Document:

Exhibit
10.07

 

BUY-SELL AGREEMENT

THIS BUY-SELL AGREEMENT (hereinafter referred to as
the “Agreement”) is made this 30th day of September, 2003, by and
between J. Scott Plank (the “Employee”) and KP SPORTS, INC., a Maryland
corporation (the “Company”).

 

Explanatory Statement

 

A.                                   The
Employee is a full time employee of the Company and has rendered valuable
service to the Company.  

 

B.                                     The
Employee is a stockholder of the Company and is the record owner of 1,400,00
shares of the Company’s Common Stock, par value $.001 per share (the “Common
Stock”).

 

C.                                     The
parties hereto believe it is desirable and in their mutual best interests to
control the ownership of the Common Stock of the Company and thereby to help
facilitate the continuous, harmonious and effective management of the affairs,
policies, and operations of the Company. 

 

D.                                    It
is the intention of the parties to provide for repurchases by the Company of
shares of Common Stock held by the Employee upon the death of the Employee.

 

E.                                      Concurrently
herewith, the Company, the Employee, the other existing stockholders of the
Company, and certain investors in the Company are entering into a Stockholders’
Agreement, dated the date hereof (the “Stockholders’ Agreement”), which
Stockholders’ Agreement provides, among other things, for certain restrictions
relating to the transfer of the Common Stock.

 

NOW, THEREFORE, in consideration of the Explanatory
Statement and the mutual covenants, promises and agreements of the parties
hereto, the parties do hereby covenant, promise and agree as follows: 

 

1.                                       Insurance.

 

Subject to the provisions of
this Section 1, the Company shall be obligated to purchase and take out
and maintain in force so long as the Employee is a stockholder of the Company,
such policy or policies of insurance on the life of the Employee with an
aggregate death benefit of $4,400,000.00 (collectively the

 

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“Policies”).  The proceeds of the Policies (the “Proceeds”)
shall be held in trust and used by the Company to purchase shares of Common
Stock from the Employee’s Estate (as hereinafter defined), which are offered to
the Company as a result of the death of the Employee pursuant to Section 3
hereof (the “Employee Offered Stock”). 
Notwithstanding the foregoing, if in the reasonable judgment of the
Company, the Employee is, or becomes, for health or other reasons, uninsurable
or cannot be insured upon economically reasonable terms, the Company shall have
no obligation to purchase or take out or to maintain in force life insurance on
the Employee.  The Company shall be the
sole owner and beneficiary of any Policy purchased or taken out hereunder.  Proceeds which are held by the Company shall
not be deemed an asset of the Company or otherwise considered by any appraiser
or appraisers or by any other person for the purpose of determining the
purchase price for the Employee Offered Stock pursuant to Section 4
hereof.  The Company shall pay premiums
on all Policies as they become due and may, in its discretion, apply any
dividends declared and paid on such policies to the payment of such premiums. 

 

2.                                       Purchase and Sale.

 

(a)                                  No Common Stock shall be Transferred (as such
term is defined in the Stockholders’ Agreement) by the Employee to a Permitted
Transferee (as such term is defined in the Stockholders’ Agreement), other than
a repurchase of the Common Stock by the Company, unless, as a condition of
receiving title to such Common Stock:

 

(i)                                     the Common Stock so transferred shall remain
subject to all the provisions of this Agreement; 

 

(ii)                                  the Permitted Transferee agrees to become a
party to this Agreement and to be bound by all of the provisions and terms or
conditions hereof; and 

 

(iii)                               such person or entity executes such other
documents as are contemplated hereby, including a counterpart of this
Agreement, which shall be deemed a supplement to this Agreement setting forth
the foregoing agreements and to which all Common Stock then and thereafter
acquired by such person or entity shall be subject.

 

(b)                                 Any purported Transfer of the Common Stock
other than in accordance with this Agreement by the Employee shall be null and
void, and the Company shall refuse to recognize any such Transfer and shall not
reflect on its records any change in record ownership of the Common Stock
pursuant to any such Transfer.

 

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(c)                                  For purposes hereof, the Employee and each of
his Permitted Transferees shall be referred to herein as an “Employee
Stockholder.”

 

(d)                                 Each Employee Stockholder agrees that during
the term of this Agreement, he or it shall not Transfer any or all of the
shares of Common Stock of the Company owned of record or beneficially by him or
it except pursuant to the Stockholders’ Agreement.

 

3.                                       Purchase Upon Death.

 

Upon the death of the
Employee, if the Policies are then in effect, the Company shall be obligated to
use the Proceeds of the Policies to purchase shares of Common Stock of the
Company held by the Employee’s estate or any Employee Stockholder
(collectively, the “Estate”), and the Estate shall be obligated to sell said
shares.  Purchases pursuant to this Section 3
shall be made from the persons or entities constituting the Estate as the
Estate shall determine.  If the Estate
cannot come to a determination within five (5) business days of the
receipt of the Proceeds by the Company, the shares will be purchased on a pro
rata basis from all of the persons or entities constituting the Estate.  The price per share for purchases pursuant to
this Section 3 shall be the higher of the amount of the Book Value (as
defined in Section 4(a)) or the Market Value (as defined in Section 4(b))
and shall be paid in cash on the Closing Date (as defined in Section 5).  If for any reason the Company does not expend
all of the Proceeds to purchase shares, any such remaining or unused Proceeds
shall be retained by the Company.  The
number of shares of Common Stock to be purchased from the Estate shall equal
the amount of the Proceeds divided by the price per share as determined in
accordance with this Section 3.

