------------------------------------------------------------------------

ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH MARYLAND STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL
AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE ISSUING LENDER
MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.

10.11.3 WAIVER OF VENUE. THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN THIS SECTION 10.11. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT AND AGREES NOT ASSERT ANY SUCH DEFENSE.

10.11.4 SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.5 [NOTICES;
EFFECTIVENESS; ELECTRONIC COMMUNICATION]. NOTHING IN THIS AGREEMENT WILL AFFECT
THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW.

10.11.5 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, ADMINISTRATIVE
AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

10.12 USA Patriot Act Notice. Each Lender that is subject to the USA Patriot Act
and the Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies Loan Parties that pursuant to the requirements of the USA Patriot Act,
it is required to obtain, verify and record information that identifies the Loan
Parties, which information includes the name and address of Loan Parties and
other information that will allow such Lender or Administrative Agent, as
applicable, to identify the Loan Parties in accordance with the USA Patriot Act.

The remainder of this page is left blank intentionally.

Signatures follow on next page.

 

- 64 -

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[SIGNATURE PAGE TO CREDIT AGREEMENT]

IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed this Agreement as of the day and year first above
written.

 

ATTEST:     UNDER ARMOUR, INC.,     a Maryland corporation

/s/ John Stanton

    By:  

/s/ Brad Dickerson

    Printed:  

Brad Dickerson

    Title:  

CFO

    UNDER ARMOUR MANUFACTURING, LLC,     a Maryland limited liability company  
  By:   Under Armour, Inc., a Maryland corporation, its sole member

/s/ John Stanton

    By:  

/s/ Brad Dickerson

    Printed:  

Brad Dickerson

    Title:  

CFO

    UNDER ARMOUR RETAIL, INC.,     a Maryland corporation

/s/ John Stanton

    By:  

/s/ Brad Dickerson

    Printed:  

Brad Dickerson

    Title:  

Treasurer

    UNDER ARMOUR HOLDINGS, INC.,     a Maryland corporation

/s/ John Stanton

    By:  

/s/ Brad Dickerson

    Printed:  

Brad Dickerson

    Title:  

VP

--------------------------------------------------------------------------------

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

ATTEST:     UNDER ARMOUR RETAIL OF MARYLAND, L.L.C.     UNDER ARMOUR RETAIL OF
FLORIDA, LLC     UNDER ARMOUR RETAIL OF OHIO, LLC     UNDER ARMOUR RETAIL OF
CALIFORNIA, LLC     UNDER ARMOUR RETAIL OF TEXAS, LLC     UNDER ARMOUR RETAIL OF
WISCONSIN, LLC     UNDER ARMOUR RETAIL OF MASSACHUSETTS, LLC     UNDER ARMOUR
RETAIL OF PENNSYLVANIA, LLC     UNDER ARMOUR RETAIL OF DELAWARE, LLC     UNDER
ARMOUR RETAIL OF GEORGIA, LLC     UNDER ARMOUR RETAIL OF NEW YORK, LLC     UNDER
ARMOUR RETAIL OF NEW JERSEY, LLC     UNDER ARMOUR RETAIL OF DC, LLC     UNDER
ARMOUR RETAIL OF CONNECTICUT, LLC     UNDER ARMOUR RETAIL OF ILLINOIS, LLC    
UNDER ARMOUR RETAIL OF SOUTH CAROLINA, LLC     UNDER ARMOUR RETAIL OF MICHIGAN,
LLC     UNDER ARMOUR RETAIL OF MAINE, LLC     UNDER ARMOUR RETAIL OF TENNESSEE,
LLC     UNDER ARMOUR RETAIL OF VIRGINIA, LLC,     each a limited liability
company     By:   Under Armour Retail, Inc., its sole member

/s/ John Stanton

    By:  

/s/ Brad Dickerson

    Printed:  

Brad Dickerson

    Title:  

Treasurer

 

--------------------------------------------------------------------------------

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

PNC BANK, NATIONAL ASSOCIATION,

individually and as Administrative Agent

By:  

/s/ John E. Hehir

Printed:   John E. Hehir Title:   Senior Vice President, Corporate Banking

--------------------------------------------------------------------------------

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

SUNTRUST BANK,

individually and as Syndication Agent

By:  

/s/ Gregory A. Farno

Printed:   Gregory A. Farno Title:   Senior Vice President

--------------------------------------------------------------------------------

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

COMPASS BANK,

individually and as Documentation Agent

By:  

/s/ Mike Williams

Printed:   Mike Williams Title:   Vice President

--------------------------------------------------------------------------------

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

BRANCH BANKING & TRUST COMPANY

By:

 

/s/ James E. Davis

Printed:

  James E. Davis

Title:

  Senior Vice President

--------------------------------------------------------------------------------

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

BANK OF AMERICA, N.A.

By:

 

/s/ Mary Giermek

Printed:

  Mary Giermek

Title:

  Senior Vice President

--------------------------------------------------------------------------------

SCHEDULE 1.1(A)

PRICING GRID—

VARIABLE PRICING AND FEES BASED ON LEVERAGE RATIO

(PRICING EXPRESSED IN BASIS POINTS)

 

Level

 

Leverage Ratio

 

Commitment

Fee

 

Letter of

Credit Fee

 

Revolving Credit

Base Rate Spread

 

Revolving

Credit LIBOR

Rate Spread

I   Less than or equal to 1.0 to 1.0   37.5   200   Base Rate + 100   LIBOR +
200 II   Greater than 1.0 to 1.0 but less than or equal to 2.0 to 1.0   45   225
  Base Rate + 125   LIBOR + 225 III   Greater than 2.0 to 1.0   50   250   Base
Rate + 150   LIBOR + 250

For purposes of determining the Applicable Margin, the Applicable Commitment Fee
Rate and the Applicable Letter of Credit Fee Rate:

(a) The Applicable Margin, the Applicable Commitment Fee Rate and the Applicable
Letter of Credit Fee Rate to be determined on the Closing Date shall be based on
the Leverage Ratio computed on such date pursuant to a Compliance Certificate to
be delivered on the Closing Date.

(b) The Applicable Margin, the Applicable Commitment Fee Rate and the Applicable
Letter of Credit Fee Rate shall be recomputed as of the end of each fiscal
quarter ending after the Closing Date based on the Leverage Ratio as of such
quarter end. Any increase or decrease in the Applicable Margin, the Applicable
Commitment Fee Rate or the Applicable Letter of Credit Fee Rate computed as of a
quarter end shall be effective on the date on which the Compliance Certificate
evidencing such computation is due to be delivered under Section 7.3.4
[Compliance Certificate].

(c) If, as a result of any restatement of or other adjustment to the financial
statements of the Borrower or for any other reason, the Borrower or the Lenders
determine that (i) the Leverage Ratio as calculated by the Borrower as of any
applicable date was inaccurate and (ii) a proper calculation of the Leverage
Ratio would have resulted in higher pricing for such period, the Borrower shall
immediately and retroactively be obligated to pay to the Administrative Agent
for the account of the applicable Lenders, promptly on demand by the
Administrative Agent (or, after the occurrence of an actual or deemed entry of
an order for relief with respect to the Borrower under the Bankruptcy Code of
the United States, automatically and without further action by the
Administrative Agent, any Lender or the Issuing Lender), an amount equal to the
excess of the amount of interest and fees that should have been paid for such

 

SCHEDULE 1.1(A) - 1

--------------------------------------------------------------------------------

period over the amount of interest and fees actually paid for such period. This
paragraph shall not limit the rights of the Administrative Agent, any Lender or
the Issuing Lender, as the case may be, under Section 2.9 [Letter of Credit
Subfacility] or 3.3 [Interest After Default] or 8 [Default]. The Borrower’s
obligations under this paragraph shall survive the termination of the
Commitments and the repayment of all other Obligations hereunder.

 

SCHEDULE 1.1(A) - 2

--------------------------------------------------------------------------------

SCHEDULE 1.1(B)

COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES

Page 1 of 2

Part 1—Commitments of Lenders and Addresses for Notices to Lenders

 

Lender

   Amount of
Commitment
for Revolving
Credit Loans    Ratable Share  

Name: PNC Bank, National Association

     

Address: The PNC Financial Services Group

     

2 Hopkins Plaza, 21st Floor

     

Baltimore, MD 21201

     

Attention: John E. Hehir

   $ 50,000,000    27.777777778 %

Telephone:

     (410) 237 4573      

Telecopy:

     (410) 237 5700      

E-Mail:

     John.Hehir@PNC.com      

Name: SunTrust Bank

     

Address: 120 East Baltimore St., 25th Fl.

     

Baltimore, MD 21202

     

Attention: Gregory A. Farno

   $ 40,000,000    22.222222222 %

Telephone:

     (410) 986-1673      

Telecopy:

     (410)986-1920      

E-Mail:

     gregory.farno@suntrust.com      

Name: Compass Bank

     

Address: 1340 Smith Avenue, Suite 200

     

Baltimore, MD 21209

     

Attention: Mike Williams

   $ 40,000,000    22.222222222 %

Telephone:

     (410) 779-1215      

Telecopy:

     (410) 779-1310      

E-Mail:

     mike.williams@compassbank.com      

Name: Bank of America, N.A.

     

Address: 100 S. Charles Street

     

Baltimore, MD 21201

   $ 25,000,000    13.888888889 %

Attention: Mary Giermek

     

Telephone:

     (410) 547-4262      

Telecopy:

     (410) 539-1454      

E-Mail:

     mary.giermek@bankofamerica.com      

 

SCHEDULE 1.1(B) - 1

--------------------------------------------------------------------------------

Name: Branch Banking & Trust Company

     

Address: 8200 Greensboro Dr., Suite 800

     

McLean, VA 22102

   $ 25,000,000    13.888888889 %

Attention: James E. Davis

     

Telephone:

     (703) 442-5561      

Telecopy:

     (703) 442-5544      

E-Mail:

     JEDavis@bbandt.com      

Total

        $ 180,000,000    100 %

 

SCHEDULE 1.1(B) - 2

--------------------------------------------------------------------------------

SCHEDULE 1.1(B)

COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES

Page 2 of 2

 

Part 2—Addresses for Notices to Borrower, Guarantors and Administrative Agent:

 

ADMINISTRATIVE AGENT

Name: PNC Bank, National Association

Agency Services

Mail Stop: P7-PFSC-04-I

Address: 500 First Avenue

Pittsburgh, PA 15219

Telephone:

     (412) 762-6442

Telecopy:

     (412) 762-8672

and

    

Name: PNC Bank, National Association

Address: The PNC Financial Services Group

2 Hopkins Plaza, 21st Floor

Baltimore, MD 21201

Attention: John E. Hehir

Telephone:

     (410) 237 4573

Telecopy:

     (410) 237 5700

E-Mail:

     John.Hehir@PNC.com

BORROWER:

Name: Under Armour, Inc.

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

GUARANTORS:

Name: Under Armour Manufacturing, LLC

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

--------------------------------------------------------------------------------

Name: Under Armour Retail, Inc.

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

Name: Under Armour Holdings, Inc.

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

Name: Under Armour Retail of Texas, LLC

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

Name: Under Armour Retail of Ohio, LLC

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

Name: Under Armour Retail of Maryland, LLC

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

Name: Under Armour Retail of Florida, LLC

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

--------------------------------------------------------------------------------

Name: Under Armour Retail of Virginia, LLC

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

Name: Under Armour Retail of California, LLC

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

Name: Under Armour Retail of Wisconsin, LLC

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

Name: Under Armour Retail of Massachusetts, LLC

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

Name: Under Armour Retail of New York, LLC

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

Name: Under Armour Retail of New Jersey, LLC

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

--------------------------------------------------------------------------------

Name: Under Armour Retail of Georgia, LLC

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

Name: Under Armour Retail of Pennsylvania, LLC

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

Name: Under Armour Retail of DC, LLC

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

Name: Under Armour Retail of Delaware, LLC

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

Name: Under Armour Retail of Connecticut, LLC

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

Name: Under Armour Retail of Illinois, LLC

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

--------------------------------------------------------------------------------

Name: Under Armour Retail of South Carolina, LLC

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

Name: Under Armour Retail of Michigan, LLC

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

Name: Under Armour Retail of Maine, LLC

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

Name: Under Armour Retail of Tennessee, LLC

Address: 1020 Hull Street

Baltimore, MD 21230

Attention: Chief Financial Officer

Telephone:

     (410) 454-6653

Telecopy:

     (410) 234-1911

E-Mail:

     bdickerson@underarmour.com

--------------------------------------------------------------------------------

SCHEDULE 1.1(C)

QUALIFIED ACCOUNTS RECEIVABLE

Upon delivery to the Administrative Agent of each Schedule of Accounts
Receivable, the Administrative Agent shall make a determination, in its sole
discretion, as to which Accounts Receivable listed thereon shall be deemed
Qualified Accounts Receivable. An Account Receivable of any Loan Party shall not
be considered a Qualified Account Receivable unless the Administrative Agent
determines, in its sole discretion, that such Account Receivable has met the
following minimum requirements:

(i) the Account Receivable represents a complete bona fide transaction for goods
sold and delivered or services rendered (but excluding any amounts in the nature
of a service charge added to the amount due on an invoice because the invoice
has not been paid when due) which requires no further act under any
circumstances on the part of such Loan Party to make such Account Receivable
payable by the Account Receivable Debtor; the Account Receivable arises from an
arm’s-length transaction in the ordinary course of such Loan Party’s business
between such Loan Party and an Account Receivable Debtor which is not an
Affiliate of any Loan Party or an executive officer of the Borrower or any
Affiliate of any Loan Party, or a member of the immediate family of an executive
officer of any Loan Party or any Affiliate of any Loan Party;

(ii) the Account Receivable shall (a) have been outstanding for less than one
hundred twenty (120) days from the invoice date, (b) have been outstanding for
less than sixty (60) days of its due date, (c) be payable by an Account
Receivable Debtor for whom no more than 35% of their Accounts Receivable have
been outstanding for more than one hundred twenty (120) days from the invoice
date or have been outstanding for less than sixty (60) days of its due date, and
(d) include only up to and including, (1) in the case of each of Dick’s Sporting
Goods, Inc. and The Sports Authority, Inc., 40% of the difference between the
aggregate amount of all outstanding Accounts Receivable and the sum of (a) and
(b) above, and (2) in the case of all other Account Receivable Debtors, 20% of
the difference between the aggregate amount of all outstanding Accounts
Receivable and the sum of (a) and (b) above;

(iii) the goods the sale of which gave rise to the Account Receivable were
shipped or delivered or provided to the Account Receivable Debtor on an absolute
sale basis and not on a bill and hold sale basis, a consignment sale basis, a
guaranteed sale basis, a sale or return basis, or on the basis of any other
similar understanding, and no part of such goods has been returned or rejected;

(iv) the Account Receivable is not evidenced by chattel paper or an instrument
of any kind;

(v) the Account Receivable Debtor with respect to the Account Receivable (a) is
Solvent or has taken no action to give public notice that it is not Solvent, and
(b) is not the subject of any bankruptcy or insolvency proceedings of any kind
or of any other proceeding or action, threatened in writing or pending, which
could reasonably be expected to have a materially adverse effect on its
business;

(vi) (a) the Account Receivable Debtor is not located outside of the United
States of America or (b) if the Account Receivable Debtor is located outside of
the

--------------------------------------------------------------------------------

United States, the Account Receivable is supported by a letter of credit or FICA
insurance reasonably deemed adequate and acceptable by the Administrative Agent;

(vii) (a) the Account Receivable Debtor is not the government of the United
States of America, or any department, agency or instrumentality thereof, or
(b) if the Account Receivable Debtor is an entity mentioned in clause (vii)(a),
the Federal Assignment of Claims Act (or applicable similar legislation) has
been fully complied with so as to validly perfect the Lenders’ Prior Security
Interest, subject to Permitted Liens, if any, to the Administrative Agent’s
satisfaction;

(viii) the Account Receivable is a valid, binding and legally enforceable
obligation of the Account Receivable Debtor with respect thereto and is not
subject to any dispute, condition, contingency, offset, recoupment, reduction,
claim for credit, allowance, adjustment, counterclaim or defense on the part of
such Account Receivable Debtor, and no facts exist which may provide a basis for
any of the foregoing in the present or future;

(ix) the Account Receivable is subject to the Administrative Agent’s and the
Lenders’ Prior Security Interest, subject to Permitted Liens, if any, and is not
subject to any other Lien, claim, encumbrance or security interest whatsoever;

(x) the Account Receivable is evidenced by an invoice or other documentation and
arises from a contract which is in form and substance reasonably satisfactory to
the Administrative Agent;

(xi) the Loan Parties have observed and complied in all material respects with
all laws of the state in which the Account Receivable Debtor or the Account
Receivable is located which, if not materially observed and complied with, would
deny to the Loan Parties access to the courts of such state;

(xii) the Account Receivable is not subject to any provision prohibiting its
assignment or requiring notice of or consent to such assignment;

(xiii) the goods giving rise to the Account Receivable were not, at the time of
sale thereof, subject to any Lien or encumbrance except the Administrative Agent
and the Lenders’ Prior Security Interest or any Permitted Lien;

(xiv) the Account Receivable is payable in freely transferable United States
Dollars; and

(xv) the Account Receivable is not, or should not be, disqualified for any other
reason generally accepted and reasonable in the commercial finance business.

In addition to the foregoing requirements, Accounts Receivable of any Account
Receivable Debtor which are otherwise Qualified Accounts Receivable shall be
reduced to the extent of any accounts payable by any of the Loan Parties to such
Account Receivable Debtor; provided that the Administrative Agent in its sole
discretion may determine that none of the Accounts Receivable in respect to such
an Account Receivable Debtor shall be Qualified Accounts Receivable in the event
there exists payables owing to such Account Receivable Debtor in excess of 25%
of the corresponding Account Receivables balance.

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SCHEDULE 1.1(D)

QUALIFIED INVENTORY

Upon delivery to the Administrative Agent of each Schedule of Inventory, the
Administrative Agent shall make a determination, in its sole discretion, as to
which Inventory listed thereon shall be deemed Qualified Inventory. Inventory
held by any Loan Party shall not be considered Qualified Inventory unless the
Administrative Agent determines, in its sole discretion, that such Inventory has
met the following minimum requirements:

(i) the Inventory is finished goods, but excluding any goods which have been
shipped, delivered, sold by, purchased by or provided to such Loan Party on a
bill and hold, consignment sale, guaranteed sale, or sale or return basis, or
any other similar basis or understanding other than an absolute sale;

(ii) the Inventory is new, of good and merchantable quality;

(iii) the Inventory is located on premises listed on Schedule A to the Security
Agreement and, with respect to inventory locations at facilities leased to any
of the Loan Parties, the Administrative Agent has received a Landlord’s Waiver
in favor of the Administrative Agent substantially in the form of Exhibit
6.1.1(xiii) hereto, or is Inventory which is in transit and is so identified on
the relevant Schedule of Inventory;

(iv) the Inventory is not stored with a bailee, warehouseman, consignee or
similar party unless the Administrative Agent has given its prior written
consent and such Loan Party has caused such bailee, warehouseman, consignee or
similar party to issue and deliver to the Administrative Agent, in form and
substance acceptable to the Administrative Agent, warehouse receipts or similar
type documentation therefor in the Administrative Agent’s name;

(v) the Inventory is subject to the Administrative Agent’s and the Lenders’
Prior Security Interest, subject to Permitted Liens, if any, and is not subject
to any other Lien;

(vi) the Inventory has not been manufactured in violation of any applicable
federal minimum wage or overtime laws, including, without limitation, the Fair
Labor Standards Act, 29 U.S.C. § 215(a)(1); and

(vii) the Inventory is not, and should not be, disqualified for any other reason
generally accepted in the commercial finance business.

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SCHEDULE 7.1.3

INSURANCE REQUIREMENTS RELATING TO THE COLLATERAL

COVENANTS:

At the request of the Administrative Agent, the Loan Parties shall deliver to
the Administrative Agent and each of the Lenders (x) on the Closing Date and
annually thereafter an original certificate of insurance signed by the Loan
Parties’ independent insurance broker describing and certifying as to the
existence of the insurance on the Collateral required to be maintained by this
Agreement and the other Loan Documents, together with a copy of the endorsement
described in the next sentence attached to such certificate and (y) from time to
time a summary schedule indicating all insurance on the Collateral then in force
with respect to each of the Loan Parties. Such policies of insurance shall
contain special endorsements, in form and substance reasonably acceptable to the
Administrative Agent, which shall include the provisions set forth below. The
applicable Loan Parties shall notify the Administrative Agent promptly of any
occurrence causing a material loss or decline in value of the Collateral and the
estimated (or actual, if available) amount of such loss or decline. Any monies
received by the Administrative Agent constituting insurance proceeds or
condemnation proceeds may, at the option of the Administrative Agent, (i) be
applied by the Administrative Agent to the payment of the Loans in such manner
as the Administrative Agent may reasonably determine, or (ii) be disbursed to
the applicable Loan Parties on such terms as are deemed appropriate by the
Administrative Agent for the repair, restoration and/or replacement of property
in respect of which such proceeds were received.

ENDORSEMENT:

(i) specify the Administrative Agent as an , mortgagee and lender loss payee as
its interests may appear, with the understanding that any obligation imposed
upon the insured (including the liability to pay premiums) shall be the sole
obligation of the applicable Loan Parties,

(ii) provide that the applicable Loan Parties may waive subrogation against any
party provided that the waiver of subrogation is in writing and executed prior
to the occurrence of any loss and evidence of this being permitted by the
insurers shall be provided to the Administrative Agent,

(iii) provide, except in the case of public liability insurance and workmen’s
compensation insurance, that all insurance proceeds for losses of less than
$5,000,000 shall be adjusted with and payable to the applicable Loan Parties and
that all insurance proceeds for losses of $5,000,000 or more shall be adjusted
with the applicable Loan Parties and payable to the Administrative Agent, and

(iv) provide that no cancellation of such policies for any reason ( except for
non-payment of premium) shall be effective until at least thirty (30) days after
receipt by the Administrative Agent of written notice of such cancellation.

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EXHIBIT 1.1(A)

FORM OF

ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Assignment”) is dated as of as
of                              , 20        1 (the “Effective Date”) and is
entered into by and between [Insert name of Assignor] (the “Assignor”) and
[Insert name of Assignee] (the “Assignee”). Capitalized terms used but not
defined herein shall have the meanings given to them in the Credit Agreement
identified below (as amended, the “Credit Agreement”), receipt of a copy of
which is hereby acknowledged by the Assignee. The Standard Terms and Conditions
set forth in Annex 1 attached hereto are hereby agreed to and incorporated
herein by reference and made a part of this Assignment as if set forth herein in
full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below, the interest in and to all of the
Assignor’s rights and obligations under the Credit Agreement and any other
documents or instruments delivered pursuant thereto that represents the amount
and percentage interest identified below of all of the Assignor’s outstanding
rights and obligations under the respective facilities identified below
(including, to the extent included in any such facilities, Letters of Credit and
Swing Loans) (the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment,
without representation or warranty by the Assignor.

 

1.      Assignor:

  

 

  

2.      Assignee:

  

 

   [and is an Affiliate2]

3.      Borrower:

  

Under Armour, Inc.

  

4.      Administrative Agent:

   PNC Bank, National Association, as the Administrative Agent under the Credit
Agreement

5.      Credit Agreement:

   The Credit Agreement dated as of January 28, 2009 among Under Armour, Inc.,
the Guarantors party thereto, the Lenders party thereto, PNC Bank, National
Association, as Administrative Agent for the Lenders, SunTrust Bank, as
Syndication Agent, and Compass Bank, as Documentation Agent.

 

1

To be inserted by the Administrative Agent and which shall be the Effective Date
of recordation of transfer in the register therefore. Assignor shall pay a fee
of $3,500 to the Administrative Agent in connection with the Assignment.

2

Insert if applicable.

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6. Assigned Interest:

 

Facility Assigned     Aggregate
Amount of
Commitment/Loans
for all Lenders   Amount of
Commitment/Loans
Assigned   Percentage
Assigned of
Commitment/Loans3                                 4   $                         
  $                                                     %
                                      $                            $
                                                    %
                                      $                            $
                                                    %

The remainder of this page is left blank intentionally.

Signatures follow on next page.

 

3

Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

4

Fill in the appropriate terminology for the types of facilities under the Credit
Agreement that are being assigned under this Assignment (e.g. “Revolving Credit
Commitment”, “Term Loan Commitment”, etc.). The same percentage of each facility
owned by the Assignor shall be assigned to the Assignee.

 

2

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IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed and delivered this Assignment as of the day and year
first set forth above.

The terms set forth in this Assignment are hereby agreed to:

 

ASSIGNOR [NAME OF ASSIGNOR] By:  

 

Name:   Title:   ASSIGNEE [NAME OF ASSIGNEE] By:  

 

Name:   Title:  

 

Accepted:

PNC BANK, NATIONAL ASSOCIATION, as
Administrative Agent

By  

 

Name:   Title:  

 

3

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ANNEX 1

STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT

AND ASSUMPTION AGREEMENT

1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and to consummate the transactions contemplated hereby;
and (b) assumes no responsibility with respect to (i) any statements, warranties
or representations made in or in connection with any Loan Document, (ii) the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement or any other Loan Document, other than this Assignment,
or any Collateral thereunder, (iii) the financial condition of the Loan Parties,
any of their Subsidiaries or Affiliates or any other Person obligated in respect
of any Loan Document or (iv) the performance or observance by the Loan Parties,
any of their Subsidiaries or Affiliates or any other Person of any of their
respective obligations under any Loan Document.

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and to consummate the transactions contemplated hereby and to
become a Lender under the Credit Agreement, (ii) it meets all requirements, if
any, of an eligible assignee under the Credit Agreement, (iii) from and after
the Effective Date hereof, it shall be bound by the provisions of the Credit
Agreement and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to Sections 7.3.2 and 7.3.3 thereof, as applicable, and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and to purchase the
Assigned Interest on the basis of which it has made such analysis and decision,
and (v) if Assignee is not incorporated or organized under the laws of the
United States of America or any State thereof, attached to the Assignment is any
documentation required to be delivered by it pursuant to the terms of the Credit
Agreement, duly completed and executed by the Assignee; and (b) agrees that
(i) it will, independently and without reliance on the Administrative Agent, the
Assignor or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents, and (ii) it will perform
in accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

2. Payments. From and after the Effective Date hereof, the Administrative Agent
shall make all payments in respect of the Assigned Interest (including payments
of principal, interest, fees and other amounts) to the Assignor for amounts
which have accrued to but excluding the Effective Date hereof and to the
Assignee for amounts which have accrued from and after the Effective Date.

3. General Provisions. This Assignment shall be binding upon, and inure to the
benefit of, the parties hereto and their respective successors and assigns. This
Assignment may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature
page of this Assignment by telecopy shall be effective as delivery of a manually
executed counterpart of this Assignment. This Assignment shall be governed by,
and construed in accordance with, the laws of the Commonwealth of Pennsylvania.

 

4

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EXHIBIT 1.1(G)(1)

FORM OF GUARANTOR JOINDER AND ASSUMPTION AGREEMENT

THIS GUARANTOR JOINDER AND ASSUMPTION AGREEMENT is made as of
[                        ], 20[    ], by
[                                        ], a [                    ]
[corporation/partnership/limited liability company] (the “New Guarantor”).

Background

Reference is made to the (i) Credit Agreement dated as January 28, 2009, as the
same may be modified, supplemented, or amended (the “Credit Agreement”) by and
among Under Armour, Inc., a Maryland corporation (the “Borrower”), the
Guarantors party thereto, PNC Bank, National Association, in its capacity as
administrative agent for the Lenders party thereto (the “Administrative Agent”),
Lenders party thereto, SunTrust Bank, as Syndication Agent, and Compass Bank, as
Documentation Agent, (ii) the Continuing Agreement of Guaranty and Suretyship
dated as of January 28, 2009 (the “Guaranty”) of Guarantors issued to the
Lenders and the Administrative Agent, as the same may be modified, supplemented,
or amended, and (iii) the other Loan Documents referred to in the Credit
Agreement, as the same may be modified, supplemented, or amended.

Agreement

Capitalized terms defined in the Credit Agreement are used herein as defined
therein. In consideration of the New Guarantor becoming a Guarantor under the
terms of the Credit Agreement and in consideration of the value of the
synergistic benefits received by New Guarantor as a result of becoming
affiliated with or being formed by the Borrower and the Guarantors, the New
Guarantor hereby agrees that effective as of the date hereof it hereby is, and
shall be deemed to be, a Guarantor under the Credit Agreement, the Guaranty and
each of the other Loan Documents to which the Guarantors are a party and agrees
that from the date hereof and so long as any Loan or any Commitment of any
Lender shall remain outstanding and until the payment in full of the
Obligations, New Guarantor has assumed the obligations of a “Guarantor” under,
and New Guarantor shall perform, comply with and be subject to and bound by,
jointly and severally, each of the terms, provisions and waivers of the Credit
Agreement and the Guaranty and each of the other Loan Documents which are stated
to apply to or are made by a “Guarantor”. Without limiting the generality of the
foregoing, the New Guarantor hereby represents and warrants that (i) each of the
representations and warranties set forth in Section 5 of the Credit Agreement
applicable to New Guarantor as a Guarantor is true and correct as to New
Guarantor on and as of the date hereof, and (ii) New Guarantor has heretofore
received a true and correct copy of the Agreement, the Guaranty, and each of the
other Loan Documents (including any modifications thereof or supplements or
waivers thereto) in effect on the date hereof.

New Guarantor hereby makes, affirms, and ratifies in favor of the Lenders and
the Administrative Agent the Credit Agreement, the Guaranty and each of the
other Loan Documents given by the Guarantors to Administrative Agent and any of
the Lenders.

--------------------------------------------------------------------------------

New Guarantor is simultaneously delivering to the Administrative Agent the
following documents together with the Guarantor Joinder required under
Section 7.2.8 [Subsidiaries, Partnerships and Joint Ventures]:

Updated Schedules to Credit Agreement. [Note:

updates to schedules do not cure any breach of

warranties].

 

Schedule No. and Description

   Delivered    Not
Delivered

Schedule 5.1.1 –

 

Qualifications To Do Business

   ¨    ¨

Schedule 5.1.2 –

 

Existing Subsidiaries

   ¨    ¨

Schedule 5.1.5 –

 

Litigation

   ¨    ¨

Schedule 5.1.10 –

 

Patents, Trademarks, Copyrights, Licenses, Etc.

