exv10w1



 






Exhibit 10.1









CONSENT AGREEMENT




     Consent
Agreement (this “Consent”), dated as of November 22, 2005 among MERRILL LYNCH
BUSINESS FINANCIAL SERVICES INC. (“MLBFS”), COLLEGIATE PACIFIC INC. (the “Customer”), KESSLERS
TEAM SPORTS, INC. (“Kessler”), TOMARK SPORTS INC.
(“Tomark”), DIXIE SPORTING GOODS CO., INC.
(“Dixie”), CMS OF CENTRAL FLORIDA, INC.
(“CMS”), and SALKELD & SONS, INC. (“Salkeld”, and
together with Kessler, Tomark, Dixie and CMS, the
“Guarantors”; and individually, a
“Guarantor”). Customer and the Guarantors are collectively referred to herein as the “Credit
Parties”; and individually as a “Credit Party”.



RECITALS




     Customer and MLBFS are parties to a WCMA Loan and Security Agreement No. 586-07067 dated
December 16, 2003, as amended and/or extended from time to time (as so amended and/or extended,
the “Loan Agreement”). Customer has requested that MLBFS consent to the proposed activity and/or
transactions set forth herein in Section 2 of this Consent under the caption “Limited Consent”,
and MLBFS has agreed to do so, all upon the terms and subject to the conditions set forth herein.



     Accordingly, in consideration of the mutual covenants and agreements contained in this
Consent and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Credit Parties and MLBFS hereby agree as follows:



     1 Defined Terms. Capitalized terms used but not defined in this Consent
(including, without limitation, in the recital clauses of this Consent) shall have the
respective meanings assigned to those terms in the Loan Agreement.



     2. Limited Consents.



          (a) From and after the Consent Effective Date, but subject to the conditions set forth
in Section 3 below, MLBFS hereby:





     (i) consents to the purchase by Customer of additional shares of the common stock,
$0.01 par value per share (the “Common Stock”), of
Sport Supply Group, Inc. (“SSG”) (the
“Additional Shares” the Additional Shares shall be in addition to the shares of
Common Stock to be acquired, if any, in connection with the proposed merger of SSG with
and into Customer, or, if the Reverse Merger Election (as defined in Section 2.2 of the
Merger Agreement (as hereinafter defined)) shall have been elected, the merger of CP
Merger Sub, Inc. (the “Merger Sub”), a Delaware corporation and a wholly-owned subsidiary
of Customer, with and Into SSG, pursuant to which the Company intends to acquire all of
the outstanding shares of Common Stock of SSG that it shall not own on the closing date of
the Merger, for the merger consideration and otherwise upon the terms and conditions set
forth in the Agreement and Plan of Merger dated as of September 7, 2005 by and among
Customer, the Merger Sub and SSG (the Agreement and Plan of Merger, together with all
schedules and exhibits thereto, in each case as in effect on the date of this Consent
(without regard to any Consents, modifications, waivers or supplements thereto),
collectively, the “Merger Agreement”), provided, that the purchase price per
Additional Share shall not be greater than $6,74;




     (ii) subject to the proviso contained in Section 2(a)(1), consents to the use
of not more than $15,000,000 of the proceeds of WCMA Loans to acquire the Additional
Shares; and



 









 







     (ii) agrees that the actions contemplated by Sections 2(a)(i) and (ii)
above shall not constitute an Event of Default under the Loan Documents.



          (b) Reference
is made to Section 3.3(h) of the Loan Agreement (Fixed Charge Coverage).
MLBFS hereby consents and agrees that, solely for the calculation of the Fixed Charge Coverage
for the fiscal quarter ending December 31, 2005 (but not for any other quarter or period), (i)
to the extent that the Merger Agreement shall be terminated and Customer shall incur
out-of-pocket costs and expenses in connection with such termination (the “Merger
Termination Costs”), and (ii) the Merger Termination Costs are deducted in the calculation
for such fiscal quarter of “income before interest (including
payments in the nature of interest
under capital leases), taxes, depreciation, amortization, and other non-cash charges” in clause
(a) of Section 3.3(h), Customer may, notwithstanding the provisions of clause (a) of Section
3.3(h), add back to such calculation the amount of the Merger Termination Costs so deducted;
provided, that the aggregate amount of the Merger Termination Costs added back to such
calculation shall not exceed $750,000.




          (c) The Credit Parties acknowledge and agree that the consents contained in Sections 2(a)
and (b) shall not be deemed to be or constitute a consent to any future action or inaction on
the part of Customer or any other Credit Party that might result in a Default or Event of
Default, and, except as expressly provided in Sections 2(a) and (b), shall not constitute a
waiver of any covenant, term or provision in the Loan Agreement or the other Loan Documents, or
hinder, restrict or otherwise modify the rights and remedies of MLBFS following the occurrence
of any present or future Default or Event of Default under the Loan Agreement or any other Loan
Document.