 

4.                                       Book Value and Market Value. 

 

(a)                                  “Book Value” as used in this Agreement shall
be the value, computed on the same accounting basis as the Company’s regular
method of accounting, of the net aggregate stockholder’s equity of the Company
divided by the total number of shares of the Common Stock of the Company
outstanding on a fully-diluted basis on the date on which said Book Value is
computed and determined (as hereinafter provided); provided, however, that
anything contained in this Section 4(a) to the contrary
notwithstanding, the computation of such Book Value shall be subject to the
following provisions: 

 

(i)                                     in no event shall the determination of the
Book Value include any of the Proceeds; 

 

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(ii)                                  no additional allowance of any kind shall be
made for the goodwill, tradenames or any other intangible asset or assets
(hereinafter referred to as the “Intangible Assets”) of the Company other
than that aggregate dollar amount for any of such Intangible Assets appearing on the most recent balance sheet of
the Company prior to those dates set forth below for determining Book Value; 

 

(iii)                               the Book Value shall be computed and
determined as of the end of the last month immediately preceding the month in
which the death of the Employee occurred for purposes of Section 4 of this
Agreement; and

 

(iv)                              the Book Value shall be determined in
accordance with generally accepted accounting principles, applied in a
consistent manner with prior periods, by the independent accountant at that
time examining the books and accounts of the Company or, if there be none, then
by the last independent accountant who had performed such services for the
Company, and a determination by such independent accountant shall, for purposes
of this Agreement, be final, conclusive and binding upon each of the parties
hereto. 

 

(b)                                 “Market Value” as used in this Agreement with
respect to the value of shares of the Company’s Common Stock, shall be the per
share dollar value of the Company’s Common Stock last determined by a
resolution of the Board of Directors of the Company, acting in good faith, as
recorded in the minute book of the Company. 
In the event that the Board of Directors has not determined a per share
dollar value for the Corporation’s Common Stock within eighteen (18) months of
its last determination of the per share dollar value for the Corporation’ s
Common Stock, then the “Market Value” with respect to the value of shares of
the Company’s Common Stock, shall be the fair market value as determined by an
accountant who is employed by or is a partner or principal in a nationally or
regionally recognized accounting firm who is knowledgeable and experienced in
evaluating and determining the fair market value of shares of stock or other
equity interests in companies that are generally similar to the Company.  The “Market Value” as determined in
accordance with this Section 4(b) shall, for purposes of this
Agreement, be final, conclusive and binding upon each of the parties hereto. 

 

5.                                       Delivery of Certificates.

 

Closing on the sale of any
shares of Common Stock sold pursuant to this Agreement, unless otherwise agreed to in
writing by the Company and the Employee Stockholder, shall be held at the principal place of business
of the Company five (5) business days from the later of (x) the date the
Proceeds are received by the Company and (y) the receipt by the Company of
written instructions from the Estate as to whom the Proceeds should be paid,
which instructions the

 

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Company is entitled to rely
on (the “Closing Date”).  On the Closing
Date, upon payment of the purchase price for the purchase of the Common Stock
hereunder, the stock certificate or certificates representing the Common Stock
shall be delivered to the Company, with appropriate stock powers or
endorsements duly executed in blank and guaranteed by a national bank or member
of the New York Stock Exchange.  If the
certificates representing any shares of Common Stock have not been surrendered
by the Employee Stockholder or shall not be delivered contemporaneously with
the tender of the purchase price, then the Company, shall be appointed, and the
same is hereby irrevocably constituted and appointed, the attorney-in-fact with
full power and authority to execute the necessary stock powers and to perform
all other acts necessary and proper in order to transfer such stock certificate
or certificates to the purchaser, in accordance with the provisions of this
Agreement and all rights of the Employee Stockholder thereof with respect to
said Common Stock (including voting rights) nonetheless shall cease and
terminate.  Each Employee Stockholder
shall also deliver to the Company at the Closing (a) all documentation
required by Section 2 hereof for the transfer of such Employee Stockholder’s
Stock, as applicable; and (b) a full and unconditional general release
signed by the Employee Stockholder in the form and substance required by the
Company. 

 

6.                                       Securities Laws and Endorsements of Stock
Certificates. 

 

(a)                                  Each Employee Stockholder acknowledges that
the Common Stock of the Company acquired by it has not been registered under
the Securities Act of 1933 (hereinafter referred to as the “Act”) or any state
securities law (the “State Act”).  Each
Employee Stockholder severally represents and warrants that it has acquired the
shares of Common Stock of the Company without a view to, the offer, offer for
sale, or sale in connection with, the distribution of such shares of the Common
Stock, and that it will hold such shares of Common Stock indefinitely unless
subsequently registered under the Act and the State Acts or unless exemption
from such registration is available and an opinion of counsel for the Company,
in form and substance satisfactory to the Company, is obtained to that
effect.  The provisions of Section 2
hereof are in all respects subject to the restrictions of the Act and the State
Acts and regulations thereunder.  All
certificates representing shares of Common Stock subject to this Agreement
shall be conspicuously legended in substantially the following form: 

 

“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS.  SUCH SECURITIES MAY NOT
BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN

 

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EXEMPTION THEREFROM UNDER
SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS.”

 

Each Employee Stockholder
realizes that the Company does not file, and does not in the foreseeable future
contemplate filing, periodic reports in accordance with the provisions of Section 13
or 15(d) of the Securities and Exchange Act of 1934, and also understands
that the Company has not agreed to register any of its securities for
distribution in accordance with the provisions of the Act or to take any
actions respecting the obtaining of an exemption from registration for such
securities or any transaction with respect thereto.

 

(b)                                 Upon the execution of this Agreement, the
certificates representing shares of Common Stock subject to this Agreement
shall be conspicuously legended as follows:

 

“THE SHARES OF STOCK
REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED AS TO TRANSFER BY THE TERMS,
CONDITIONS AND COVENANTS OF AN AGREEMENT WITH RESPECT THERETO DATED THE     
DAY OF SEPTEMBER, 2003, A COPY OF WHICH IS ON FILE WITH THE COMPANY.  THE COMPANY WILL GRATUITOUSLY FURNISH A COPY
OF SAID AGREEMENT TO ANY PARTY HAVING A VALID INTEREST THEREIN.  ANY TRANSFER OF STOCK OTHER THAN IN
ACCORDANCE WITH SAID AGREEMENT SHALL BE ABSOLUTELY NULL AND VOID.”