   ¨    ¨

Schedule 5.1.11 –

 

Liens in the Collateral

   ¨    ¨

Schedule 5.1.14 –

 

Environmental Disclosures

   ¨    ¨

Schedule 6.1.1 –

 

Opinion of Counsel

   ¨    ¨

Any other Schedules to Credit Agreement that necessitate updates after giving
effect to this Guarantor Joinder and Assumption Agreement

   ¨    ¨

In furtherance of the foregoing, New Guarantor shall execute and deliver or
cause to be executed and delivered at any time and from time to time such
further instruments and documents and do or cause to be done such further acts
as may be reasonably necessary in the reasonable opinion of Administrative Agent
to carry out more effectively the provisions and purposes of this Guarantor
Joinder and Assumption Agreement.

The remainder of this page is left blank intentionally.

Signatures follow on next page.

 

2

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[SIGNATURE PAGE TO GUARANTOR JOINDER AND ASSUMPTION AGREEMENT]

IN WITNESS WHEREOF, and intending to be legally bound hereby, the New Guarantor
has duly executed this Guarantor Joinder and Assumption Agreement and delivered
the same to the Administrative Agent for the benefit of the Lenders, as of the
date and year first above written.

 

[  

 

  ]

 

By  

 

  (SEAL) Name:  

 

Title:  

 

 

Acknowledged and accepted:

PNC BANK, NATIONAL ASSOCIATION, as

Administrative Agent

By:  

 

Name:  

 

Title:  

 

 

3

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CONTINUING AGREEMENT OF GUARANTY AND SURETYSHIP

THIS CONTINUING AGREEMENT OF GUARANTY AND SURETYSHIP (this “Guaranty”), dated as
of this 28th day of January, 2009, is jointly and severally given by each of the
undersigned and each of the other Persons which become Guarantors hereunder from
time to time (each a “Guarantor” and collectively the “Guarantors”) in favor of
PNC Bank, National Association, in its capacity as administrative agent (the
“Agent”) for the Lenders (as hereinafter defined) in connection with that Credit
Agreement, dated as of the date hereof, by and among Under Armour, Inc., a
Maryland corporation (the “Borrower”), the Guarantors now or hereafter party
thereto, the Agent, the Lenders now or hereafter party thereto (the “Lenders”),
SunTrust Bank, as Syndication Agent, and Compass Bank, as Documentation Agent
(as amended, restated, modified, or supplemented from time to time hereafter,
the “Credit Agreement”). Capitalized terms not otherwise defined herein shall
have the respective meanings ascribed to them by the Credit Agreement and the
rules of construction set forth in Section 1.2 [Construction] of the Credit
Agreement shall apply to this Guaranty.

1. Guarantied Obligations. To induce the Agent and the Lenders to make loans and
grant other financial accommodations to the Borrower under the Credit Agreement,
each Guarantor hereby jointly and severally unconditionally, and irrevocably,
guaranties to the Agent, each Lender and any Lender Provided Interest Rate Hedge
(an “IRH Provider”); and becomes surety, as though it was a primary obligor for,
the full and punctual payment and performance when due (whether on demand, at
stated maturity, by acceleration, or otherwise and including any amounts which
would become due but for the operation of an automatic stay under the federal
bankruptcy code of the United States or any similar laws of any country or
jurisdiction) of all Obligations of the Borrower or any other Guarantor to the
Agent or any of the Lenders or any Affiliate of any Lender under or in
connection with the Credit Agreement or any other Loan Document, whether for
principal, interest, fees, indemnities, expenses, or otherwise, and all
refinancings or refundings thereof, whether such obligations, liabilities, or
indebtedness are direct or indirect, secured or unsecured, joint or several,
absolute or contingent, due or to become due, whether for payment or
performance, now existing or hereafter arising (and including obligations,
liabilities, and indebtedness arising or accruing after the commencement of any
bankruptcy, insolvency, reorganization, or similar proceeding with respect to
the Borrower or any Guarantor or which would have arisen or accrued but for the
commencement of such proceeding, even if the claim for such obligation,
liability, or indebtedness is not enforceable or allowable in such proceeding,
and including all Obligations, regardless of whether any such extensions of
credit are in excess of the amount committed under or contemplated by the Loan
Documents or are made in circumstances in which any condition to extension of
credit is not satisfied) (all of the foregoing obligations, liabilities and
indebtedness are referred to herein collectively as the “Guarantied Obligations”
and each as a “Guarantied Obligation”). Without limitation of the foregoing, any
of the Guarantied Obligations shall be and remain Guarantied Obligations
entitled to the benefit of this Guaranty if the Agent or any of the Lenders (or
any one or more assignees or transferees thereof) from time to time assign or
otherwise transfer all or any portion of their respective rights and obligations
under the Loan Documents, or any other Guarantied Obligations, to any other
Person in accordance with the terms of the Credit Agreement. In furtherance of
the foregoing, each Guarantor jointly and severally agrees as follows.

--------------------------------------------------------------------------------

2. Guaranty. Each Guarantor hereby promises to pay and perform all such
Guarantied Obligations immediately upon demand of the Agent and the Lenders or
any one or more of them. All payments made hereunder shall be made by each
Guarantor in immediately available funds in United States Dollars and shall be
made without setoff, counterclaim, withholding, or other deduction of any
nature.

3. Obligations Absolute. The obligations of the Guarantors hereunder shall not
be discharged or impaired or otherwise diminished by the failure, default,
omission, or delay, willful or otherwise, by any Lender, the Agent, or any
Borrower or any other obligor on any of the Guarantied Obligations, or by any
other act or thing or omission or delay to do any other act or thing which may
or might in any manner or to any extent vary the risk of any Guarantor or would
otherwise operate as a discharge of any Guarantor as a matter of law or equity.
Each of the Guarantors agrees that the Guarantied Obligations will be paid and
performed strictly in accordance with the terms of the Loan Documents. Without
limiting the generality of the foregoing, each Guarantor hereby consents to, at
any time and from time to time, and the joint and several obligations of each
Guarantor hereunder shall not be diminished, terminated, or otherwise similarly
affected by any of the following:

(a) any lack of genuineness, legality, validity, enforceability or allowability
(in a bankruptcy, insolvency, reorganization or similar proceeding, or
otherwise), or any avoidance or subordination, in whole or in part, of any Loan
Document or any of the Guarantied Obligations and regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of the Guarantied Obligations, any of the terms of the Loan Documents, or any
rights of the Agent or the Lenders or any other Person with respect thereto;

(b) any increase, decrease, or change in the amount, nature, type or purpose of
any of, or any release, surrender, exchange, compromise or settlement of any of
the Guarantied Obligations (whether or not contemplated by the Loan Documents as
presently constituted); any change in the time, manner, method, or place of
payment or performance of, or in any other term of, any of the Guarantied
Obligations; any execution or delivery of any additional Loan Documents; or any
amendment, modification or supplement to, or refinancing or refunding of, any
Loan Document or any of the Guarantied Obligations;

(c) any failure to assert any breach of or default under any Loan Document or
any of the Guarantied Obligations; any extensions of credit in excess of the
amount committed under or contemplated by the Loan Documents, or in
circumstances in which any condition to such extensions of credit has not been
satisfied; any other exercise or non-exercise, or any other failure, omission,
breach, default, delay, or wrongful action in connection with any exercise or
non-exercise, of any right or remedy against the Borrower or any other Person
under or in connection with any Loan Document or any of the Guarantied
Obligations; any refusal of payment or performance of any of the Guarantied
Obligations, whether or not with any reservation of rights against any
Guarantor; or any application of collections (including but not limited to
collections resulting from realization upon any direct or indirect security for
the Guarantied Obligations) to other obligations, if any, not entitled to the
benefits of this Guaranty, in preference to Guarantied Obligations entitled to
the benefits of this Guaranty, or if any

 

- 2 -

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collections are applied to Guarantied Obligations, any application to particular
Guarantied Obligations;

(d) any taking, exchange, amendment, modification, waiver, supplement,
termination, subordination, compromise, release, surrender, loss, or impairment
of, or any failure to protect, perfect, or preserve the value of, or any
enforcement of, realization upon, or exercise of rights, or remedies under or in
connection with, or any failure, omission, breach, default, delay, or wrongful
action by the Agent or the Lenders, or any of them, or any other Person in
connection with the enforcement of, realization upon, or exercise of rights or
remedies under or in connection with, or, any other action or inaction by any of
the Agent or the Lenders, or any of them, or any other Person in respect of, any
direct or indirect security for any of the Guarantied Obligations. As used in
this Guaranty, “direct or indirect security” for the Guarantied Obligations, and
similar phrases, includes any collateral security, guaranty, suretyship, letter
of credit, capital maintenance agreement, put option, subordination agreement,
or other right or arrangement of any nature providing direct or indirect
assurance of payment or performance of any of the Guarantied Obligations, made
by or on behalf of any Person;

(e) any merger, consolidation, liquidation, dissolution, winding-up, charter
revocation, or forfeiture, or other change in, restructuring or termination of
the corporate structure or existence of, the Borrower or any other Person; any
bankruptcy, insolvency, reorganization or similar proceeding with respect to the
Borrower or any other Person; or any action taken or election made by the Agent
or the Lenders, or any of them (including but not limited to any election under
Section 1111(b)(2) of the United States Bankruptcy Code), the Borrower, or any
other Person in connection with any such proceeding;

(f) any defense, setoff, or counterclaim which may at any time be available to
or be asserted by the Borrower or any other person with respect to any Loan
Document or any of the Guarantied Obligations; or any discharge by operation of
law or release of the Borrower or any other Person from the performance or
observance of any Loan Document or any of the Guarantied Obligations; or

(g) any other event or circumstance, whether similar or dissimilar to the
foregoing, and whether known or unknown, which might otherwise constitute a
defense available to, or limit the liability of, any Guarantor, a guarantor or a
surety, excepting only full, strict, and indefeasible payment and performance of
the Guarantied Obligations in full.

Each Guarantor acknowledges, consents, and agrees that new Guarantors may join
in this Guaranty pursuant to Section 7.2.8 of the Credit Agreement and each
Guarantor affirms that its obligations shall continue hereunder undiminished.

4. Waivers, etc. Each of the Guarantors hereby waives any defense to, or
limitation on, its obligations under this Guaranty arising out of or based on
any event or circumstance referred to in Section 3 hereof. Without limitation
and to the fullest extent permitted by applicable law, each Guarantor waives
each of the following:

 

- 3 -

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(a) all notices, disclosures and demand of any nature which otherwise might be
required from time to time to preserve intact any rights against any Guarantor,
including the following: any notice of any event or circumstance described in
Section 3 hereof; any notice required by any law, regulation or order now or
hereafter in effect in any jurisdiction; any notice of nonpayment,
nonperformance, dishonor, or protest under any Loan Document or any of the
Guarantied Obligations; any notice of the incurrence of any Guarantied
Obligation; any notice of any default or any failure on the part of the Borrower
or any other Person to comply with any Loan Document or any of the Guarantied
Obligations or any direct or indirect security for any of the Guarantied
Obligations; and any notice of any information pertaining to the business,
operations, condition (financial or otherwise) or prospects of the Borrower or
any other Person;

(b) any right to any marshalling of assets, to the filing of any claim against
the Borrower or any other Person in the event of any bankruptcy, insolvency,
reorganization or similar proceeding, or to the exercise against the Borrower or
any other Person of any other right or remedy under or in connection with any
Loan Document or any of the Guarantied Obligations or any direct or indirect
security for any of the Guarantied Obligations; any requirement of promptness or
diligence on the part of the Agent or the Lenders, or any of them, or any other
Person; any requirement to exhaust any remedies under or in connection with, or
to mitigate the damages resulting from default under, any Loan Document or any
of the Guarantied Obligations or any direct or indirect security for any of the
Guarantied Obligations; any benefit of any statute of limitations; and any
requirement of acceptance of this Guaranty or any other Loan Document, and any
requirement that any Guarantor receive notice of any such acceptance;

(c) any defense or other right arising by reason of any law now or hereafter in
effect in any jurisdiction pertaining to election of remedies (including but not
limited to anti-deficiency laws, “one action” laws or the like), or by reason of
any election of remedies or other action or inaction by the Agent or the
Lenders, or any of them (including but not limited to commencement or completion
of any judicial proceeding or nonjudicial sale or other action in respect of
collateral security for any of the Guarantied Obligations), which results in
denial or impairment of the right of the Agent or the Lenders, or any of them,
to seek a deficiency against the Borrower or any other Person or which otherwise
discharges or impairs any of the Guarantied Obligations; and

(d) any and all defenses it may now or hereafter have based on principles of
suretyship, impairment of collateral, or the like.

5. Reinstatement. This Guaranty is a continuing obligation of the Guarantors and
shall remain in full force and effect notwithstanding that no Guarantied
Obligations may be outstanding from time to time and notwithstanding any other
event or circumstance. Upon termination of all Commitments, the expiration of
all Letters of Credit and indefeasible payment in full of all Guarantied
Obligations, this Guaranty shall terminate; provided, however, that this
Guaranty shall continue to be effective or be reinstated, as the case may be,
any time any payment of any of the Guarantied Obligations is rescinded,
recouped, avoided, or must otherwise be returned or released by any Lender or
Agent upon or during the insolvency, bankruptcy, or reorganization of, or any
similar proceeding affecting, the Borrower or for any other reason whatsoever,
all as though such payment had not been made and was due and owing.

 

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6. Subrogation. Each Guarantor waives and agrees it will not exercise any rights
against Borrower or any other Guarantor arising in connection with, or any
Collateral securing, the Guarantied Obligations (including rights of
subrogation, contribution, and the like) until the Guarantied Obligations have
been indefeasibly paid in full, and all Commitments have been terminated and all
Letters of Credit have expired. If any amount shall be paid to any Guarantor by
or on behalf of the Borrower or any other Guarantor by virtue of any right of
subrogation, contribution, or the like, such amount shall be deemed to have been
paid to such Guarantor for the benefit of, and shall be held in trust for the
benefit of, the Agent and the Lenders and shall forthwith be paid to the Agent
to be credited and applied upon the Guarantied Obligations, whether matured or
unmatured, in accordance with the terms of the Credit Agreement.

7. No Stay. Without limitation of any other provision of this Guaranty, if any
declaration of default or acceleration or other exercise or condition to
exercise of rights or remedies under or with respect to any Guarantied
Obligation shall at any time be stayed, enjoined, or prevented for any reason
(including but not limited to stay or injunction resulting from the pendency
against the Borrower or any other Person of a bankruptcy, insolvency,
reorganization or similar proceeding), the Guarantors agree that, for the
purposes of this Guaranty and their obligations hereunder, the Guarantied
Obligations shall be deemed to have been declared in default or accelerated, and
such other exercise or conditions to exercise shall be deemed to have been taken
or met.

8. Taxes.

(a) No Deductions. All payments made by any Guarantor under any of the Loan
Documents shall be made free and clear of and without deduction for any present
or future taxes, levies, imposts, deductions, charges, or withholdings, and all
liabilities with respect thereto, excluding taxes imposed on the net income of
any Lender and all income and franchise taxes of the United States applicable to
any Lender (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings, and liabilities being hereinafter referred to as “Taxes”). If any
Guarantor shall be required by law to deduct any Taxes from or in respect of any
sum payable under any of the Loan Documents, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Subsection (a) such Lender receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Guarantor shall make such
deductions and (iii) such Guarantor shall timely pay the full amount deducted to
the relevant tax authority or other authority in accordance with applicable law.

(b) Stamp Taxes. In addition, each Guarantor agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges, or
similar levies which arise from any payment made hereunder or from the
execution, delivery, or registration of, or otherwise with respect to, any of
the Loan Documents (hereinafter referred to as “Other Taxes”).

(c) Indemnification for Taxes Paid by any Lender. Each Guarantor shall indemnify
each Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Subsection)

 

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paid by any Lender and any liability (including penalties, interest, and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. This indemnification shall be
made within thirty (30) days from the date a Lender makes written demand
therefor.

(d) Certificate. Within thirty (30) days after the date of any payment of any
Taxes by any Guarantor, such Guarantor shall furnish to each Lender, the
original or a certified copy of a receipt evidencing payment thereof. If no
Taxes are payable in respect of any payment by such Guarantor, such Guarantor
shall, if so requested by a Lender, provide a certificate of an officer of such
Guarantor to that effect.

9. [Reserved].

10. Notices. Each Guarantor agrees that all notices, statements, requests,
demands and other communications under this Guaranty shall be given to such
Guarantor at the address set forth on a Schedule to, or in a Guarantor Joinder
and Assumption Agreement given under, the Credit Agreement and in the manner
provided in Section 10.5 of the Credit Agreement. The Agent and the Lenders may
rely on any notice (whether or not made in a manner contemplated by this
Guaranty) purportedly made by or on behalf of a Guarantor, and the Agent and the
Lenders shall have no duty to verify the identity or authority of the Person
giving such notice.

11. Counterparts; Telecopy Signatures. This Guaranty may be executed in any
number of counterparts, each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute but one and the same
instrument. Each Guarantor acknowledges and agrees that a telecopy transmission
to Agent or any Lender of signature pages hereof purporting to be signed on
behalf of any Guarantor shall constitute effective and binding execution and
delivery hereof by such Guarantor.

12. Setoff, Default Payments by Borrower.

(a) In the event that at any time any obligation of the Guarantors now or
hereafter existing under this Guaranty shall have become due and payable, the
Agent and the Lenders, or any of them, shall have the right from time to time,
without notice to any Guarantor, to set off against and apply to such due and
payable amount any obligation of any nature of any Lender or the Agent, or any
subsidiary or affiliate of any Lender or Agent, to any Guarantor, including but
not limited to all deposits (whether time or demand, general or special,
provisionally credited or finally credited, however evidenced) now or hereafter
maintained by any Guarantor with the Agent or any Lender or any IRH Provider.
Such right shall be absolute and unconditional in all circumstances and, without
limitation, shall exist whether or not the Agent or the Lenders, or any of them,
shall have given any notice or made any demand under this Guaranty or under such
obligation to the Guarantor, whether such obligation to the Guarantor is
absolute or contingent, matured or unmatured (it being agreed that the Agent and
the Lenders, or any of them, may deem such obligation to be then due and payable
at the time of such setoff), and regardless of the existence or adequacy of any
collateral, guaranty, or other direct or indirect security or right or remedy
available to the Agent or any of the Lenders. The rights of the Agent and the
Lenders under this Section are in addition to such other rights and remedies
(including, without

 

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limitation, other rights of setoff and banker’s lien) which the Agent and the
Lenders, or any of them, may have, and nothing in this Guaranty or in any other
Loan Document shall be deemed a waiver of or restriction on the right of setoff
or banker’s lien of the Agent and the Lenders, or any of them. Each of the
Guarantors hereby agrees that, to the fullest extent permitted by law, any
affiliate or subsidiary of the Agent or any of the Lenders and any holder of a
participation in any obligation of any Guarantor under this Guaranty, shall have
the same rights of setoff as the Agent and the Lenders as provided in this
Section (regardless of whether such affiliate or participant otherwise would be
deemed a creditor of the Guarantor).

(b) Upon the occurrence and during the continuation beyond any applicable cure
period of any default under any Guarantied Obligation, if any amount shall be
paid to any Guarantor by or for the account of Borrower, such amount shall be
held in trust for the benefit of each Lender and Agent and shall forthwith be
paid to the Agent to be credited and applied to the Guarantied Obligations when
due and payable.

13. Construction. The section and other headings contained in this Guaranty are
for reference purposes only and shall not affect interpretation of this Guaranty
in any respect. This Guaranty has been fully negotiated between the applicable
parties, each party having the benefit of legal counsel, and accordingly neither
any doctrine of construction of guaranties or suretyships in favor of the
guarantor or surety, nor any doctrine of construction of ambiguities in
agreement or instruments against the party controlling the drafting thereof,
shall apply to this Guaranty.

14. Successors and Assigns. This Guaranty shall be binding upon each Guarantor,
its successors and assigns, and shall inure to the benefit of and be enforceable
by the Agent and the Lenders, or any of them, and their successors and permitted
assigns provided, however, that no Guarantor may assign or transfer any of its
rights or obligations hereunder or any interest herein and any such purported
assignment or transfer shall be null and void. Without limitation of the
foregoing, the Agent and the Lenders, or any of them (and any successive
assignee or transferee), from time to time may assign or otherwise transfer all
or any portion of its rights or obligations under the Loan Documents (including
all or any portion of any commitment to extend credit), or any other Guarantied
Obligations, to any other person and such Guarantied Obligations (including any
Guarantied Obligations resulting from extension of credit by such other Person
under or in connection with the Loan Documents) shall be and remain Guarantied
Obligations entitled to the benefit of this Guaranty, and to the extent of its
interest in such Guarantied Obligations such other Person shall be vested with
all the benefits in respect thereof granted to the Agent and the Lenders in this
Guaranty or otherwise.

15. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

(a) Governing Law. This Guaranty shall be governed by, construed, and enforced
in accordance with the internal laws of the Commonwealth of Pennsylvania,
without regard to conflict of laws principles.

(b) Certain Waivers. Each Guarantor hereby irrevocably:

 

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(i) Certain Waivers; Submission to Jurisdiction. Each Guarantor hereby
irrevocably submits to the nonexclusive jurisdiction of the Court of Common
Pleas of Allegheny County and the United States District Court for the Western
District of Pennsylvania, and waives personal service of any and all process
upon it and consents that all such service of process be made by certified or
registered mail directed to the Borrower at the address provided for in the
Credit Agreement and service so made shall be deemed to be completed upon actual
receipt thereof. Each Guarantor waives any objection to jurisdiction and venue
of any action instituted against it as provided herein and agrees not to assert
any defense based on lack of jurisdiction or venue.

Each Guarantor hereby appoints a process agent, Corporation Service Company, as
its agent to receive on behalf of such party and its respective property,
service of copies of the summons and complaint and any other process which may
be served in any action or proceeding. Such service may be made by mailing or
delivering a copy of such process to any of the Guarantors in care of the
Process Agent at the Process Agent’s address, and each of the Guarantors hereby
authorizes and directs the Process Agent to receive such service on its behalf.
Each Guarantor agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions (or any political
subdivision thereof) by suit on the judgment or in any other manner provided by
law. Each Guarantor further agrees that it shall, for so long as any Commitment,
Letter of Credit or any Obligation of any Loan Party to the Lender remains
outstanding, continue to retain Process Agent for the purposes set forth in this
Section 15. The Process Agent hereby accepts the appointment of Process Agent by
the Guarantors and agrees to act as Process Agent on behalf of the Guarantors.
The Process Agent has an address of, on the date hereof, 2711 Centerville Road,
Suite 400, Wilmington, DE 19808.

(ii) Waives any objection to jurisdiction and venue of any action instituted
against it as provided herein and agrees not to assert any defense based on lack
of jurisdiction or venue.

(iii) WAIVES TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM OF
ANY KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE CREDIT AGREEMENT, OR
ANY OTHER LOAN DOCUMENT TO THE FULLEST EXTENT PERMITTED BY LAW.

16. Severability; Modification to Conform to Law.

(a) It is the intention of the parties that this Guaranty be enforceable to the
fullest extent permissible under applicable law, but that the unenforceability
(or modification to conform to such law) of any provision or provisions hereof
shall not render unenforceable, or impair, the remainder hereof. If any
provision in this Guaranty shall be held invalid or unenforceable in whole or in
part in any jurisdiction, this Guaranty shall, as to such jurisdiction, be
deemed amended to modify or delete, as necessary, the offending provision or
provisions and to alter the bounds thereof in order to render it or them valid
and enforceable to the maximum extent permitted by applicable law, without in
any manner affecting the validity or enforceability of such provision or
provisions in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.

 

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(b) Without limitation of the preceding subsection (a), to the extent that
applicable law (including applicable laws pertaining to fraudulent conveyance or
fraudulent or preferential transfer) otherwise would render the full amount of
the Guarantor’s obligations hereunder invalid, voidable, or unenforceable on
account of the amount of a Guarantor’s aggregate liability under this Guaranty,
then, notwithstanding any other provision of this Guaranty to the contrary, the
aggregate amount of such liability shall, without any further action by the
Agent or any of the Lenders or such Guarantor or any other Person, be
automatically limited and reduced to the highest amount which is valid and
enforceable as determined in such action or proceeding, which (without limiting
the generality of the foregoing) may be an amount which is equal to the greater
of:

(i) the fair consideration actually received by such Guarantor under the terms
and as a result of the Loan Documents and the value of the benefits described in
Section 16(b) hereof, including (and to the extent not inconsistent with
applicable federal and state laws affecting the enforceability of guaranties)
distributions, commitments, and advances made to or for the benefit of such
Guarantor with the proceeds of any credit extended under the Loan Documents; or

(ii) the excess of (1) the amount of the fair value of the assets of such
Guarantor as of the date of this Guaranty as determined in accordance with
applicable federal and state laws governing determinations of the insolvency of
debtors as in effect on the date hereof, over (2) the amount of all liabilities
of such Guarantor as of the date of this Guaranty, also as determined on the
basis of applicable federal and state laws governing the insolvency of debtors
as in effect on the date hereof.

(c) Notwithstanding anything to the contrary in this Section or elsewhere in
this Guaranty, this Guaranty shall be presumptively valid and enforceable to its
full extent in accordance with its terms, as if this Section (and references
elsewhere in this Guaranty to enforceability to the fullest extent permitted by
law) were not a part of this Guaranty, and in any related litigation the burden
of proof shall be on the party asserting the invalidity or unenforceability of
any provision hereof or asserting any limitation on any Guarantor’s obligations
hereunder as to each element of such assertion.

17. Additional Guarantors. At any time after the initial execution and delivery
of this Guaranty to the Agent and the Lenders, additional Persons may become
parties to this Guaranty and thereby acquire the duties and rights of being
Guarantors hereunder by executing and delivering to the Agent and the Lenders a
Guarantor Joinder and Assumption Agreement pursuant to the Credit Agreement. No
notice of the addition of any Guarantor shall be required to be given to any
pre-existing Guarantor and each Guarantor hereby consents thereto.

18. Joint and Several Obligations. The obligations and additional liabilities of
the Guarantors under this Agreement are joint and several obligations of the
Guarantors, and each Guarantor hereby waives to the full extent permitted by law
any defense it may otherwise have to the payment and performance of the
Obligations that its liability hereunder is limited and not joint and several.
Each Guarantor acknowledges and agrees that the foregoing waivers and those set
forth below serve as a material inducement to the agreement of the Agent and the
Lenders to

 

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make the Loans, and that the Agent and the Lenders are relying on each specific
waiver and all such waivers in entering into this Guaranty. The undertakings of
each Guarantor hereunder secure the obligations of itself and the other
Guarantors. The Agent and the Lenders, or any of them, may, in their sole
discretion, elect to enforce this Guaranty against any Guarantor without any
duty or responsibility to pursue any other Guarantor and such an election by the
Agent and the Lenders, or any of them, shall not be a defense to any action the
Agent and the Lenders, or any of them, may elect to take against any Guarantor.
Each of the Lenders and Agent hereby reserve all rights against each Guarantor.

19. Receipt of Credit Agreement, Other Loan Documents, Benefits.

(a) Each Guarantor hereby acknowledges that it has received a copy of the Credit
Agreement and the other Loan Documents and each Guarantor certifies that the
representations and warranties made therein with respect to such Guarantor are
true and correct. Further, each Guarantor acknowledges and agrees to perform,
comply with, and be bound by all of the provisions of the Credit Agreement and
the other Loan Documents.

(b) Each Guarantor hereby acknowledges, represents, and warrants that it
receives synergistic benefits by virtue of its affiliation with Borrower and the
other Guarantors and that it will receive direct and indirect benefits from the
financing arrangements contemplated by the Credit Agreement and that such
benefits, together with the rights of contribution and subrogation that may
arise in connection herewith are a reasonably equivalent exchange of value in
return for providing this Guaranty.

20. Miscellaneous.

(a) Generality of Certain Terms. As used in this Guaranty, the terms “hereof,”
“herein,” and terms of similar import refer to this Guaranty as a whole and not
to any particular term or provision; the term “including,” as used herein, is
not a term of limitation and means “including, without limitation.”

(b) Amendments, Waivers. No amendment to or waiver of any provision of this
Guaranty, and no consent to any departure by any Guarantor herefrom, shall in
any event be effective unless in a writing manually signed by or on behalf of
the Agent and the Lenders. Any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. No delay or
failure of the Agent or the Lenders, or any of them, in exercising any right or
remedy under this Guaranty shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right or remedy preclude any other or
further exercise thereof or the exercise of any other right or remedy. The
rights and remedies of the Agent and the Lenders under this Guaranty are
cumulative and not exclusive of any other rights or remedies available
hereunder, under any other agreement or instrument, by law, or otherwise.

(c) Telecommunications. Each Lender and Agent shall be entitled to rely on the
authority of any individual making any telecopy or telephonic notice, request,
or signature without the necessity of receipt of any verification thereof.

 

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(d) Expenses. Each Guarantor unconditionally agrees to pay all costs and
expenses, including reasonable attorneys’ fees incurred by the Agent or any of
the Lenders in enforcing this Guaranty against any Guarantor and each Guarantor
shall pay and indemnify each Lender and Agent for, and hold it harmless from and
against, any and all obligations, liabilities, losses, damages, costs, expenses
(including disbursements and reasonable legal fees of counsel to any Lender or
Agent), penalties, judgments, suits, actions, claims, and disbursements imposed
on, asserted against, or incurred by any Lender or Agent (A) relating to the
preparation, negotiation, execution, administration, or enforcement of or
collection under this Guaranty or any document, instrument, or agreement
relating to any of the Obligations, including in any bankruptcy, insolvency, or
similar proceeding in any jurisdiction or political subdivision thereof;
(B) relating to any amendment, modification, waiver, or consent hereunder or
relating to any telecopy or telephonic transmission purporting to be by any
Guarantor or Borrower; (C) in any way relating to or arising out of this
Guaranty, or any document, instrument, or agreement relating to any of the
Guarantied Obligations, or any action taken or omitted to be taken by any Lender
or Agent hereunder, and including those arising directly or indirectly from the
violation or asserted violation by any Guarantor or Borrower or Agent or any
Lender of any law, rule, regulation, judgment, order, or the like of any
jurisdiction or political subdivision thereof (including those relating to
environmental protection, health, labor, importing, exporting, or safety) and
regardless whether asserted by any governmental entity or any other Person.

(e) Prior Understandings. This Guaranty and the Credit Agreement constitute the
entire agreement of the parties hereto with respect to the subject matter hereof
and supersede any and all other prior and contemporaneous understandings and
agreements.

(f) Survival. All representations and warranties of the Guarantors made in
connection with this Guaranty shall survive, and shall not be waived by, the
execution and delivery of this Guaranty, any investigation by or knowledge of
the Agent and the Lenders, or any of them, any extension of credit, or any other
event or circumstance whatsoever.