     3. Effective
Date of Consent and Consent.



          (a) This Consent shall become effective (the “Consent Effective Date”) when, and
only when, each of the following conditions precedent have been fulfilled to the satisfaction of
MLBFS in its sole discretion: (i) Customer, MLBFS and each other Credit Party shall have
executed and delivered to each other a fully executed counterpart of this Consent, and (ii) all
legal and other matters incident to the execution, delivery and performance of this Consent, the
documents and instruments contemplated hereby, and the transactions contemplated hereby,
including, without limitation, under Regulation U and the other regulations of the Board of
Governors of the Federal Reserve System, shall be satisfactory in form and substance to MLBFS,
and the Credit Parties shall have executed and delivered such documents, certificates,
agreements, certificates, consents and confirmations in connection with the foregoing as MLBFS
shall reasonably request. The Credit Parties also covenant and agree that each will promptly
deliver to MLBFS and its counsel a copy of any and all other documents, certificates,
agreements, certificates, consents and confirmations in connection with the acquisition of the
Additional Shares, or relating thereto, all of which shall be subject to review and approval by
MLBFS.




          (b) The Credit Parties acknowledge and agree that failure to comply with any of the
conditions set forth in Section 3 shall constitute an immediate Event of Default under the Loan
Documents, without the necessity of notice or any other event of any kind or nature, and the
effectiveness of the consent contained in Section 3 shall be void and of no further force or
effect.




     4. Representations and Warranties. In order to induce MLBFS to enter into
this Consent, Customer and the other Credit Parties each hereby represents and warrants to MLBFS
that:



          (a)
(i) the recital clauses set forth in this Consent are true, complete and correct in all
respects and (ii) after giving effect to the consents set forth in Section 2, all representations
and warranties contained in the Loan Agreements and the other Loan Documents are true and correct
in all respects on the date hereof and are hereby considered to be remade as of the date hereof,
except to the extent that any such representation or warranty relates
to a specific date in which
case such representation or warranty shall be true and correct as of such specific date, (iii)
the execution and delivery by Customer and the other Credit Parties of this Consent does not and
will not, by the passage of time, the giving of notice or otherwise: (A) require the approval of
any governmental authority or any other Person, or




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violate any applicable law relating to such Credit Party or (B) conflict with, result in a breach
of or constitute a default under the organizational documents of any Credit Party, or any
Indenture, agreement or other instrument to which such Credit Party is a party or by which it or
any of its properties may be bound, (C) as of the date hereof and as of the Consent Effective
Date, no Default or Event of Default has occurred and is continuing, nor will any exist
immediately after giving effect to this Consent or after the consummation of the acquisition of
the Additional Shares or the transactions contemplated thereby, and (D) the execution, delivery
and performance by the Credit Parties of this Consent Agreement have been duly authorized by all
necessary corporate and other action.




          (b) the acquisition by Customer of the shares of Common Stock it owns on the date hereof,
the Additional Shares, and the shares of Common Stock it proposes to acquire pursuant to the
Merger Agreement, if any (collectively, the “Owned Shares”), (i) did not and does not require the
consent, approval, qualification or authorization of, or registration, designation, declaration
or filing with, any governmental authority or any other Person (other than those items listed on
Exhibit A to this Consent), including, without limitation, schedules and filings by Customer, any
other Credit Party or, to the best of Customer’s knowledge, any other party to any such
acquisition or proposed acquisition of the Owned Shares under Sections 13 and/or 16 under the
Securities Exchange Act of 1934, as amended, or filings or submissions under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or violate any applicable law
relating to such Credit Party, (ii) conflict with, result in a breach of or constitute a default
under the organizational documents of any Credit Party, or any indenture, agreement or other
instrument to which such Credit Party is a party or by which it or any of its properties may be
bound, and (iii) have been duly authorized by all necessary corporate and other action.




     5. Ratification and Enforceability of Loan Documents. By executing this Consent,
each of the Credit Parties hereby (a) ratifies, confirms and approves the Loan Agreement and each
of the other Loan Documents, each of which shall remain in full force and effect in accordance
with their respective terms, and (b) represents and warrants that the Loan Agreement and Loan
Document each constitutes the valid and legally binding obligation of the Credit Parties, as the
case may be, enforceable in accordance with its terms. In addition, and without limiting the
generality of the foregoing, by executing this Consent, the Guarantors each expressly consent to
this Consent and acknowledge and agree that (x) the term “Obligations” under its unconditional
guaranty and security agreement and any other Loan Document in favor of or with MLBFS extends to
and includes the Obligations of Customer under the Loan Agreement and the Loan Documents, and (y)
the activity or transactions contemplated by this Consent shall not in any way affect the
validity or enforceability of any such Loan Document, or reduce, impair or discharge the
obligations or collateral of such Person.