 

All certificates for any shares of Common Stock
hereinafter issued to an Employee Stockholder shall bear the same legend, and this
Agreement shall cover all such stock.

 

7.                                       Stock Issued In The Future.

 

Nothing in this Agreement
shall be construed as preventing the Company from issuing its shares of any
class to any other person at any other time free of any restrictions including,
without limitation, the restrictions provided for herein.

 

8.                                       After-Acquired Stock.

 

Whenever an Employee
Stockholder acquires any additional shares of Common Stock of the Company or
any other “securities” (as said term is defined in the Act) of the Company
other than the shares of Common Stock owned at the time

 

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of the execution of this
Agreement, such shares of Common Stock or such other securities (as the term is
defined in the Act) of the Company so acquired shall be subject to all of the
terms of this Agreement, and the certificates therefor shall be surrendered to
the Company for legending in accordance with Section 6 of this Agreement,
unless already so legended.

 

9.                                       Termination.

 

This Agreement shall remain
in effect until the happening of any of the events listed below, upon the first
to occur of such events, all rights and obligations other than the obligations
relating to registration under or exemption from the Act and the State Acts, as
set forth in Section 6 of this Agreement, and rights and obligations
respecting the payments pursuant to Section 3 shall cease:

 

(a)                                  the adjudication of the Company as a
bankrupt, the execution by the Company of an assignment for the benefit of
creditors or the appointment of a receiver for the Company;

 

(b)                                 the voluntary dissolution of the Company;

 

(c)                                  in the event that there shall be only one (1) owner
of issued and outstanding shares of Common Stock of the Company;

 

(d)                                 the Company’s IPO (as such term is defined in
the Stockholders’ Agreement); or

 

(e)                                  the Company’s Change of Control (as such term
is defined in the Stockholders’ Agreement).

 

10.                                 Notices.

 

All notices, offers,
acceptances, exercises of options, waivers and other acts under this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
in person or mailed by certified or registered mail to the Employee Stockholder
at his or its address on the Company records and to the Company as follows:

 

KP Sports, Inc. 

1020 Hull Street, Third Floor 

Baltimore, Maryland 21230

Attn: Kevin Plank, President and CEO

 

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Any party hereto may change
his or its address for notice by written notice to the others, in the manner
hereinabove provided.

 

11.                                 Additional Actions And Documents.

 

Each of the parties hereto
agrees to take or cause to be taken further actions, to execute and deliver or
cause to be executed and delivered such further instruments and to use his or
its best efforts to obtain such requisite consents as any other party may from
time to time reasonably request in order to fully effectuate the purposes,
terms and conditions of this Agreement.

 

12.                                 Miscellaneous.

 

(a)                                  This instrument contains the entire agreement
between the parties and supersedes all prior oral or written agreements,
commitments or understandings with respect to the purchase of securities of the
Company held by the Employee Stockholders on the Employee’s death, and no
modification shall be binding upon the party affected unless set forth in
writing and duly executed by each party affected.

 

(b)                                 The Employee represents and warrants that he
is the sole owner of the number of shares of the Common Stock set forth
opposite his signature hereto, evidenced by the certificate number or numbers
shown immediately after such number of shares, that all of such shares are free
and clear of all liens, claims, charges, security interests, or encumbrances of
any kind, and that he has the right and lawful authority to sell or otherwise
transfer such shares.

 

(c)                                  All of the covenants and agreements in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of their respective heirs, guardians, personal and legal
representatives, successors and assigns.

 

(d)                                 This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed
by, the laws of the State of Maryland, without regard to principles of
conflicts of law.

 

(e)                                  It is the express intention of the parties
that the agreements contained herein shall have the widest application
possible.  If any agreement contained
herein is found by a court having jurisdiction to be unreasonable in scope or
character, the agreement shall not be rendered unenforceable thereby; but
rather the scope or character of such agreement shall be deemed reduced or
modified with retroactive effect to render such agreement reasonable and such
agreement shall be enforced as thus modified. 
If the court having jurisdiction will not review the

 

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agreement, then the parties
shall mutually agree to a revision having an effect as close as permitted by
law to the provision declared unenforceable. 
In the event that a court having jurisdiction determines that one or
more of the provisions of this Agreement shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or impaired
thereby.

 

(f)                                    Inasmuch as the shares of Common Stock cannot
be readily purchased or sold in the open market, irreparable damage would
result in the event this Agreement is not specifically enforced.  In the event of a breach of this Agreement,
any non-breaching party hereto may maintain an action for specific performance
against the party or parties hereto who are alleged to have breached any of the
terms, conditions, representations, warranties, or agreements herein contained
and it is hereby further agreed that no objection to the form of action in any
proceeding for specific performance of this Agreement shall be raised by any
party hereto so that such specific performance of this Agreement may not be
obtained by the aggrieved party. 
Anything contained herein to the contrary notwithstanding, this Section 12(f) shall
not be construed to limit in any manner whatsoever any other rights and
remedies an aggrieved party may have by virtue of any breach of this Agreement.

 

(g)                                 The descriptive headings of the several
sections and paragraphs’ of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.

 

(h)                                 Unless the context otherwise requires,
whenever used in this Agreement, the singular shall include the plural, the plural
shall include the singular, and the masculine gender shall include the neuter
and feminine gender, and vice-versa.

 

(i)                                     This Agreement may be executed in
counterparts, each of which shall be an original, but all of which shall
together constitute one document.

 

13.                                 Wills.

 

The Employee agrees to
either prepare and execute a Will or amend his existing Will to instruct his
personal representative to strictly comply with the terms and conditions of
this Agreement; provided that any failure of an Employee to comply with the
provisions of this Section shall not affect in any way the agreements and
obligations otherwise imposed upon them by this Agreement.

 

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14.                                 Representation by Counsel.