The remainder of this page is left blank intentionally.

Signatures follow on next page.

 

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[SIGNATURE PAGE TO CONTINUING AGREEMENT OF GUARANTY AND SURETYSHIP]

IN WITNESS WHEREOF, each Guarantor intending to be legally bound, has executed
this Guaranty as of the date first above written with the intention that this
Guaranty shall constitute a sealed instrument.

 

UNDER ARMOUR MANUFACTURING, LLC, a Maryland limited liability company By: Under
Armour, Inc., a Maryland corporation, its sole member By:  

 

Printed:  

 

Title:  

 

UNDER ARMOUR RETAIL, INC.,

a Maryland corporation

By:  

 

Printed:  

 

Title:  

 

UNDER ARMOUR HOLDINGS, INC.,

a Maryland corporation

By:  

 

Printed:  

 

Title:  

 

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[SIGNATURE PAGE TO CONTINUING AGREEMENT OF GUARANTY AND SURETYSHIP]

 

    UNDER ARMOUR RETAIL OF MARYLAND, L.L.C.     UNDER ARMOUR RETAIL OF FLORIDA,
LLC     UNDER ARMOUR RETAIL OF OHIO, LLC     UNDER ARMOUR RETAIL OF CALIFORNIA,
LLC     UNDER ARMOUR RETAIL OF TEXAS, LLC     UNDER ARMOUR RETAIL OF WISCONSIN,
LLC     UNDER ARMOUR RETAIL OF MASSACHUSETTS, LLC     UNDER ARMOUR RETAIL OF
PENNSYLVANIA, LLC     UNDER ARMOUR RETAIL OF DELAWARE, LLC     UNDER ARMOUR
RETAIL OF GEORGIA, LLC     UNDER ARMOUR RETAIL OF NEW YORK, LLC    
UNDER ARMOUR RETAIL OF NEW JERSEY, LLC     UNDER ARMOUR RETAIL OF DC, LLC    
UNDER ARMOUR RETAIL OF CONNECTICUT, LLC     UNDER ARMOUR RETAIL OF ILLINOIS, LLC
    UNDER ARMOUR RETAIL OF SOUTH CAROLINA, LLC     UNDER ARMOUR RETAIL OF
MICHIGAN, LLC     UNDER ARMOUR RETAIL OF MAINE, LLC     UNDER ARMOUR RETAIL OF
TENNESSEE, LLC     UNDER ARMOUR RETAIL OF VIRGINIA, LLC,     each a limited
liability company     By: Under Armour Retail, Inc., its sole member     By:  

 

    Printed:  

 

    Title:  

 

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Indemnity Agreement

THIS INDEMNITY AGREEMENT (this “Agreement”) is made as of the 28th day of
January, 2009 by UNDER ARMOUR, INC., the Guarantors listed on Exhibit A hereto,
jointly and severally (each, an “Indemnitor” and collectively, the
“Indemnitors”), in favor of PNC BANK, NATIONAL ASSOCIATION (the “Bank”) in its
capacity as Administrative Agent pursuant to that certain Credit Agreement
(amended, restated, supplemented or modified from time to time, the “Credit
Agreement”) dated as of January 28, 2009, by and among the Indemnitors, the
Lenders party thereto (the “Lenders”), the Bank as the Administrative Agent (the
“Administrative Agent”), SunTrust Bank, as Syndication Agent, and Compass Bank,
as Documentation Agent.

A. The Lenders are prepared to make a loan, enter into a swap, derivative or
other interest rate hedging product and/or to issue a letter of credit in the
aggregate amount of up to $180,000,000 (the “Loan”) secured by, among other
things, Collateral contained on the premises subject to the leases on the
locations as set forth on Exhibit B attached hereto (said lease or other similar
instrument, together with all amendments, modifications, replacements or
supplements thereof being herein collectively called the “Lease,” and the said
leased real property, together with all improvements, equipment and other
property now or hereafter located therein or thereon, being hereinafter
collectively called the “Property”);

B. To induce the Lenders to agree to make the Loan, each Indemnitor has agreed
to enter into this Agreement.

NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound, each Indemnitor hereby covenants, warrants,
represents and agrees as follows:

1. Administrative Agent Rights Under the Agreement. The Administrative Agent’s
rights and remedies under this Agreement shall be in addition to and not in
limitation of all rights and remedies of the Administrative Agent under the
Credit Agreement or any of the other Loan Documents. Payments, if any, by the
Indemnitors as required under this Agreement shall not reduce the Indemnitors’
obligations and liabilities under any of the Loan Documents. Any default by an
Indemnitor under this Agreement (including any breach of any representation or
warranty made by each Indemnitor) shall, at the Administrative Agent’s option,
constitute a default and an Event of Default (“Event of Default”) under the
Credit Agreement, the Note and/or any of the other Loan Documents after the
expiration of any applicable cure period.

2. Definitions. Terms which are defined in the Credit Agreement and not
otherwise defined herein are used herein as defined therein and the rules of
Construction set forth in Section 1.2 of the Credit Agreement shall apply to
this Agreement. For purposes of this Agreement, the following terms shall have
the following meanings:

(a) “Environmental Laws” means all applicable federal, state, local, tribal,
territorial and foreign Laws (including common law), constitutions, statutes,
treaties, regulations,

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rules, ordinances and codes and any consent decrees, settlement agreements,
judgments, orders, directives, policies or programs issued by or entered into by
any indemnitor with a governmental authority pertaining or relating to:
(i) pollution or pollution control; (ii) protection of human health or the
environment from exposure to regulated substances; (iii) protection of the
environment and/or natural resources; (iv) the presence, use, management,
generation, manufacture, processing, extraction, treatment, recycling, refining,
reclamation, labeling, packaging, sale, transport, storage, collection,
distribution, disposal or release or threat of release of regulated substances;
(v) the presence of contamination; (vi) the protection of endangered or
threatened species; and (vii) the protection of environmentally sensitive areas.

(b) “Hazardous Substances” includes any substances, chemicals, materials, or
elements in any physical state (liquid, solid, gaseous/vapor, etc.) that are
prohibited, limited or regulated by the Environmental Laws, or any other
substances, chemicals, materials, or elements that are defined as “hazardous” or
“toxic,” or otherwise regulated, under the Environmental Laws, or that are known
or considered to be harmful, hazardous or injurious to the health or safety of
occupants or users of the Property. The term Hazardous Substances shall also
include any substance, chemical, material, or element in any physical state
(liquid, solid, gaseous/vapor, etc.) (i) defined as a “hazardous substance”
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980 (“CERCLA”) (42 U.S.C. §§ 9601, et seq.), as amended by the Superfund
Amendments and Reauthorization Act of 1986, and as further amended from time to
time, and regulations promulgated thereunder; (ii) defined as a “regulated
substance” within the meaning of Subtitle I of the Resource Conservation and
Recovery Act (42 U.S.C. §§ 6991-6991i), as amended from time to time, and
regulations promulgated thereunder; (iii) designated as a “hazardous substance”
pursuant to Section 311 of the Clean Water Act (33 U.S.C. § 1321), as amended
from time to time, and the regulations promulgated thereunder, or listed
pursuant to Section 307 of the Clean Water Act (33 U.S.C. § 1317), as amended
from time to time, and the regulations promulgated thereunder; (iv) defined as
“hazardous”, “toxic”, or otherwise regulated, under any Environmental Laws
adopted by the state in which the Property is located, or its agencies or
political subdivisions; (v) which is petroleum, petroleum products, ethanol,
methyl tertiary butyl ether or derivatives or constituents of or vapors from any
of the foregoing; (vi) which is asbestos or asbestos-containing materials;
(vii) the presence of which requires notification, investigation or remediation
under any Environmental Laws or common law; (viii) the presence of which on the
Property causes or threatens to cause a nuisance upon the Property or to
adjacent properties or poses or threatens to pose a hazard to the health or
safety of persons on or about the Property; (ix) the presence of which on
adjacent properties would constitute a trespass by the Indemnitor; (x) which is
urea formaldehyde foam insulation or urea formaldehyde foam
insulation-containing materials; (xi) which is lead base paint or lead base
paint-containing materials; (xii) which are polychlorinated biphenyls or
polychlorinated biphenyl-containing materials; (xiii) which is radon or
radon-containing or producing materials; (xiv) which is or contains excessive
moisture, mildew, mold, microbial contamination, microbial growth or other
fungi, or biological agents that can or are known to produce mycotoxins or other
bioaerosols, such as antigens, bacteria, amoebae and microbial organic compounds
or other similar matter, in each case that poses a risk to human health or the
environment, or negatively impacts the value of the Property (herein referred to
as “toxic mold”); (xv) which is a vapor from volatile chemicals or any other
toxic or hazardous materials, including petroleum hydrocarbons, from a
subsurface soil, groundwater or other source; or (xvi) which by any laws of any

 

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applicable governmental authority requires special handling in its collection,
storage, treatment, or disposal; and

(c) “Contamination” means the seeping, spilling, leaking, pumping, pouring,
emitting, using, emptying, discharging, injecting, escaping, leaching, dumping,
disposing, releasing, migrating, vaporizing or the presence of Hazardous
Substances at, under or upon the Property or into the environment, or arising
from the Property or migrating or vaporizing to or from the Property, whether or
not the presence of such Hazardous Substances or the Contamination may require
notification, treatment, response or removal action or remediation under any
Environmental Laws.

3. Representations and Warranties. Each Indemnitor hereby represents and
warrants that, except as is otherwise set forth on Schedule 5.1.14 to the Credit
Agreement, each Indemnitor is and has been, and, to the actual knowledge of each
respective Indemnitor, each of its Subsidiaries is and has been, in compliance
in all material respects with applicable Environmental Laws; provided that such
matters so disclosed could not in the aggregate result in a Material Adverse
Change.

4. Environmental Covenants. Each Indemnitor hereby covenants and agrees as
follows:

(a) to cause all activities at the Property during the term of the Loan to be
conducted in compliance with all Environmental Laws in all material respects;

(b) to provide the Administrative Agent with copies of all: (i) correspondence,
notices of violation, summons, orders, complaints or other documents received by
the Indemnitor, its sublessees, occupants or assigns, pertaining to compliance
with any Environmental Laws and/or the presence or potential presence of
Contamination; (ii) reports of or information from previous environmental
investigations undertaken at the Property which the Indemnitor knows of, or has
or can obtain possession without unreasonable effort or expense; (iii) any
reports of or information from environmental investigations undertaken at the
Property by any person or entity after the date of this Agreement to which an
Indemnitor has access; (iv) licenses, certificates and permits required by the
Environmental Laws; and (v) any other information that the Administrative Agent
may reasonably request from time to time;

(c) not to generate, manufacture, refine, transport, transfer, produce, store,
use, process, treat, dispose of, handle, permit to exist, or in any manner deal
with, any Hazardous Substances on any part of the Property, nor permit others to
engage in any such activity on the Property, except for (i) those Hazardous
Substances which are used or present in the ordinary course of the Indemnitors’
business in compliance with all Environmental Laws and have not been released
into the environment in such a manner as to constitute Contamination hereunder;
and (ii) those Hazardous Substances which are naturally occurring on the
Property, but only in such naturally occurring form and only in such quantities
that are known not to be harmful, hazardous or injurious to the health or safety
of occupants or users of the Property;

 

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(d) not to cause or permit, as a result of any intentional or unintentional act
or omission on the part of the Indemnitor or any tenant, subtenant, occupant or
assigns, the presence of Hazardous Substances or Contamination on the Property,
except for (i) those Hazardous Substances which are used or present in the
ordinary course of the Indemnitors’ business in compliance with all
Environmental Laws and have not been released into the environment in such a
manner as to constitute Contamination hereunder; and (ii) those Hazardous
Substances which are naturally occurring on the Property, but only in such
naturally occurring form and only in such quantities that are known not to be
harmful, hazardous or injurious to the health or safety of occupants or users of
the Property;

(e) to give notice and a full description to the Administrative Agent
immediately upon the Indemnitors’ acquiring actual knowledge of (i) any and all
enforcement, clean-up, removal or other regulatory actions threatened,
instituted or completed by any governmental authority with respect to the
Indemnitor or the Property; (ii) all claims made or threatened in writing by any
third party against the Indemnitor or the Property relating to damage,
contribution, compensation, loss or injury resulting from any Hazardous
Substances or Contamination; (iii) any complaint made or threatened in writing
by any third party against the Indemnitor or the Property relating to damage,
contribution, compensation, loss or injury resulting from any Hazardous
Substances or Contamination; (iv) the presence of any Contamination on, under,
from or affecting the Property; (v) any Contamination or other release or
discharge of Hazardous Substances on or from the Property that must be reported
to any governmental entity under applicable Environmental Laws;
(vi) Indemnitors’ violation of any Environmental Laws in any material respect or
any allegation of same in writing from any other person; (vii) the imposition,
attachment or recording of any lien, deed restriction, activity and use
limitations, environmental covenant, institutional control or encumbrance under
Environmental Laws against the Property and/or any personal or other real
property owned by Indemnitor; (viii) the inability to obtain or renew any
Environmental Permit or a written notice from a governmental authority that it
has revoked or suspended, or otherwise intends to revoke or suspend, whether in
whole or in part, any permit for the Property, which permit relates, in any way,
to any Environmental Law; and (ix) any matters relating to Hazardous Substances,
Contamination or Environmental Laws that would give a reasonably prudent lender
cause to be concerned that the value of their security interest in the
Collateral contained on the Property may be reduced or threatened or that may
impair or threaten to impair the Indemnitors’ ability to perform any of its
obligations under this Agreement or the Loan Documents;

(f) to timely comply in all material respects with any Environmental Laws
requiring the removal, treatment, storage, processing, handling, transportation
or disposal of Hazardous Substances or Contamination and provide the
Administrative Agent with satisfactory evidence of such compliance;

(g) to conduct and complete all investigations, studies, sampling and testing,
as well as all remedial, removal and other actions necessary to clean up and
remove all Contamination on, under, from or affecting the Property, all in
accordance with the Environmental Laws;

 

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(h) to continue to have all necessary licenses, certificates and permits
required under the Environmental Laws relating to the Indemnitor and its leased
Property, facilities, assets and business;

(i) to remediate or cause to be remediated, at its sole cost and expense, any
substance which is or contains toxic mold; and

(j) to investigate, and as necessary, remediate or cause to be remediated, at
its sole cost and expense, any vapor intrusion conditions from volatile
chemicals or other toxic or hazardous materials, including petroleum
hydrocarbons.

5. Administrative Agent’s Right to Conduct an Investigation.

(a) The Administrative Agent may, at any time and with reasonable cause,
commission an investigation into the presence of Hazardous Substances or
Contamination on, from or affecting the Property, or the compliance with
Environmental Laws at, or relating to, the Property, subject to the rights of
the owner of the Property. Such an investigation performed by the Administrative
Agent shall be at the Indemnitors’ expense if the performance of the
investigation is commenced (i) upon the occurrence of a default hereunder or of
a default or “Event of Default” under any of the Loan Documents; or (ii) because
the Administrative Agent has a reasonable belief that the Indemnitor has
violated any provision of this Agreement (including any representation, warranty
or covenant). All other investigations performed by the Administrative Agent
shall be at the Administrative Agent’s expense. In connection with any
investigation under this paragraph, the Indemnitor, its subtenants, occupants
and assigns, shall comply with all reasonable requests for information made by
the Administrative Agent or its agents and the Indemnitor represents and
warrants that all responses to any such requests for information will be correct
and complete. The Indemnitor shall provide the Administrative Agent and its
agents with rights of access to all areas of the Property and permit the
Administrative Agent and its agents to perform testing (including any invasive
testing) necessary or appropriate, in the Administrative Agent’s reasonable
judgment, to perform such investigation, subject to the rights of the owner of
the Property.

(b) The Administrative Agent is under no duty, however, to conduct such
investigations of the Property and any such investigations by the Administrative
Agent shall be solely for the purposes of protecting the Administrative Agent’s
security interest in the Collateral located on the Property and preserving its
rights under the Loan Documents. No site visit, observation, or testing by the
Administrative Agent shall constitute a waiver of any default of the Indemnitor
or be characterized as a representation regarding the presence or absence of
Hazardous Substances or Contamination at the Property. The Administrative Agent
owes no duty of care to protect the Indemnitor or any third party from the
presence of Hazardous Substances, Contamination or any other adverse condition
affecting the Property nor shall the Administrative Agent be obligated to
disclose to the Indemnitor or any third party any report or findings made in
connection with any investigation done on behalf of the Administrative Agent,
unless otherwise required by law.

 

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6. Indemnification.

(a) Each Indemnitor covenants and agrees, at its sole cost and expense, to
indemnify, defend, protect, save and hold harmless the Administrative Agent
(including the Administrative Agent, should the Administrative Agent ever become
a lessee in possession, or as successor in interest to any Indemnitor) and all
of its officers, directors, employees and agents, any participant in the Loan,
and their respective successors and assigns, against and from any and all
Environmental Damages (as defined in subsection (b) below), which may at any
time be imposed upon, threatened against, incurred by or asserted or awarded
against the Administrative Agent (whether before or after the release,
satisfaction or extinguishment of the Lease) and arising from or out of:

(i) the Indemnitors’ failure to comply with any of the provisions of this
Agreement, including the Indemnitors’ breach of any covenant, representation or
warranty contained in this Agreement;

(ii) any Contamination, or threatened release of any Hazardous Substances or
Contamination, on, in, under, affecting or migrating or threatening to migrate
to or from all or any portion of the Property, any surrounding areas or other
property or any persons;

(iii) any violation of, or noncompliance with, or alleged violation of, or
noncompliance with, Environmental Laws (and/or any permit relating to any
Environmental Laws) by the Property or the Indemnitor, or its agents, employees,
contractors, and the like, including, without limitation, reasonable costs and
fees of lawyers, environmental consultants and the like incurred to remove any
environmentally related lien imposed upon the Property;

(iv) the willful misconduct, error or omission or negligent act or omission of
the Indemnitor, or its agents, employees, contractors, and the like;

(v) any judgment, lien, order, complaint, notice, citation, action, proceeding
or investigation pending or threatened by or before any governmental authority
or any private party litigant, including any environmental regulatory body, or
before any court of law (including any private civil litigation) with respect to
the Indemnitors’ business, assets, property or facilities, or the Property, in
connection with any Hazardous Substances, Contamination or any Environmental
Laws (including the assertion that any lien existing or arising pursuant to any
Environmental Laws takes priority over the lien created in the Loan Documents);
or

(vi) the enforcement of this Agreement or the assertion by the Indemnitor of any
defense to its obligations hereunder.

The Indemnitors’ indemnification obligations set forth in this Section 6 shall
be in effect and enforceable regardless of whether any such indemnification
obligations arise before or after termination of the Lease or other taking of
possession to all or any portion of the Property by the Administrative Agent or
any affiliate of the Administrative Agent, and whether the underlying

 

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basis of any claim arose from events prior to the Indemnitor acquiring
possession of the Property.

(b) For the purposes of this Agreement, “Environmental Damages” shall mean all
claims, judgments, damages, losses, penalties, fines, liabilities (including
strict liability), encumbrances, liens, reasonable costs and expenses of
investigation and defense of any claim, whether or not such claim is ultimately
defeated, and of any good faith settlement, of whatever kind or nature,
contingent or otherwise, matured or unmatured, foreseeable or unforeseeable,
including reasonable attorneys’ fees and disbursements and consultants’ fees,
any of which are incurred at any time, and including:

(i) damages, losses or costs for personal injury, or injury to property or
natural resources (including costs of assessment), occurring upon or off of the
Property, including lost profits, consequential damages, punitive damages, the
cost of demolition and rebuilding of any improvements on real property, interest
and penalties;

(ii) reasonable fees incurred for the services of attorneys, consultants,
contractors, experts, laboratories and all other costs and expenses incurred in
connection with investigation, removal, remediation or post-remediation
monitoring, operation and maintenance, of any Hazardous Substances or
Contamination or violation of any Environmental Laws including the preparation
of any feasibility studies or reports or the performance of any cleanup,
remediation, removal, response, abatement, contaminant, closure, restoration,
treatment, investigation work or monitoring work required by any Environmental
Laws, or reasonably necessary to make full economic use of the Collateral
located on the Property or any other property or otherwise expended in
connection with such conditions, including any and all Corrective Work under
Section 7, and further including any reasonable attorneys’ fees, costs and
expenses incurred in enforcing this Agreement or collecting any sums due
hereunder;

(iii) any additional costs required to take necessary precautions to protect
against a release of Hazardous Substances or Contamination on, in, under or
affecting the Property into the air, any body of water, any other public domain
or any surrounding or adjoining areas;

(iv) any costs incurred to comply, in connection with all or any portion of the
Property or any area surrounding or adjoining the Property, with all
Environmental Laws;

(v) liability to any third persons or governmental agency for costs expended in
connection with the items referenced in clause (ii) above; and

(vi) diminution in the value of the Collateral located on the Property.

(c) Promptly after the receipt by the Administrative Agent of written notice of
any demand or claim or the commencement of any action, suit or proceeding
concerning the Indemnitor or the Administrative Agent in connection with the
Property, the Administrative Agent shall notify the Indemnitor thereof in
writing. The failure by the Administrative Agent promptly to give such notice
shall not relieve the Indemnitor of any liability to the

 

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Administrative Agent hereunder, unless such failure results in additional
Environmental Damage.

7. Indemnitors’ Obligation to Perform Corrective Work.

(a) The Indemnitor shall have the obligation to promptly commence and perform
any corrective work required to address any Environmental Damages or
Contamination, including any actions required by the Indemnitor under Section 6
(“Corrective Work”) after the occurrence of any of the following: (i) the
Indemnitor obtains actual knowledge of any Contamination on, in, under,
affecting, or migrating to or from the Property or any surrounding areas; or
(ii) an event occurs for which the Administrative Agent can seek indemnification
from the Indemnitor pursuant to Section 6.

(b) The Indemnitor shall provide to the Administrative Agent written
notification at least twenty (20) days prior to the commencement of any such
Corrective Work, and shall give the Administrative Agent a monthly report,
during the performance of such Corrective Work, on the Indemnitors’ progress
with respect thereto, and shall promptly give the Administrative Agent such
other information with respect thereto as the Administrative Agent shall
reasonably request from time to time. Such written notice shall contain the name
of the person or entity performing such Corrective Work and shall be accompanied
by: (i) written evidence, satisfactory in form and content to the Administrative
Agent, showing that such person or entity is fully insured against any and all
injury and damages caused by or resulting from the performance of such
Corrective Work; and (ii) copies of the plans for such Corrective Work, approved
in writing by the appropriate governmental authorities.

(c) Any Corrective Work conducted by the Indemnitor shall be diligently
performed to completion and shall comply with all Environmental Laws and all
other applicable laws to correct, contain, clean up, treat, remove, resolve,
dispose of or minimize the impact of all Hazardous Substances or Contamination.

(d) Any failure by the Administrative Agent to object to any actions taken by
the Indemnitor shall not be construed to be an approval by the Administrative
Agent of such actions. This Agreement shall not be construed as creating any
obligation for the Administrative Agent to initiate any contests or to perform
or review the Indemnitors’ or any other party’s performance of, any Corrective
Work, or disburse any funds for any contests or the performance of any
Corrective Work.

8. Administrative Agent’s Right to Select Engineers, Consultants and Attorneys.
Without limiting the other provisions hereof, in the event any claim (whether or
not a judicial or administrative action is involved) is asserted against the
Administrative Agent with respect to Hazardous Substances, Environmental Laws or
Contamination, the Administrative Agent shall have the right to select the
engineers, other consultants and attorneys for the Administrative Agent’s
defense or guidance, determine the appropriate legal strategy for such defense,
and compromise or settle such claim, all in the Administrative Agent’s sole
discretion, and the Indemnitor shall be liable to the Administrative Agent in
accordance with the terms

 

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hereof for liabilities, costs and reasonable expenses incurred by the
Administrative Agent in this regard.

9. Indemnitors’ Obligation to Deliver Property. The Indemnitor agrees that, in
the event the Administrative Agent assumes the Lease, the Indemnitor shall,
subject to the terms of the Lease, deliver the Property to the Administrative
Agent free of any and all Hazardous Substances, (except for (a) those Hazardous
Substances which are used or present in the ordinary course of the Indemnitors’
business in compliance with all Environmental Laws and have not been released
into the environment in such a manner as to constitute Contamination hereunder,
and (b) those Hazardous Substances which are naturally occurring on the
Property, but only in such naturally occurring form and only in such quantities
that are known not to be harmful, hazardous or injurious to the health or safety
of occupants or users of the Property) or Contamination in a condition such that
the Property conforms in all material respects with all Environmental Laws and
such that no remedial or removal action or other Corrective Work will be
required with respect to the Property. The Indemnitors’ obligations as set forth
in this Section are strictly for the benefit of the Administrative Agent and the
other Lenders as holders of any portion of the Loan and shall not in any way
impair or affect the Administrative Agent’s right to assume the Lease.

10. Administrative Agent’s Right to Cure. In addition to the other remedies
provided to the Administrative Agent in the Credit Agreement and the other Loan
Documents, should the Indemnitor fail to abide by any provisions of this
Agreement, subject to the terms of the Lease, the Administrative Agent may,
should it elect to do so, perform any Corrective Work and any other such actions
as it, in its sole discretion, deems necessary to repair, respond to and remedy
any damage to the Property caused by Hazardous Substances or Contamination or
any such Corrective Work. In such event, all funds expended by the
Administrative Agent in connection with the performance of any Corrective Work,
including all contractor charges, reasonable attorneys’ fees, engineering fees,
consultant fees and similar charges, shall become a part of the obligation
secured by the Credit Agreement and other Loan Documents and shall be due and
payable by the Indemnitor on demand. Each disbursement made by the
Administrative Agent pursuant to this provision shall bear interest at the lower
of the rate of interest after default (as contained in Section 3.3.1 of the
Credit Agreement) or the highest rate allowable under applicable laws from the
date the Indemnitor shall have received written notice that the funds have been
advanced by the Administrative Agent until paid in full.

11. Scope of Liability. The liability under this Agreement shall in no way be
limited or impaired by: (a) any extension of time for performance required by
any of the Loan Documents; (b) any assignment of the Credit Agreement or Loan
Documents; (c) the discharge of the Credit Agreement or other Loan Documents;
(d) any exculpatory provisions in any of the Loan Documents limiting the
Administrative Agent’s recourse; (e) the accuracy or inaccuracy of the
representations and warranties made by the Indemnitor, or any other obligor
under any of the Loan Documents; (f) the release of the Indemnitor or any
guarantor or any other person from performance or observance of any of the
agreements, covenants, terms or conditions contained in any of the Loan
Documents by operation of law, the Administrative Agent’s voluntary act or
otherwise; (g) the release or substitution, in whole or in part, of any security
for the Note or other obligations; or (h) the Administrative Agent’s failure to
file any UCC financing statements (or

 

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the Administrative Agent’s improper recording or filing of any thereof) or to
otherwise perfect, protect, secure or insure any security interest or lien given
as security for the Credit Agreement or other obligations; and, in any such
case, whether with or without notice to the Indemnitor or any guarantor or other
person or entity and with or without consideration.

12. Notices. All notices, demands, requests, consents, approvals and other
communications required or permitted hereunder (“Notices”) must be in writing
and will be effective upon receipt. Notices may be given in any manner to which
the parties may separately agree, including electronic mail. Without limiting
the foregoing, first class mail, facsimile transmission and commercial courier
service are hereby agreed to as acceptable methods for giving Notices.
Regardless of the manner in which provided, Notices may be sent to a party’s
address as set forth above or to such other address any party may give to the
other for such purpose in accordance with this section.

13. Preservation of Rights. No delay or omission on the Administrative Agent’s
part to exercise any right or power arising hereunder will impair any such right
or power or be considered a waiver of any such right or power, nor will the
Administrative Agent’s action or inaction impair any such right or power. The
Administrative Agent’s rights and remedies hereunder are cumulative and not
exclusive of any other rights or remedies which the Administrative Agent may
have under other agreements, at law or in equity. Any representations,
warranties, covenants or indemnification liabilities for breach thereof
contained in this Agreement shall not be affected by any knowledge of, or
investigations performed by, the Administrative Agent. Any one or more persons
or entities comprising the Indemnitor, or any other party liable upon or in
respect of this Agreement or the Loan, may be released without affecting the
liability of any party not so released.

14. Illegality. If any provision contained in this Agreement should be invalid,
illegal or unenforceable in any respect, it shall not affect or impair the
validity, legality and enforceability of the remaining provisions of this
Agreement.

15. Changes in Writing. No modification, amendment or waiver of, or consent to
any departure by the Indemnitor from, any provision of this Agreement will be
effective unless made in a writing signed by the Administrative Agent, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice to or demand on the Indemnitor will
entitle the Indemnitor to any other or further notice or demand in the same,
similar or other circumstance.

16. Successors and Assigns; Survival. This Agreement will be binding upon the
Indemnitor and its heirs, administrators, successors and assigns, and will inure
to the benefit of the Administrative Agent and its successors and assigns as
well as any persons or entities who acquire possession of the Property from, or
through action by, the Administrative Agent; provided, however, that the
Indemnitor may not assign this Agreement in whole or in part without the
Administrative Agent’s prior written consent and the Administrative Agent at any
time may assign this Agreement in whole or in part to any Person who succeeds
the Administrative Agent under the Loan Documents or who acts on behalf of the
Administrative Agent in connection with the exercise of its rights pursuant to
Section 8.2 of the Credit

 

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Agreement. The Indemnitors’ obligations under this Agreement shall survive any
transfer of possession of the Property by the Indemnitor or the Administrative
Agent and payment of the Loan in full.

17. Interpretation. In this Agreement, unless the Administrative Agent and the
Indemnitor otherwise agree in writing, the singular includes the plural and the
plural the singular; words importing any gender include the other genders;
references to statutes are to be construed as including all statutory provisions
consolidating, amending or replacing the statute referred to; the word “or”
shall be deemed to include “and/or”, the words “including”, “includes” and
“include” shall be deemed to be followed by the words “without limitation”;
references to articles, sections (or subdivisions of sections) or exhibits are
to those of this Agreement; and references to agreements and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications to such instruments, but only to the extent such amendments and
other modifications are not prohibited by the terms of this Agreement. Section
headings in this Agreement are included for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose. If this
Agreement is executed by more than one party as Indemnitor, the obligations of
such persons or entities will be joint and several.