     6. Certain Acknowledgments and Agreements by Customer.



          (a) To induce MLBFS to agree to the terms of this Consent, the Credit Parties each
represents and warrants that as of the date of its execution of this Consent, there are no claims
or offsets against, or rights of recoupment with respect to, or defenses or counterclaims to its
obligations (including, without limitation, “Obligations”) under, the Loan Documents and, in
accordance therewith, the Credit Parties each hereby waives any and all such claims, offsets,
rights of recoupment, defenses or counterclaims, whether known or unknown, arising prior to the
date of this Consent, and releases and discharges MLBFS and its officers, directors, employees,
agents, stockholders, affiliates and attorneys (collectively, the “Released Parties”)
from any and all obligations, indebtedness, liabilities, claims,
rights, causes of action or
demands whatsoever, whether known or unknown, suspected or
unsuspected, in law or equity, which
the Credit Parties, or any of them, ever had or now has against any Released Party arising prior
to the date hereof and from, arising out of, or relating to the Loan Documents.




     7. Miscellaneous.



          (a) Any provision of this Consent held by a court of competent jurisdiction to be invalid or
unenforceable shall not impair or invalidate the remainder of this Consent and the effect thereof
shall be confined to the provision so held to be invalid or unenforceable.




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          (b) THIS CONSENT AND ALL OTHER LOAN DOCUMENTS EXECUTED PURSUANT HERETO
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW OR ANY OTHER LAWS THAT WOULD MAKE THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF ILLINOIS APPLICABLE HERETO.




          (c) Except as expressly herein modified, the terms and conditions of the Loan Agreement
and the other Loan Documents shall remain in full force and effect.




          (d) This Consent is binding upon and shall inure to the benefit of the Credit Parties and
their respective successors and assigns, except that none of the Credit Parties may assign or transfer this
Consent or any of their respective rights or obligations hereunder without the prior written consent of MLBFS.




          (e) This Consent may be executed in two or more counterparts, each of which when so executed
shall be deemed to be an original, but all of which when taken together shall constitute one
and the same agreement. Any signature delivered by a party by facsimile transmission shall be deemed an original signature
hereto.




          (f) The headings and captions used in this Consent are for convenience only and shall not
affect the interpretation of this Consent.




(signatures appear on next page)




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     IN WITNESS WHEREOF, Customer, MLBFS and the Guarantors have signed this Consent as of the
date first above written.



	 	 	 	 	 	 	 
	 	 	COLLEGIATE PACIFIC INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Adam Blumenfeld	 	 
	 

	 	 	 	 	 	 
	 	 	Print Name: Adam Blumenfeld	 	 
	 	 	Print Title: President	 	 
	 
	 	 	 	 	 	 
	 	 	MERRILL LYNCH BUSINESS
FINANCIAL SERVICES INC.
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Brian Tally	 	 
	 

	 	 	 	 	 	 
	 	 	Print Name: Brian Tally	 	 
	 	 	Print Title: Vice President	 	 






GUARANTORS:




KESSLERS TEAM SPORTS, INC.




	 	 	 	 	 
	By:

	 	/s/ Adam Blumenfeld
	 	 
	 

	 	 	 	 
	Print Name: Adam Blumenfeld	 	 
	Print Title: President	 	 
	 
	 	 	 	 
	TOMARK SPORTS INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Adam Blumenfeld	 	 
	 

	 	 	 	 
	Print Name: Adam Blumenfeld	 	 
	Print Title: President	 	 
	 
	 	 	 	 
	DIXIE SPORTING GOODS CO., INC.
	 
	 	 	 	 
	By:

	 	/s/ Adam Blumenfeld	 	 
	 

	 	 	 	 
	Print Name: Adam Blumenfeld	 	 
	Print Title: President	 	 
	 
	 	 	 	 
	CMS OF CENTRAL FLORIDA, INC.
	 
	 	 	 	 
	By:

	 	/s/ Adam Blumenfeld	 	 
	 

	 	 	 	 
	Print Name: Adam Blumenfeld	 	 
	Print Title: President	 	 






(signatures continued on next page)





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SALKELD & SONS, INC.




	 	 	 	 	 
	By:

	 	/s/ Adam Blumenfeld
	 	 
	 

	 	 	 	 
	Print Name: Adam Blumenfeld	 	 
	Print Title: President	 	 






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Exhibit A




Consents, Approvals, Filings




     Customer will be required to file with the Securities and Exchange Commission a Current
Report on Form 8-K pursuant to the Securities Exchange Act of 1934, as amended, with regard to the
matters set forth in Section 2 of the Consent.



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