 

In the negotiation of this
Agreement, each party has had the opportunity to be represented by legal
counsel and independent accountants. 
This Agreement is a fair and reasonable agreement, is not the result of
any fraud, duress or undue influence exercised by any party or by any other
person and has been signed freely and voluntarily, without relying upon any
representations, warranties or statements other than those expressly set forth
herein.

 

15.                                 Amendment.

 

Any term or condition set
forth in this Agreement may be amended, modified, altered or waived, and
additional terms and conditions may be incorporated into this Agreement with
the express written consent of the Company and the holders of a majority of the
shares of Common Stock held by the Employee Stockholders under this
Agreement.  All of such amendments,
modifications, alterations, waivers or additions shall be effective as of the
date of such consent, shall be in writing and shall be provided to each of the
parties.

 

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Signature Page to

Buy-Sell Agreement

 

IN WITNESS WHEREOF, the
parties have hereunto set their hands and seals and acknowledged this Agreement
as of the date first above written.

 

	
  ATTEST:

  	
   

  	
  KP SPORTS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
    /s/ Joanne Hillman

  	
   

  	
   

  	
  By:

  	
    /s/ Kevin A. Plank

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
    /s/ Joanne Hillman

  	
   

  	
   

  	
    /s/ J. Scott Plank

  	
   

  
	
   

  	
   

  	
  Name: J. Scott Plank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Number of Shares: 
  1,400,000

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Certificate No(s): 8

  

 

11Exhibit 10.08

 

AMENDED AND RESTATED

BUY-SELL AGREEMENT

 

THIS AMENDED AND RESTATED BUY-SELL AGREEMENT
(hereinafter referred to as the “Agreement”) is made this 30th day
of September, 2003, by and between Ryan Wood (the “Employee”) and KP SPORTS,
INC., a Maryland corporation (the “Company”).

 

Explanatory Statement

 

A.                                   The
Employee and the Company previously entered into a Buy-Sell Agreement dated as
of March 1, 2001 (the “Prior Buy-Sell Agreement”), which the Employee and
the Company wish to amend and restate in its entirety as provided herein.

 

B.                                     The
Employee is a full time employee of the Company and has rendered valuable
service to the Company.  The Company
recognizes that the loss of the services of the Employee would constitute a
serious impairment to the effective conduct of its business and also might
appreciably reduce the value of its goodwill.

 

C.                                     In
recognition of the service rendered by the Employee and as an inducement to the
Employee to remain in the employ of the Company and to contribute to the
Company’s growth, the Company previously granted to the Employee options to
purchase, prior to the 4,000-for-1 stock split of the Company, two hundred
(200) shares of the Company’s Common Stock, par value $.001 per share (the “Common
Stock”), under the KP Sports, Inc. Stock Option Plan, which the Employee
has since exercised.

 

D.                                    The
parties hereto believe it is desirable and in their mutual best interests to
control the ownership of the Common Stock of the Company and thereby to help
facilitate the continuous, harmonious and effective management of the affairs,
policies, and operations of the Company and to induce the Employee to remain in
the employ of the Company.

 

E.                                      It
is the intention of the parties to provide for repurchases by the Company of
shares of Common Stock held by the Employee upon the occurrence of certain
events, as provided herein.

 

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F.                                      Concurrently
herewith, the Company, the Employee, the other existing stockholders of the
Company, and certain investors in the Company are entering into a Stockholders’
Agreement, dated the date hereof (the “Stockholders’ Agreement”), which
Stockholders’ Agreement provides, among other things, for certain restrictions
relating to the transfer of the Common Stock.

 

G.                                     Concurrently
herewith, the Company and the Employee are entering into an Executive
Employment Agreement, dated the date hereof (the “Employment Agreement”), which
Employment Agreement provides, among other things, for certain understandings
with respect to the termination of the employment of the Employee.

 

NOW, THEREFORE, in consideration of the Explanatory
Statement and the mutual covenants, promises and agreements of the parties
hereto, the parties do hereby covenant, promise and agree as follows:

 

1.                                       Option Grant and Stock Holdings.

 

In consideration of services
rendered, and to be rendered, by the Employee to the Company, the Company
previously issued to the Employee, concurrently with the execution of the Prior
Buy-Sell Agreement, options for the purchase of two hundred (200) shares of the
Company’s Common Stock under the KP Sports, Inc. Stock Option Plan.  The Employee subsequently exercised said
option and holds, as adjusted to reflect the 4,000-for-1 stock split of the
Company, eight hundred thousand (800,000) shares of the Company’s Common Stock.

 

2.                                       Insurance.

 

Subject to the provisions of
this Section 2, the Company shall be obligated to purchase and take out
and maintain in force so long as the Employee is a stockholder and employee of
the Company, such policy or policies of insurance on the life of the Employee
with an aggregate death benefit of $2,500,000.00 (collectively the “Policies”).  The proceeds of the Policies (the “Proceeds”)
shall be held in trust and used by the Company to purchase shares of Common
Stock from the Employee’s Estate (as hereinafter defined), which are offered to
the Company as a result of the death of the Employee pursuant to Section 4(a) hereof
(the “Employee Offered Stock”). 
Notwithstanding the foregoing, if in the reasonable judgment of the
Company, the Employee is, or becomes, for health or other reasons, uninsurable
or cannot be insured upon economically reasonable terms, the Company shall have
no obligation to purchase or take out or to maintain in force life insurance on
the Employee.  The Company shall be the
sole owner and beneficiary of any Policy purchased or taken out hereunder.  Proceeds which are held by the Company shall
not be deemed an asset of the Company or otherwise considered by any appraiser or
appraisers or by any other person for the purpose of determining the purchase
price for the Employee Offered Stock pursuant to Section 4 hereof.  The Company shall 

 

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pay premiums on all Policies as they become due and
may, in its discretion, apply any dividends declared and paid on such policies
to the payment of such premiums.