18. Governing Law and Jurisdiction. This Agreement has been delivered to and
accepted by the Administrative Agent and will be deemed to be made in the State
of Pennsylvania. THIS AGREEMENT WILL BE INTERPRETED AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF PENNSYLVANIA, EXCLUDING ITS CONFLICT OF LAWS RULES. The Indemnitor
hereby irrevocably consents to the exclusive jurisdiction of any state or
federal court in the county or judicial district where the Administrative
Agent’s office indicated above is located; provided that nothing contained in
this Agreement will prevent the Administrative Agent from bringing any action,
enforcing any award or judgment or exercising any rights against the Indemnitor
individually, against any security or against any property of the Indemnitor
within any other county, state or other foreign or domestic jurisdiction. The
Administrative Agent and the Indemnitor agree that the venue provided above is
the most convenient forum for both the Administrative Agent and the Indemnitor.
The Indemnitor waives any objection to venue and any objection based on a more
convenient forum in any action instituted under this Agreement.

19. Further Assurances. Indemnitor will, at the cost of Indemnitor, upon the
Administrative Agent’s request, execute, acknowledge and deliver to the
Administrative Agent such further documents and statements and do or cause to be
done such acts or things as the Administrative Agent may deem necessary or
appropriate to effect the transactions contemplated hereby or to confirm the
assumption of and agreement to pay, perform and discharge the liabilities and
obligations hereby assumed and agreed to be paid, performed or discharged, or
intended so to be.

20. WAIVER OF JURY TRIAL. THE INDEMNITOR IRREVOCABLY WAIVES ANY AND ALL RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE
RELATING TO THIS AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS

 

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AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE
INDEMNITOR ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

The Indemnitor acknowledges that it has read and understood all the provisions
of this Agreement, including the waiver of jury trial, and has been advised by
counsel as necessary or appropriate.

The remainder of this page is left blank intentionally.

Signatures follow on next page.

 

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[SIGNATURE PAGE TO INDEMNITY AGREEMENT]

WITNESS the due execution hereof as a document under seal, as of the date first
written above.

 

ATTEST:     UNDER ARMOUR, INC.,     a Maryland corporation

 

    By:  

 

    Printed:  

 

    Title:  

 

    UNDER ARMOUR MANUFACTURING, LLC,     a Maryland limited liability company  
 

By: Under Armour, Inc., a Maryland corporation, its sole

member

 

    By:  

 

    Printed:  

 

    Title:  

 

    UNDER ARMOUR RETAIL, INC.,     a Maryland corporation

 

    By:  

 

    Printed:  

 

    Title:  

 

    UNDER ARMOUR HOLDINGS, INC.,     a Maryland corporation

 

    By:  

 

    Printed:  

 

    Title:  

 

--------------------------------------------------------------------------------

[SIGNATURE PAGE TO INDEMNITY AGREEMENT]

 

ATTEST:     UNDER ARMOUR RETAIL OF MARYLAND, L.L.C.     UNDER ARMOUR RETAIL OF
FLORIDA, LLC     UNDER ARMOUR RETAIL OF OHIO, LLC     UNDER ARMOUR RETAIL OF
CALIFORNIA, LLC     UNDER ARMOUR RETAIL OF TEXAS, LLC     UNDER ARMOUR RETAIL OF
WISCONSIN, LLC     UNDER ARMOUR RETAIL OF MASSACHUSETTS, LLC     UNDER ARMOUR
RETAIL OF PENNSYLVANIA, LLC     UNDER ARMOUR RETAIL OF DELAWARE, LLC     UNDER
ARMOUR RETAIL OF GEORGIA, LLC     UNDER ARMOUR RETAIL OF NEW YORK, LLC     UNDER
ARMOUR RETAIL OF NEW JERSEY, LLC     UNDER ARMOUR RETAIL OF DC, LLC     UNDER
ARMOUR RETAIL OF CONNECTICUT, LLC     UNDER ARMOUR RETAIL OF ILLINOIS, LLC    
UNDER ARMOUR RETAIL OF SOUTH CAROLINA, LLC     UNDER ARMOUR RETAIL OF MICHIGAN,
LLC     UNDER ARMOUR RETAIL OF MAINE, LLC     UNDER ARMOUR RETAIL OF TENNESSEE,
LLC     UNDER ARMOUR RETAIL OF VIRGINIA, LLC,     each a limited liability
company

 

    By: Under Armour Retail, Inc., its sole member     By:  

 

    Printed:  

 

    Title:  

 

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[SIGNATURE PAGE TO INDEMNITY AGREEMENT]

 

   

PNC BANK, NATIONAL ASSOCIATION,

individually and as Administrative Agent

    By:  

 

    Printed:   John E. Hehir     Title:   Senior Vice President, Corporate
Banking

--------------------------------------------------------------------------------

EXHIBIT A

Guarantors

 

1.    Under Armour Manufacturing, LLC 2.    Under Armour Retail, Inc. 3.   
Under Armour Holdings, Inc. 4.    Under Armour Retail of Texas, LLC 5.    Under
Armour Retail of Ohio, LLC 6.    Under Armour Retail of Maryland, L.L.C. 7.   
Under Armour Retail of Florida, LLC 8.    Under Armour Retail of Virginia, LLC
9.    Under Armour Retail of California, LLC 10.    Under Armour Retail of
Wisconsin, LLC 11.    Under Armour Retail of Massachusetts, LLC 12.    Under
Armour Retail of New York, LLC 13.    Under Armour Retail of New Jersey, LLC 14.
   Under Armour Retail of Georgia, LLC 15.    Under Armour Retail of
Pennsylvania, LLC 16.    Under Armour Retail of DC, LLC 17.    Under Armour
Retail of Delaware, LLC 18.    Under Armour Retail of Connecticut, LLC 19.   
Under Armour Retail of Illinois, LLC 20.    Under Armour Retail of South
Carolina, LLC 21.    Under Armour Retail of Michigan, LLC 22.    Under Armour
Retail of Maine, LLC 23.    Under Armour Retail of Tennessee, LLC

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EXHIBIT B

Location of Leases

 

Store

  

Street

  

Suite

  

City, State, Zip

Glen Burnie, MD    1040 Swan Creek Dr.       Glen Burnie, MD 21226 Swan Creek,
MD    1010 Swan Creek Dr.    Suite B    Curtis Bay, MD 21226 Hagerstown, MD   
365 Prime Outlets Blvd.       Hagerstown, MD 21740 Leesburg, VA    241 Fort
Evans Road N.E.    Suite 369    Leesburg, VA 20176 Williamsburg, VA    5707-3
Richmond Rd.       Williamsburg, VA 23188 Wrentham, MA    One Premium Outlets
Blvd.    Suite 305    Wrentham, MA 02093 Tannersville, PA    1000 Rte. 611 North
   Suite C-12    Tannersville, PA 18372 Riverhead, NY    1513 Tanger Mall Dr.   
Suite 1513    Riverhead, NY 11901 Rehoboth Beach, DE    36698 Bayside Outlet
Drive    Suite 210    Rehoboth Beach, DE 19971 Jackson, NJ    537 Monmouth Road
   Suite 0128    Jackson, NJ 08527 Limerick, PA    18 Light Cap Road    Suite
1073    Limerick, PA 19464 Clinton, CT    20 Killingworth Turnpike    Suite 204
   Clinton, CT 06413 Waterloo, NY    655 Route 318    Suite A003    Waterloo, NY
13165 Kittery, ME    336 US Route 1    Suite 220 #6    Kittery, ME 03904
Woodbury, NY    350 Red Apple Court    Suite 350    Central Valley, NY 10917
Tinton Falls, NJ    4001 Route 66    Suite 101    Tinton Falls, NJ 07753
Ellenton, FL    5111 Factory Shops Blvd.       Ellenton, FL 34222
Jeffersonville, OH    8740 Factory Shops Blvd.       Jeffersonville, OH 43128
Destin, FL    10676 Emerald Coast Parkway West    Suite 135    Destin, FL 32550
San Marcos, TX    3939 IH-35 South    Suite 610    San Marcos, TX 78666 Pleasant
Prairie, WI    11211 120th Ave.    Suite 504    Pleasant Prairie, WI 53158
Dawsonville, GA    800 Highway 400 South    Suite 1052    Dawsonville, GA 30534
Orlando, FL    4975 International Dr.    Suite 3C01    Orlando, FL 32819
Houston, TX    29300 Hempstead Road    Suite 849    Houston, TX 77433 Myrtle
Beach, SC    10843 Kings Road (Hwy 17)    Suite 685    Myrtle Beach, SC 29572
Birch Run, MI    12150 Beyer Road    Suite F70    Birch Run, MI 48415 Annapolis,
MD    2575 Annapolis Mall       Annapolis, MD 21401 Fox Valley, IL    2308 Fox
Valley Center    A-6    Aurora, IL 60504 Natick, MA    1245 Worcester Street   
2068    Natick MA 017604 Montgomery Mall, MD    7101 Democracy Blvd.      
Bethesda, MD 20617

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INTERCOMPANY SUBORDINATION AGREEMENT

THIS INTERCOMPANY SUBORDINATION AGREEMENT (this “Agreement”) is dated as of
January 28, 2009 and is made by and among the entities listed on the signature
page hereto and each Person who hereafter becomes a Guarantor under the Credit
Agreement (as defined below) (subsequently joining this Agreement) (each being
individually referred to herein as a “Company” and collectively as the
“Companies”).

WITNESSETH THAT:

WHEREAS, each capitalized term used herein shall, unless otherwise defined
herein, have the meaning specified in that certain Credit Agreement dated as of
even date herewith (as it may be hereafter amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”) by and among Under
Armour, Inc., a Maryland corporation (the “Borrower”), the Guarantors now or
hereafter party thereto, the Lenders now or hereafter party thereto (the
“Lenders”) PNC Bank, National Association, as Administrative Agent (the “Agent”)
for the Lenders, SunTrust Bank, as Syndication Agent, and Compass Bank, as
Documentation Agent; and

WHEREAS, pursuant to the Credit Agreement and the other Loan Documents referred
to and defined in the Credit Agreement, the Lenders intend to make Loans to the
Borrower; and

WHEREAS, the Companies are or may become indebted to each other (the
Indebtedness of each of the Companies to any other Company, now existing or
hereafter incurred (whether created directly or acquired by assignment or
otherwise), and interest and premiums, if any, thereon and other amounts payable
in respect thereof are hereinafter collectively referred to as the “Intercompany
Indebtedness”); and

WHEREAS, the obligations of the Lenders to maintain the Commitments and make
Loans to the Borrower from time to time are subject to the condition, among
others, that the Companies subordinate the Intercompany Indebtedness to the
Obligations of the Borrower or any other Company to the Agent or the Lenders
pursuant to the Credit Agreement, the other Loan Documents or any Lender
Provided Interest Rate Hedge (collectively, the “Senior Debt”) in the manner set
forth herein.

NOW, THEREFORE, intending to be legally bound hereby, the parties hereto
covenant and agree as follows:

1. Intercompany Indebtedness Subordinated to Senior Debt. The recitals set forth
above are hereby incorporated by reference. All Intercompany Indebtedness shall
be subordinate and subject in right of payment to the prior indefeasible payment
in full of all Senior Debt pursuant to the provisions contained herein.

--------------------------------------------------------------------------------

2. Payment Over of Proceeds Upon Dissolution, Etc. Upon any distribution of
assets of any Company in the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to any such Company or to
its creditors, as such, or to its assets, or (b) any liquidation, dissolution or
other winding up of any such Company, whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy, or (c) any assignment for the
benefit of creditors or any marshalling of assets and liabilities of any such
Company (a Company distributing assets as set forth herein being referred to in
such capacity as a “Distributing Company”), then and in any such event, the
Agent shall be entitled to receive, for the benefit of the Agent and the Lenders
as their respective interests may appear, indefeasible payment in full of all
amounts due or to become due (whether or not an Event of Default has occurred
under the terms of the Loan Documents or the Senior Debt has been declared due
and payable prior to the date on which it would otherwise have become due and
payable) on or in respect of any and all Senior Debt before the holder of any
Intercompany Indebtedness owed by the Distributing Company is entitled to
receive any payment on account of the principal of or interest on such
Intercompany Indebtedness, and to that end, the Agent shall be entitled to
receive, for application to the payment of the Senior Debt, any payment or
distribution of any kind or character, whether in cash, property or securities,
which may be payable or deliverable in respect of the Intercompany Indebtedness
owed by the Distributing Company in any such case, proceeding, dissolution,
liquidation or other winding up event.

3. No Commencement of Any Proceeding. Each Company agrees that, so long as the
Senior Debt shall remain unpaid, it will not commence, or join with any creditor
other than the Lenders and the Agent in commencing, any proceeding referred to
in Section 2 herein against any other Company which owes it any Intercompany
Indebtedness.

4. Prior Payment of Senior Debt Upon Acceleration of Intercompany Indebtedness.
If any portion of the Intercompany Indebtedness owed by any Company becomes or
is declared due and payable before its stated maturity, then and in such event
the Agent and the Lenders shall be entitled to receive indefeasible payment in
full of all amounts due and to become due on or in respect of the Senior Debt
(whether or not an Event of Default has occurred under the terms of the Credit
Agreement or the other Loan Documents, or the Senior Debt has been declared due
and payable prior to the date on which it would otherwise have become due and
payable) before the holder of any such Intercompany Indebtedness is entitled to
receive any payment thereon.

5. No Payment When Senior Debt in Default. If any Event of Default shall have
occurred and be continuing, or such an Event of Default or Potential Default
would result from or exist after giving effect to a payment with respect to any
portion of the Intercompany Indebtedness, unless the Required Lenders shall have
consented to or waived the same, so long as any of the Senior Debt shall remain
outstanding, no payment shall be made by any Company owing such Intercompany
Indebtedness on account of principal or interest on any portion of the
Intercompany Indebtedness.

6. Payment Permitted if No Default. Nothing contained in this Agreement shall
prevent any of the Companies, at any time except during the pendency of any of
the conditions

 

- 2 -

--------------------------------------------------------------------------------

described in Sections 2, 4 and 5, from making payments at any time of principal
of or interest on any portion of the Intercompany Indebtedness, or the retention
thereof by any of the Companies of any money deposited with them for the payment
of or on account of the principal of or interest on the Intercompany
Indebtedness.

7. Receipt of Prohibited Payments. If, notwithstanding the foregoing provisions
of Sections 2, 4, 5 and 6, a Company which is owed Intercompany Indebtedness by
a Distributing Company shall have received any payment or distribution of assets
from the Distributing Company of any kind or character, whether in cash,
property or securities, then and in such event such payment or distribution
shall be held in trust for the benefit of the Agent and the Lenders as their
respective interests may appear, shall be segregated from other funds and
property held by such Company, and shall be forthwith paid over to the Agent in
the same form as so received (with any necessary endorsement) to be applied (in
the case of cash) to or held as collateral (in the case of noncash property or
securities) for the payment or prepayment of the Senior Debt in accordance with
the terms of the Credit Agreement.

8. Rights of Subrogation. Each Company agrees that no payment or distribution to
the Agent or the Lenders pursuant to the provisions of this Agreement shall
entitle it to exercise any rights of subrogation in respect thereof until the
Senior Debt shall have been indefeasibly paid in full and the Commitments shall
have terminated and the Letters of Credit have expired.

9. Instruments Evidencing Intercompany Indebtedness. Each Company shall cause
each instrument which now or hereafter evidences all or a portion of the
Intercompany Indebtedness to be conspicuously marked as follows:

“This instrument is subject to the terms of an Intercompany Subordination
Agreement dated as of January 28, 2009 in favor of PNC Bank, National
Association, as Agent for the Lenders referred to therein, which Intercompany
Subordination Agreement is incorporated herein by reference. Notwithstanding any
contrary statement contained in this instrument, no payment on account of the
principal thereof or interest thereon shall become due or payable except in
accordance with the express terms of said Intercompany Subordination Agreement.”

Each Company will further mark its books of account in such a manner as shall be
effective to give proper notice of the effect of this Agreement.

10. Agreement Solely to Define Relative Rights. The purpose of this Agreement is
solely to define the relative rights of the Companies, on the one hand, and the
Agent and the Lenders, on the other hand. Nothing contained in this Agreement is
intended to or shall impair, as between any of the Companies and their creditors
other than the Agent and the Lenders, the obligation of the Companies to each
other to pay the principal of and interest on the Intercompany Indebtedness as
and when the same shall become due and payable in accordance with its terms, or
is intended to or shall affect the relative rights among the Companies and their

 

- 3 -

--------------------------------------------------------------------------------

creditors other than the Agent and the Lenders, nor shall anything herein
prevent any of the Companies from exercising all remedies otherwise permitted by
applicable Law upon default under any agreement pursuant to which the
Intercompany Indebtedness is created, subject to the rights, if any, under this
Agreement of the Agent and the Lenders to receive cash, property or securities
otherwise payable or deliverable with respect to the Intercompany Indebtedness.

11. No Implied Waivers of Subordination. No right of the Agent or any Lender to
enforce subordination, as herein provided, shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of any Company
or by any act or failure to act by the Agent or any Lender, or by any
non-compliance by any Company with the terms, provisions and covenants of any
agreement pursuant to which the Intercompany Indebtedness is created, regardless
of any knowledge thereof with which the Agent or any Lender may have or be
otherwise charged. Each Company by its acceptance hereof shall agree that, so
long as there is Senior Debt outstanding or Commitments in effect under the
Credit Agreement, such Company shall not agree to sell, assign, pledge, encumber
or otherwise dispose of, or agree to compromise, the obligations of the other
Companies with respect to their Intercompany Indebtedness, other than by means
of payment of such Intercompany Indebtedness according to its terms, without the
prior written consent of the Agent.

Without in any way limiting the generality of the foregoing paragraph, the Agent
or any of the Lenders may, at any time and from time to time, without the
consent of or notice to the Companies, without incurring responsibility to the
Companies and without impairing or releasing the subordination provided in this
Agreement or the obligations hereunder of the Companies to the Agent and the
Lenders, do any one or more of the following: (i) change the manner, place or
terms of payment, or extend the time of payment, renew or alter the Senior Debt
or otherwise amend or supplement the Senior Debt or the Loan Documents;
(ii) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing the Senior Debt; (iii) release any person liable
in any manner for the payment or collection of the Senior Debt; and
(iv) exercise or refrain from exercising any rights against any of the Companies
and any other person.

12. Additional Subsidiaries. The Companies covenant and agree that they shall
cause Subsidiaries created or acquired after the date of this Agreement, and any
other Subsidiaries required to join this Agreement pursuant to Section 7.2.8
[Subsidiaries] or otherwise under the Credit Agreement, to execute a Guarantor
Joinder in substantially the form of Exhibit 1.1(G)(1) to the Credit Agreement,
whereby such Subsidiary joins this Agreement and subordinates all Indebtedness
owed to any such Subsidiary by any of the Companies or other Subsidiaries
hereafter created or acquired to the Senior Debt.

13. Continuing Force and Effect. This Agreement shall continue in force for so
long as any portion of the Senior Debt remains unpaid and any Commitments or
Letters of Credit under the Credit Agreement remain outstanding, it being
contemplated that this Agreement be of a continuing nature.

 

- 4 -

--------------------------------------------------------------------------------

14. Modification, Amendments or Waivers. Any and all agreements amending or
changing any provision of this Agreement or the rights of the Agent or the
Lenders hereunder, and any and all waivers or consents to Events of Default or
other departures from the due performance of the Companies hereunder, shall be
made only by written agreement, waiver or consent signed by the Agent, acting on
behalf of all the Lenders, with the written consent of the Required Lenders, any
such agreement, waiver or consent made with such written consent being effective
to bind all the Lenders.

15. Expenses. The Companies unconditionally and jointly and severally agree upon
demand to pay to the Agent and the Lenders the amount of any and all
out-of-pocket costs, expenses and disbursements, including fees and expenses of
counsel (including the allocated costs of staff counsel) for which reimbursement
is customarily obtained, which the Agent or any of the Lenders may incur in
connection with (a) the administration of this Agreement, (b) the exercise or
enforcement of any of the rights of the Agent or the Lenders hereunder, or
(c) the failure by the Companies to perform or observe any of the provisions
hereof.

16. Severability. The provisions of this Agreement are intended to be severable.
If any provision of this Agreement shall be held invalid or unenforceable in
whole or in part in any jurisdiction, such provision shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.

17. Governing Law. This Agreement shall be a contract under the internal laws of
the Commonwealth of Pennsylvania and for all purposes shall be construed in
accordance with the internal laws of the Commonwealth of Pennsylvania without
giving effect to its principles of conflict of laws.

18. Successors and Assigns. This Agreement shall inure to the benefit of the
Agent and the Lenders and their respective successors and assigns, and the
obligations of the Companies shall be binding upon their respective successors
and permitted assigns, provided, that no company may assign or transfer its
rights or obligations hereunder or any interest herein and any such purported
assignment or transfer shall be null and void. The duties and obligations of the
Companies may not be delegated or transferred by the Companies without the
written consent of the Required Lenders and any such delegation or transfer
without such consent shall be null and void. Except to the extent otherwise
required by the context of this Agreement, the word “Lenders” when used herein
shall include, without limitation, any holder of a Note or an assignment of
rights therein originally issued to a Lender under the Credit Agreement, and
each such holder of a Note or assignment shall have the benefits of this
Agreement to the same extent as if such holder had originally been a Lender
under the Credit Agreement.

19. Joint and Several Obligations. Each of the obligations of each and every
Company under this Agreement is joint and several. The Agent and the Lenders, or
any of them, may, in their sole discretion, elect to enforce this Agreement
against any Company without any duty or responsibility to pursue any other
Company and such an election by the Agent and the Lenders, or any of them, shall
not be a defense to any action the Agent and the Lenders, or any of

 

- 5 -

--------------------------------------------------------------------------------

them, may elect to take against any Company. Each of the Lenders and Agent
hereby reserve all rights against each Company.

20. Counterparts. This Agreement may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which,
when executed and delivered, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument.

21. Attorneys-in-Fact. Each of the Companies hereby authorizes and empowers the
Agent, at its election and in the name of either itself, for the benefit of the
Agent and the Lenders as their respective interests may appear, or in the name
of each such Company as is owed Intercompany Indebtedness, to execute and file
proofs and documents and take any other action the Agent may deem advisable to
completely protect the Agent’s and the Lenders’ interests in the Intercompany
Indebtedness and their right of enforcement thereof, and to that end each of the
Companies hereby irrevocably makes, constitutes and appoints the Agent, its
officers, employees and agents, or any of them, with full power of substitution,
as the true and lawful attorney-in-fact and agent of such Company, and with full
power for such Company, and in the name, place and stead of such Company for the
purpose of carrying out the provisions of this Agreement, and taking any action
and executing, delivering, filing and recording any instruments which the Agent
may deem necessary or advisable to accomplish the purposes hereof, which power
of attorney, being given for security, is coupled with an interest and is
irrevocable. Each Company hereby ratifies and confirms, and agrees to ratify and
confirm, all action taken by the Agent, its officers, employees or agents
pursuant to the foregoing power of attorney.

22. Application of Payments. In the event any payments are received by the Agent
under the terms of this Agreement for application to the Senior Debt at any time
when the Senior Debt has not been declared due and payable and prior to the date
on which it would otherwise become due and payable, such payment shall
constitute a voluntary prepayment of the Senior Debt for all purposes under the
Credit Agreement.

23. Remedies. In the event of a breach by any of the Companies in the
performance of any of the terms of this Agreement, the Agent, on behalf of the
Lenders, may demand specific performance of this Agreement and seek injunctive
relief and may exercise any other remedy available at law or in equity, it being
recognized that the remedies of the Agent on behalf of the Lenders at law may
not fully compensate the Agent on behalf of the Lenders for the damages they may
suffer in the event of a breach hereof.

24. Consent to Jurisdiction; Waiver of Jury Trial. Each of the Companies hereby
irrevocably consents to the non-exclusive jurisdiction of any Pennsylvania State
or Federal Court sitting in Pittsburgh, Pennsylvania, waives personal service of
any and all process upon it and consents that all such service of process be
made by certified or registered mail directed to the Companies at the addresses
set forth or referred to in Section 24 hereof and service so made shall be
deemed to be completed upon actual receipt thereof. Each of the Companies waives
any objection to jurisdiction and venue of any action instituted against it as
provided herein and agrees not to assert any defense based on lack of
jurisdiction or venue, AND EACH OF THE

 

- 6 -

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COMPANIES WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT TO THE FULL EXTENT PERMITTED BY LAW.

Each Company hereby appoints a process agent, Corporation Service Company, (the
“Process Agent”) as its agent to receive on behalf of such party and its
respective property, service of copies of the summons and complaint and any
other process which may be served in any action or proceeding. Such service may
be made by mailing or delivering a copy of such process to any of the Companies
in care of the Process Agent at the Process Agent’s address, and each of the
Companies hereby authorizes and directs the Process Agent to receive such
service on its behalf. Each Company agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions (or any political subdivision thereof) by suit on the judgment or
in any other manner provided by law. Each Company further agrees that it shall,
for so long as any Commitment, Letter of Credit or any obligation of any Loan
Party to the Lender remains outstanding, continue to retain Process Agent for
the purposes set forth in this Section 24. The Process Agent hereby accepts the
appointment of Process Agent by the Companies and agrees to act as Process Agent
on behalf of the Companies. The Process Agent has an address of, on the date
hereof, 2711 Centerville Road, Suite 400, Wilmington, DE 19808, United States.

25. EXCEPT AS PROHIBITED BY LAW, EACH COMPANY, THE AGENT AND THE LENDERS HEREBY
WAIVE TRIAL BY A JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY
KIND ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE COLLATERAL
TO THE FULLEST EXTENT PERMITTED BY LAW.

26. Notices. All notices, statements, requests and demands and other
communications given to or made upon the Companies, the Agent or the Lenders in
accordance with the provisions of this Agreement shall be given or made as
provided in Section 10.5 [Notices] of the Credit Agreement.

27. Rules of Construction. The rules of construction set forth in Section 1.2
[Construction] of the Credit Agreement shall apply to this Agreement.

The remainder of this page is left blank intentionally.

Signatures follow on next page.

 

- 7 -

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[SIGNATURE PAGE TO

INTERCOMPANY SUBORDINATION AGREEMENT]

WITNESS the due execution hereof as of the day and year first above written.

 

UNDER ARMOUR, INC., a Maryland corporation By:  

 

Printed:  

 

Title:  

 

UNDER ARMOUR MANUFACTURING, LLC,

a Maryland limited liability company

By: Under Armour, Inc., a Maryland corporation, its sole member By:  

 

Printed:  

 

Title:  

 

UNDER ARMOUR RETAIL, INC.,

a Maryland corporation

By:  

 

Printed:  

 

Title:  

 

--------------------------------------------------------------------------------

[SIGNATURE PAGE TO

INTERCOMPANY SUBORDINATION AGREEMENT]

 

UNDER ARMOUR HOLDINGS, INC., a Maryland corporation By:  

 

Printed:  

 

Title:  

 

UNDER ARMOUR RETAIL OF MARYLAND, L.L.C. UNDER ARMOUR RETAIL OF FLORIDA, LLC
UNDER ARMOUR RETAIL OF OHIO, LLC UNDER ARMOUR RETAIL OF CALIFORNIA, LLC UNDER
ARMOUR RETAIL OF TEXAS, LLC UNDER ARMOUR RETAIL OF WISCONSIN, LLC
UNDER ARMOUR RETAIL OF MASSACHUSETTS, LLC
UNDER ARMOUR RETAIL OF PENNSYLVANIA, LLC UNDER ARMOUR RETAIL OF DELAWARE, LLC
UNDER ARMOUR RETAIL OF GEORGIA, LLC UNDER ARMOUR RETAIL OF NEW YORK, LLC
UNDER ARMOUR RETAIL OF NEW JERSEY, LLC UNDER ARMOUR RETAIL OF DC, LLC
UNDER ARMOUR RETAIL OF CONNECTICUT, LLC UNDER ARMOUR RETAIL OF ILLINOIS, LLC
UNDER ARMOUR RETAIL OF SOUTH CAROLINA, LLC UNDER ARMOUR RETAIL OF MICHIGAN, LLC
UNDER ARMOUR RETAIL OF MAINE, LLC UNDER ARMOUR RETAIL OF TENNESSEE, LLC

UNDER ARMOUR RETAIL OF VIRGINIA, LLC,

each a limited liability company

By: Under Armour Retail, Inc., its sole member By:  

 

Printed:  

 

Title:  

 

--------------------------------------------------------------------------------

LOCKBOX AGREEMENT

                    , 20    

 

 

   

 

   

 

   

Attention:                     

Ladies and Gentlemen:

Reference is made to account number                                  (the
“Blocked Account”) at                              (the “the Depositary Bank”),
into which certain monies, instruments and other properties are deposited on
behalf of Under Armour, Inc., a Maryland corporation (the “Customer”). PNC Bank,
National Association (the “Agent”) hereby advises the the Depositary Bank that
pursuant to that certain Credit Agreement by and among the Customer, the Lenders
party thereto, the Guarantors party thereto, the Agent, as Administrative Agent,
SunTrust Bank, as Syndication Agent, and Compass Bank, as Documentation Agent,
and the other documents executed and delivered in connection therewith
(collectively, the “Loan Documents”), the Customer has granted to the Agent, for
the benefit of the Lenders, a security interest in, among other things, the
Blocked Account and all proceeds thereof. All capitalized terms used in this
letter that are not otherwise defined herein shall have the meanings assigned to
them in the Loan Documents.

By signing this letter agreement (this “Lockbox Agreement”), the Depositary
Bank: (i) acknowledges the above notice from the Agent of the security interest
granted to the Agent, for the benefit of the Lenders, in the Blocked Account;
(ii) confirms that the Depositary Bank has received no currently effective
notice of any pledge or assignment of the Blocked Account (other than pursuant
to this Lockbox Agreement); and (iii) agrees that, to the extent of the
obligations of the Customer incurred, or to be incurred, under the Loan
Documents and until this Lockbox Agreement is terminated, the Depositary Bank
shall have no security interest or rights in or claims to the funds in the
Blocked Account except as set forth herein. Further, it is hereby agreed that:

 

(a) Prior to the date hereof, the Blocked Account was maintained solely for the
benefit of, and under the sole dominion and control, of the Customer, its
designated employees and agents and was entitled
“                                .” As of the date hereof: (i) the Blocked
Account will be maintained solely for the benefit of the Agent and will be under
the sole dominion and control of the Agent, except as set forth in paragraph
(d) below; (ii) the name of the Blocked Account will be changed to “Customer for
the benefit of Agent”; and (iii) the Blocked Account will be subject to written
instructions from an officer of the Agent.

 

(b) All expenses for the maintenance of the Blocked Account and all expenses
arising under this Lockbox Agreement are the responsibility of the Customer.