 

3.                                       Purchase and Sale.

 

(a)                                  No Common Stock shall be Transferred (as such
term is defined in the Stockholders’ Agreement) by the Employee to a Permitted
Transferee (as such term is defined in the Stockholders’ Agreement), other than
a repurchase of the Common Stock by the Company, unless, as a condition of
receiving title to such Common Stock:

 

(i)                                     the Common Stock so transferred shall remain
subject to all the provisions of this Agreement;

 

(ii)                                  the Permitted Transferee agrees to become a
party to this Agreement and to be bound by all of the provisions and terms or
conditions hereof; and

 

(iii)                               such person or entity executes such other
documents as are contemplated hereby, including a counterpart of this
Agreement, which shall be deemed a supplement to this Agreement setting forth
the foregoing agreements and to which all Common Stock then and thereafter
acquired by such person or entity shall be subject.

 

(b)                                 Any purported Transfer of the Common Stock
other than in accordance with this Agreement by the Employee shall be null and
void, and the Company shall refuse to recognize any such Transfer and shall not
reflect on its records any change in record ownership of the Common Stock
pursuant to any such Transfer.

 

(c)                                  For purposes hereof, the Employee and each of
his Permitted Transferees shall be referred to herein as an “Employee
Stockholder.”

 

4.                                       Purchase Upon Death, Termination of Employment
or Involuntary Transfer.

 

(a)                                  Upon the death of the Employee, if the
Policies are then in effect, the Company shall be obligated to use the Proceeds
of the Policies to purchase shares of Common Stock of the Company held by the
Employee’s estate or any Employee Stockholder (collectively, the “Estate”), and
the Estate shall be obligated to sell said shares.  Purchases pursuant to this Section 4(a) shall
be made from the persons or entities constituting the Estate as the Estate
shall determine.  If the Estate cannot
come to a determination within five (5) business days of the receipt of
the Proceeds by the Company, the shares will be purchased on a pro rata basis
from all of the persons or entities constituting the Estate.  The price per share for 

 

3

 

purchases pursuant to this Section 4(a) shall
be the higher of the amount of the Book Value (as defined in Section 6(a))
or the Market Value (as defined in Section 6(b)) and shall be paid in cash
on the Closing Date (as defined in Section 8).  If for any reason the Company does not expend
all of the Proceeds to purchase shares, any such remaining or unused Proceeds
shall be retained by the Company.  The
number of shares of Common Stock to be purchased from the Estate shall equal
the amount of the Proceeds divided by the price per share as determined in
accordance with this Section 4(a).

 

(b)                                 Upon the termination of the employment of the
Employee with the Company for any reason (including death) or upon an Involuntary
Transfer (as defined in Section 4(e)) of the Common Stock of any Employee
Stockholder, then for a period of ninety (90) days following the occurrence of (1) any
such event or, (2) in the event of death, the payment of Proceeds, the
Company shall have the option to purchase 100% of the shares of Common Stock
then registered in the name of each Employee Stockholder, in the case of the
Employee’s termination of employment, or Involuntarily Transferred by the
Employee Stockholder at a price per share which shall be the higher of the
amount of the Book Value (as defined in Section 6(a)) or the Market Value
(as defined in Section 6(b)) of the Common Stock (the “Purchase Price”);
provided, however, that in the event of the termination of the employment of the
Employee by the Company without Cause (as defined in the Employment Agreement)
or by the Employee for Good Reason (as defined in the Employment Agreement),
then the Company shall only have such option with respect to 50% of the shares
of Common Stock then registered in the name of each Employee Stockholder.  The Company shall have the right to assign
the repurchase right provided in this Section 4(b) to any stockholder
or stockholders of the Company as it determines in its sole discretion.

 

(c)                                  The Purchase Price multiplied by the number
of shares of Common Stock at the date of termination of employment of the
Employee or Involuntary Transfer purchased under this Section 4 shall be
payable in cash on the Closing Date (as hereinafter defined), unless with
respect to purchases other than under Section 4(a) the Company shall
elect prior to or on the Closing Date to purchase the Common Stock in
installments as provided in Section 7 hereof.  If the Company elects to assign the
repurchase right to a stockholder or stockholders pursuant to Section 4(b),
such stockholder or stockholders shall not be entitled to purchase the Common
Stock in installments as provided in Section 7 hereof.

 

(d)                                 The option period, upon the death of the
Employee, contemplated by Section 4(b) hereof, shall commence upon
the appointment and qualification of the Employee’s personal
representative.  Subject to the
application of Section 4(a), the personal representative of the Employee
shall have the option to distribute the Common Stock from the Employee’s
estate, to file a waiver agreement pursuant to Section 302(c)(2) of
the Internal Revenue Code of 1986, as amended (the 

 

4

 

“Code”), and to do any and all other things
necessary or desirable for the purchase contemplated hereunder to satisfy the
requirements of Section 302(b) of the Code, prior to a purchase as
provided in this Section 4.  If a
distribution from the Employee’s estate is made, the distributees shall be
considered Employee Stockholders and shall be subject to this Agreement in all
respects.

 

(e)                                  For purposes of this Section 4, the
occurrence of any of the following events shall constitute an “Involuntary
Transfer” by an Employee Stockholder:  (i) if
any portion of the Employee Stockholder’s Common Stock is attached or taken in
execution; (ii) if the Employee Stockholder applies for the benefit of, or
files a case under, any provision of the federal bankruptcy law or any other
law relating to insolvency or relief of debtors; (iii) if a case or
proceeding is brought against the Employee Stockholder under any provision of
the federal bankruptcy law or any other law relating to insolvency or relief of
debtors which is not dismissed within thirty (30) days after the commencement
thereof; (iv) if the Employee Stockholder makes an assignment for the
benefit of creditors; (v) if any portion of the Employee Stockholder’s
Common Stock is made subject to a charging order; or (vi) if any portion
of the Employee Stockholder’s Common Stock is transferred pursuant to a divorce
decree.

 

(f)                                    Each Employee Stockholder hereby agrees that
in the event the Company or any stockholder exercises his or its option
pursuant to this Section 4, he or it shall be bound to take any and all
action necessary to enable such party to purchase the Common Stock held by him
or it his Permitted Transferee.

 

5.                                       Transfer of Common Stock.

 

Each Employee Stockholder
agrees that during the term of this Agreement, he or it shall not Transfer any
or all of the shares of Common Stock of the Company owned of record or
beneficially by him or it except pursuant to the Stockholders’ Agreement.

 

6.                                       Book Value and Market Value.

 

(a)                                  “Book Value” as used in this Agreement shall
be the value, computed on the same accounting basis as the Company’s regular
method of accounting, of the net aggregate stockholder’s equity of the Company
divided by the total number of shares of the Common Stock of the Company
outstanding on a fully-diluted basis on the date on which said Book Value is
computed and determined (as hereinafter provided); provided, however, that
anything contained in this Section 6(a) to the contrary
notwithstanding, the computation of such Book Value shall be subject to the
following provisions:

 

(i)                                     in no event shall the determination of the
Book Value include any of the Proceeds;

 

5

 

(ii)                                  no additional allowance of any kind shall be
made for the goodwill, tradenames or any other intangible asset or assets
(hereinafter referred to as the “Intangible Assets”) of the Company other
than that aggregate dollar amount for any of such Intangible Assets appearing on the most recent balance sheet of
the Company prior to those dates set forth below for determining Book Value;

 

(iii)                               the Book Value shall be computed and
determined as of the end of the last month immediately preceding the month in
which either the death, termination of employment of the Employee or the
Involuntary Transfer occurred for purposes of Section 4 of this Agreement;
and

 

(iv)                              the Book Value shall be determined in
accordance with generally accepted accounting principles, applied in a
consistent manner with prior periods, by the independent accountant at that
time examining the books and accounts of the Company or, if there be none, then
by the last independent accountant who had performed such services for the
Company, and a determination by such independent accountant shall, for purposes
of this Agreement, be final, conclusive and binding upon each of the parties
hereto.

 

 (b)                              “Market Value” as used in this Agreement with respect to the value of
shares of the Company’s Common Stock, shall be the per share dollar value of
the Company’s Common Stock last determined by a resolution of the Board of
Directors of the Company, acting in good faith, as recorded in the minute book
of the Company.  In the event that the
Board of Directors has not determined a per share dollar value for the
Corporation’s Common Stock within eighteen (18) months of its last
determination of the per share dollar value for the Corporation’ s Common
Stock, then the “Market Value” with respect to the value of shares of the
Company’s Common Stock, shall be the fair market value as determined by an
accountant who is employed by or is a partner or principal in a nationally or
regionally recognized accounting firm who is knowledgeable and experienced in
evaluating and determining the fair market value of shares of stock or other
equity interests in companies that are generally similar to the Company.  The “Market Value” as determined in
accordance with this Section 6(b) shall, for purposes of this
Agreement, be final, conclusive and binding upon each of the parties hereto.

 

7.                                       Installment Payments.

 

(a)                                  In the event of a repurchase of Common Stock
by the Company pursuant to Section 4(b) hereof, at least twenty-five
percent (25%) of the total purchase price of the Common Stock shall be paid by
check by the Company at the Closing Date, as defined in Section 10 hereof,
such amount in excess of twenty-five percent (25%), if any, shall be determined
by the Company in its sole discretion.

 

6

 

(b)                                 The balance of the purchase price shall be
represented by a non-negotiable promissory note of the Company payable in three
(3) equal annual installments of principal and interest, the first of
which shall be due and payable one (1) year after the Closing Date.  The note shall be substantially in the form
of the promissory note attached hereto and made a part hereof as Exhibit A, and contain terms and
conditions substantially similar to the terms and conditions contained
therein.  Interest shall accrue on, and
be payable with, the unpaid principal amount of said note from the Closing Date
at a rate of eight percent (8%) per annum.

 

(c)                                  Any debt due by the Employee Stockholder to
the Company shall be payable according to its terms, as shall any debt due by
the Company to the Employee Stockholder; except, however, that, regardless of
the terms of any such debt due by the Employee Stockholder to the Company, any
cash payment due under Section 7(a) with respect to the purchase of
the Employee Stockholder’s Common Stock shall, instead of being paid to the
Employee Stockholder, be first applied to the discharge of any such
indebtedness, until all such indebtedness is fully discharged.

 

(d)                                 The Company shall settle with an assignee,
trustee in bankruptcy, attaching court or officer or successor in interest
holding Common Stock received in an Involuntary Transfer by taking any or all
such Common Stock in execution and paying to such appropriate person the
purchase price for each share of such Common Stock as provided in Section 7,
but not in excess of the Employee Stockholder’s indebtedness and proper items
of expense applicable to such proceeding constituting the Involuntary
Transfer.  The balance of the value of
such Common Stock, if any, shall be distributable to the Employee Stockholder
(as applicable), with such payments to be applied in the order due in accordance
with Section 7, giving effect to the payment made upon the Involuntary
Transfer.