 

(c)

Unless the Agent directs the Depositary Bank in writing to the contrary, and
subject to the Depositary Bank’s right to place holds for uncollected funds
pursuant to Federal Reserve Regulation CC and the Depositary Bank’s customary
procedures, the Depositary Bank agrees to

--------------------------------------------------------------------------------

 

wire transfer the funds in the Blocked Account, on a daily basis and in same day
funds, to such account as the Agent may direct in writing.

 

(d) Notwithstanding the foregoing, the Depositary Bank shall have the right at
any time to set-off against and withdraw funds from the Blocked Account for:
(i) items credited to the Blocked Account in error or which were unpaid for any
reason; (ii) any amounts deposited therein in error or as necessary to correct
processing errors; (iii) the Depositary Bank’s fees and expenses owed by
Customer and Agent for the maintenance of the Blocked Account and for the
Depositary Bank’s services under this Lockbox Agreement; and (iv) reasonable
attorney’s fees of the Depositary Bank’s counsel for the review, negotiation and
enforcement of this Lockbox Agreement, which attorney’s fees Customer hereby
agrees to pay. Except as set forth in this paragraph, all transfers referred to
in paragraph (c) above shall be made by the Depositary Bank irrespective of, and
without deduction for, any counterclaim, defense, recoupment or set-off.

 

(e) The Customer agrees that the Agent shall have full and irrevocable right,
power and authority to take any action which Agent deems reasonably necessary or
appropriate to preserve or protect its interest in the Blocked Account
consistent with this Lockbox Agreement and the Loan Documents.

 

(f) The Depositary Bank will follow its customary procedures for determining
whether or not to honor any checks, drafts or other payment requests drawn on or
with respect to the Blocked Account. Any electronic funds transfers (wire,
automated clearing house, etc.) to or from the Blocked Account will be subject
to the terms and conditions of the Depositary Bank’s standard agreements for
such services, as in effect and as amended from time to time. In the event of
any conflict between the terms and conditions of such agreements and those of
this Lockbox Agreement, then this Lockbox Agreement shall control.

 

(g) The Depositary Bank will not modify or alter the Depositary Bank’s
arrangements with the Customer concerning the Blocked Account without the
Agent’s prior written consent.

 

(h) The Depositary Bank may rely, and shall be protected in acting or refraining
from acting, upon any notice (including, without limitation, to electronically
confirmed facsimiles of such notice) believed by the Depositary Bank to be
genuine and to have been given by the proper party or parties.

 

(i) This Lockbox Agreement shall not be effective until signed by the Agent, the
Customer and the Depositary Bank and shall then be binding upon the parties
hereto and their respective successors and assigns. In the absence of fraud or
abuse on the part of the Customer or any of its subsidiaries, the Depositary
Bank may not terminate this Lockbox Agreement or the Blocked Account without
giving thirty (30) days’ prior written notice thereof to both the Customer and
the Agent. Upon such termination, the Depositary Bank shall close the Blocked
Account and transfer all funds therein and any future instruments deposited in
the Blocked Account to the Agent.

 

(j)

The Customer and the Agent agree to indemnify, defend and hold harmless the
Depositary Bank and its affiliates, directors, officers, employees, agents,
successors and assigns (each a “Bank Indemnitee”) from and against any and all
liabilities, losses, claims, damages, demands, costs and expenses of every kind
(including, without limitation, costs incurred as a result of items being
deposited in the Blocked Account and being unpaid for any reason, reasonable
attorney’s fees

 

2

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and the reasonable charges of the Depositary Bank’s in-house counsel) incurred
or sustained by any Bank Indemnitee arising out of the Depositary Bank’s
performance of the services contemplated by this Lockbox Agreement, except to
the extent such liabilities, losses, claims, damages, demands, costs and
expenses are the direct result of the Depositary Bank’s gross negligence or
willful misconduct. Compliance by the Depositary Bank with its standard
procedures for the services provided hereunder shall be deemed to be the
exercise of ordinary care by the Depositary Bank. The Depositary Bank shall have
no obligation to review or confirm that any actions taken pursuant to this
Lockbox Agreement comply with the Loan Documents or any other agreement or
document. The provisions of this paragraph shall survive termination of this
Lockbox Agreement.

 

(k) The Depositary Bank will not be liable to the Customer or the Agent for any
expense, claim, loss, damage or cost (“Damages”) arising out of or relating to
its performance under this Lockbox Agreement other than Damages which result
directly from its acts or omissions constituting gross negligence or willful
misconduct. In no event will the Depositary Bank be liable for any punitive,
special, indirect, or consequential damages, including, without limitation, lost
profits, even if advised of the possibility or likelihood of such damages.

 

(l) The Customer and the Depositary Bank agree to indemnify, defend and hold
harmless the Agent and its affiliates, directors, officers, employees, agents,
successors and assigns (each an “Agent Indemnitee”) from and against any and all
liabilities, losses, claims, damages, demands, costs and expenses of every kind
(including, without limitation, costs incurred as a result of items being
deposited in the Blocked Account and being unpaid for any reason, reasonable
attorney’s fees and the reasonable charges of the Agent’s in-house counsel)
incurred or sustained by any Agent Indemnitee arising out of the Agent’s
performance of the services contemplated by this Lockbox Agreement, except to
the extent such liabilities, losses, claims, damages, demands, costs and
expenses are the direct result of the Agent’s gross negligence or willful
misconduct. Compliance by the Agent with its standard procedures for the
services provided hereunder shall be deemed to be the exercise of ordinary care
by the Agent. The Agent shall have no obligation to review or confirm that any
actions taken pursuant to this Lockbox Agreement comply with the Loan Documents
or any other agreement or document. The provisions of this paragraph shall
survive termination of this Lockbox Agreement.

 

(m) The Agent will not be liable to the Customer or the Depositary Bank for any
Damages arising out of or relating to its performance under this Lockbox
Agreement other than Damages which result directly from its acts or omissions
constituting gross negligence. In no event will the Agent be liable for any
punitive, special, indirect, or consequential damages, including, without
limitation, lost profits, even if advised of the possibility or likelihood of
such damages.

 

(n)

If the Customer becomes subject to a voluntary or involuntary proceeding under
the United States Bankruptcy Code, or if the Depositary Bank is otherwise served
with legal process or becomes aware of facts or circumstances which the
Depositary Bank in good faith believes affects its ability to carry out the
terms of this Agreement or the disposition of funds deposited in the Blocked
Account, the Depositary Bank shall have the right: (a) to place a hold on funds
deposited in the Blocked Account until such time as the Depositary Bank receives
an appropriate order from a court of competent jurisdiction or other assurances
satisfactory to the Depositary Bank establishing that this Agreement may be
effectuated and/or funds may continue to be disbursed according to the
instructions contained in this Lockbox Agreement; or (b) to commence, at the
Customer’s expense, an interpleader action in any court of competent

 

3

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jurisdiction and to take no further action except in accordance with joint
instructions from the Customer and the Agent or in accordance with the final
order of court in such action.

 

(o) This Lockbox Agreement may be executed by one or more of the parties hereto
on any number of separate counterparts, each of which when so executed shall be
an original, but all of which shall together constitute one and the same
instrument.

 

(p) This Lockbox Agreement shall be governed by and construed in accordance with
the laws of the State of Pennsylvania.

 

Very truly yours, PNC BANK, NATIONAL ASSOCIATION By:  

 

Name:  

 

Title:  

 

Acknowledged and agreed to this      day of             , 20        .

 

[DEPOSITARY BANK] By:  

 

Name:  

 

Title:  

 

The Customer hereby agrees and consents to all of the terms and conditions of
the foregoing Lockbox Agreement and authorizes and directs the Depositary Bank
to take any and all action required or requested by the Agent or otherwise
necessary to implement and maintain compliance with such terms and conditions.

 

[CUSTOMER] By:  

 

Name:  

 

Title:  

 

 

4

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REVOLVING CREDIT NOTE

 

[US $                    ]         Pittsburgh, Pennsylvania        
    [                    ], 2009

FOR VALUE RECEIVED, the undersigned, UNDER ARMOUR, INC., a Maryland corporation
(herein called the “Borrower”), hereby promises to pay to the order of
[                    ] (the “Lender”), the lesser of (i) the principal sum of
[                     (US $                    )] [LENDER’S REVOLVING CREDIT
COMMITMENT], or (ii) the aggregate unpaid principal balance of all revolving
credit loans made by the Lender to the Borrower pursuant to the Credit Agreement
(the “Revolving Credit Loans”), dated as of [                    , 2009], among
each of the Borrower, the Guarantors now or hereafter party thereto, the Lenders
now or hereafter party thereto, and PNC Bank, National Association, as Agent
(hereinafter referred to in such capacity as the “Agent”) (as amended, restated,
modified, or supplemented from time to time, the “Credit Agreement”), payable by
11:00 am on the Expiration Date, together with interest on the unpaid principal
balance hereof from time to time outstanding from the date hereof at the rate or
rates per annum specified by the Borrower pursuant to, or as otherwise provided
in, the Credit Agreement.

All capitalized terms used herein shall, unless otherwise defined herein, have
the same meanings given to such terms in the Credit Agreement.

Interest on the unpaid principal balance hereof from time to time outstanding
from the date hereof will be payable at the times provided for in the Credit
Agreement. Upon the occurrence and during the continuation of an Event of
Default, the Borrower shall pay interest on the entire principal amount of the
then outstanding Revolving Credit Loans evidenced by this Revolving Credit Note
(this “Note”) and all other obligations due and payable to the Lender pursuant
to the Credit Agreement and the other Loan Documents at a rate per annum as set
forth in Section 3.3 of the Credit Agreement. Such interest rate will accrue
before and after any judgment has been entered.

Subject to the provisions of the Credit Agreement, payments of both principal
and interest shall be made without setoff, counterclaim, or other deduction of
any nature at the office of the Agent located at The PNC Financial Services
Group, 2 Hopkins Plaza, 21st Floor, Baltimore, Maryland 21201, Attention:
Mr. John E. Hehir, Senior Vice President, Corporate Banking, unless otherwise
directed in writing by the holder hereof, in lawful money of the United States
of America in immediately available funds.

This Note is one of the Revolving Credit Notes referred to in, and is entitled
to the benefits of, the Credit Agreement and other Loan Documents, including the
representations, warranties, covenants, conditions, security interests, and
Liens contained or granted therein. The Credit Agreement among other things
contains provisions for acceleration of the maturity hereof upon the happening
of certain stated events and also for prepayment, in certain circumstances, on

--------------------------------------------------------------------------------

account of principal hereof prior to maturity upon the terms and conditions
therein specified. The Borrower waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note and the Credit Agreement.

This Note shall bind the Borrower and its successors and assigns, and the
benefits hereof shall inure to the benefit of the Lender and its successors and
assigns. All references herein to the “Borrower” and the “Lender” shall be
deemed to apply to the Borrower and the Lender, respectively, and their
respective successors and assigns as permitted under the Credit Agreement.

This Note and any other documents delivered in connection herewith and the
rights and obligations of the parties hereto and thereto shall for all purposes
be governed by and construed and enforced in accordance with the internal laws
of the Commonwealth of Pennsylvania without giving effect to its conflicts of
law principles.

The remainder of this page is left blank intentionally.

Signatures follow on next page.

 

- 2 -

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[SIGNATURE PAGE TO REVOLVING CREDIT NOTE]

IN WITNESS WHEREOF, and intending to be legally bound hereby, the undersigned
has executed this Note by its duly authorized officer with the intention that it
constitute a sealed instrument.

 

UNDER ARMOUR, INC., a Maryland corporation By:  

 

Printed:  

 

Title:  

 

--------------------------------------------------------------------------------

SWING LOAN NOTE

 

US $10,000,000

   Pittsburgh, Pennsylvania    January 28, 2009

FOR VALUE RECEIVED, the undersigned, UNDER ARMOUR, INC., a Maryland corporation
(herein called the “Borrower”), hereby unconditionally promises to pay to the
order of PNC BANK, NATIONAL ASSOCIATION (the “Lender”), the lesser of (i) the
principal sum of Ten Million Dollars (US $10,000,000), or (ii) the aggregate
unpaid principal balance of all Swing Loans made by the Lender to the Borrower
pursuant to that Credit Agreement, dated as of January 28, 2009, among each of
the Borrower, the Guarantors now or hereafter party thereto, the Lenders now or
hereafter party thereto, the Lender, as administrative agent for the other
Lenders party thereto (hereinafter referred to in such capacity as the “Agent”),
SunTrust Bank, as Syndication Agent, and Compass Bank, as Documentation Agent
(as amended, restated, modified, or supplemented from time to time, the “Credit
Agreement”), payable with respect to each Swing Loan evidenced hereby on the
earlier of (i) demand by the Lender or (ii) by 11:00 a.m. Pittsburgh time on the
Expiration Date, or at such other time specified in the Credit Agreement.

All capitalized terms used herein shall, unless otherwise defined herein, have
the same meanings given to such terms in the Credit Agreement.

The Borrower shall pay interest on the unpaid principal balance of each Swing
Loan from time to time outstanding hereunder from the date hereof at the rate
per annum and on the date(s) provided in the Credit Agreement. Upon the
occurrence and during the continuation of an Event of Default, the Borrower
shall pay interest on the entire principal amount of the then outstanding Swing
Loans evidenced by this Swing Loan Note (this “Note”) at a rate per annum as set
forth in Section 3.3 of the Credit Agreement. Such interest rate will accrue
before and after any judgment has been entered.

Subject to the provisions of the Credit Agreement, payments of both principal
and interest shall be made without setoff, counterclaim or other deduction of
any nature at the office of the Agent located at The PNC Financial Services
Group, 2 Hopkins Plaza, 21st Floor, Baltimore, Maryland 21201, Attention:
Mr. John E. Hehir, Senior Vice President, Corporate Banking, unless otherwise
directed in writing by the Agent, in lawful money of the United States of
America in immediately available funds.

This Note is the Swing Loan Note referred to in, and is entitled to the benefits
of, the Credit Agreement and the other Loan Documents, including the
representations, warranties, covenants, conditions and liens contained or
granted therein. The Credit Agreement among other things contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayment, in certain circumstances, on demand or otherwise, on
account of principal hereof prior to maturity upon the terms and conditions
therein specified. The Borrower waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note and the Credit Agreement.

--------------------------------------------------------------------------------

The Borrower acknowledges and agrees that the Lender may at any time and in its
sole discretion demand payment of all amounts outstanding under this Note
without prior notice to the Borrower.

This Note shall bind the Borrower and its successors and assigns, and the
benefits hereof shall inure to the benefit of the Lender and its successors and
assigns. All references herein to the “Borrower”, the “Agent” and the “Lender”
shall be deemed to apply to the Borrower, the Agent and the Lender,
respectively, and their respective successors and assigns.

This Note and any other documents delivered in connection herewith and the
rights and obligations of the parties hereto and thereto shall for all purposes
be governed by and construed and enforced in accordance with the internal laws
of the Commonwealth of Pennsylvania without giving effect to its conflict of
laws principles.

The remainder of this page is left blank intentionally.

Signatures follow on next page.

 

2

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[SIGNATURE PAGE TO SWING LOAN NOTE]

IN WITNESS WHEREOF, and intending to be legally bound hereby, the undersigned
has executed this Swing Loan Note by its duly authorized officers with the
intention that it constitute a sealed instrument.

 

UNDER ARMOUR, INC., a Maryland corporation By:  

 

Printed:  

 

Title:  

 

--------------------------------------------------------------------------------

PLEDGE AGREEMENT

THIS PLEDGE AGREEMENT, dated as of January 28, 2009 (as amended, restated,
supplemented or modified from time to time, this “Agreement”), is given, made
and entered into by EACH OF THE PERSONS LISTED ON THE SIGNATURE PAGES HERETO AND
EACH OF THE OTHER PERSONS WHICH BECOME PLEDGORS HEREUNDER FROM TIME TO TIME,
(each, a “Pledgor” and collectively, the “Pledgors”), a Pledgor of the
corporations, limited liability companies, partnerships or other entities as set
forth on Schedule A hereto (each a “Company” and collectively the “Companies”),
and PNC BANK, NATIONAL ASSOCIATION, as the administrative agent for itself and
the other Lenders under the Credit Agreement described below (the
“Administrative Agent”).

WHEREAS, pursuant to that certain Credit Agreement (amended, restated,
supplemented or modified from time to time, the “Credit Agreement”) dated as of
January 28, 2009, by and among Under Armour, Inc., a Maryland corporation (the
“Borrower”), each of the Guarantors party thereto, the Lenders party thereto,
the Administrative Agent, SunTrust Bank as Syndication Agent, and Compass Bank,
as Documentation Agent, the Administrative Agent and the Lenders have agreed to
provide certain loans and other financial accommodations to the Borrower; and

WHEREAS, pursuant to and in consideration of the Credit Agreement, certain of
the issued and outstanding capital stock, shares, securities, member interests,
partnership interests and other ownership interests of each of the Companies is
to be pledged to the Administrative Agent in accordance herewith; and

WHEREAS, each Pledgor owns the outstanding capital stock, shares, securities,
member interests, partnership interests and other ownership interests of the
Companies as set forth on Schedule A hereto.

NOW, THEREFORE, intending to be legally bound hereby, the parties hereto hereby
agree as follows:

1. Defined Terms.

(a) Except as otherwise expressly provided herein, capitalized terms used in
this Agreement shall have the respective meanings assigned to them in the Credit
Agreement. Where applicable and except as otherwise expressly provided herein,
terms used herein (whether or not capitalized) shall have the respective
meanings assigned to them in the Uniform Commercial Code as enacted in the State
of Maryland, as amended from time to time (the “Code”).

(b) “Pledged Collateral” shall mean and include all of each Pledgor’s present
and future right, title and interest in and to the following: (i) all investment
property, capital stock, shares, securities, member interests, partnership
interests, warrants, options, put rights, call rights, similar rights, and all
other ownership or participation interests in any entity or business or in the
revenue, income, or profits thereof; (ii) all property of each Pledgor in the
Administrative Agent’s possession or in transit to or from, under the custody or
control of, or on deposit with, the Administrative Agent or any Affiliate
thereof, including deposit and other accounts; (iii) cash and cash equivalents
(collectively referred to herein as “Investments”, including all Investments
listed on Schedule A attached hereto and made a part hereof, and all

--------------------------------------------------------------------------------

rights and privileges pertaining thereto, including, without limitation, all
present and future Investments receivable in respect of or in exchange for any
Investments, and all rights under shareholder, member, partnership agreements
and other similar agreements relating to any Investments, all rights to
subscribe for Investments, whether or not incidental to or arising from
ownership of any Investments; (iv) all Investments hereafter pledged by any
Pledgor to Administrative Agent to secure the Secured Obligations; (v) together
with all cash, interest, stock and other dividends or distributions paid or
payable on any of the foregoing, and all books and records (whether paper,
electronic or any other medium) pertaining to the foregoing, including, without
limitation, all stock record and transfer books, and together with whatever is
received when any of the foregoing is sold, exchanged, replaced or otherwise
disposed of, including all proceeds, as such term is defined in the Code, and
all other investment property and similar assets of any Pledgor; and (vi) all
cash and non-cash proceeds (including, without limitation, insurance proceeds)
of any of the foregoing property, all products thereof, and all additions and
accessions thereto, substitutions therefor and replacements.

(c) “Company” and “Companies” shall mean one or more of the entities issuing any
of the Collateral which is or should be (in accordance with Section 5(g) hereto)
described on Schedule A hereto.

(d) “Secured Obligations” shall mean and include the following: (i) all now
existing and hereafter arising Obligations of each and every Pledgor to the
Administrative Agent, the Lenders, or any provider of a Lender Provided Interest
Rate Hedge or an Other Lender Provided Financial Service Product (an “IRH
Provider”) under the Credit Agreement or any of the other Loan Documents,
including all obligations, liabilities, and indebtedness, whether for principal,
interest, fees, expenses or otherwise, of each and every Pledgor to the
Administrative Agent, the Lenders, or any IRH Provider, now existing or
hereafter incurred under the Credit Agreement or the Notes or the Guaranty
Agreement or any of the other Loan Documents as any of the same or any one or
more of them may from time to time be amended, restated, modified, or
supplemented, together with any and all extensions, renewals, refinancings, and
refundings thereof in whole or in part (and including obligations, liabilities,
and indebtedness arising or accruing after the commencement of any bankruptcy,
insolvency, reorganization, or similar proceeding with respect to the Borrower
or which would have arisen or accrued but for the commencement of such
proceeding, even if the claim for such obligation, liability or indebtedness is
not enforceable or allowable in such proceeding, and including all obligations,
liabilities and indebtedness arising from any extensions of credit under or in
connection with the Loan Documents from time to time, regardless whether any
such extensions of credit are in excess of the amount committed under or
contemplated by the Loan Documents or are made in circumstances in which any
condition to extension of credit is not satisfied); (ii) all reimbursement
obligations of each and every Pledgor with respect to any one or more Letters of
Credit issued by Administrative Agent or any Lender; (iii) all indebtedness,
loans, obligations, expenses and liabilities of each and every Pledgor to the
Administrative Agent, any of the Lenders, or any IRH Provider, arising out of
any Lender Provided Interest Rate Hedge or any Other Lender Provided Financial
Service Products; and (iv) any sums advanced by the Administrative Agent or the
Lenders or which may otherwise become due pursuant to the provisions of the
Credit Agreement, the Notes, this Agreement, or any other Loan Documents or
pursuant to any other document or instrument at any time delivered to the
Administrative Agent in connection therewith, including commitment, letter of
credit, agent or other fees and charges,

 

- 2 -

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and indemnification obligations under any such document or instrument, together
with all interest payable on any of the foregoing, whether such sums are
advanced or otherwise become due before or after the entry of any judgment for
foreclosure or any judgment on any Loan Document or with respect to any default
under any of the Secured Obligations.

2. Grant of Security Interests.

(a) To secure on a first priority perfected basis the payment and performance of
all Secured Obligations in full, each Pledgor hereby grants to the
Administrative Agent a continuing first priority security interest under the
Code in and hereby pledges to Administrative Agent, in each case for the benefit
of each of the Lenders and Administrative Agent and any provider of Lender
Provided Interest Rate Hedge or any Other Lender Provided Financial Service
Products, all of such Pledgor’s now existing and hereafter acquired or arising
right, title and interest in, to, and under the Pledged Collateral whether now
or hereafter existing and wherever located.

(b) Upon the execution and delivery of this Agreement, each Pledgor shall
deliver to and deposit with the Administrative Agent in pledge, all of such
Pledgor’s certificates, instruments or other documents comprising or evidencing
the Pledged Collateral, together with undated stock powers, instruments or other
documents signed in blank by such Pledgor. In the event that any Pledgor should
ever acquire or receive certificates, securities, instruments or other documents
evidencing the Pledged Collateral, such Pledgor shall deliver to and deposit
with the Administrative Agent in pledge, all such certificates, securities,
instruments or other documents which evidence the Pledged Collateral.

(c) Notwithstanding anything to the contrary contained in this Agreement, the
Pledged Collateral with respect to any one Company not incorporated or otherwise
organized under the laws of a state of the United States of America or the
District of Columbia shall not exceed sixty-five percent (65%) of the total
combined voting power of all classes of capital stock, shares, securities,
member interests, partnership interests and other ownership interests entitled
to vote of such Company, and this Agreement shall not apply to any such stock,
shares, securities, member interests, partnership interests or ownership
interests which are in excess of such sixty-five percent (65%) limitation. To
the extent the Administrative Agent receives more than sixty-five percent
(65%) of the total combined voting power of all classes of capital stock,
shares, securities, member interests, partnership interests and other ownership
interests entitled to vote of any Company, Administrative Agent shall return
such excess stock, shares, securities, member interests, partnership interests
and other ownership interests upon the request of a Pledgor.

3. Further Assurances.

Prior to or concurrently with the execution of this Agreement, and thereafter at
any time and from time to time upon reasonable request of the Administrative
Agent, each Pledgor shall execute and deliver to the Administrative Agent all
financing statements, continuation financing statements, assignments,
certificates and documents of title, affidavits, reports, notices, schedules of
account, letters of authority, further pledges, powers of attorney and all other
documents (collectively, the “Security Documents”) which the Administrative
Agent may reasonably request, in form reasonably satisfactory to the
Administrative Agent, and take such other action

 

- 3 -

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which the Administrative Agent may reasonably request, to perfect and continue
perfected and to create and maintain the first priority status of the
Administrative Agent’s security interest in the Pledged Collateral and to fully
consummate the transactions contemplated under this Agreement. Each Pledgor
hereby irrevocably makes, constitutes and appoints the Administrative Agent (and
any of the Administrative Agent’s officers or employees or agents designated by
the Administrative Agent) as such Pledgor’s true and lawful attorney with power
to sign the name of such Pledgor on all or any of the Security Documents which
the Administrative Agent determines must be executed, filed, recorded or sent in
order to perfect or continue perfected the Administrative Agent’s security
interest in the Pledged Collateral in any jurisdiction. Such power, being
coupled with an interest, is irrevocable until all of the Secured Obligations
have been indefeasibly paid in full and the Commitments have terminated.

4. Representations and Warranties.

Each Pledgor hereby jointly and severally represents and warrants to the
Administrative Agent as follows:

(a) Such Pledgor, has and will continue to have (or, in the case of
after-acquired Pledged Collateral, at the time such Pledgor acquires rights in
such Pledged Collateral, will have and will continue to have), title to its
Pledged Collateral, free and clear of all Liens other than Permitted Liens and
those in favor of the Administrative Agent for the Lenders and the
Administrative Agent;

(b) The capital stock shares, securities, member interests, partnership
interests and other ownership interests constituting the Pledged Collateral have
been duly authorized and validly issued to such Pledgor (as set forth on
Schedule A hereto), are fully paid and nonassessable and constitute the
following: (i) one hundred percent (100%) of the issued and outstanding capital
stock, member interests, and partnership interests of each Company organized
under the laws of the United States of America or the District of Columbia, and
(ii) in the case of each Company not incorporated or otherwise organized under
the laws of a state of the United States of America or the District of Columbia,
sixty-five percent (65%) of the issued and outstanding capital stock, shares,
securities, member interests and partnership interests of each of such Company;

(c) The security interests in the Pledged Collateral granted hereunder are
valid, perfected and of first priority, subject to the Lien of no other Person
other than Permitted Liens;

(d) There are no restrictions upon the transfer of the Pledged Collateral and
such Pledgor has the power and authority and right to transfer the Pledged
Collateral owned by such Pledgor free of any encumbrances and without obtaining
the consent of any other Person;

(e) Such Pledgor has all necessary power to execute, deliver and perform this
Agreement;

(f) There are no actions, suits, or proceedings pending or, to such Pledgor’s
best knowledge after due inquiry, threatened against or affecting such Pledgor
with respect to the Pledged Collateral, at law or in equity or before or by any
Official Body, and such Pledgor is not

 

- 4 -

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in default with respect to any judgment, writ, injunction, decree, rule or
regulation which could adversely affect such Pledgor’s performance hereunder;

(g) This Agreement has been duly executed and delivered and constitutes the
valid and legally binding obligation of such Pledgor, enforceable in accordance
with its terms, except to the extent that enforceability of this Agreement may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar Laws affecting the enforceability of creditors’ rights generally
or limiting the right of specific performance;

(h) Neither the execution and delivery by such Pledgor of this Agreement, nor
the compliance with the terms and provisions hereof, will violate any provision
of any Law or conflict with or result in a breach of any of the terms,
conditions or provisions of any judgment, order, injunction, decree or ruling of
any Official Body to which such Pledgor is subject or any provision of any
agreement, understanding or arrangement to which Pledgor is a party or by which
such Pledgor is bound;

(i) Such Pledgor’s exact legal name is as set forth on the signature page
hereto;

(j) The state of incorporation, formation or organization as applicable, of such
Pledgor is as set forth on Schedule A hereto;

(k) Such Pledgor’s chief executive office is as set forth on Schedule A to the
Security Agreement; and

(l) All rights of such Pledgor in connection with its ownership of each of the
Companies are evidenced and governed solely by the stock certificates,
instruments or other documents evidencing ownership and organizational documents
of each of the Companies and no shareholder or other similar agreements are
applicable to any of the Pledged Collateral, and no such certificate, instrument
or other document provides that any member interest, or partnership interest or
other intangible ownership interest, constituting Pledged Collateral, is a
“Security” within the meaning of and subject to Article 8 of the Code; and, the
organizational documents of each Company contain no restrictions on the rights
of shareholders, members or partners other than those that normally would apply
to a company organized under the laws of the jurisdiction of organization of
each of the Companies.

5. General Covenants.

Each Pledgor hereby covenants and agrees as follows:

(a) Such Pledgor shall do all reasonable acts that may be necessary and
appropriate to maintain, preserve and protect the Pledged Collateral; such
Pledgor shall be responsible for the risk of loss of, damage to, or destruction
of the Pledged Collateral owned by such Pledgor, unless such loss is the result
of the gross negligence or willful misconduct of the Administrative Agent.

(b) Such Pledgor shall appear in and defend any action or proceeding of which
such Pledgor is aware which could reasonably be expected to affect such
Pledgor’s title to, or the Administrative Agent’s interest in, the Pledged
Collateral or the proceeds thereof; provided,

 

- 5 -

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however, that with the consent of the Administrative Agent such Pledgor may
settle such actions or proceedings with respect to the Pledged Collateral;

(c) Such Pledgor shall, and shall cause each of the Companies to, keep separate,
accurate and complete records of the Pledged Collateral, disclosing the
Administrative Agent’s security interest hereunder;

(d) Such Pledgor shall comply with all Laws applicable to the Pledged Collateral
unless any noncompliance would not individually or in the aggregate materially
impair the use or value of the Pledged Collateral or the Administrative Agent’s
rights hereunder;

(e) Such Pledgor shall pay any and all taxes, duties, fees or imposts of any
nature imposed by any Official Body on any of the Pledged Collateral, except to
the extent contested in good faith by appropriate proceedings;

(f) Such Pledgor shall permit the Administrative Agent, its officers, employees
and agents to inspect, audit, and verify all books and records related to the
Pledged Collateral, including reviewing all of such Pledgor’s books and records
and copying and making excerpts therefrom, provided that prior to an Event of
Default or a Potential Default, the same is done with reasonable advance notice
during normal business hours to the extent access to such Pledgor’s premises is
required;

(g) Subject to Section 2(c) hereof, to the extent, following the date hereof,
such Pledgor acquires capital stock, shares securities, member interests,
partnership interests and other ownership interests of any of the Companies or
any of the rights, property or securities, shares, capital stock, member
interests, partnership interests or any other ownership interests described in
the definition of Pledged Collateral with respect to any of the Companies, such
ownership interests shall be subject to the terms hereof and, upon such
acquisition, shall be deemed to be hereby pledged to the Administrative Agent;
and, such Pledgor thereupon shall deliver all such securities, shares, capital
stock, member interests, partnership interests and other ownership interests[,
if any,] together with an updated Schedule A hereto, to the Administrative Agent
together with all such control agreements, financing statements, and any other
documents necessary to implement the provisions and purposes of this Agreement
as the Administrative Agent may request;

(h) Except as permitted by the Credit Agreement, during the term of this
Agreement, such Pledgor shall not sell, assign, replace, retire, transfer or
otherwise dispose of its Pledged Collateral;

(i) Such Pledgor will not change its state of incorporation, formation or
organization, as applicable, without providing thirty (30) days prior written
notice to the Administrative Agent;

(j) Such Pledgor will not change its name without providing thirty (30) days
prior written notice to the Administrative Agent;

(k) Such Pledgor shall preserve its existence as a corporation or a limited
liability company, as applicable, and except as permitted by the Credit
Agreement, shall not (i) in one, or

 

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a series of related transactions, merge into or consolidate with any other
entity, the survivor of which is not such Pledgor, or (ii) sell all or
substantially all of its assets; and

(l) During the term of this Agreement, such Pledgor shall not permit any Company
to treat any uncertificated ownership interests as securities which are subject
to Article 8 of the Code.