 

8.                                       Delivery of Certificates.

 

Closing on the sale of any
shares of Common Stock sold pursuant to this Agreement, unless otherwise agreed to in
writing by the Company and the Employee Stockholder, shall be held at the principal place of
business of the Company thirty (30) days from the date that the last applicable
period for exercising an option to purchase has lapsed, or, with respect to
shares purchased pursuant to Section 4(a), five (5) business days from
the later of (x) the date the Proceeds are received by the Company and (y) the
receipt by the Company of written instructions from the Estate as to whom the
Proceeds should be paid, which instructions the Company is entitled to rely on
(the “Closing Date”).  On the Closing
Date, upon payment of the purchase price (including the note), for the purchase
of the Common Stock hereunder, the stock certificate or certificates
representing the Common Stock shall be delivered to the Company, with
appropriate stock powers or 

 

7

 

endorsements duly executed in blank and guaranteed
by a national bank or member of the New York Stock Exchange.  If the certificates representing any shares
of Common Stock have not been surrendered by the Employee Stockholder or shall
not be delivered contemporaneously with the tender of the purchase price, then
the Company, shall be appointed, and the same is hereby irrevocably constituted
and appointed, the attorney-in-fact with full power and authority to execute
the necessary stock powers and to perform all other acts necessary and proper
in order to transfer such stock certificate or certificates to the purchaser,
in accordance with the provisions of this Agreement and all rights of the Employee
Stockholder thereof with respect to said Common Stock (including voting rights)
nonetheless shall cease and terminate. 
Each Employee Stockholder shall also deliver to the Company at the
Closing (a) all documentation required by Section 3 hereof for the
transfer of such Employee Stockholder’s Stock, as applicable; and (b) a
full and unconditional general release signed by the Employee Stockholder in
the form and substance required by the Company.

 

9.                                       Securities Laws and Endorsements of Stock
Certificates.

 

(a)                                  Each Employee Stockholder acknowledges that
the Common Stock of the Company acquired by it has not been registered under
the Securities Act of 1933 (hereinafter referred to as the “Act”) or any state
securities law (the “State Act”).  Each
Employee Stockholder severally represents and warrants that it has acquired the
shares of Common Stock of the Company without a view to, the offer, offer for
sale, or sale in connection with, the distribution of such shares of the Common
Stock, and that it will hold such shares of Common Stock indefinitely unless
subsequently registered under the Act and the State Acts or unless exemption
from such registration is available and an opinion of counsel for the Company,
in form and substance satisfactory to the Company, is obtained to that
effect.  The provisions of Sections 4 and
5 hereof are in all respects subject to the restrictions of the Act and the
State Acts and regulations thereunder. 
All certificates representing shares of Common Stock subject to this
Agreement shall be conspicuously legended in substantially the following form:

 

“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS.  SUCH SECURITIES MAY NOT
BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS.”

 

Each Employee Stockholder
realizes that the Company does not file, and does not in the foreseeable future
contemplate filing, periodic reports in accordance with the provisions of Section 13
or 15(d) of the Securities and Exchange Act of 1934, and 

 

8

 

also understands that the Company has not agreed to
register any of its securities for distribution in accordance with the
provisions of the Act or to take any actions respecting the obtaining of an
exemption from registration for such securities or any transaction with respect
thereto.

 

(b)                                 Upon the execution of this Agreement, the
certificates representing shares of Common Stock subject to this Agreement
shall be conspicuously legended as follows:

 

“THE SHARES OF STOCK
REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED AS TO TRANSFER BY THE TERMS,
CONDITIONS AND COVENANTS OF AN AGREEMENT WITH RESPECT THERETO DATED THE
         DAY OF SEPTEMBER, 2003, A COPY
OF WHICH IS ON FILE WITH THE COMPANY. 
THE COMPANY WILL GRATUITOUSLY FURNISH A COPY OF SAID AGREEMENT TO ANY
PARTY HAVING A VALID INTEREST THEREIN. 
ANY TRANSFER OF STOCK OTHER THAN IN ACCORDANCE WITH SAID AGREEMENT SHALL
BE ABSOLUTELY NULL AND VOID.”

 

All certificates for any shares of Common Stock
hereinafter issued to an Employee Stockholder shall bear the same legend, and
this Agreement shall cover all such stock.

 

10.                                 Stock Issued In The Future.

 

Nothing in this Agreement
shall be construed as preventing the Company from issuing its shares of any
class to any other person at any other time free of any restrictions including,
without limitation, the restrictions provided for herein.

 

11.                                 After-Acquired Stock.

 

Whenever an Employee
Stockholder acquires any additional shares of Common Stock of the Company or
any other “securities” (as said term is defined in the Act) of the Company
other than the shares of Common Stock owned at the time of the execution of
this Agreement, such shares of Common Stock or such other securities (as the
term is defined in the Act) of the Company so acquired shall be subject to all
of the terms of this Agreement, and the certificates therefor shall be
surrendered to the Company for legending in accordance with Section 9 of
this Agreement, unless already so legended.

 

9

 

12.                                 Termination.

 

This Agreement shall remain
in effect until the happening of any of the events listed below, upon the first
to occur of such events, all rights and obligations other than the obligations
relating to registration under or exemption from the Act and the State Acts, as
set forth in Section 9 of this Agreement, and rights and obligations
respecting the payments pursuant to Section 4(a) shall cease:

 

(a)                                  the agreement in writing of the holders of a
majority of the outstanding shares of Common Stock to terminate this Agreement;

 

(b)                                 the adjudication of the Company as a
bankrupt, the execution by the Company of an assignment for the benefit of
creditors or the appointment of a receiver for the Company;

 

(c)                                  the voluntary dissolution of the Company;

 

(d)                                 in the event that there shall be only one (1) owner
of issued and outstanding shares of Common Stock of the Company;

 

(e)                                  the Company’s IPO (as such term is defined in
the Stockholders’ Agreement); or

 

(f)                                    the Company’s Change of Control (as such term
is defined in the Stockholders’ Agreement).

 

13.                                 Notices.

 

All notices, offers,
acceptances, exercises of options, waivers and other acts under this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
in person or mailed by certified or registered mail to the Employee Stockholder
at his or its address on the Company records and to the Company as follows:

 

KP Sports, Inc. 

1020 Hull Street, Third Floor 

Baltimore, Maryland 21230

Attn: Kevin Plank, President and CEO

 

Any party hereto may change
his or its address for notice by written notice to the others, in the manner
hereinabove provided.

 

14.                                 Additional Actions And Documents.

 

Each of the parties hereto
agrees to take or cause to be taken further actions, to execute and deliver or
cause to be executed and delivered such further instruments and to use his or
its best efforts to obtain such requisite consents as 

 

10

 

any other party may from time to time reasonably
request in order to fully effectuate the purposes, terms and conditions of this
Agreement.

 

15.                                 No Guarantee of Employment.

 

Nothing in this Agreement
shall be construed as guaranteeing employment to the Employee for any period of
time or upon any terms and conditions. 
Unless otherwise agreed in writing in a separate agreement between the
parties, the Employee’s employment by the Company shall be “at will” with each
party having the right to terminate the employment at any time and for any
reason that is not otherwise in violation of applicable law.

 

16.                                 Miscellaneous.

 

(a)                                  This instrument contains the entire agreement
between the parties and supersedes all prior oral or written agreements,
commitments or understandings with respect to the purchase of securities of the
Company held by the Employee Stockholders on the Employee’s death, termination
of employment or involuntary transfer, including the Prior Buy-Sell Agreement
and no modification shall be binding upon the party affected unless set forth
in writing and duly executed by each party affected.  The Employee expressly acknowledges and
agrees that any prior agreements, claims, actions, or causes of action that he
may have, or have had, against the Company and its agents, officers, directors,
and stockholders are merged into this Agreement and that neither the Company
nor any of its agents, officers, directors, or stockholders is, or shall be,
indebted or obligated to the Employee on account of any matter arising out of
or relating to the affairs of the Company as of the date of this Agreement,
except as expressly provided herein. 
Upon the execution hereof, the Prior Buy-Sell Agreement shall be
terminated and of no further force and effect.

 

(b)                                 The Employee represents and warrants that he
is the sole owner of the number of shares of the Common Stock set forth
opposite his signature hereto, evidenced by the certificate number or numbers
shown immediately after such number of shares, that all of such shares are free
and clear of all liens, claims, charges, security interests, or encumbrances of
any kind, and that he has the right and lawful authority to sell or otherwise
transfer such shares.

 

(c)                                  All of the covenants and agreements in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of their respective heirs, guardians, personal and legal
representatives, successors and assigns.

 

(d)                                 This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed
by, the laws of the State of Maryland, without regard to principles of conflicts
of law.

 

11

 

(e)                                  It is the express intention of the parties
that the agreements contained herein shall have the widest application
possible.  If any agreement contained
herein is found by a court having jurisdiction to be unreasonable in scope or
character, the agreement shall not be rendered unenforceable thereby; but
rather the scope or character of such agreement shall be deemed reduced or
modified with retroactive effect to render such agreement reasonable and such
agreement shall be enforced as thus modified. 
If the court having jurisdiction will not review the agreement, then the
parties shall mutually agree to a revision having an effect as close as permitted
by law to the provision declared unenforceable. 
In the event that a court having jurisdiction determines that one or
more of the provisions of this Agreement shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.

 

(f)                                    Inasmuch as the shares of Common Stock cannot
be readily purchased or sold in the open market, irreparable damage would
result in the event this Agreement is not specifically enforced.  In the event of a breach of this Agreement,
any non-breaching party hereto may maintain an action for specific performance
against the party or parties hereto who are alleged to have breached any of the
terms, conditions, representations, warranties, or agreements herein contained
and it is hereby further agreed that no objection to the form of action in any
proceeding for specific performance of this Agreement shall be raised by any
party hereto so that such specific performance of this Agreement may not be
obtained by the aggrieved party. 
Anything contained herein to the contrary notwithstanding, this Section 16(f) shall
not be construed to limit in any manner whatsoever any other rights and
remedies an aggrieved party may have by virtue of any breach of this Agreement.

 

(g)                                 The descriptive headings of the several
sections and paragraphs’ of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.

 

(h)                                 Unless the context otherwise requires,
whenever used in this Agreement, the singular shall include the plural, the
plural shall include the singular, and the masculine gender shall include the
neuter and feminine gender, and vice-versa.

 

(i)                                     As of the date of this Agreement and
thereafter, the parties acknowledge and agree that the employment relationship
is “at-will” and may be terminated by either party at any time and for any
reason not prohibited by law.

 

(j)                                     This Agreement may be executed in
counterparts, each of which shall be an original, but all of which shall
together constitute one document.

 

12

 

17.                                 Wills.

 

The Employee agrees to
either prepare and execute a Will or amend his existing Will to instruct his
personal representative to strictly comply with the terms and conditions of
this Agreement; provided that any failure of an Employee to comply with the
provisions of this Section shall not affect in any way the agreements and
obligations otherwise imposed upon them by this Agreement.

 

18.                                 Representation by Counsel.

 

In the negotiation of this
Agreement, each party has had the opportunity to be represented by legal
counsel and independent accountants. 
This Agreement is a fair and reasonable agreement, is not the result of
any fraud, duress or undue influence exercised by any party or by any other
person and has been signed freely and voluntarily, without relying upon any
representations, warranties or statements other than those expressly set forth
herein.

 

19.                                 Amendment.

 

Any term or condition set
forth in this Agreement may be amended, modified, altered or waived, and
additional terms and conditions may be incorporated into this Agreement with
the express written consent of the Company and the holders of a majority of the
shares of Common Stock held by the Employee Stockholders under this
Agreement.  All of such amendments,
modifications, alterations, waivers or additions shall be effective as of the
date of such consent, shall be in writing and shall be provided to each of the
parties. 

 

13

 

Signature Page to

Buy-Sell Agreement

 

IN
WITNESS WHEREOF, the parties have hereunto set their hands and seals and
acknowledged this Agreement as of the date first above written.

 

	
  ATTEST:

  	
   

  	
  KP SPORTS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
     /s/ Joanne Hillman

  	
   

  	
  By:

  	
  /s/ J. Scott Plank

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
     /s/ Joanne Hillman

  	
   

  	
     /s/ Ryan Wood

  	
   

  
	
   

  	
   

  	
  Name: Ryan Wood

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Number of Shares: 800,000

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Certificate No(s):

  

 

14

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