6. Other Rights With Respect to Pledged Collateral.

In addition to the other rights with respect to the Pledged Collateral granted
to the Administrative Agent hereunder, at any time and from time to time, after
and during the continuation of an Event of Default and following acceleration of
the Obligations pursuant to Section 8.2 of the Credit Agreement, the
Administrative Agent, at its option and at the expense of the Pledgors, may:
(a) transfer into its own name, or into the name of its nominee, all or any part
of the Pledged Collateral, thereafter receiving all dividends, income or other
distributions upon the Pledged Collateral; (b) take control of and manage all or
any of the Pledged Collateral; (c) apply to the payment of any of the Secured
Obligations, whether any be due and payable or not, any moneys, including cash
dividends and income from any Pledged Collateral, now or hereafter in the hands
of the Administrative Agent or provider of Lender Provided Interest Rate Hedge
or any Other Lender Provided Financial Service Products, on deposit or
otherwise, belonging to any Pledgor, as the Administrative Agent in its sole
discretion shall determine; and (d) do anything which any Pledgor is required
but fails to do hereunder.

7. Additional Remedies Upon Event of Default.

Upon the occurrence of any Event of Default and while such Event of Default
shall be continuing and following acceleration of the Obligations pursuant to
Section 8.2 of the Credit Agreement, the Administrative Agent shall have, in
addition to all rights and remedies of a secured party under the Code or other
applicable Law, and in addition to its rights under Section 6 above and under
the other Loan Documents, the following rights and remedies:

(a) The Administrative Agent may, after ten (10) days’ advance notice to the a
Pledgor, sell, assign, give an option or options to purchase or otherwise
dispose of such Pledgor’s Pledged Collateral or any part thereof at public or
private sale, at any of the Administrative Agent’s offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as the
Administrative Agent may deem commercially reasonable. Each Pledgor agrees that
ten (10) days’ advance notice of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification. The Administrative Agent shall not be obligated to make any sale
of Pledged Collateral regardless of notice of sale having been given. The
Administrative Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. Each
Pledgor recognizes that the Administrative Agent may be compelled to resort to
one or more private sales of the Pledged Collateral to a restricted group of
purchasers who will be obliged to agree, among other things, to acquire such
securities, shares, capital stock, member interests, partnership interests or
ownership interests for their own account for investment and not with a view to
the distribution

 

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or resale thereof. The Administrative Agent shall complete all sales,
assignments, options or other dispositions in compliance with all applicable
securities laws.

(b) The proceeds of any collection, sale or other disposition of the Pledged
Collateral, or any part thereof, shall, after the Administrative Agent has made
all deductions of expenses, including, without limitation, reasonable attorneys’
fees and other expenses incurred in connection with repossession, collection,
sale or disposition of such Pledged Collateral or in connection with the
enforcement of the Administrative Agent’s rights with respect to the Pledged
Collateral, including in any insolvency, bankruptcy or reorganization
proceedings, be applied against the Secured Obligations, whether or not all the
same be then due and payable, as set forth in Section 8.2.5 of the Credit
Agreement [Application of Proceeds].

8. Administrative Agent’s Duties.

The powers conferred on the Administrative Agent hereunder are solely to protect
its interest in the Pledged Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Pledged Collateral
in its possession and the accounting for moneys actually received by it
hereunder, the Administrative Agent shall have no duty as to any Pledged
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Pledged Collateral.

9. Additional Pledgors.

It is anticipated that additional persons will from time to time become
Subsidiaries of the Borrower or a Guarantor and will own equity interests in a
Subsidiary. In such instance, each Subsidiary will be required to join this
Pledge Agreement. It is acknowledged and agreed that such Subsidiaries of the
Borrower or of a Guarantor will become Pledgors hereunder and will be bound
hereby simply by executing and delivering to Administrative Agent a Guarantor
Joinder in the form of Exhibit 1.1(G)(1) to the Credit Agreement. In addition, a
new Schedule A hereto shall be provided to Administrative Agent showing the
pledge of such equity interests owned by the new Subsidiary.

10. No Waiver; Cumulative Remedies.

No failure to exercise, and no delay in exercising, on the part of the
Administrative Agent, any right, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any further exercise thereof or the exercise of any
other right, power or privilege. The remedies herein provided are cumulative and
not exclusive of any remedies provided under the other Loan Documents or by Law.
Each Pledgor waives any right to require the Administrative Agent to proceed
against any other Person or to exhaust any of the Pledged Collateral or other
security for the Secured Obligations or to pursue any remedy in the
Administrative Agent’s power.

11. No Discharge Until Indefeasible Payment of the Secured Obligations.

The pledge, security interests, and other Liens and the obligations of each
Pledgor hereunder shall not be discharged or impaired or otherwise diminished by
any failure, default, omission, or delay, willful or otherwise, by
Administrative Agent, or any other obligor on any of

 

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the Secured Obligations, or by any other act or thing or omission or delay to do
any other act or thing which may or might in any manner or to any extent vary
the risk of such Pledgor or which would otherwise operate as a discharge of such
Pledgor as a matter of law or equity. Without limiting the generality of the
foregoing, each Pledgor hereby consents to, and the pledge, security interests,
and other Liens given by such Pledgor hereunder shall not be diminished,
terminated, or otherwise similarly affected by any of the following at any time
and from time to time:

(a) any lack of genuineness, legality, validity, enforceability, or allowability
(in a bankruptcy, insolvency, reorganization or similar proceeding, or
otherwise), or any avoidance or subordination, in whole or in part, of any Loan
Document, any obligations in connection with any Lender Provided Interest Rate
Hedge or any Other Lender Provided Financial Service Products or any of the
Secured Obligations and regardless of any law, regulation, or order now or
hereafter in effect in any jurisdiction affecting any of the Secured
Obligations, any of the terms of the Loan Documents, or any rights of the
Administrative Agent or any other Person with respect thereto;

(b) any increase, decrease, or change in the amount, nature, type or purpose of
any of or any release, surrender, exchange, compromise or settlement of any of
the Secured Obligations (whether or not contemplated by the Loan Documents as
presently constituted); any change in the time, manner, method, or place of
payment or performance of, or in any other term of, any of the Secured
Obligations; any execution or delivery of any additional Loan Documents; or any
amendment, modification or supplement to, or refinancing or refunding of, any
Loan Document, any Lender Provided Interest Rate Hedge or any Other Lender
Provided Financial Service Products or any of the Secured Obligations;

(c) any failure to assert any breach of or default under any Loan Document, any
Lender Provided Interest Rate Hedge or any Other Lender Provided Financial
Service Products or any of the Secured Obligations; any extensions of credit in
excess of the amount committed under or contemplated by the Loan Documents or
any Lender Provided Interest Rate Hedge or any Other Lender Provided Financial
Service Products, or in circumstances in which any condition to such extensions
of credit has not been satisfied; any other exercise or non-exercise, or any
other failure, omission, breach, default, delay, or wrongful action in
connection with any exercise or non-exercise, of any right or remedy against
such Pledgor or any other Person under or in connection with any Loan Document
or any Lender Provided Interest Rate Hedge or any Other Lender Provided
Financial Service Products or any of the Secured Obligations; any refusal of
payment or performance of any of the Secured Obligations, whether or not with
any reservation of rights against any Pledgor; or any application of collections
(including collections resulting from realization upon any direct or indirect
security for the Secured Obligations) to other obligations, if any, not entitled
to the benefits of this Agreement, in preference to Secured Obligations or, if
any collections are applied to Secured Obligations, any application to
particular Secured Obligations;

(d) any taking, exchange, amendment, modification, supplement, termination,
subordination, release, loss, or impairment of, or any failure to protect,
perfect, or preserve the value of, or any enforcement of, realization upon, or
exercise of rights or remedies under or in connection with, or any failure,
omission, breach, default, delay, or wrongful action by the Administrative Agent
or any other Person in connection with the enforcement of, realization

 

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upon, or exercise of rights or remedies under or in connection with, or, any
other action or inaction by Administrative Agent or any other Person in respect
of, any direct or indirect security for any of the Secured Obligations
(including the Pledged Collateral). As used in this Agreement, “direct or
indirect security” for the Secured Obligations, and similar phrases, includes
any collateral security, guaranty, suretyship, letter of credit, capital
maintenance agreement, put option, subordination agreement, or other right or
arrangement of any nature providing direct or indirect assurance of payment or
performance of any of the Secured Obligations, made by or on behalf of any
Person;

(e) any merger, consolidation, liquidation, dissolution, winding-up, charter
revocation, or forfeiture, or other change in, restructuring or termination of
the corporate structure or existence of, any Pledgor or the Borrower or any
other Person; any bankruptcy, insolvency, reorganization or similar proceeding
with respect to any Pledgor or the Borrower or any other Person; or any action
taken or election (including any election under Section 1111(b)(2) of the United
States Bankruptcy Code or any comparable law of any jurisdiction) made by
Administrative Agent or any Pledgor or the Borrower or by any other Person in
connection with any such proceeding;

(f) any defense, setoff, or counterclaim which may at any time be available to
or be asserted by any Pledgor or the Borrower or any other Person with respect
to any Loan Document or any of the Secured Obligations; or any discharge by
operation of law or release of any Pledgor or the Borrower or any other Person
from the performance or observance of any Loan Document or any of the Secured
Obligations; or

(g) any other event or circumstance, whether similar or dissimilar to the
foregoing, and whether known or unknown, which might otherwise constitute a
defense available to, or limit the liability of a guarantor or a surety,
including any Pledgor, excepting only full, strict, and indefeasible payment and
performance of the Secured Obligations in full.

12. Taxes.

(a) No Deductions. All payments and collections made by or from any Pledgor
under this Agreement shall be made or received free and clear of and without
deduction for any present or future taxes, levies, imposts, deductions, charges,
or withholdings, and all liabilities with respect thereto, excluding taxes
imposed on the net income of Administrative Agent and all income and franchise
taxes of the United States applicable to Administrative Agent (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings, and
liabilities being hereinafter referred to as “Taxes”). If any Pledgor shall be
required by law to deduct any Taxes from or in respect of any sum payable or any
collection made under this Agreement, (i) the sum payable or collectable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable or collectable under
this Subsection) Administrative Agent receives an amount equal to the sum it
would have received had no such deductions been made, (ii) such Pledgor shall
make such deductions and (iii) such Pledgor shall timely pay the full amount
deducted to the relevant tax authority or other authority in accordance with
applicable law.

 

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(b) Stamp Taxes. In addition, each Pledgor acknowledges that the Pledged
Collateral secures payment of all present and future stamp or documentary taxes
and any other excise or property taxes, charges, or similar levies which arise
from any payment or collection made hereunder or from the execution, delivery,
or registration of, or otherwise with respect to, this Agreement (hereinafter
referred to as “Other Taxes”).

(c) Indemnification for Taxes Paid by Administrative Agent. Each Pledgor
acknowledges that the Pledged Collateral secures the full amount of Taxes or
Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by
any jurisdiction on amounts payable under this Section 12) paid by
Administrative Agent and any liability (including penalties, interest, and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted.

(d) Certificate. In the event any Pledgor pays any Taxes or Other Taxes, within
30 days after the date of any such payment, such Pledgor shall furnish to
Administrative Agent, the original or a certified copy of a receipt evidencing
payment thereof.

(e) Survival. Without prejudice to the survival of any other agreement of any
Pledgor hereunder, the agreements and obligations of each Pledgor contained in
Clauses (a) through (d) directly above shall survive the payment in full of
principal and interest under any Note and the termination of the Credit
Agreement.

13. Waivers.

Each Pledgor hereby waives any and all defenses which any Pledgor may now or
hereafter have based on principles of suretyship, impairment of collateral, or
the like and each Pledgor hereby waives any defense to or limitation on its
obligations under this Agreement arising out of or based on any event or
circumstance referred to in the immediately preceding section hereof. Without
limiting the generality of the foregoing and to the fullest extent permitted by
applicable law, each Pledgor hereby further waives each of the following:

(a) all notices, disclosures and demands of any nature which otherwise might be
required from time to time to preserve intact any rights against such Pledgor,
including the following: any notice of any event or circumstance described in
the immediately preceding section hereof; any notice required by any law,
regulation or order now or hereafter in effect in any jurisdiction; any notice
of nonpayment, nonperformance, dishonor, or protest under any Loan Document or
any Lender Provided Interest Rate Hedge or any Other Lender Provided Financial
Service Products or any of the Secured Obligations; any notice of the incurrence
of any Secured Obligations; any notice of any default or any failure on the part
of such Pledgor or the Borrower or any other Person to comply with any Loan
Document or any Lender Provided Interest Rate Hedge or any Other Lender Provided
Financial Service Products or any of the Secured Obligations or any requirement
pertaining to any direct or indirect security for any of the Secured
Obligations; and any notice or other information pertaining to the business,
operations, condition (financial or otherwise), or prospects of the Borrower or
any other Person;

(b) any right to any marshalling of assets, to the filing of any claim against
such Pledgor or the Borrower or any other Person in the event of any bankruptcy,
insolvency,

 

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reorganization, or similar proceeding, or to the exercise against such Pledgor
or the Borrower, or any other Person of any other right or remedy under or in
connection with any Loan Document, any Lender Provided Interest Rate Hedge or
any Other Lender Provided Financial Service Products, or any of the Secured
Obligations or any direct or indirect security for any of the Secured
Obligations; any requirement of promptness or diligence on the part of the
Administrative Agent or any other Person; any requirement to exhaust any
remedies under or in connection with, or to mitigate the damages resulting from
default under, any Loan Document or any of the Secured Obligations or any direct
or indirect security for any of the Secured Obligations; any benefit of any
statute of limitations; and any requirement of acceptance of this Agreement or
any other Loan Document, and any requirement that any Pledgor receive notice of
any such acceptance; and

(c) any defense or other right arising by reason of any Law now or hereafter in
effect in any jurisdiction pertaining to election of remedies (including
anti-deficiency laws, “one action” laws, or the like), or by reason of any
election of remedies or other action or inaction by the Administrative Agent
(including commencement or completion of any judicial proceeding or nonjudicial
sale or other action in respect of collateral security for any of the Secured
Obligations), which results in denial or impairment of the right of the
Administrative Agent to seek a deficiency against the Borrower or any other
Person or which otherwise discharges or impairs any of the Secured Obligations.

14. Assignment.

All rights of the Administrative Agent under this Agreement shall inure to the
benefit of its successors and assigns. All obligations of each Pledgor shall
bind its successors and assigns; provided, however, no Pledgor may assign or
transfer any of its rights and obligations hereunder or any interest herein, and
any such purported assignment or transfer shall be null and void.

15. Severability.

Any provision of this Agreement which shall be held invalid or unenforceable
shall be ineffective without invalidating the remaining provisions hereof.

16. Governing Law.

This Agreement shall be construed in accordance with and governed by the
internal laws of the State of Maryland without regard to its conflicts of law
principles, except to the extent the validity or perfection of the security
interests or the remedies hereunder in respect of any Pledged Collateral are
governed by the law of a jurisdiction other than the State of Maryland.

17. Notices.

All notices, requests, demands, directions and other communications
(collectively, “notices”) given to or made upon any party hereto under the
provisions of this Agreement shall be as set forth in Section 10.5 [Notices;
Effectiveness; Electronic Communication] of the Credit Agreement.

 

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18. Specific Performance.

Each Pledgor acknowledges and agrees that, in addition to the other rights of
the Administrative Agent hereunder and under the other Loan Documents, because
the Administrative Agent’s remedies at law for failure of such Pledgor to comply
with the provisions hereof relating to the Administrative Agent’s rights (i) to
inspect the books and records related to the Pledged Collateral, (ii) to receive
the various notifications such Pledgor is required to deliver hereunder,
(iii) to obtain copies of agreements and documents as provided herein with
respect to the Pledged Collateral, (iv) to enforce the provisions hereof
pursuant to which the such Pledgor has appointed the Administrative Agent its
attorney-in-fact, and (v) to enforce the Administrative Agent’s remedies
hereunder, would be inadequate and that any such failure would not be adequately
compensable in damages, such Pledgor agrees that each such provision hereof may
be specifically enforced.

19. Voting Rights in Respect of the Pledged Collateral.

So long as no Event of Default shall occur and be continuing under the Credit
Agreement, each Pledgor may exercise any and all voting and other consensual
rights pertaining to the Pledged Collateral or any part thereof for any purpose
not inconsistent with the terms of this Agreement or the other Loan Documents;
provided, however, that such Pledgor will not exercise or will refrain from
exercising any such voting and other consensual right pertaining to the Pledged
Collateral, as the case may be, if such action would have a material adverse
effect on the value of any Pledged Collateral. Without limiting the generality
of the foregoing and in addition thereto, the Pledgors shall not vote to enable,
or take any other action to permit, any of the Companies to issue any stock,
member interests, partnership interests or other equity securities, member
interests, partnership interests or other ownership interests of any nature or
to issue any other securities, shares, capital stock, member interests,
partnership interests or other ownership interests convertible into or granting
the right to purchase or exchange for any stock, member interests, partnership
interests or other equity securities, member interests, partnership interests or
other ownership interests of any nature of any such Company or to enter into any
agreement or undertaking restricting the right or ability of the Pledgor or the
Administrative Agent to sell, assign or transfer any of the Pledged Collateral.

20. Consent to Jurisdiction.

Each Pledgor and each of the Companies hereby irrevocably submits to the
nonexclusive jurisdiction of any Maryland State or Federal Court sitting in
Baltimore County, in any action or proceeding arising out of or relating to this
Agreement, and Pledgors and each of the Companies hereby irrevocably agree that
all claims in respect of such action or proceeding may be heard and determined
in such Maryland State or Federal court. Each Pledgor and each of the Companies
hereby waives to the fullest extent it may effectively do so, the defense of an
inconvenient forum to the maintenance of any such action or proceeding. Each
Pledgor and each of the Companies hereby appoints the process agent identified
below (the “Process Agent”) as its agent to receive on behalf of such party and
its respective property service of copies of the summons and complaint and any
other process which may be served in any action or proceeding. Such service may
be made by mailing or delivering a copy of such process to any of the Pledgors
or the

 

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Companies in care of the Process Agent at the Process Agent’s address, and each
of the Pledgors and the Companies hereby authorizes and directs the Process
Agent to receive such service on its behalf. Each Pledgor and each of the
Companies agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions (or any political
subdivision thereof) by suit on the judgment or in any other manner provided by
law. Each Pledgor and each of the Companies further agrees that it shall, for so
long as any Commitment or any obligation of any Loan Party to the Lender remains
outstanding, continue to retain Process Agent for the purposes set forth in this
Section 20. The Process Agent is Corporation Service Company, with an office on
the date hereof at 2711 Centerville Road, Suite 400, Wilmington, DE 19808,
United States. Each Pledgor and each of the Companies shall produce to
Administrative Agent evidence of the acceptance by Process Agent of such
appointment.

21. Waiver of Jury Trial.

EXCEPT AS PROHIBITED BY LAW, EACH PLEDGOR AND EACH OF THE COMPANIES HEREBY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY A JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER DOCUMENTS OR TRANSACTIONS RELATING THERETO.

22. Entire Agreement; Amendments.

This Agreement constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes all prior agreements relating to a
grant of a security interest in the Pledged Collateral by any Pledgor. This
Agreement may not be amended or supplemented except by a writing signed by the
Administrative Agent and the Pledgors.

23. Counterparts; Telecopy Signatures.

This Agreement may be executed in any number of counterparts, and by different
parties hereto in separate counterparts, each of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute one and the
same instrument. Each Pledgor acknowledges and agrees that a telecopy or other
electronic transmission to the Administrative Agent or any Lender of the
signature pages hereof purporting to be signed on behalf of any Pledgor shall
constitute effective and binding execution and delivery hereof by such Pledgor.

24. Construction.

The rules of construction contained in Section 1.2 of the Credit Agreement apply
to this Agreement.

The remainder of this page is left blank intentionally.

Signatures follow on next page.

 

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[SIGNATURE PAGE TO PLEDGE AGREEMENT]

IN WITNESS WHEREOF, and intending to be legally bound, the parties hereto have
caused this Agreement to be duly executed as of the date first above written.

 

ADMINISTRATIVE AGENT: PNC BANK, NATIONAL ASSOCIATION By:  

 

Printed:   John E. Hehir Title:   Senior Vice President, Corporate Banking

--------------------------------------------------------------------------------

[SIGNATURE PAGE TO PLEDGE AGREEMENT]

 

PLEDGORS:

UNDER ARMOUR, INC.,

a Maryland corporation

By:  

 

Printed:  

 

Title:  

 

UNDER ARMOUR RETAIL, INC.,

a Maryland corporation

By:  

 

Printed:  

 

Title:  

 

UNDER ARMOUR EUROPE BV By:  

 

Printed:  

 

Title:  

 

--------------------------------------------------------------------------------

ACKNOWLEDGEMENT AND CONSENT

Each of the undersigned hereby acknowledges receipt of a copy of the Pledge
Agreement, dated as of January 28, 2009, made by Under Armour, Inc., Under
Armour Retail, Inc., and Under Armour Europe BV for the benefit of PNC Bank,
National Association, as Administrative Agent (the “Pledge Agreement”). Each of
the undersigned, intending to be legally bound hereby, agrees for the benefit of
the Administrative Agent and the Lenders as follows:

1. Each of the undersigned will be bound by the terms of the Pledge Agreement
and will comply with such terms insofar as such terms are applicable to the
undersigned, including without limiting the generality of the foregoing, those
terms in Sections 20 and 21 of the Pledge Agreement.

2. Each of the undersigned will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5(g) of the
Pledge Agreement.

3. The terms of Section 3 of the Pledge Agreement shall apply to it, mutatis
mutandis, with respect to all actions that may facilitate, in the reasonable
judgment of the Administrative Agent, the carrying out of Section 3 of the
Pledge Agreement.

4. To the extent that any of undersigned has or hereafter may acquire any
immunity from the jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution, or otherwise) with respect to itself or its property, each
of undersigned hereby irrevocably waives such immunity in respect of its
obligations under the Pledge Agreement and any other document or agreement
executed in connection therewith, and each of undersigned agrees that it will
not raise or claim any such immunity at or in respect of any such action or
proceeding.

5. Each of the undersigned acknowledges and agrees that any notices sent to the
Pledgor regarding any of the Pledged Collateral shall also be sent to the
Administrative Agent in the manner and at the address of Administrative Agent as
indicated in Section 17 of the Pledge Agreement.

6. During the term of this Agreement, each of the undersigned shall not treat
any uncertificated ownership interests as securities which are subject to
Article 8 of the Code.

The remainder of this page is left blank intentionally.

Signatures follow on next page.

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[SIGNATURE PAGE TO ACKNOWLEDGMENT AND CONSENT TO PLEDGE AGREEMENT]

 

UNDER ARMOUR MANUFACTURING, LLC, a Maryland limited liability company

By: Under Armour, Inc., a Maryland corporation,

its sole member

By:  

 

Printed:  

 

Title:  

 

UNDER ARMOUR CANADA, INC.,

a Canadian corporation

By:  

 

Printed:  

 

Title:  

 

UNDER ARMOUR RETAIL, INC.,

a Maryland corporation

By:  

 

Printed:  

 

Title:  

 

UNDER ARMOUR HOLDINGS, INC.,

a Maryland corporation

By:  

 

Printed:  

 

Title:  

 

--------------------------------------------------------------------------------

[SIGNATURE PAGE TO ACKNOWLEDGMENT AND CONSENT TO

PLEDGE AGREEMENT]

 

UNDER ARMOUR EUROPE BV By:  

 

Printed:  

 

Title:  

 

UNDER ARMOUR FRANCE,

a French limited company

By:  

 

Printed:  

 

Title:  

 

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[SIGNATURE PAGE TO ACKNOWLEDGMENT AND CONSENT TO

PLEDGE AGREEMENT]

 

UNDER ARMOUR RETAIL OF MARYLAND, L.L.C.

UNDER ARMOUR RETAIL OF FLORIDA, LLC

UNDER ARMOUR RETAIL OF OHIO, LLC

UNDER ARMOUR RETAIL OF CALIFORNIA, LLC

UNDER ARMOUR RETAIL OF TEXAS, LLC

UNDER ARMOUR RETAIL OF WISCONSIN, LLC

UNDER ARMOUR RETAIL OF MASSACHUSETTS, LLC

UNDER ARMOUR RETAIL OF PENNSYLVANIA, LLC

UNDER ARMOUR RETAIL OF DELAWARE, LLC

UNDER ARMOUR RETAIL OF GEORGIA, LLC

UNDER ARMOUR RETAIL OF NEW YORK, LLC

UNDER ARMOUR RETAIL OF NEW JERSEY, LLC

UNDER ARMOUR RETAIL OF DC, LLC

UNDER ARMOUR RETAIL OF CONNECTICUT, LLC

UNDER ARMOUR RETAIL OF ILLINOIS, LLC

UNDER ARMOUR RETAIL OF SOUTH CAROLINA, LLC

UNDER ARMOUR RETAIL OF MICHIGAN, LLC

UNDER ARMOUR RETAIL OF MAINE, LLC

UNDER ARMOUR RETAIL OF TENNESSEE, LLC

UNDER ARMOUR RETAIL OF VIRGINIA, LLC,

each a limited liability company

By: Under Armour Retail, Inc., its sole member By:  

 

Printed:  

 

Title:  

 

 

Address for Notices: 1020 Hull Street Baltimore, Maryland 21230 Fax: (410)
234-1911

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SCHEDULE A

TO

PLEDGE AGREEMENT

Description of Pledged Collateral

 

A. Corporations

 

Pledgor and Pledgor’s

jurisdiction of formation

  

Pledged Shares

  

Type and Amount of

Ownership

                                            

 

B. Limited Liability Companies

 

Pledgor and Pledgor’s

jurisdiction of formation

  

Pledged limited liability

company interests

  

Type and Amount of

Ownership

                                            

 

C. Partnerships

 

Pledgor and Pledgor’s

jurisdiction of formation

  

Pledged Partnership Interests

  

Type and Amount of

Ownership

                                            

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SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this “Agreement”), dated as of January 28, 2009, is
made by and among UNDER ARMOUR, INC., a Maryland corporation (the “Borrower”),
each of the GUARANTORS (as hereinafter defined) (the “Guarantors” and the
Borrower, each a “Debtor” and collectively the “Debtors”), and PNC BANK,
NATIONAL ASSOCIATION, in its capacity as administrative agent for the Lenders
(as hereinafter defined) (the “Agent”).

WITNESSETH THAT:

WHEREAS, the Debtors are (or will be with respect to after-acquired property)
the legal and beneficial owners and the holders of the Collateral (as defined in
Section 1 hereof); and

WHEREAS, pursuant to that certain Credit Agreement (as it may hereafter from
time to time be restated, amended, modified or supplemented, the “Credit
Agreement”) of even date herewith by and among the Agent, the Lenders now or
hereafter party thereto (the “Lenders”) the Guarantors now or hereafter party
thereto (the “Guarantors”), the Borrower, SunTrust Bank as Syndication Agent,
and Compass Bank, as Documentation Agent, the Agent and the Lenders have agreed
to make certain loans to the Borrower; and

WHEREAS, the obligation of the Agent and the Lenders to make loans under the
Credit Agreement is subject to the condition, among others, that the Debtors
secure their obligations and the obligations of the Loan Parties to the Agent
and the Lenders under the Credit Agreement, the other Loan Documents and
otherwise as more fully described herein in the manner set forth herein.

NOW, THEREFORE, intending to be legally bound hereby, the parties hereto
covenant and agree as follows:

1. Terms which are defined in the Credit Agreement and not otherwise defined
herein are used herein as defined therein and the rules of Construction set
forth in Section 1.2 of the Credit Agreement shall apply to this Agreement. The
following words and terms shall have the following meanings, respectively,
unless the context hereof otherwise clearly requires:

(a) “Code” means the Uniform Commercial Code as in effect in the Commonwealth of
Pennsylvania on the date hereof and as amended from time to time except to the
extent that the conflict of law rules of such Uniform Commercial Code shall
apply the Uniform Commercial Code as in effect from time to time in any other
state to specific property or other matters.

(b) “Collateral” means all of any Debtor’s right, title and interest in, to and
under the following described property of such Debtor (each capitalized term
used in this Section 1(b) shall have in this Agreement the meaning given to it
by the Code):

(i) all now existing and hereafter acquired or arising Account Receivables,
Goods, Health Care Insurance Receivables, General Intangibles, Payment
Intangibles, Deposit

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Accounts, Chattel Paper (including, without limitation, Electronic Chattel
Paper), Documents, Instruments, Software, Investment Property (other than
thirty-five percent (35%) of the equity interests of Foreign Subsidiaries (as
defined in the Credit Agreement)), Letters of Credit, Letter of Credit Rights,
advices of credit, money, Commercial Tort Claims as listed on Schedule B hereto
(as such Schedule is amended or supplemented from time to time), Equipment, and
Inventory, Fixtures, and Supporting Obligations, together with all products of
and Accessions to any of the foregoing and all Proceeds of any of the foregoing
(including, without limitation, all insurance policies and proceeds thereof);

(ii) to the extent, if any, not included in clause (i) above, each and every
other item of personal property and fixtures, whether now existing or hereafter
arising or acquired, including, without limitation, all licenses, contracts and
agreements, and all collateral for the payment or performance of any contract or
agreement, together with all products and Proceeds (including all insurance
policies and proceeds) of any Accessions to any of the foregoing; and

(iii) all present and future business records and information, including
computer tapes and other storage media containing the same and computer programs
and software (including, without limitation, source code, object code and
related manuals and documentation and all licenses to use such software) for
accessing and manipulating such information.

Notwithstanding the foregoing, “Collateral’ shall specifically exclude the
Trademarks (as defined in the Credit Agreement) of each of the Debtors.

(c) “Secured Obligations” shall mean and include the following: (i) all now
existing and hereafter arising Obligations of each and every Debtor to the
Agent, the Lenders, or any provider of a Lender Provided Interest Rate Hedge or
an Other Lender Provided Financial Services Product (an “IRH Provider”) under
the Credit Agreement or any of the other Loan Documents, including all
obligations, liabilities, and indebtedness, whether for principal, interest,
fees, expenses or otherwise, of each and every Debtor to the Agent, the Lenders,
or any IRH Provider, now existing or hereafter incurred under the Credit
Agreement or the Notes or the Guaranty Agreement or any of the other Loan
Documents as any of the same or any one or more of them may from time to time be
amended, restated, modified, or supplemented, together with any and all
extensions, renewals, refinancings, and refundings thereof in whole or in part
(and including obligations, liabilities, and indebtedness arising or accruing
after the commencement of any bankruptcy, insolvency, reorganization, or similar
proceeding with respect to the Borrower or which would have arisen or accrued
but for the commencement of such proceeding, even if the claim for such
obligation, liability or indebtedness is not enforceable or allowable in such
proceeding, and including all obligations, liabilities and indebtedness arising
from any extensions of credit under or in connection with the Loan Documents
from time to time, regardless whether any such extensions of credit are in
excess of the amount committed under or contemplated by the Loan Documents or
are made in circumstances in which any condition to extension of credit is not
satisfied); (ii) all reimbursement obligations of each and every Debtor with
respect to any one or more Letters of Credit issued by Agent or any Lender;
(iii) all indebtedness, loans, obligations, expenses and liabilities of each and
every Debtor to the Agent, any of the Lenders, or any IRH Provider, arising out
of any Lender Provided Interest Rate Hedge or any Other Lender

 

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Provided Financial Services Products; and (iv) any sums advanced by the Agent or
the Lenders or which may otherwise become due pursuant to the provisions of the
Credit Agreement, the Notes, this Agreement, or any other Loan Documents or
pursuant to any other document or instrument at any time delivered to the Agent
in connection therewith, including commitment, letter of credit, agent or other
fees and charges, and indemnification obligations under any such document or
instrument, together with all interest payable on any of the foregoing, whether
such sums are advanced or otherwise become due before or after the entry of any
judgment for foreclosure or any judgment on any Loan Document or with respect to
any default under any of the Secured Obligations.

(d) “Receivables” means all of the Collateral except Equipment and Inventory.

2. As security for the due and punctual payment and performance of the Secured
Obligations in full, each Debtor hereby agrees that the Agent and the Lenders
and any IRH Provider shall have, and each Debtor hereby grants to and creates in
favor of the Agent for the benefit of itself, the Lenders and any IRH Provider,
a continuing first priority lien on and security interest under the Code in and
to the Collateral subject only to Permitted Liens. Without limiting the
generality of Section 4 below, each Debtor further agrees that with respect to
each item of Collateral as to which (i) the creation of a valid and enforceable
security interest is not governed exclusively by the Code or (ii) the perfection
of a valid and enforceable first priority security interest therein under the
Code cannot be accomplished either by the Agent taking possession thereof or by
the filing in appropriate locations of appropriate Code financing statements
executed by such Debtor, such Debtor will at its expense execute and deliver to
the Agent and hereby does authorize the Agent to execute and file such
documents, agreements, notices, assignments and instruments and take such
further actions as may be requested by the Agent from time to time for the
purpose of creating a valid and perfected first priority Lien on such item,
subject only to Permitted Liens, enforceable against such Debtor and all third
parties to secure the Secured Obligations.

3. Each Debtor represents and warrants to the Agent and the Lenders that:
(a) subject to Permitted Liens, such Debtor has good and marketable title to its
Collateral; (b) except for the security interest granted to and created in favor
of the Agent for the benefit of itself and the Lenders hereunder and Permitted
Liens, all the Collateral is free and clear of any Lien; (c) each Debtor will
defend the Collateral against all claims and demands of all persons at any time
claiming the same or any interest therein; (d) each Account Receivable is
genuine and enforceable in accordance with its terms and such Debtor will defend
the same against all claims, demands, recoupment, setoffs, and counterclaims at
any time asserted; (e) at the time any Account Receivable becomes subject to
this Agreement, each such Account Receivable will be a good and valid Account
Receivable representing a bona fide sale of goods or services by such Debtor and
such goods will have been shipped to the respective account debtors or the
services will have been performed for the respective account debtors, (or for
those on behalf of whom the account debtors are obligated on the Account
Receivables) and no such Account Receivable will at such time be subject to any
claim for credit, allowance, setoff, recoupment, defense, counterclaim or
adjustment by any account debtor or otherwise, except to the extent permitted by
Schedule 1.1(C) of the Credit Agreement; (f) the exact legal name of each Debtor
is as set forth

 

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on the signature page hereto; and (g) the state of incorporation, formation or
organization, as applicable, of such Debtor is as set forth on Schedule A
hereto.

4. Each Debtor will faithfully preserve and protect the Agent’s security
interest in the Collateral as a prior perfected security interest under the
Code, superior and prior to the rights of all third Persons, except for holders
of Permitted Liens, and will do all such other acts and things and will, upon
request therefor by the Agent, execute, deliver, file and record, and each
Debtor hereby authorizes the Agent to so file, all such other documents and
instruments, including, without limitation, financing statements, security
agreements, assignments and documents and powers of attorney with respect to the
Collateral, and pay all filing fees and taxes related thereto, as the Agent, in
its reasonable discretion, may deem necessary or advisable from time to time in
order to attach, continue, preserve, perfect, and protect said security interest
(including the filing at any time or times after the date hereof of financing
statements under, and in the locations advisable pursuant to, the Code); and,
each Debtor hereby irrevocably appoints the Agent, its officers, employees and
agents, or any of them, as attorneys-in-fact for such Debtor to execute,
deliver, file and record such items for such Debtor and in such Debtor’s name,
place and stead. This power of attorney, being coupled with an interest, shall
be irrevocable for the life of this Agreement.

5. Each Debtor jointly and severally covenants and agrees that:

(a) it will defend the Agent’s and the Lenders’ right, title and lien on and
security interest in and to the Collateral and the proceeds thereof against the
claims and demands of all Persons whomsoever, other than the holders of
Permitted Liens, other than any Person claiming a right in the Collateral
pursuant to an agreement between such Person and the Agent;

(b) it will not suffer or permit to exist on any Collateral any Lien except for
Permitted Liens;

(c) it will not take or omit to take any action, the taking or the omission of
which might result in a material alteration (except as permitted by the Credit
Agreement) or impairment of the Collateral or of the Agent’s rights under this
Agreement;

(d) it will not sell, assign or otherwise dispose of any portion of the
Collateral except as permitted in Section 7.2.6 [Disposition of Assets or
Subsidiaries] of the Credit Agreement;

(e) it will (i) except for such Collateral delivered to the Agent pursuant to
this Section or otherwise now or hereafter under the control of the Agent,
obtain and maintain sole and exclusive possession of the Collateral,
(ii) maintain its chief executive office and keep the Collateral and all records
pertaining thereto at the locations specified on the Security Interest Data
Summary attached as Schedule A hereto, unless it shall have given the Agent
prior notice and taken any action reasonably requested by the Agent to maintain
its security interest therein, (iii) notify the Agent if an Account Receivable
becomes evidenced or secured by an Instrument or Chattel Paper and deliver to
the Agent upon the Agent’s request therefor all Collateral consisting of
Instruments and Chattel Paper immediately upon such Debtor’s receipt of a
request

 

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therefor, (iv) deliver to the Agent possession of all Collateral the possession
of which is required to perfect the Agent’s lien thereon or security interest
therein or the possession of which grants priority over a Person filing a
financing statement with respect thereto, (v) if required by the Credit
Agreement, execute control agreements and cause other Persons to execute
acknowledgments in form and substance satisfactory to the agent evidencing the
Agent’s control with respect to all Collateral the control or acknowledgment of
which perfects the Agent’s security interest therein, including Letters of
Credit, Letter of Credit Rights, Electronic Chattel Paper, Deposit Accounts and
Investment Property, and (vi) keep materially accurate and complete books and
records concerning the Collateral and such other books and records as the Agent
may from time to time reasonably require;

(f) it will promptly furnish to the Agent such information and documents
relating to the Collateral as the Agent may reasonably request, including,
without limitation, all invoices, Documents, contracts, Chattel Paper,
Instruments and other writings pertaining to such Debtor’s contracts or the
performance thereof, all of the foregoing to be certified upon request of the
Agent by an authorized officer of such Debtor;

(g) it shall immediately notify the Agent if any Account Receivable arises out
of contracts with the United States or any department, agency or instrumentality
thereof or any one or more of the states of the United States or any department,
agency, or instrumentality thereof, and will execute any instruments and take
any steps required by the Agent so that all monies due and to become due under
such contract shall be assigned to the Agent and notice of the assignment given
to and acknowledged by the appropriate government agency or authority under the
Federal Assignment of Claims Act;

(h) it will not change its state of incorporation, formation or organization, as
applicable without providing thirty (30) days prior written notice the Agent;

(i) it will not change its name without providing thirty (30) days prior written
notice to the Agent;

(j) it shall preserve its corporate existence and shall not (i) in one, or a
series of related transactions, merge into or consolidate with any other entity,
the survivor of which is not such Debtor, or (ii) sell all or substantially all
or its assets except, in each case, to the extent permitted by the Credit
Agreement;

(k) if it shall at any time acquire a commercial tort claim, as defined in the
Code, such Debtor shall immediately notify the Agent in a writing signed by such
Debtor of the details thereof and grant to the Agent for the benefit of the
Lenders in such writing a security interest therein and in the proceeds thereof,
with such writing to be in form and substance satisfactory to the Agent and such
writing shall constitute a supplement to Schedule B hereto;

(l) it hereby authorizes the Agent to, at any time and from time to time, file
in any one or more jurisdictions financing statements that describe the
Collateral, together with continuation statements thereof and amendments
thereto, without the signature of such Debtor and which contain any information
required by the Code or any other applicable statute

 

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applicable to such jurisdiction for the sufficiency or filing office acceptance
of any financing statements, continuation statements, or amendments. Each Debtor
agrees to furnish any such information to the Agent promptly upon request. Any
such financing statements, continuation statements, or amendments may be signed
by Agent on behalf of such Debtor if the Agent so elects and may be filed at any
time in any jurisdiction; and

(m) it shall at any time and from time to time take such steps as the Agent may
reasonably request as are necessary for the Agent to insure the continued
perfection of the Agent’s and the Lenders’ security interest in the Collateral
with the same priority required hereby and the preservation of its rights
therein.

6. Each Debtor assumes full responsibility for taking any and all necessary
steps to preserve the Agent’s and the Lenders’ rights with respect to the
Collateral against all Persons other than anyone asserting rights in respect of
a Permitted Lien. The Agent shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral in its possession if the Agent
takes such action for that purpose as such Debtor shall request in writing,
provided that such requested action will not, in the judgment of the Agent,
impair the security interest in the Collateral created hereby or the Agent’s and
the Lenders’ rights in, or the value of, the Collateral, and provided further
that such written request is received by the Agent in sufficient time to permit
the Agent to take the requested action.

7. No Discharge Until Indefeasible Payment of the Secured Obligations.

The pledge, security interests, and other Liens and the obligations of each
Debtor hereunder shall not be discharged or impaired or otherwise diminished by
any failure, default, omission, or delay, willful or otherwise, by Agent, or any
other obligor on any of the Secured Obligations, or by any other act or thing or
omission or delay to do any other act or thing which may or might in any manner
or to any extent vary the risk of such Debtor or which would otherwise operate
as a discharge of such Debtor as a matter of law or equity. Without limiting the
generality of the foregoing, each Debtor hereby consents to, and the pledge,
security interests, and other Liens given by such Debtor hereunder shall not be
diminished, terminated, or otherwise similarly affected by any of the following
at any time and from time to time:

(a) any lack of genuineness, legality, validity, enforceability, or allowability
(in a bankruptcy, insolvency, reorganization or similar proceeding, or
otherwise), or any avoidance or subordination, in whole or in part, of any Loan
Document or any of the Secured Obligations and regardless of any law,
regulation, or order now or hereafter in effect in any jurisdiction affecting
any of the Secured Obligations, any of the terms of the Loan Documents, or any
rights of the Agent or any other Person with respect thereto;

(b) any increase, decrease, or change in the amount, nature, type or purpose of
any of the Secured Obligations (whether or not contemplated by the Loan
Documents as presently constituted); any change in the time, manner, method, or
place of payment or performance of, or in any other term of, any of the Secured
Obligations; any execution or delivery of any additional Loan Documents; or any
amendment, modification or supplement to, or refinancing or refunding of, any
Loan Document or any of the Secured Obligations;

 

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(c) any failure to assert any breach of or default under any Loan Document or
any of the Secured Obligations; any extensions of credit in excess of the amount
committed under or contemplated by the Loan Documents, or in circumstances in
which any condition to such extensions of credit has not been satisfied; any
other exercise or non-exercise, or any other failure, omission, breach, default,
delay, or wrongful action in connection with any exercise or non-exercise, of
any right or remedy against such Debtor or any other Person under or in
connection with any Loan Document or any of the Secured Obligations; any refusal
of payment or performance of any of the Secured Obligations, whether or not with
any reservation of rights against any Debtor; or any application of collections
(including collections resulting from realization upon any direct or indirect
security for the Secured Obligations) to other obligations, if any, not entitled
to the benefits of this Agreement, in preference to Secured Obligations or, if
any collections are applied to Secured Obligations, any application to
particular Secured Obligations;

(d) any taking, exchange, amendment, modification, supplement, termination,
subordination, release, loss, or impairment of, or any failure to protect,
perfect, or preserve the value of, or any enforcement of, realization upon, or
exercise of rights or remedies under or in connection with, or any failure,
omission, breach, default, delay, or wrongful action by the Agent or any other
Person in connection with the enforcement of, realization upon, or exercise of
rights or remedies under or in connection with, or, any other action or inaction
by Agent or any other Person in respect of, any direct or indirect security for
any of the Secured Obligations (including the Collateral). As used in this
Agreement, “direct or indirect security” for the Secured Obligations, and
similar phrases, includes any collateral security, guaranty, suretyship, letter
of credit, capital maintenance agreement, put option, subordination agreement,
or other right or arrangement of any nature providing direct or indirect
assurance of payment or performance of any of the Secured Obligations, made by
or on behalf of any Person;

(e) any merger, consolidation, liquidation, dissolution, winding-up, charter
revocation, or forfeiture, or other change in, restructuring or termination of
the corporate structure or existence of, any Debtor or any other Person; any
bankruptcy, insolvency, reorganization or similar proceeding with respect to any
Debtor or any other Person; or any action taken or election (including any
election under Section 1111(b)(2) of the United States Bankruptcy Code or any
comparable law of any jurisdiction) made by Agent or any Debtor or by any other
Person in connection with any such proceeding;

(f) any defense, setoff, or counterclaim which may at any time be available to
or be asserted by any Debtor or any other Person with respect to any Loan
Document or any of the Secured Obligations; or any discharge by operation of law
or release of any Debtor or any other Person from the performance or observance
of any Loan Document or any of the Secured Obligations; or

(g) any other event or circumstance, whether similar or dissimilar to the
foregoing, and whether known or unknown, which might otherwise constitute a
defense available to, or limit the liability of a guarantor or a surety,
including any Debtor, excepting only full, strict, and indefeasible payment and
performance of the Secured Obligations in full.

 

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8. Waivers.

Each Debtor hereby waives any and all defenses which any Debtor may now or
hereafter have based on principles of suretyship, impairment of collateral, or
the like and each Debtor hereby waives any defense to or limitation on its
obligations under this Agreement arising out of or based on any event or
circumstance referred to in the immediately preceding section hereof. Without
limiting the generality of the foregoing and to the fullest extent permitted by
applicable law, each Debtor hereby further waives each of the following:

(a) all notices, disclosures and demands of any nature which otherwise might be
required from time to time to preserve intact any rights against such Debtor,
including the following: any notice of any event or circumstance described in
the immediately preceding section hereof; any notice required by any law,
regulation or order now or hereafter in effect in any jurisdiction; any notice
of nonpayment, nonperformance, dishonor, or protest under any Loan Document or
any of the Secured Obligations; any notice of the incurrence of any Secured
Obligations; any notice of any default or any failure on the part of such Debtor
or any other Person to comply with any Loan Document or any of the Secured
Obligations or any requirement pertaining to any direct or indirect security for
any of the Secured Obligations; and any notice or other information pertaining
to the business, operations, condition (financial or otherwise), or prospects of
the Borrower or any other Person;

(b) any right to any marshalling of assets, to the filing of any claim against
such Debtor or any other Person in the event of any bankruptcy, insolvency,
reorganization, or similar proceeding, or to the exercise against such Debtor or
any other Person of any other right or remedy under or in connection with any
Loan Document or any of the Secured Obligations or any direct or indirect
security for any of the Secured Obligations; any requirement of promptness or
diligence on the part of the Agent or any other Person; any requirement to
exhaust any remedies under or in connection with, or to mitigate the damages
resulting from default under, any Loan Document or any of the Secured
Obligations or any direct or indirect security for any of the Secured
Obligations; any benefit of any statute of limitations; and any requirement of
acceptance of this Agreement or any other Loan Document, and any requirement
that any Debtor receive notice of any such acceptance; and

(c) any defense or other right arising by reason of any Law now or hereafter in
effect in any jurisdiction pertaining to election of remedies (including
anti-deficiency laws, “one action” laws, or the like), or by reason of any
election of remedies or other action or inaction by the Agent (including
commencement or completion of any judicial proceeding or nonjudicial sale or
other action in respect of collateral security for any of the Secured
Obligations), which results in denial or impairment of the right of the Agent to
seek a deficiency against the Borrower or any other Person or which otherwise
discharges or impairs any of the Secured Obligations.

9. The Obligations and additional liabilities of the Debtors under this
Agreement are joint and several obligations of the Debtors, and each Debtor
hereby waives to the full extent permitted by law any defense it may otherwise
have to the payment and performance of the Obligations that its liability
hereunder is limited and not joint and several. Each Debtor acknowledges and
agrees that the foregoing waivers serve as a material inducement to the

 

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agreement of the Agent and the Lenders to make the Loans, and that the Agent and
the Lenders are relying on each specific waiver and all such waivers in entering
into this Agreement. The undertakings of each Debtor hereunder secure the
obligations of itself and the other Debtors. The Agent and the Lenders, or any
of them, may, in their sole discretion, elect to enforce this Agreement against
any Debtor without any duty or responsibility to pursue any other Debtor and
such an election by the agent and the Lenders, or any of them, shall not be a
defense to any action the Agent and the Lenders, or any of them, may elect to
take against any Debtor. Each of the Lenders and Agent hereby reserve all right
against each Debtor.

10. (a) At any time and from time to time whether or not an Event of Default
then exists and without prior notice to or consent of any Debtor, the Agent may
at its option take such actions as the Agent deems appropriate (i) to attach,
perfect, continue, preserve and protect the Agent’s and the Lenders’ first
priority security interest in or lien on the Collateral, and/or (ii) to inspect,
audit and verify the Collateral, including reviewing all of such Debtor’s books
and records and copying and making excerpts therefrom, provided that prior to an
Event of Default or a Potential Default, the same is done with reasonable
advance notice during normal business hours to the extent access to such
Debtor’s premises is required, and (iii) to add all liabilities, obligations,
costs and expenses reasonably incurred in connection with the foregoing clauses
(i) and (ii) to the Secured Obligations, to be paid by the Debtors to the Agent
for the benefit of the Agent and the Lenders upon demand.

(b) At any time and from time to time after an Event of Default exists and is
continuing and without prior notice to or consent of any Debtor, the Agent may
at its option take such action as the Agent deems appropriate (i) to maintain,
repair, protect and insure the Collateral, and/or (ii) to perform, keep, observe
and render true and correct any and all covenants, agreements, representations
and warranties of any Debtor hereunder, and (iii) to add all liabilities,
obligations, costs and expenses reasonably incurred in connection with the
foregoing clauses (i) and (ii) to the Secured Obligations, to be paid by any
Debtor to the Agent for the benefit of the Agent and the Lenders upon demand.

11. After there exists any Event of Default under the Credit Agreement and
following acceleration pursuant to Section 8.2 of the Credit Agreement:

(a) The Agent shall have and may exercise all the rights and remedies available
to a secured party under the Code in effect at the time, and such other rights
and remedies as may be provided by Law and as set forth below, including,
without limitation, to take over and collect all of any Debtor’s Account
Receivables and all other Collateral, and to this end each Debtor hereby
appoints the Agent, its officers, employees and agents, as its irrevocable, true
and lawful attorneys-in-fact with all necessary power and authority to: (i) take
possession immediately, with or without notice, demand, or legal process, of any
of or all of the Collateral wherever found, and for such purposes, enter upon
any premises upon which the Collateral may be found and remove the Collateral
therefrom; (ii) require any Debtor to assemble the Collateral and deliver it to
the Agent or to any place designated by the Agent at such Debtor’s expense;
(iii) receive, open and dispose of all mail addressed to any Debtor and notify
postal authorities to change the address for delivery thereof to such address as
the Agent may designate; (iv) demand payment of the Account Receivables;
(v) enforce payment of the Account Receivables by legal

 

- 9 -

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proceedings or otherwise; (vi) exercise all of any Debtor’s rights and remedies
with respect to the collection of the Account Receivables; (vii) settle, adjust,
compromise, extend or renew the Account Receivables; (viii) settle, adjust or
compromise any legal proceedings brought to collect the Account Receivables;
(ix) to the extent permitted by applicable Law, sell or assign the Account
Receivables upon such terms, for such amounts and at such time or times as the
Agent deems advisable; (x) discharge and release the Account Receivables;
(xi) take control, in any manner, of any item of payment or proceeds from any
account debtor; (xii) prepare, file and sign any Debtor’s name on any Proof of
Claim in Bankruptcy or similar document against any account debtor;
(xiii) prepare, file and sign any Debtor’s name on any notice of Lien,
assignment or satisfaction of Lien or similar document in connection with the
Account Receivables; (xiv) do all acts and things necessary, in the Agent’s sole
discretion, to fulfill any Debtor’s obligations to the Agent or the Lenders
under the Credit Agreement, Loan Documents or otherwise; (xv) endorse the name
of any Debtor upon any check, Chattel Paper, Document, Instrument, invoice,
freight bill, bill of lading or similar document or agreement relating to the
Account Receivables or Inventory; (xvi) use any Debtor’s stationery and sign
such Debtor’s name to verifications of the Account Receivables and notices
thereof to account debtors; (xvii) access and use the information recorded on or
contained in any data processing equipment or computer hardware or software
relating to the Account Receivables, Inventory, or other Collateral or proceeds
thereof to which any Debtor has access; (xviii) demand, sue for, collect,
compromise and give acquittances for any and all Collateral; (xix) prosecute,
defend or compromise any action, claim or proceeding with respect to any of the
Collateral; and (xx) take such other action as the Agent may deem appropriate,
including extending or modifying the terms of payment of any Debtor’s debtors.
This power of attorney, being coupled with an interest, shall be irrevocable for
the life of this Agreement. To the extent permitted by Law, each Debtor hereby
waives all claims of damages due to or arising from or connected with any of the
rights or remedies exercised by the Agent pursuant to this Agreement, except
claims for physical damage to the Collateral arising from gross negligence or
willful misconduct by the Agent.

(b) The Agent shall have the right to lease, sell or otherwise dispose of all or
any of the Collateral at public or private sale or sales for cash, credit (which
shall be applied against the Obligations) or any combination thereof, with such
notice as may be required by Law (it being agreed by each Debtor that, in the
absence of any contrary requirement of Law, ten (10) days’ prior notice of a
public or private sale of Collateral shall be deemed reasonable notice), in lots
or in bulk, for cash or on credit (which shall be applied against the
Obligations), all as the Agent, in its sole discretion, may deem advisable. Such
sales may be adjourned from time to time with or without notice. The Agent shall
have the right to conduct such sales on any Debtor’s premises or elsewhere and
shall have the right to use any Debtor’s premises without charge for such sales
for such time or times as the Agent may see fit. The Agent may purchase all or
any part of the Collateral at public or, if permitted by Law, private sale and,
in lieu of actual payment of such purchase price, may set off the amount of such
price against the Secured Obligations.

(c) Each Debtor, at its cost and expense (including the cost and expense of any
of the following referenced consents, approvals, etc.) will promptly execute and
deliver or cause the execution and delivery of all applications, certificates,
instruments, registration statements, and all other documents and papers the
Agent may request in connection with the

 

- 10 -

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obtaining of any consent, approval, registration, qualification, permit,
license, accreditation, or authorization of any other Official Body or other
Person necessary or appropriate for the effective exercise of any rights
hereunder or under the other Loan Documents. Without limiting the generality of
the foregoing, each Debtor agrees that in the event the Agent on behalf of
itself and/or the Lenders shall exercise its rights hereunder or pursuant to the
other Loan Documents, to sell, transfer, or otherwise dispose of, or vote,
consent, operate, or take any other action in connection with any of the
Collateral, such Debtor shall execute and deliver (or cause to be executed and
delivered) all applications, certificates, assignments and other documents that
the Agent requests to facilitate such actions and shall otherwise promptly,
fully, and diligently cooperate with the Agent and any other Persons in making
any application for the prior consent or approval of any Official Body or any
other Person to the exercise by the Agent on behalf of itself and/or the Lenders
or any such rights relating to all or any of the Collateral. Furthermore,
because each Debtor agrees that the remedies at law, of the Agent on behalf of
itself and/or the Lenders, for failure of such Debtor to comply with this
Subsection (c) would be inadequate, and that any such failure would not be
adequately compensable in damages, each Debtor agrees that this Subsection
(c) may be specifically enforced.

(d) The Agent may request, without limiting the rights and remedies of the Agent
on behalf of itself and the Lenders otherwise provided hereunder and under the
other Loan Documents, that each Debtor do any of the following: (i) give the
Agent on behalf of itself and the Lenders specific assignments of the accounts
receivable of such Debtor after such accounts receivable come into existence,
and schedules of such accounts receivable, the form and content of such
assignment and schedules to be satisfactory to Agent; and (ii) in order to
better secure the Agent on behalf of itself and the Lenders, to the extent
permitted by Law, enter into such lockbox agreements and establish such lockbox
accounts as the agent may require, all at the sole expense of such Debtor and
shall direct all payments from all payors due to such Debtor, to such lockbox
accounts.

12. The lien on and security interest in each Debtor’s Collateral granted to and
created in favor of the Agent by this Agreement shall be for the benefit of the
Agent and the Lenders and any IRH Provider. Each of the rights, privileges, and
remedies provided to the Agent hereunder or otherwise by Law with respect to any
Debtor’s Collateral shall be exercised by the Agent only for its own benefit and
the benefit of the Lenders, and any of such Debtor’s Collateral or proceeds
thereof held or realized upon at any time by the Agent shall be applied as set
forth in Section 8.2.5 [Application of Proceeds] of the Credit Agreement. Each
Debtor shall remain liable to the Agent and the Lenders and any IRH Provider for
and shall pay to the Agent for the benefit of itself and the Lenders and any IRH
Provider any deficiency which may remain after such sale or collection.

13. If the Agent repossesses or seeks to repossess any of the Collateral
pursuant to the terms hereof because of the occurrence of an Event of Default,
then to the extent it is commercially reasonable for the Agent to store any
Collateral on any of any Debtor’s premises, each Debtor hereby agrees to lease
to the Agent on a month-to-month tenancy for a period not to exceed [ninety
(90)] days at the Agent’s election, at a rental of One Dollar ($1.00) per month,
the premises on which the Collateral is located, provided it is located on
premises owned or leased by such Debtor.

 

- 11 -

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14. Upon indefeasible payment in full of the Secured Obligations, the expiration
of all Commitments and Letters of Credit, and termination of the Credit
Agreement, this Agreement shall terminate and be of no further force and effect,
and the Agent shall thereupon promptly return to a Debtor such of the Collateral
and such other documents delivered by such Debtor hereunder as may then be in
the Agent’s possession, subject to the rights of third parties. Until such time,
however, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.

15. No failure or delay on the part of the Agent in exercising any right,
remedy, power or privilege hereunder shall operate as a waiver thereof or of any
other right, remedy, power or privilege of the Agent hereunder; nor shall any
single or partial exercise of any such right, remedy, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. No waiver of a single Event of Default shall
be deemed a waiver of a subsequent Event of Default. All waivers under this
Agreement must be in writing. The rights and remedies of the Agent under this
Agreement are cumulative and in addition to any rights or remedies which it may
otherwise have, and the Agent may enforce any one or more remedies hereunder
successively or concurrently at its option.

16. All notices, statements, requests and demands given to or made upon either
party hereto in accordance with the provisions of this Agreement shall be given
or made as provided in Section 10.5 [Notices; Effectiveness; Electronic
Communication] of the Credit Agreement.

17. Each Debtor agrees that as of the date hereof, all information contained on
the Security Interest Data Schedule attached hereto as Schedule A is accurate
and complete and contains no omission or misrepresentation. Each Debtor shall
promptly notify the Agent of any changes in the information set forth thereon.

18. Each Debtor acknowledges that the provisions hereof giving the Agent rights
of access to books, records and information concerning the Collateral and such
Debtor’s operations and providing the Agent access, at reasonable times and upon
one (1) day prior notice, to such Debtor’s premises are intended to afford the
Agent with immediate access to current information concerning such Debtor and
its activities, including, without limitation, the value, nature and location of
the Collateral so that the Agent can, among other things, make an appropriate
determination after the occurrence of an Event of Default, whether and when to
exercise its other remedies hereunder and at Law, including, without limitation,
instituting a replevin action should any Debtor refuse to turn over any
Collateral to the Agent. Each Debtor further acknowledges that should such
Debtor at any time fail to promptly provide such information and access to the
Agent, each Debtor acknowledges that the Agent would have no adequate remedy at
Law to promptly obtain the same. Each Debtor agrees that the provisions hereof
may be specifically enforced by the Agent and waives any claim or defense in any
such action or proceeding that the Agent has an adequate remedy at Law.

19. This Agreement shall be binding upon and inure to the benefit of the Agent,
the Lenders and their respective successors and assigns, and each Debtor and
each of its respective successors and assigns, except that no debtor may assign
or transfer such Debtor’s obligations hereunder or any interest herein.

 

- 12 -

--------------------------------------------------------------------------------

20. This Agreement shall be deemed to be a contract under the laws of the
Commonwealth of Pennsylvania and for all purposes shall be governed by and
construed in accordance with the laws of said Commonwealth excluding its rules
relating to conflicts of law.

21. Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall not invalidate the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

22. Each Debtor hereby irrevocably submits to the nonexclusive jurisdiction of
any Pennsylvania State or Federal Court sitting in Pittsburgh, Pennsylvania, in
any action or proceeding arising out of or relating to this Agreement, and
Debtors hereby irrevocably agree that all claims in respect of such action or
proceeding may be heard and determined in such Pennsylvania State or Federal
court. Each Debtor hereby waives to the fullest extent it may effectively do so,
the defense of an inconvenient forum to the maintenance of any such action or
proceeding. Each Debtor hereby appoints the process agent identified below (the
“Process Agent”) as its agent to receive on behalf of such party and its
respective property service of copies of the summons and complaint and any other
process which may be served in any action or proceeding. Such service may be
made by mailing or delivering a copy of such process to any of the Debtors in
care of the Process Agent at the Process Agent’s address, and each of the
Debtors hereby authorizes and directs the Process Agent to receive such service
on its behalf. Each Debtor agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions (or
any political subdivision thereof) by suit on the judgment or in any other
manner provided by law. Each Debtor further agrees that it shall, for so long as
any Commitment or any obligation of any Loan Party to the Lender remains
outstanding, continue to retain Process Agent for the purposes set forth in this
Section 22. The Process Agent is Corporation Service Company, with an office on
the date hereof at 2711 Centerville Road, Suite 400, Wilmington, DE 19808,
United States. Each Debtor shall produce to the Agent evidence of the acceptance
by Process Agent of such appointment.

23. EXCEPT AS PROHIBITED BY LAW, EACH DEBTOR HEREBY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY A JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER DOCUMENTS OR
TRANSACTIONS RELATING THERETO.

24. This Agreement may be executed in any number of counterparts, and by
different parties hereto in separate counterparts, each of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute one and the same instrument. Each Debtor acknowledges and agrees that
a telecopy or other electronic transmission to the Agent or any Lender of the
signature pages hereof purporting to be signed on behalf of any Debtor shall
constitute effective and binding execution and delivery hereof by such Debtor.

The remainder of this page is left blank intentionally.

Signatures follow on next page.

 

- 13 -

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[SIGNATURE PAGE TO SECURITY AGREEMENT]

IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed and delivered this Agreement as of the day and year
first above set forth.

 

ATTEST:     UNDER ARMOUR, INC.,     a Maryland corporation

 

    By:  

 

    Printed:  

 

    Title:  

 

   

UNDER ARMOUR MANUFACTURING, LLC,

a Maryland limited liability company

    By: Under Armour, Inc., a Maryland corporation, its sole member

 

    By:  

 

    Printed:  

 

    Title:  

 

   

UNDER ARMOUR RETAIL, INC.,

a Maryland corporation

 

    By:  

 

    Printed:  

 

    Title:  

 

   

UNDER ARMOUR HOLDINGS, INC.,

a Maryland corporation

 

    By:  

 

    Printed:  

 

    Title:  

 

--------------------------------------------------------------------------------

[SIGNATURE PAGE TO SECURITY AGREEMENT]

 

ATTEST:

    UNDER ARMOUR RETAIL OF MARYLAND, L.L.C.     UNDER ARMOUR RETAIL OF FLORIDA,
LLC     UNDER ARMOUR RETAIL OF OHIO, LLC     UNDER ARMOUR RETAIL OF CALIFORNIA,
LLC     UNDER ARMOUR RETAIL OF TEXAS, LLC     UNDER ARMOUR RETAIL OF WISCONSIN,
LLC     UNDER ARMOUR RETAIL OF MASSACHUSETTS, LLC     UNDER ARMOUR RETAIL OF
PENNSYLVANIA, LLC     UNDER ARMOUR RETAIL OF DELAWARE, LLC     UNDER ARMOUR
RETAIL OF GEORGIA, LLC     UNDER ARMOUR RETAIL OF NEW YORK, LLC     UNDER ARMOUR
RETAIL OF NEW JERSEY, LLC     UNDER ARMOUR RETAIL OF DC, LLC     UNDER ARMOUR
RETAIL OF CONNECTICUT, LLC     UNDER ARMOUR RETAIL OF ILLINOIS, LLC     UNDER
ARMOUR RETAIL OF SOUTH CAROLINA, LLC     UNDER ARMOUR RETAIL OF MICHIGAN, LLC  
  UNDER ARMOUR RETAIL OF MAINE, LLC     UNDER ARMOUR RETAIL OF TENNESSEE, LLC  
  UNDER ARMOUR RETAIL OF VIRGINIA, LLC,     each a limited liability company    
By: Under Armour Retail, Inc., its sole member

 

    By:  

 

    Printed:  

 

    Title:  

 

--------------------------------------------------------------------------------

[SIGNATURE PAGE TO SECURITY AGREEMENT]

 

PNC BANK, NATIONAL ASSOCIATION By:  

 

Printed:   John E. Hehir Title:   Senior Vice President, Corporate Banking

--------------------------------------------------------------------------------

SCHEDULE A

TO

SECURITY AGREEMENT

SECURITY INTEREST DATA SUMMARY

1. The chief executive office of                      (each a “Debtor”) is
located at:

 

 

 

    

 

    

 

                              County   

2. Each Debtor’s true and full name is as follows:                     . Each
Debtor uses no trade names or fictitious names.

3. Each Debtor’s form of organization is as follows:

4. Each Debtor’s state of organization is as follows:

5. Each Debtor’s EIN # is as follows:

6. Each Debtor’s organization ID # is (if any exists) is as follows:

7. All of each Debtor’s personal property which has not been delivered to the
Agent pursuant to the terms of this Agreement or the Credit Agreement is now,
and will be at all future times, located at such Debtor’s chief executive office
as described in Paragraph 1 above, except as specified below:

8. All of each Debtor’s books and records, including those relating to accounts
payable and accounts receivable, are kept at such Debtor’s chief executive
office as described in Paragraph 1 above, except as specified below:

--------------------------------------------------------------------------------

SCHEDULE B

TO

SECURITY AGREEMENT

COMMERCIAL TORT CLAIMS

[None]

--------------------------------------------------------------------------------

EXHIBIT 2.4

FORM OF

LENDER JOINDER AND ASSUMPTION AGREEMENT

THIS LENDER JOINDER AND ASSUMPTION AGREEMENT (this “Joinder”) is made as of
                    , 20     (the “Effective Date”) by
                                        , (the “New Lender”).

Background

Reference is made to the Credit Agreement dated as of January 28, 2009 among
Under Armour, Inc., a Maryland corporation (the “Borrower”), each of the
Guarantors party thereto, the Lenders party thereto, PNC Bank, National
Association, as administrative agent (the “Administrative Agent”), SunTrust
Bank, as Syndication Agent, and Compass Bank, as Documentation Agent (as the
same has been and may hereafter be modified, supplemented, amended or restated
from time to time, the “Credit Agreement”). Capitalized terms defined in the
Credit Agreement are used herein as defined therein.

Agreement

In consideration of the Lenders’ permitting the New Lender to become a Lender
under the Credit Agreement, the New Lender agrees that effective as of the
Effective Date hereof it shall become, and shall be deemed to be, a Lender under
the Credit Agreement and each of the other Loan Documents and agrees that from
the Effective Date hereof and so long as the New Lender remains a party to the
Credit Agreement, such New Lender shall assume the obligations of a Lender under
and perform, comply with and be bound by each of the provisions of the Credit
Agreement which are stated to apply to a Lender and shall be entitled to the
benefits, rights and remedies set forth therein and in each of the other Loan
Documents. The New Lender hereby acknowledges that it has heretofore received a
true and correct copy of the Credit Agreement (including any modifications
thereof or supplements or waivers thereto) as in effect on the Effective Date
hereof and the executed original of its Note dated the Effective Date hereof
issued by the Borrower under the Credit Agreement in the face amount of
$                    .

The Commitments and Ratable Shares of the New Lender and each of the other
Lenders are as set forth on Schedule 1.1(B) to the Credit Agreement. Schedule
1.1(B) to the Credit Agreement is being amended and restated effective as of the
Effective Date hereof to read as set forth on Schedule 1.1(B) hereto. Schedule 1
hereto lists as of the date hereof the amount of Loans under each outstanding
Borrowing Tranche. Notwithstanding the foregoing, on the date hereof, the
Borrower shall repay all outstanding Loans to which either the Base Rate Option
or the LIBOR Rate Option applies and simultaneously reborrow a like amount of
Loans under each such Interest Rate Option from the Lenders (including the New
Lender) according to the Ratable Shares set forth on attached Schedule 1.1(B)
and shall be subject to breakage fees and other indemnities provided in
Section 4.12 [Indemnity].

--------------------------------------------------------------------------------

The New Lender is executing and delivering this Joinder as of the Effective Date
and acknowledges that it shall: (A) share ratably in all Loans subject to the
Base Rate Option borrowed by the Borrower on and after the Effective Date
hereof; and (B) participate in all new Loans subject to the LIBOR Rate Option
borrowed by the Borrower on and after the Effective Date hereof according to its
Ratable Share.

The remainder of this page is left blank intentionally.

Signatures follow on next page.

 

- 2 -

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[SIGNATURE PAGE TO LENDER JOINDER AND ASSUMPTION AGREEMENT]

IN WITNESS WHEREOF, the New Lender has duly executed and delivered this Joinder
as of the Effective Date hereof.

 

[NEW LENDER] By:  

 

Name:  

 

Title:  

 

--------------------------------------------------------------------------------

[ACKNOWLEDGEMENT PAGE TO LENDER JOINDER AND ASSUMPTION AGREEMENT]

ACKNOWLEDGED:

 

PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent By:  

 

  Name:  

 

  Title:  

 

  UNDER ARMOUR, INC., as Borrower By:  

 

  (SEAL) Name:     Title:    

--------------------------------------------------------------------------------

SCHEDULE 1.1(B)

COMMITMENTS OF LENDERS

Revised Schedule 1.1(B) to Credit Agreement attached.

--------------------------------------------------------------------------------

SCHEDULE 1

TO

LENDER JOINDER AND ASSUMPTION AGREEMENT

OUTSTANDING TRANCHES

--------------------------------------------------------------------------------

EXHIBIT 2.5

FORM OF LOAN REQUEST

 

TO:    PNC Bank, National Association    Agency Services    Mail Stop:
P7-PFSC-04-I    500 First Avenue    Pittsburgh, PA 15219    Attention: Rini
Davis    Telephone:    (412) 762-7638    Telecopy:    (412) 762-8672 CC:    PNC
Bank, National Association    The PNC Financial Services Group    2 Hopkins
Plaza, 21st Floor    Baltimore, MD 21201    Attention: John E. Hehir   
Telephone:    (410) 237 4573    Telecopy:    (410) 237 5700 FROM:    Under
Armour, Inc. RE:    Credit Agreement (as it may be amended, restated, modified
or supplemented, the “Credit Agreement”) dated as of January 28, 2009 by and
among Under Armour, Inc., the Guarantors party thereto, the Lenders party
thereto, PNC Bank, National Association, as Administrative Agent for the Lenders
(the “Administrative Agent”), SunTrust Bank, as Syndication Agent, and Compass
Bank, as Documentation Agent.

Capitalized terms not otherwise defined herein shall have the respective
meanings ascribed to them by the Credit Agreement.

 

A. Pursuant to Section 2.5.1 of the Credit Agreement, the undersigned Borrower
irrevocably requests [check one line under 1(a) below and fill in blank space
next to the line as appropriate]:

 

1.(a)   —   A new Revolving Credit Loan OR   —   A new Letter of Credit OR

--------------------------------------------------------------------------------

  —   Renewal of the LIBOR Rate Option applicable to an outstanding
                                         [specify type of Loan — Revolving
Credit Loan or Letter of Credit], originally made on                     ,
20     OR   —   Conversion of the Base Rate Option applicable to an outstanding
                                         [specify type of Loan — Revolving
Credit Loan or Letter of Credit] originally made on
                                         to a Loan to which the LIBOR Rate
Option applies, OR   —   Conversion of the LIBOR Rate Option applicable to an
outstanding                                          [specify type of Loan —
Revolving Credit Loan or Letter of Credit] originally made on
                    , 20     to a Loan to which the Base Rate Option applies.

SUCH NEW, RENEWED OR CONVERTED LOAN SHALL BEAR INTEREST:

[Check one line under 1(b) below and fill in blank spaces in line next to line]:

 

1.(b)(i)   —   Under the Base Rate Option. Such Loan shall have a Borrowing Date
of                     , 20     (which date shall be (i) be the same Business
Day as the Business Day of receipt by the Administrative Agent by 10:00 a.m. of
this Loan Request for making a new Revolving Credit Loan to which the Base Rate
Option applies, or (ii) the last day of the preceding Interest Period if a Loan
to which the LIBOR Rate Option applies is being converted to a Loan to which the
Base Rate Option applies).    

OR

(ii)   —   Under the LIBOR Rate Option. Such Loan shall have a Borrowing Date of
                                         (which date shall be (i) three
(3) Business Days subsequent to the Business Day of receipt by the Agent by
10:00 a.m. of this Loan Request for making a new Revolving Credit Loan to which
the LIBOR Rate Option applies, renewing a Loan to which the LIBOR Rate Option
applies, or converting a Loan to which the Base Rate Option applies to a Loan to
which the LIBOR Rate Option applies, or (ii) the same Business Day as the last
day of the preceding Interest Period if a Loan to which the LIBOR Rate Option
applies is being convert to a Loan to which the Base Rate Option applies). 2.  
  Such Loan is in the principal amount of US $                     or the
principal amount to be renewed or converted is US $                         [in
increments of $500,000 and not less than $1,000,000 for each Borrowing Tranche
to which the LIBOR Rate Option applies and in increments of $100,000 and not
less than $500,000 for each Borrowing Tranche to which the Base Rate Option
applies]

 

2

--------------------------------------------------------------------------------

3.     [Complete blank below if the Borrower is selecting the LIBOR Rate
Option]:     Such Loan shall have an Interest Period of one [one, two, three, or
six] Months.

   

 

 

 

B. As of the date hereof and the date of making of the above-requested Loan (and
after giving effect thereto): the Loan Parties have performed and complied with
all covenants and conditions of the Credit Agreement and the other Loan
Documents; all of the representations and warranties contained in Section 5 of
the Credit Agreement are true and correct in all material respects; no Event of
Default or Potential Default has occurred and is continuing or exists; the
making of such Loan shall not contravene any Law applicable to the Borrower, any
other Loan Party, any Subsidiary of the Borrower or of any other Loan Party, or
any Lender; and the aggregate principal amount of Swing Loans and the Revolving
Credit Loans of all the Lenders does not exceed the Revolving Credit
Commitments.

 

C. The undersigned hereby irrevocably requests [check one line under 1.(a) below
and fill in blank space next to the line as appropriate]:

 

1.(a)   —   Funds to be deposited into PNC bank account per our current standing
instructions. Complete amount of deposit if not full loan advance amount:
$                    .   —   Funds to be wired per the following wire
instructions:     US $                     Amount of Wire Transfer

      Bank Name:  

 

   

    ABA:  

 

   

        Account Number:  

 

   

        Account Name:  

 

   

    Reference:  

 

   

  —   Funds to be wired per the attached Funds Flow (multiple wire transfers)

The remainder of this page is left blank intentionally.

Signatures follow on next page.

 

3

--------------------------------------------------------------------------------

[SIGNATURE PAGE TO LOAN REQUEST]

The undersigned certifies to the Administrative Agent for the benefit of the
Lenders as to the accuracy of the foregoing on January 28, 2009.

 

UNDER ARMOUR, INC., a Maryland corporation

 

  (SEAL)

By:  

 

Name:  

 

Title:  

 

--------------------------------------------------------------------------------

EXHIBIT 2.5.2

FORM OF SWING LOAN REQUEST

 

TO:    PNC Bank, National Association    Agency Services    Mail Stop:
P7-PFSC-04-I    500 First Avenue    Pittsburgh, PA 15219    Telephone:    (412)
762-6442    Telecopy:    (412) 762-8672 CC:    PNC Bank, National Association   
The PNC Financial Services Group    2 Hopkins Plaza, 21st Floor    Baltimore, MD
21201    Attention: John E. Hehir    Telephone:    (410) 237 4573    Telecopy:
   (410) 237 5700 FROM:    Under Armour, Inc., a Maryland corporation (the
“Borrower”) RE:    Credit Agreement (as it may be amended, restated, modified or
supplemented, the “Credit Agreement”), dated as January 28, 2009, by and among
the Borrower, the Guarantors party thereto, the Lenders party thereto, PNC Bank,
National Association, as administrative agent for the Lenders (the
“Administrative Agent”), SunTrust Bank, as Syndication Agent, and Compass Bank,
as Documentation Agent.

Capitalized terms not otherwise defined herein shall have the respective
meanings given to them by the Credit Agreement.

Pursuant to Section 2.5.2 of the Credit Agreement, the Borrower hereby makes,
irrevocably, the following Swing Loan Request:

 

1.   Aggregate principal amount of such Swing Loan (in integral multiples of
$100,000 and not less than $100,000)    US $                      2.  

Proposed Borrowing Date

(which date shall be on or after the date on which the Administrative Agent
receives this Swing Loan Request, with such Swing Loan Request to be received no
later than 12:00 p.m. E.D.T. on the Proposed Borrowing Date)

                       , 20    

--------------------------------------------------------------------------------

  3. The undersigned hereby irrevocably requests [check one line below and fill
in blank spaces next to the line as appropriate]:

a. — Funds to be deposited into a PNC Bank bank account per our current standing
instructions. Complete amount of deposit if not full loan advance amount: US
$                    .

b. — Funds to be wired per the following wire instructions:

 

  US $                      Amount of Wire Transfer

    Bank Name:  

 

 

   ABA:  

 

 

    Account Number:  

 

 

    Account Name:  

 

 

   Reference:  

 

  .

c. — Funds to be wired per the attached Funds Flow (multiple wire transfers)

 

  4. As of the date hereof and the date of making the above-requested Swing Loan
(and after giving effect thereto): the Loan Parties have performed and complied
with all covenants and conditions of the Credit Agreement and the other Loan
Documents; all of the representations and warranties contained in Section 5 of
the Credit Agreement and in the other Loan Documents are true and correct in all
material respects; no Event of Default or Potential Default has occurred and is
continuing or exists; the making of such Swing Loan shall not contravene any Law
applicable to the Borrower, any other Loan Party, any Subsidiary of the Borrower
or of any other Loan Party, or any Lender; and the aggregate principal amount of
Swing Loans and the Revolving Credit Loans of all the Lenders does not exceed
the Revolving Credit Commitments of all of the Lenders.

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Signatures follow on next page.

 

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[SIGNATURE PAGE TO SWING LOAN REQUEST]

The Borrower certifies to the Administrative Agent for the benefit of the
Lenders as to the accuracy of the foregoing on                     , 20    .

 

UNDER ARMOUR, INC.

By:

 

 

Name:

 

 

Title:

 

 

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Borrowing Base Certificate    PNCBANK

THIS BORROWING BASE CERTIFICATE, dated as of January 28, 2009 is executed and
delivered by the undersigned borrower (the “Borrower”) in favor of PNC BANK,
NATIONAL ASSOCIATION (the “Bank”), pursuant to a Credit Agreement dated as of
January 28, 2009 (as amended or otherwise modified from time to time, the
“Credit Agreement”). All initially capitalized terms used in this Certificate
not otherwise defined herein shall have the meanings assigned to them in the
Credit Agreement. To induce the Bank to make loans and other financial
accommodations available to the Borrower under the Credit Agreement, the
Borrower hereby certifies, represents and warrants to the Bank, as of the date
hereof, that (a) the person signing below is an Authorized Officer of the
Borrower; (b) the statements on Schedule 1 hereto concerning the Collateral
securing the Obligations are true and complete; (c) the eligible Collateral
described on Schedule 1 hereto represents only Qualified Accounts and Qualified
Inventory; (d) the Borrower is in compliance with all of the terms and
provisions of the Credit Agreement and the other Loan Documents; (e) all of the
Borrower’s representations and warranties in the Credit Agreement and the other
Loan Documents are true and correct in all material respects; (f) the Loan
Parties are in compliance with each of the covenants and conditions contained in
the Credit Agreement; and (g) no Event of Default or Potential Default has
occurred and is continuing or exists.

 

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[SIGNATURE PAGE TO BORROWING BASE CERTIFICATE]

WITNESS the due execution hereof as a document under seal, as of the date first
written above.

 

UNDER ARMOUR, INC., a Maryland corporation By:  

 

  (SEAL)

Print Name:  

 

Title:  

 

Certificate No.: Certificate Number:             

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LANDLORD’S WAIVER

THIS LANDLORD’S WAIVER (this “Agreement”) is made as of this          day of
                    , 20     by [INSERT LANDLORD’S NAME] (the “Landlord”) to PNC
BANK, NATIONAL ASSOCIATION (the “Agent”) in its capacity as Administrative Agent
for the Lenders (as defined in a certain Credit Agreement by and among UNDER
ARMOUR, INC., a Maryland corporation, as the Borrower thereunder, the Guarantors
from time to time party thereto, the Lenders from time to time party thereto and
the Agent) (the “Credit Agreement”).

WITNESSETH:

[INSERT TENANT’S NAME] (as the “Tenant”) is or may become indebted to the Agent
and the Lenders for certain credit facilities (the “Loans”). Pursuant to the
provisions of the Credit Agreement, the Loans are or may become secured by
security interests and liens in all of the tangible and intangible personal
property of the Tenant (collectively, the “Collateral”). Under the provisions of
a certain lease (the “Lease”) dated [INSERT DATE OF LEASE], between the Landlord
and the Tenant, the Landlord has leased approximately [INSERT SQUARE FEET]
square feet situated on the property described as [INSERT STREET ADDRESS, CITY,
STATE POSTAL CODE] (the “Premises”). Since part of the Collateral may be located
on or affixed to the Premises, the Agent and the Lenders have required, as a
condition to making the Loans, the execution and delivery of this Agreement by
the Landlord.

NOW, THEREFORE, to induce the Agent and the Lenders to make the Loans and other
financial accommodations available to the Borrower and the Tenant, the Landlord,
intending to be legally bound hereby covenants and agrees with the Agent and the
Lenders as follows:

1. The Landlord hereby consents to the security interests and liens of the
Lenders and their respective successors and assigns in the Collateral located
on, at or about the Premises. This waiver shall apply to any of the Collateral
which is already located on, at or about or affixed to the Premises or may
hereafter be located on, at or about or affixed to the Premises.

2. The Landlord hereby waives and releases in favor of the Agent and the Lenders
and agrees that the Agent’s and the Lenders’ liens and security interests in the
Collateral shall be prior and superior to (a) any and all rights of distraint,
levy and execution, and marshalling of assets which the Landlord may now or
hereafter have against the Collateral, (b) any and all liens and security
interests which the Landlord may now or hereafter have on the Collateral, and
(c) and any and all other claims of every nature whatsoever which the Landlord
may now or hereafter have on or against the Collateral for any rent or other
sums due or to become due to the Landlord by the Tenant under the provisions of
the Lease or otherwise.

3. The Agent and the Lenders may remove the Collateral from the Premises
whenever the Agent and the Lenders deem it necessary to do so to protect their
interest, and without liability or accountability, with the exception of actual
damages caused by Agent or its subcontractors, representatives, designees or
agents during the removal of any Collateral, to the Landlord therefor, and the
Landlord hereby irrevocably grants to the Agent and the Lenders the

 

- 1 -

--------------------------------------------------------------------------------

right of entry to the Premises to remove any of the Collateral at any reasonable
time or times and upon [        ] days prior notice.

4. In the event the Tenant defaults under the Lease and is evicted by the
Landlord or in the event that the Tenant abandons the Premises, the Landlord
shall send written notice to the Agent as provided in Section 5 below. Following
receipt of such notice, the Agent and the Lenders shall have the right, by
sending notice to the Landlord, to keep and store any portion of the Collateral
located at the Premises at or about the date the Tenant loses possession of the
Premises on the Premises for a period, determined by the Agent and the Lenders,
of up to ninety (90) days, counting from the date the Tenant loses possession of
the Premises on a month to month basis, provided the Agent and the Lenders pay
rent to the Landlord for each month at the monthly rent provided for in the
Lease. The Agent and the Lenders may conduct one or more auction sales of the
Collateral at the Premises at any time during which the Tenant is in possession
of the Premises or during the period the Agent or the Lenders are using the
Premises for storage of the Collateral.

5. The Landlord shall use commercially reasonable efforts to notify the Agent in
writing of any default by the Tenant under the provisions of the Lease. Any such
notice shall be sent to the Agent at the attention of
[                                        ], PNC Bank, National Association,
[                                                             ].

6. The Landlord shall notify any purchaser of the Premises and any mortgagee or
any other holder of any lien, security interest or encumbrance on the Premises
of the existence of this Agreement.

7. The Landlord hereby certifies that the Landlord has full power and authority
to execute this Agreement and that it has legal title to the Premises.

8. This Agreement shall continue in effect during the term of the Credit
Agreement and any extensions, renewals, refinancings or modifications thereof
and any substitutions therefor, shall be binding upon the successors, assigns
and transferees of the Landlord, and shall inure to the benefit of the Agent and
the Lenders and their respective successors and assigns. The Landlord hereby
waives notice of the Agent’s and the Lenders’ acceptance of and reliance on this
Agreement.

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Signatures follow on next page.

 

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[SIGNATURE PAGE TO LANDLORD’S WAIVER]

IN WITNESS WHEREOF, the Landlord has caused this Agreement to be executed,
sealed and delivered on the day and year first written above.

 

    LANDLORD:   WITNESS/ATTEST:     [INSERT LANDLORD NAME]  

 

    By:  

 

  (Seal)     Name:  

 

    Title:  

 

    Address:  

 

     

 

     

 

--------------------------------------------------------------------------------

ACKNOWLEDGEMENT TO LANDLORD’S WAIVER

TO BE MADE BY LANDLORD

 

STATE OF:    COUNTY OF:    TO WIT:

I HEREBY CERTIFY that on this          day of                     , 20    ,
before me, a Notary Public for the state and county aforesaid, personally
appeared                                         , known to me or satisfactorily
proven to be the person whose name is subscribed to the foregoing instrument,
who acknowledged that he/she is the                                          of
                                        , that he/she has been duly authorized
to execute, and has executed, the foregoing instrument on behalf of the said
entity for the purposes therein set forth, and that the same is its act and
deed.

IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal, the day and
year first above written.

 

[SEAL]  

 

  Notary Public

My commission expires on                                         

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CONSENT TO LANDLORD’S WAIVER

The undersigned Tenant hereby consents to the terms and conditions of this
Landlord’s Waiver as set forth above.

 

ATTEST:     [INSERT NAME OF TENANT]

 

    By:  

 

    Name:  

 

    Title:  

 

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EXHIBIT 7.3.4

FORM OF COMPLIANCE CERTIFICATE

THIS COMPLIANCE CERTIFICATE (this “Certificate”) is delivered pursuant to
Section 7.3.4 of that certain Credit Agreement dated as of                     ,
20     (the “Credit Agreement”) by and among Under Armour, Inc., a Maryland
corporation (the “Borrower”), the Guarantors from time to time party thereto
(the “Guarantors”), the Lenders from time to time party thereto (the “Lenders”),
PNC Bank, National Association, as administrative agent for the Lenders (the
“Administrative Agent”), SunTrust Bank, as Syndication Agent, and Compass Bank,
as Documentation Agent. Unless otherwise defined herein, terms defined in the
Credit Agreement are used herein with the same meanings.

The undersigned,                                         , the
                                         [Chief Executive Officer/Chief
Operating Officer/Chief Financial Officer], is authorized to execute and deliver
this Compliance Certificate on behalf of the Borrower and makes the following
certifications in his/her capacity as such officer and not individually (the
“Authorized Officer”). The Authorized Officer (i) is familiar with the
provisions of the Loan Documents and the transactions contemplated thereby,
(ii) has reviewed the Loan Documents, (iii) had certain discussions with the
Borrower’s management and employees as he/she deemed sufficient to provide the
certifications contain herein, (iv) has done such other investigation as
necessary to support the statements made below, and (v) does hereby certify as
of the quarter/year ended                     , 20     (the “Report Date”), as
follows:

 

(1) Financial Covenants.

 

  (A) Minimum Fixed Charge Coverage Ratio. As of the Report Date, the Fixed
Charge Coverage Ratio is              to             , which is not less than
1.25 to 1.0.

 

  (B) Maximum Leverage Ratio. As of the Report Date, the Leverage Ratio is
             to             , which does not exceed 2.5 to 1.0.

 

(2) Indebtedness (Section 7.2.1).

 

  (A) As of the Report Date, the aggregate amount of Indebtedness secured by
capitalized leases and Purchase Money Security Interests incurred by each of the
Loan Parties and each of their respective Subsidiaries is US
$                     other than Indebtedness permitted by clause (ii) of the
definition of Permitted Indebtedness, which amount does not exceed US
$35,000,000, as required by Section 7.2.1 of the Credit Agreement.

 

  (B) As of the Report Date, each of the Loan Parties and each of their
respective Subsidiaries has entered into the following Interest Rate Hedges and
each of the following has been approved by the Administrative Agent:

--------------------------------------------------------------------------------

  

 

     

 

     

 

  

 

(3) Representations, Warranties and Covenants. The representations and
warranties contained in Section 5 of the Credit Agreement and in the other Loan
Documents are true and correct on and as of the date of this certificate with
the same effect as though such representations and warranties had been made on
the date hereof, and each of the Borrower and the other Loan Parties has
performed and complied with all covenants and conditions of the Credit Agreement
and the other Loan Documents.

 

(4) Event of Default or Potential Default. No Event of Default or Potential
Default has occurred and is continuing or exists as of the date hereof.

The remainder of this page is left blank intentionally.

Signatures follow on next page.

 

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[SIGNATURE PAGE TO COMPLIANCE CERTIFICATE]

IN WITNESS WHEREOF, the undersigned has executed this Certificate this 28th day
of January, 2009.

 

UNDER ARMOUR, INC., a Maryland corporation By:  

 

Printed:  

 

Title: