Document:

Exhibit 10.13

 

CIT Commercial Services

Two First Union Center

PO Box 31307

Charlotte, NC 28231-1307

 

CIT

 

April 15, 2002

 

FIRST AMENDMENT TO CREDIT
APPROVED

RECEIVABLES PURCHASING AGREEMENT

 

KP Sports, Inc.

1600 Bush Street

Baltimore, Maryland 21230

 

Ladies and Gentlemen:

 

Reference is hereby made
to the Credit Approved Receivables Purchasing Agreement, dated December 21,
2001 (the “Agreement”), between KP Sports, Inc.. a Maryland
corporation, and The CIT Group/Commercial Services, Inc., a New York
corporation. The Agreement shall be amended as follows:

 

A.            The
first sentence of Paragraph B is hereby deleted in its entirety and the
following inserted in lieu thereof:

 

“You hereby sell, assign
and transfer to us as absolute owner all of your Approved Receivables subject
to the perfected security interest granted by you to: (i) us and (ii) Prudent
Capital I, LP in such Approved Receivables.”

 

B.            The
fifth and the last sentences of Paragraph D are hereby deleted in their
entirety and the following inserted in lieu thereof:

 

“If the aggregate fees
paid to us by you under this Agreement during any Contract Year, is less than
the Minimum Fee, you shall pay us as of the end of such Contract Year an amount
equal to the difference between the actual fees paid during such Contract Year
and the Minimum Fee.  As used herein, the
term “Contract Year” shall mean the twelve (12) month period ending on April 30,
2003 (the “Anniversary Date”) and each Anniversary Date thereafter.”

 

C.            Paragraph
9 is hereby deleted in its entirety and the following inserted in lieu thereof:

 

“9.         This
Agreement shall continue in full force and effect until the Anniversary Date
(the “Initial Term”), and from year to year thereafter, unless sooner
terminated as herein provided. You may terminate this Agreement as of the end
of the Initial Term, or as of any Anniversary Date with respect to any Contract
Year after the 

 

 

Initial Term, by giving us at least sixty (60) days’
prior written notice. You may terminate this Agreement during the Initial Term,
and at any time thereafter, by giving us at least sixty (60) days’ prior
written notice. In the event that this Agreement is terminated by you during
the Initial Term or prior to an Anniversary Date with respect to any Contract
Year occurring after the Initial Term, we shall be entitled to the unpaid
portion of the Minimum Fee, if any, for the applicable Contract Year, as
provided in Paragraph D above, as of the effective date of termination. We may
terminate this Agreement at any time by giving you written notice stating a
termination date not less than sixty (60) days from the date such notice is
given, or immediately at any time without prior notice but with your payment to
us of the Minimum Fee, if any, as described above, upon the occurrence of any of
the following events:  cessation of your
business or the calling of a meeting of your creditors; your failure to meet
your debts generally as they mature; the commencement by or against you of any
bankruptcy, insolvency, arrangement, reorganization, receivership or similar
proceeding under any foreign, federal or state law; breach by you of any
representation, warranty or covenant contained herein; or your failure to pay
when due any indebtedness or obligation owing by you to us whether under this
Agreement, that certain Accounts Receivable Financing Agreement, dated as of June 20,
2001, between you and us (as amended, modified or restated from time to time,
the “Financing Agreement”) or any other agreements and instruments entered into
between you and us in connection therewith (such agreements and instruments, as
amended, modified or restated from time to time, together with the Financing
Agreement, collectively, the “Financing Documents”). We may also terminate this
Agreement immediately and without any Minimum Fee required from you in the
event that we shall reasonably determine that any material provision of this
Agreement is not enforceable under applicable law or would require any filing
with, or consent or approval by, any governmental authority. Further, if a
Default occurs under (and as such term is defined in) the Financing Agreement,
then, at our election, this Agreement shall thereupon terminate. Any
termination of this Agreement, however, shall not affect obligations of you or
us incurred hereunder prior to such termination including, without limitation,
our obligation to pay for Approved Receivables arising prior to such
termination date (provided that our assumption of credit risks and losses
hereunder shall cease upon your failure to pay our fees hereunder when due or
to deliver to us the information required by this Agreement, all as hereinabove
provided approval.”

 

2

 

You agree to pay all
costs and expenses incurred by us in connection with the preparation of this
amendment, including, without limitation, all reasonable fees and expenses
attributable to the services of our attorneys (whether in-house or outside).

 

Except as herein
specifically provided, the Agreement remains in full force and effect in
accordance with its terms and no other changes in the terms or provisions of
the Agreement are intended or implied. This amendment may be executed in one or
more counterparts, each of which shall constitute an original, but of which
when taken together shall constitute but one and the same instrument. If you
are in agreement with the foregoing, please so indicate by signing and
returning to us the enclosed copy of this letter.

 

	
   

  	
  Very truly yours,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE CIT
  GROUP/COMMERCIAL

  	
   

  
	
   

  	
  SERVICES, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Dan Upchurch

  	
   

  
	
   

  	
  Name:

  	
   Dan Upchurch

  	
   

  
	
   

  	
  Title:

  	
     V.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

Read and Agreed
to:

	
   

  	
   

  	
   

  
	
  KP SPORTS, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   /s/ J. S. Plank

  	
   

  	
   

  	
   

  
	
  Name:

  	
   J. S. Plank

  	
   

  	
   

  	
   

  
	
  Title:

  	
    V.P. – Finance

  	
   

  	
   

  	
   

  
							

 

3Exhibit 10.14

 

[CIT]

 

June 30, 2004

 

SECOND AMENDMENT TO
CREDIT APPROVED

RECEIVABLES PURCHASING AGREEMENT

 

KP Sports, Inc.

1020 Hull Street, 3rd Floor

Baltimore, Maryland  21230

 

Ladies and Gentlemen:

 

Reference is hereby made
to the Credit Approved Receivables Purchasing Agreement, dated December 21,
2001, as amended (the “Agreement”), between KP Sports, Inc., a
Maryland corporation, and The CIT Group/Commercial Services, Inc., a New
York corporation.  The Agreement shall be
amended as follows:

 

A.            The
first sentence of Paragraph B of the Agreement is hereby deleted in its
entirety and the following inserted in lieu thereof:

 

“You hereby sell, assign and transfer to us as
absolute owner all of your Approved Receivables subject to the perfected
securities interest granted by you to us and any perfected security interest
granted by you to any other person as permitted by us pursuant to Section 4.4
of that certain Amended and Restated Accounts Receivable Financing Agreement,
dated as of June 30, 2004, between you and us (as the same may be amended,
modified, restated or supplemented from time to time, the “Financing Agreement”)
in such Approved Receivables.”

 

B.            Paragraph
9 of the Agreement is hereby amended by deleting the phrase “that certain
Accounts Receivable Financing Agreement, dated as of June 20, 2001,
between you and us (as amended, modified or restated from time to time, the “Financing
Agreement”)” contained therein and substituting in lieu thereof the phrase “the
Financing Agreement”.

 

Except as herein
specifically provided, the Agreement remains in full force and effect in
accordance with its terms and no other changes in the terms or provisions of
the Agreement are intended or implied. 
This amendment may be executed in one or more counterparts, each of
which shall constitute an original, but all of which when taken together shall
constitute but one and the same instrument. 
If you are in agreement with 

 

 

the foregoing,
please so indicate by signing and returning to us the enclosed copy of this letter.

 

	
   

  	
  Very truly
  yours,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE CIT
  GROUP/COMMERCIAL

  	
   

  
	
   

  	
  SERVICES, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dan Upchurch

  	
   

  
	
   

  	
  Name:

  	
  Dan Upchurch

  	
   

  
	
   

  	
  Title:

  	
  V.P.

  	
   

  
						

 

	
  Read and Agreed to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  KP SPORTS, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Wayne A.
  Marino

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Wayne A. Marino

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Chief Financial Officer

  	
   

  	
   

  	
   

  
							

 

2Exhibit 10.21

 

SECOND AMENDED AND RESTATED

FINANCING AGREEMENT

 

 

The CIT
Group/Commercial Services, Inc., as Agent

Wachovia
Bank, National Association, as Documentation Agent,

SunTrust
Bank, as Syndication Agent,

 

the Lenders that are parties
hereto

 

and

 

Under
Armour, Inc., and

its
wholly-owned Domestic Subsidiaries that are parties hereto

as Borrowers

 

Dated: September 28, 2005

 

 

TABLE OF
CONTENTS

 

	
  SECTION 1.

  	
  Definitions

  	
   

  
	
   

  	
  1.1

  	
  Defined Terms

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  Conditions
  Precedent

  	
   

  
	
   

  	
  2.1

  	
  Conditions
  Precedent to Initial Funding

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  Revolving
  Loans and Collections

  	
   

  
	
   

  	
  3.1

  	
  Funding
  Conditions and Procedures

  	
   

  
	
   

  	
  3.2

  	
  Handling of
  Proceeds of Collateral; Cash Dominion

  	
   

  
	
   

  	
  3.3

  	
  Revolving Loan
  Account

  	
   

  
	
   

  	
  3.4

  	
  Repayment of
  Overadvances

  	
   

  
	
   

  	
  3.5

  	
  Application of
  Proceeds of Collateral

  	
   

  
	
   

  	
  3.6

  	
  Monthly
  Statement

  	
   

  
	
   

  	
  3.7

  	
  Access to
  CIT’s System

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  Term Loan

  	
   

  
	
   

  	
  4.1

  	
  Promissory
  Notes Evidencing Term Loan

  	
   

  
	
   

  	
  4.2

  	
  Funding of
  Term Loan

  	
   

  
	
   

  	
  4.3

  	
  Repayment of
  Principal of the Term Loan

  	
   

  
	
   

  	
  4.4

  	
  Mandatory
  Prepayments of the Term Loan

  	
   

  
	
   

  	
  4.5

  	
  Optional
  Prepayments of the Term Loan

  	
   

  
	
   

  	
  4.6

  	
  Provisions
  Regarding the Term Loan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  Letters of Credit

  	
   

  
	
   

  	
  5.1

  	
  Assistance and
  Purpose

  	
   

  
	
   

  	
  5.2

  	
  Authority to
  Charge Revolving Loan Account

  	
   

  

 

i

 

	
   

  	
  5.3

  	
  Indemnity
  Relating to Letters of Credit

  	
   

  
	
   

  	
  5.4

  	
  Compliance of
  Goods, Documents and Shipments with Agreed Terms

  	
   

  
	
   

  	
  5.5

  	
  Handling of
  Goods, Documents and Shipments

  	
   

  
	
   

  	
  5.6

  	
  Compliance
  with Laws; Payments of Levies and Taxes

  	
   

  
	
   

  	
  5.7

  	
  Subrogation
  Rights

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  Collateral

  	
   

  
	
   

  	
  6.1

  	
  Grant of
  Security Interest

  	
   

  
	
   

  	
  6.2

  	
  Representations,
  Covenants and Agreements Regarding Collateral Generally

  	
   

  
	
   

  	
  6.3

  	
  Representations
  Regarding Accounts and Inventory

  	
   

  
	
   

  	
  6.4

  	
  Covenants and
  Agreements Regarding Accounts and Inventory

  	
   

  
	
   

  	
  6.5

  	
  Covenants and
  Agreements Regarding Equipment

  	
   

  
	
   

  	
  6.6

  	
  General
  Intangibles

  	
   

  
	
   

  	
  6.7

  	
  Commercial
  Tort Claims

  	
   

  
	
   

  	
  6.8

  	
  Letter of
  Credit Rights

  	
   

  
	
   

  	
  6.9

  	
  Real Estate

  	
   

  
	
   

  	
  6.10

  	
  Reference to
  Other Loan Documents

  	
   

  
	
   

  	
  6.11

  	
  Credit Balances;
  Additional Collateral

  	
   

  
	
   

  	
  6.12

  	
  Release of
  Trademarks

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  Representations,
  Warranties and Covenants

  	
   

  
	
   

  	
  7.1

  	
  Representations
  and Warranties

  	
   

  
	
   

  	
  7.2

  	
  Affirmative
  Covenants

  	
   

  

 

ii

 

	
   

  	
  7.3

  	
  Financial
  Covenants

  	
   

  
	
   

  	
  7.4

  	
  Negative
  Covenants

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  Interest, Fees
  and Expenses

  	
   

  
	
   

  	
  8.1

  	
  Interest

  	
   

  
	
   

  	
  8.2

  	
  Default
  Interest Rate

  	
   

  
	
   

  	
  8.3

  	
  Fees and
  Expenses Relating to Letters of Credit

  	
   

  
	
   

  	
  8.4

  	
  Out of Pocket
  Expenses

  	
   

  
	
   

  	
  8.5

  	
  Line of Credit
  Fee; Collection Days

  	
   

  
	
   

  	
  8.6

  	
  Agent Fee
  Agreement

  	
   

  
	
   

  	
  8.7

  	
  Standard
  Operating Fees

  	
   

  
	
   

  	
  8.8

  	
  LIBOR Rate Loans

  	
   

  
	
   

  	
  8.9

  	
  Capital
  Adequacy

  	
   

  
	
   

  	
  8.10

  	
  Taxes,
  Reserves and Other Conditions

  	
   

  
	
   

  	
  8.11

  	
  Authority to
  Charge Revolving Loan Account

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  Powers

  	
   

  
	
   

  	
  9.1

  	
  Authority

  	
   

  
	
   

  	
  9.2

  	
  Limitations on
  Exercise

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  Events of
  Default and Remedies

  	
   

  
	
   

  	
  10.1

  	
  Events of
  Default

  	
   

  
	
   

  	
  10.2

  	
  Remedies With
  Respect to Outstanding Loans

  	
   

  
	
   

  	
  10.3

  	
  Remedies With
  Respect to Collateral

  	
   

  
	
   

  	
  10.4

  	
  Limited
  License

  	
   

  
	
   

  	
  10.5

  	
  Application of
  Proceeds

  	
   

  

 

iii

 

	
   

  	
  10.6

  	
  General
  Indemnity

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
  Termination

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
  Miscellaneous

  	
   

  
	
   

  	
  12.1

  	
  Waivers

  	
   

  
	
   

  	
  12.2

  	
  Entire
  Agreement; Amendments; Counterparts

  	
   

  
	
   

  	
  12.3

  	
  Usury Limit

  	
   

  
	
   

  	
  12.4

  	
  Severability

  	
   

  
	
   

  	
  12.5

  	
  Waiver of Jury
  Trial; Service of Process; Limitation of Liability70

  	
   

  
	
   

  	
  12.6

  	
  Notices

  	
   

  
	
   

  	
  12.7

  	
  Joint and Several
  Liability

  	
   

  
	
   

  	
  12.8

  	
  Choice of Law

  	
   

  
	
   

  	
  12.9

  	
  Reasonable
  Discretion

  	
   

  
	
   

  	
  12.10

  	
  Non-Disclosure
  by the Companies

  	
   

  
	
   

  	
  12.11

  	
  Consent by
  Agent and Lenders

  	
   

  
	
   

  	
  12.11

  	
  Payments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.

  	
  Agreements
  Regarding the Lenders

  	
   

  
	
   

  	
  13.1

  	
  Copies of
  Statements and Financial Information

  	
   

  
	
   

  	
  13.2

  	
  Payments of
  Principal, Interest and Fees

  	
   

  
	
   

  	
  13.3

  	
  Defaulting
  Lender

  	
   

  
	
   

  	
  13.4

  	
  Participations
  and Assignments

  	
   

  
	
   

  	
  13.5

  	
  Sharing of
  Liabilities

  	
   

  
	
   

  	
  13.6

  	
  Exercise of
  Setoff Rights

  	
   

  

 

iv

 

	
   

  	
  13.7

  	
  Confidentiality

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  14.

  	
  Agency

  	
   

  
	
   

  	
  14.1

  	
  Appointment of
  Agent; Powers

  	
   

  
	
   

  	
  14.2

  	
  Delegation of
  Agent’s Duties

  	
   

  
	
   

  	
  14.3

  	
  Disclaimer of
  Agent’s Liabilities

  	
   

  
	
   

  	
  14.4

  	
  Reliance and
  Action by Agent

  	
   

  
	
   

  	
  14.5

  	
  Events of
  Default

  	
   

  
	
   

  	
  14.6

  	
  Lenders’ Due
  Diligence

  	
   

  
	
   

  	
  14.7

  	
  Right to
  Indemnification

  	
   

  
	
   

  	
  14.8

  	
  Other
  Transactions

  	
   

  
	
   

  	
  14.9

  	
  Resignation of
  Agent

  	
   

  
	
   

  	
  14.10

  	
  Voting Rights; Agent’s
  Discretionary Rights

  	
   

  
	
   

  	
  14.11

  	
  Deemed Consent

  	
   

  
	
   

  	
  14.12

  	
  Notice of
  Termination of Commitments

  	
   

  
	
   

  	
  14.13

  	
  Survival of
  Agreements of the Lenders

  	
   

  

 

	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
  Exhibit A - Form of Assignment and
  Transfer Agreement

  	
   

  
	
  Exhibit B - Form of Revolving Loan
  Promissory Note

  	
   

  
	
  Exhibit C - Form of Term Loan
  Promissory Note

  	
   

  
	
  Exhibit D-1 - Form of Compliance
  Certificate

  	
   

  
	
  Exhibit D-2 - Form of Special
  Compliance Certificate

  	
   

  
	
  Exhibit D-3 - Form of Additional
  Special Compliance Certificate

  	
   

  
	
  Exhibit E - Form of Revolving Line of
  Credit Increase Notice

  	
   

  
	
  Exhibit F - Form of Joinder Agreement

  	
   

  

 

v

 

	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1.1(a)
  - Existing Indebtedness

  	
   

  
	
  Schedule 1.1(b)
  - Description of Owned Real Estate

  	
   

  
	
  Schedule 7.1(b)
  - Companies and Collateral Information

  	
   

  
	
  Schedule 7.1(f)
  - Environmental Matters

  	
   

  
	
  Schedule 7.1(k)
  - Benefit Plans

  	
   

  
	
  Schedule 7.1(m)
  - Self Insurance Programs

  	
   

  
	
  Schedule 7.1(n)
  - Outstanding Indebtedness

  	
   

  

 

vi

 

THE CIT
GROUP/ COMMERCIAL SERVICES, INC., a New York corporation,
with an office located at Two Wachovia Center, 301 South Tryon Street, 25th
Floor, Charlotte, North Carolina 28202 (“CIT” and, together with the
lenders listed on the signature pages hereof and any other entity becoming a
Lender hereunder pursuant to Section 13.4(b) of this Second Amended and
Restated Financing Agreement, being herein collectively referred to as the “Lenders”
and individually as a “Lender”); CIT, as the Agent for the Lenders (in
such capacity, the “Agent”); 
WACHOVIA BANK, NATIONAL ASSOCIATION (“Wachovia”), as the
Documentation Agent for the Lenders (in such capacity, the “Documentation
Agent”); and SUNTRUST BANK (“SunTrust”), as the Syndication Agent
for the Lenders (in such capacity, the “Syndication Agent”), are pleased
to confirm the terms and conditions under which the Lenders, acting through the
Agent, shall make a term loan, revolving loans and other financial
accommodations to UNDER ARMOUR, INC., a Maryland corporation (“Under Armour”),
and its wholly-owned Domestic Subsidiaries (as defined below) that are parties
hereto or may hereafter become a party hereto pursuant to Section 7.4(h)
this Second Amended and Restated Financing Agreement (Under Armour and such
Domestic Subsidiaries being herein collectively referred to as the “Companies”
and, individually, as a “Company”).

 

BACKGROUND
STATEMENT

 

A.            Under
Armour and CIT are parties to a certain Amended and Restated Accounts
Receivable Financing Agreement, dated as of June 30, 2004, as supplemented by
that Inventory Security Agreement, dated September 28, 2001 and that certain
Letter of Credit Agreement, dated October 9, 2002 (the Amended and Restated
Accounts Receivable Financing Agreement, as previously supplemented by such
Inventory Security Agreement and Letter of Credit Agreement, all as amended or
otherwise modified from time to time, the “Existing Financing Agreement”),
which previously amended and restated in its entirety that certain Accounts
Receivable Financing Agreement, dated as of June 21, 2001, as amended and supplemented
from time to time, by which CIT has agreed to extend credit to Under
Armour.  Under Armour has requested that
CIT enter into certain amendments to the Existing Financing Agreement, and
permit Under Armour Retail to borrow thereunder, and CIT has agreed to such
amendments, subject to all of the terms, conditions and provisions hereof.

 

B.            Effective
on the date on which all of the conditions set forth in Section 2 hereof are
satisfied and the Lenders make the Term Loan and the initial Revolving Loan
hereunder (such date being herein called the “Closing Date”), this
Financing Agreement shall amend and restate in its entirety the Existing
Financing Agreement, and shall represent the entire agreement among the
Companies, the Agent and CIT and the other Lenders with respect to the terms
and conditions upon which CIT and the other Lenders are to extend credit to the
Companies from and after the Closing Date. Amounts in respect of interest,
fees, and other amounts payable to or for the account of CIT shall be
calculated (i) in accordance with the provisions of the Existing Financing
Agreement with respect to any period (or a portion of any period) ending prior
to the Closing Date, and (ii) in accordance with the provisions of this
Financing Agreement with respect to any period (or a portion of any period)
commencing on or after the Closing Date.

 

C.            This
Financing Agreement is not a novation or extinquishment of the Existing
Financing Agreement, and shall in no way be construed to, nor shall it affect,
modify, diminish or

 

1

 

break the continuity of
any lien or security interest granted by Under Armour to CIT in the Collateral
(as defined in the Existing Financing Agreement).  All liens and security interests granted to
or held by CIT under the Existing Financing Agreement shall, effective on the
Closing Date, be automatically assigned to, and held by, the Agent in its
capacity as Agent for the Lenders under this Financing Agreement, all of which
shall continue in full force and effect and shall secure all Obligations as
provided in this Financing Agreement.

 

SECTION 1.   Definitions

 

1.1          Defined Terms.     As used in this Financing Agreement:

 

Accounts
shall mean any and all of the Companies’ present and future: (a) accounts (as
defined in the UCC); (b) instruments, documents, chattel paper (including
electronic chattel paper) (all as defined in the UCC); (c) unpaid seller’s or
lessor’s rights (including rescission, replevin, reclamation, repossession and
stoppage in transit) relating to the foregoing or arising therefrom; (d) rights
to any goods represented by any of the foregoing, including rights to returned,
reclaimed or repossessed goods; (e) reserves and credit balances arising in
connection with or pursuant to this Financing Agreement; (f) guaranties, other
supporting obligations, payment intangibles and letter of credit rights (all as
defined in the UCC); (g) insurance policies or rights relating to any of the
foregoing; (h) general intangibles pertaining to any of the foregoing
(including rights to payment, including those arising in connection with bank
and non-bank credit cards), and all books and records and any electronic media
and software relating thereto; (i) notes, deposits or other property of the
Companies’ account debtors securing the obligations owed by such account
debtors to the Companies; and (j) all Proceeds of any of the foregoing.

 

Accounts
Borrowing Base shall mean, at any date, the sum of: (a)
up to ninety percent (90%) of the aggregate amount of the Companies’ Eligible
Accounts Receivable consisting of Eligible Approved Accounts Receivable
outstanding at such date, plus (b) up to eighty-five percent (85%) of
the aggregate amount of the Companies’ Eligible Accounts Receivable consisting
of Eligible Non-Approved Accounts Receivable outstanding at such date; provided,
however, that the maximum amount of Royalty Trade Accounts Receivables
that shall be included in the Accounts Borrowing Base at any time shall not
exceed $5.0 million.

 

Adjusted Net Earnings From Operations
shall mean, with respect to any fiscal period, the net income from operations
of the Companies and their Subsidiaries, all determined on a consolidated basis
in accordance with GAAP on a basis consistent with the latest audited financial
statements of the Companies and their respective Subsidiaries.

 

Adjusted
Tangible Assets shall mean all assets except for the
following:  (a) any surplus resulting
from any write-up of assets subsequent to the Closing Date; (b) deferred
assets, other than prepaid insurance, prepaid taxes and deferred tax assets;
(c) patents, copyrights, trademarks, trade names, non-compete agreements,
franchises and other similar intangibles; (d) goodwill, including any amounts,
however designated on the consolidated balance sheet of the Companies and their
Subsidiaries, representing the excess of the purchase price paid for assets or
stock over the value assigned thereto; (e) unamortized debt discount and
expense; (f) Accounts, notes and other receivables due from affiliates or
employees.

 

2

 

Adjustment
Date  shall have the meaning ascribed to such term in the
definition of “Applicable Margin”.

 

Affiliate
shall mean, with respect to any Company, any person or entity which directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with, such Company.

 

Agent’s Bank Account
shall mean the Agent’s bank account at Wachovia Bank, National Association (or
its successor) in Charlotte, North Carolina.

 

Agent
Fee Agreement shall mean the letter agreement, dated July
14, 2005, between CIT and the Companies, as such letter agreement is amended,
modified, supplemented or restated from time to time in accordance with its
terms.

 

Agent
Lockbox shall mean a lockbox established in Charlotte,
North Carolina by the Agent to which the Companies may, at their option, direct
each of its customers to make payment of all Accounts owing to the Companies,
and from which the Agent shall collect and process such payments.

 

Agent
Lockbox Agreement shall mean an agreement, in form and
substance reasonably satisfactory to the Agent, between the Companies and the
Agent, establishing the Agent Lockbox and providing for the deposit by the
Agent of all checks, items of payment and other remittances received in such
lockbox into the Agent’s Bank Account for application to the Obligations.

 

Applicable Margin shall mean, from the Closing Date until the
initial Adjustment Date, with respect to (a) the Revolving Loans, -0.25%
for Chase Bank Rate Loans and 2.25% for LIBOR Rate Loans, (b) Letters of Credit, 2.25%, and the Line of
Credit Fee, 0.375%.  On the initial
Adjustment Date, and on the each subsequent Adjustment Date thereafter, the
Applicable Margins for Chase Bank Rate Loans, LIBOR Rate Loans, Letters of
Credit and the Line of Credit Fee shall be adjusted prospectively based on the
consolidated Pricing Leverage Ratio of the Companies and their Subsidiaries as of
the end of the most recent fiscal quarter, to the following amounts:

 

	
  Pricing Leverage Ratio

  	
   

  	
  Chase Bank

  Rate Loans

  	
   

  	
  LIBOR Rate

  Loans and

  Letters of

  Credit

  	
   

  	
  Line of Credit Fee

  	
   

  
	
  Greater than 3.5

  	
   

  	
  0.50

  	
  %

  	
  3.0

  	
  %

  	
  0.625

  	
  %

  
	
  Equal to or greater than 2.75 but less than 3.5

  	
   

  	
  0.0

  	
  %

  	
  2.5

  	
  %

  	
  0.50

  	
  %

  
	
  Equal to or greater than 2.0 but less than 2.75

  	
   

  	
  -.25

  	
  %

  	
  2.25

  	
  %

  	
  0.375

  	
  %

  

 

3

 

	
  Pricing Leverage Ratio

  	
   

  	
  Chase Bank

  Rate Loans

  	
   

  	
  LIBOR Rate

  Loans and

  Letters of

  Credit

  	
   

  	
  Line of Credit Fee

  	
   

  
	
  Equal to or greater than 1.5 but less than 2.0

  	
   

  	
  -.50

  	
  %

  	
  2.0

  	
  %

  	
  0.25

  	
  %

  
	
  Less than 1.5

  	
   

  	
  -.75

  	
  %

  	
  1.75

  	
  %

  	
  0.125

  	
  %

  

 

All adjustments to the Applicable Margins shall be implemented by the
Agent based on the financial statements and related officer’s certificate for
the relevant period delivered by the Companies to the Agent pursuant to Section
7.2(h)(ii) hereof, and shall take effect as of the first day of the month
in which such financial statements and related officer’s certificate are
received by the Agent (each, an “Adjustment
Date”).  Notwithstanding the foregoing: (a) no
reduction in Applicable Margins shall occur on an Adjustment Date if a Default
or an Event of Default shall have occurred and remain outstanding on such
Adjustment Date or the date of the Agent’s receipt of the financial statements
and related officer’s certificate on which such reduction is to be based; and
(b) if the Companies fail to deliver the financial statements and related
officer’s and compliance certificates on which any reduction in applicable
margins is to be based within ten (10) days of the due date for such items set
forth in Section 7.2(h)(ii), then effective as of the Adjustment Date
immediately preceding the due date for such financial statements and officer’s
certificate, the Applicable Margins may, at the discretion of the Agent,
increase to the highest margins set forth in the table above until the Agent
receives such financial statements and officer’s certificate, at which time the
Applicable Margin shall be determined and any adjustment thereto shall be made
to become effective as of the first day of the following month.

 

Assignment
and Transfer Agreement shall mean the Assignment and
Transfer Agreement in the form of Exhibit A attached hereto.

 

Availability
Reserve shall mean an amount equal to the sum of:

 

(a)           (i)
three (3) months rental payments or similar charges for each Company’s leased
premises or other Collateral locations for which such Company, as applicable,
has not delivered to the Agent a Waiver Agreement within thirty (30) days after
Collateral is located on such leased premises, and (ii) three (3) months
estimated payments (plus any other fees or charges owing by any Company) to any
applicable warehousemen or third party processor (as determined by the Agent in
the exercise of its reasonable discretion) who has not executed and delivered
to the Agent a Waiver Agreement, provided that any of the foregoing
amounts shall be adjusted from time to time hereafter upon (x) delivery to the
Agent of a Waiver Agreement, (y) the opening or closing of a Collateral
location and/or (z) any change in the

 

4

 

amount of rental, storage or processor payments or
similar charges; plus

 

(b)           such
other reserves as the Agent, in the exercise of its reasonable discretion,
deems necessary as a result of (i) negative forecasts and/or trends in any
Company’s business, industry, profits, operations or financial condition or
(ii) other issues, circumstances or facts that could otherwise negatively
impact any Company, or any Company’s business, profits, operations, industry,
financial condition or assets.

 

Average
Borrowing Base shall mean, for any period, the amount
obtained by adding the Borrowing Base as calculated based upon each Borrowing
Base Certificate received by the Agent for any day during the period in
question and by dividing that sum by the number of Borrowing Base Certificates
received by the Agent for any day during such period.

 

Average
Net Availability shall mean, for any period, the amount
obtained by adding Net Availability as calculated based upon each Borrowing
Base Certificate received by the Agent for any day during the period in
question and by dividing that sum by the number of Borrowing Base Certificates
received by the Agent for any day during such period.

 

Benefit
Plan shall mean a defined benefit plan as defined in Section
3(35) of ERISA (other than a “multiemployer plan,” as such term is defined
in ERISA) in respect of which a Company or any ERISA Affiliate is, or within
the immediately preceding six (6) years was, an “employer” as defined in Section
3(5) of ERISA.

 

Borrowing
Base shall mean, at any date, the sum of the following:

 

(a)           the
Accounts Borrowing Base; plus

 

(b)           the
least of: (i) the Inventory Cap Amount, or (ii) the Inventory Borrowing Base, less

 

(c)           the
aggregate amount of the Letter of Credit Reserve in effect at such date; less

 

(d)           the
Term Loan Reserve in effect at such date; less

 

(e)           the
aggregate amount of the Availability Reserve in effect at such date.

 

Borrowing
Base Certificate shall mean a borrowing base certificate
delivered to the Agent pursuant to the requirements of item (g)(1) of Annex
A (Collateral Reporting Requirements) attached hereto.

 

Business Day
shall mean any day on which the Agent and JPMorgan Chase Bank are both open for
business in New York, New York.

 

Capital Expenditures
shall mean, for any period, the aggregate expenditures of the Companies and
their Subsidiaries during such period on account of property, plant, equipment
or

 

5

 

similar fixed assets that
are required to be treated as capital expenditures in conformity with GAAP.

 

Capital Lease
shall mean any lease of property (whether real, personal or mixed) which, in
conformity with GAAP, is accounted for as a capital lease.

 

Capital Stock shall mean, with respect to any person or
entity (i) any and all shares, interests, participations or other equivalents
of or interests in (however designated) corporate stock, including shares of
preferred or preference stock of such person or entity, (ii) all partnership
interests (whether general or limited) in such person or entity which is a
partnership, (iii) all membership interests or limited liability company
interests in such person or entity which is a limited liability company, (iv)
any interest or participation that confers on a person or entity the right to
receive a share of the profits and/or losses of, or distributions of assets of
such person or entity, and (v) all equity or ownership interests in such person
or entity of any other type, and any and all warrants, rights or options to
purchase any of the foregoing.

CARPA shall
mean that certain Amended and Restated Credit Approved Receivables Purchasing
Agreement, dated of even date herewith, between CIT and the Companies, as the
same may hereafter be amended, modified, supplemented or restated from time to
time.

 

CARPA
Assignment of Proceeds  shall mean the Amended and
Restated Assignment Agreement for Proceeds of Credit Approved Receivables
Purchasing Agreement, dated of even date herewith, between the Companies and
the Agent, by which the Companies grant the Agent a lien and security interest,
as security for all of the Obligations, in all sums due or to become due to the
Companies under the CARPA.

 

Cash
Equivalents shall mean the following: (a) 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, in each case issued by any state or
municipality thereof or the District of Columbia, 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; (b) any money market or similar fund the assets of which are
comprised exclusively of any of the items specified in clause (b) above and as
to which withdrawals are permitted daily; 
(c) repurchase obligations with a term of not more than thirty (30) days
for underlying securities of the types described in clause (a) above entered
into with any financial institution meeting the qualifications specified in
clause (a); and (d) 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 nine (9)
months after the date of acquisition thereof.

 

Casualty Proceeds shall mean (a) payments or other proceeds
from an insurance carrier with respect to any loss, casualty or damage to
Collateral, and (b) payments received on account of any condemnation or other
governmental taking of any of the Collateral.

 

Change
of Control shall mean the occurrence of any of the
following: (a) the failure of

 

6

 

Kevin Plank, and members
of his immediate family and trusts for their benefit, at any time (whether
before or after an IPO) to own and control, directly or indirectly, of record
and beneficially, more than fifteen percent (15%) of the issued and outstanding
Voting Stock of Under Armour; or (b) any merger, consolidation or other
transaction, excluding an IPO for which the Net Issuance Proceeds are in excess
of the then outstanding balance of the Term Loan, as a result of which the stockholders
of Under Armour immediately prior to such transaction cease to beneficially own
at least a majority of the outstanding Voting Stock of Under Armour or the
outstanding Voting Stock of any successor or surviving entity in the case of a
merger or consolidation, immediately after such transaction.

 

Chase Bank Rate
shall mean the rate of interest per annum announced by JPMorgan Chase Bank (or
its successor) from time to time as its “prime rate” in effect at its principal
office in New York City.  (The prime rate
is not intended to be the lowest rate of interest charged by JPMorgan Chase
Bank to its borrowers).

 

Chase Bank Rate Loan
shall mean a Loan outstanding under this Financing Agreement when the interest
rate applicable thereto is based upon the Chase Bank Rate.

 

CIT’s
System shall mean the Agent’s internet-based loan
accounting and reporting system.

 

Closing Date
shall have the meaning ascribed to such term in the Background Statement of
this Financing Agreement.

 

Collateral
shall mean, collectively, all of the Companies’ present and future Accounts,
Equipment, Inventory and other Goods, Documents of Title, General Intangibles,
Investment Property, Real Estate and Other Collateral.  Upon release of the Agent’s lien in, and
security interest upon, the Companies’ Trademarks pursuant to Section 6.12
of this Financing Agreement, such Trademarks shall no longer constitute
Collateral.

 

Collection
Days shall mean a period of two (2) Business Days after
the receipt by the Agent in the Agent’s Bank Account of monies initially
deposited into the Agent Lockbox or any other lockbox established in connection
with a Depository Account, for which interest may be charged on the aggregate
amount of such receipts at the rate provided for in Section 8.1 or 8.2
(if applicable) of this Financing Agreement.

 

Commitment
shall mean, as to each Lender, the
aggregate amount of such Lender’s Revolving Line of Credit Commitment and Term
Loan Commitment, and “Commitments” means the aggregate amount of all Revolving
Line of Credit Commitments and Term Loan Commitments.

 

Commitment Letter
shall mean the Commitment Letter dated July 14, 2005 issued by the Agent to,
and accepted by, Under Armour, as extended by letter agreement, dated August
23, 2005, between the Agent and Under Armour.

 

Confidential Information
shall have the meaning provided for in Section 13.7 of this Agreement.

 

7

 

Consolidated Balance Sheet
shall mean a consolidated balance sheet for the Companies and their
respective Subsidiaries, eliminating all intercompany transactions and prepared
in accordance with GAAP.

 

Consolidating Balance Sheet
shall mean a Consolidated Balance
Sheet of the Companies and their respective Subsidiaries plus individual
balance sheets for the Companies, showing all eliminations of intercompany
transactions and prepared in accordance with GAAP.

 

Contract Year shall mean the one (1) year period from the
Closing Date until the first anniversary of the Closing Date and each one (1)
year period thereafter.

 

Copyrights
shall mean all of the Companies’ 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.

 

Current
Four Quarters Testing Period shall mean, for the purposes
of testing compliance with each of the financial covenants set forth in Section
7.3 hereof if a Net Availability Shortfall occurs, the period of four (4)
consecutive fiscal quarters ending with the quarter in which such Net
Availability Shortfall occurs.

 

Default
shall mean any event specified in Section 10.1 hereof, regardless of
whether any requirement for the giving of notice, the lapse of time, or both,
has occurred or been satisfied.

 

Default Rate of Interest
shall mean a rate of interest equal to two percent (2%) per  annum
greater than the interest rate accruing on the Obligations pursuant to Section
8.1 hereof, which the Agent and the Lenders shall be entitled to charge the
Companies in the manner set forth in Section 8.2 of this Financing Agreement.

 

Depository Account shall mean each bank account (and the
related lockbox, if any) that is established by the Agent or the Companies
pursuant to Section 3.2 of this Financing Agreement and which is subject
to the Agent’s control pursuant to a duly executed Depository Account
Control Agreement.

 

Depository
Account Control Agreement shall mean a three-party
agreement in form and substance reasonably satisfactory to the Agent among the
Agent, the applicable Company and the bank which will maintain a Depository
Account, (a) which provides the Agent with control of such Depository Account
and provides for the transfer of funds in a manner consistent with the
provisions of Section 3.2 of this Financing Agreement, and (b) pursuant
to which such bank agrees that (x) all cash, checks, wires and other items
received or deposited into the Depository Account are subject to the lien and
security interest of the Agent, for the benefit of the Lenders, and (y) except
as otherwise agreed by the Agent in its sole discretion, such bank has no lien
upon, or right of set off against, the Depository Account and any cash, checks,
wires and other items from time to time on deposit therein.

 

8

 

Documentation Fees
shall mean the Agent’s reasonable standard fees for the use of the Agent’s
in-house legal department relating to any and all modifications, waivers,
releases, legal file reviews or additional collateral with respect to this
Financing Agreement, the Collateral and/or the Obligations.

 

Documents of Title
shall mean all of the Companies’ present and future documents (as defined in
the UCC), and any and all warehouse receipts, bills of lading, shipping
documents, chattel paper, instruments and similar documents, all whether
negotiable or non-negotiable, together with all Inventory and other Goods
relating thereto, and all Proceeds of any of the foregoing.

 

Domestic
Subsidiary shall mean a Subsidiary of a Company which is not
a Foreign Subsidiary.

 

Early
Termination Date  shall have the meaning set forth in Section
11 of this Financing Agreement.

 

EBITDA
shall mean, for any period, the Adjusted Net Earnings From Operations of the
Companies and their respective Subsidiaries on a consolidated basis for such
period before all interest, tax obligations and depreciation and amortization
expense of the Companies and their respective Subsidiaries on a consolidated
basis for such period, all determined in accordance with GAAP on a basis
consistent with the latest audited financial statements of the Companies and
their respective Subsidiaries.

 

Electronic
Transmission shall have the meaning given to such term in
Section 7.2(g) of this Financing Agreement.

 

Eligible Accounts Receivable
shall mean the gross amount of the Companies’ Trade Accounts Receivable that
are subject to a valid, exclusive, first priority and fully perfected security
interest in favor of the Agent, for the benefit of the Lenders, which conform
to the warranties contained herein and which, at all times, continue to be
acceptable to the Agent in the exercise of its reasonable discretion, less,
without duplication, the sum of:

 

(a)           actual
returns, discounts, claims, credits and allowances of any nature (whether
issued, owing, granted, claimed or outstanding), plus

 

(b)           reserves
for such Trade Accounts Receivable that arise from, or are subject to or
include: (i) sales to the United States of America, any state or other
governmental entity or to any agency, department or division thereof, except
for (x) any such sales as to which the Companies have complied with the
Assignment of Claims Act of 1940 or any other applicable statute, rules or
regulation to the Agent’s satisfaction in the exercise of its reasonable
discretion, and (y) up to the sum of $7,500,000, or such lesser amount as
Agent, based on its customary judgment and credit practices determines, of the
aggregate value of such Trade Accounts Receivable arising from such sales; (ii)
foreign sales, other than sales which otherwise comply with all of the other
criteria for eligibility hereunder and are (x)

 

9

 

secured by letters of credit (in form and substance
reasonably satisfactory to the Agent) issued or confirmed by, and payable at,
banks acceptable to the Agent having a place of business in the United States
of America, or (y) to customers residing in Canada; (iii) Royalty Trade
Accounts Receivables which remain unpaid more than thirty (30) days after the
original due date and all other Accounts that remain unpaid more than the
earlier of one hundred twenty (120) days from the original invoice date or
sixty (60) days from the original due date as shown on the invoice; (iv) sales
to a customer that is also a creditor or supplier of any Company or is
otherwise a contra account (unless a no-offset agreement has been entered into
by the customer and the Agent and is, in the Agent’s reasonable discretion,
acceptable to the Agent); (v) sales to any Subsidiary (direct or indirect) or
parent (direct or indirect) of any Company, or to any other person or entity
otherwise affiliated with any Company or with any shareholder, Subsidiary
(direct or indirect) or parent (direct or indirect) of any Company in any way;
(vi) bill and hold (deferred shipment) or consignment sales; (vii) except for
Eligible Approved Accounts Receivable, sales to any customer which is either
(x) insolvent, (y) the debtor in any bankruptcy, insolvency, arrangement,
reorganization, receivership or similar proceedings under any federal or state
law, or (z) negotiating, or has called a meeting of its creditors for purposes
of negotiating, a compromise of its debts; (viii) invoices which are not paid
by a customer due to an existing or alleged dispute, offset, recoupment or
counter-claim; (ix) all sales to any customer if fifty percent (50%) or more of the aggregate
dollar amount of all outstanding invoices to such customer are not Eligible
Accounts Receivable; (x) the dollar amount of all outstanding invoices to any
customer in excess of forty percent (40%) of the aggregate amount of
outstanding Eligible Accounts Receivable; (xi) pre-billed receivables and
receivables arising from progress billings; (xii) sales not payable in United
States currency; (xiii) invoices owing by any and all customers that are any
state, any other local governmental entity, or any department, agency or
instrumentality of any of them with respect to which the right to payment of
the Companies, as applicable, has not been assigned to the Agent, in a manner
reasonably acceptable to the Agent, pursuant to any applicable statute, rule,
regulation or the like, to the extent that such invoices outstanding at any
time exceed five percent (5%) of aggregate amount of Eligible Accounts
Receivable; and (xiv) except for Eligible Approved Accounts Receivable, sales
to any customer that the Agent, in its reasonable discretion, determines is
financially unacceptable to the Agent, has a credit rating unacceptable to the
Agent, or that collection is insecure or that payment may not be made by reason
of the customer’s financial inability to pay.

 

Eligible
Approved Accounts Receivable shall mean such Eligible
Accounts Receivable of the Companies that are deemed to be “Approved
Receivables”, as such term is defined in the CARPA.

 

Eligible
Inventory  shall mean the gross amount of the Companies’
Inventory that is subject to a valid, first priority and fully perfected
security interest in favor of the Agent, for the benefit of the Lenders,
subject only to Permitted Encumbrances, and which conforms to the warranties
contained herein and which, at all times continues to be acceptable to the
Agent in the exercise of its reasonable discretion, less, without
duplication, (a) all work-in-process, (b) all supplies (other than
raw materials), (c) all Inventory not present in the United States of America,
(d) all Inventory returned or rejected by the Companies’ customers (other than
goods that are undamaged and resalable in the normal course of business) and
goods to be returned to the Companies’ suppliers, (e)

 

10

 

all Inventory in transit
or in the possession of a warehouseman, bailee, third party processor, or other
third party, unless such warehouseman, bailee or third party has executed and
delivered to the Agent a Waiver Agreement, (f) Inventory that is subject to any
license or other agreement that would condition or restrict the Companies’ or
the Agent’s right to sell or otherwise dispose of such Inventory, unless such
license or other agreement, after review by the Agent, is determined by the
Agent in its reasonable discretion to be acceptable; and (g) the amount of such
other reserves against Inventory as the Agent deems necessary in the exercise
of its reasonable discretion.

 

Eligible
Non-Approved Accounts Receivable  shall mean such Eligible
Accounts Receivable of the Companies that are deemed to be “non-Approved
Receivables”, as such term is defined in the CARPA.

 

Equipment
shall mean all of the Companies’ present and hereafter acquired equipment
(as defined in the UCC) including, without limitation, all machinery,
equipment, rolling stock, furnishings and fixtures, and all additions,
substitutions and replacements thereof, wherever located, together with all
attachments, components, parts, equipment and accessories installed thereon or
affixed thereto and all Proceeds of any of the foregoing.

 

Equivalent
Amount shall mean, on any date of determination, with
respect to obligations or valuations denominated in one currency (the “first
currency”), the amount of another currency (the “second currency”)
which would result from the conversion of the relevant amount of the first
currency into the second currency at the 12:00 noon rate quoted on the Reuters
Monitor Screen (Page BOFC or such other Page as may replace such Page for the
purpose of displaying such exchange rates) on such date or, if such date is not
a Business Day, on the Business Day immediately preceding such date of
determination, or at such other rate as may have been agreed to in writing
between the Funds Administrator and the Agent.

 

ERISA
shall mean the United States Employee Retirement Income Security Act of 1974,
as amended from time to time, and the rules and regulations promulgated
thereunder from time to time.

 

ERISA
Affiliate shall mean any (a) corporation which is or was
at any time a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Internal Revenue Code) as the
Companies; (b) partnership or other trade or business (whether or not
incorporated) which is or was at any time under common control (within the
meaning of Section 414(c) of the Internal Revenue Code) with the
Companies; and (c) member of the same affiliated service group (within the
meaning of Section 414(m) of the Internal Revenue Code) as the
Companies, any corporation described in clause (a) above, or any partnership or
trade or business described in clause (b) above.

 

Extended
Early Termination Date  shall have the meaning set forth
in Section 11 of this Financing Agreement.

 

Event(s) of Default
shall have the meaning given to such term in Section 10.1 of this
Financing Agreement.

 

11

 

Existing Financing Agreement
shall have the meaning ascribed to such term in the Background Statement of
this Financing Agreement.

 

Financing
Agreement shall mean this Second Amended and Restated
Financing Agreement, as the same may hereafter be amended, modified,
supplemented or restated from time to time, and all exhibits and schedules
hereto.

 

First
Tier Foreign Subsidiary shall mean any Foreign Subsidiary
that is directly owned by a Company or a Domestic Subsidiary of a Company.

 

Fixed Charge Coverage Ratio
shall mean, for any period, the quotient (expressed as a ratio) obtained by
dividing (a) EBITDA of the Companies and their
respective Subsidiaries for such period by (b) Fixed
Charges of the Companies and their respective Subsidiaries for such period.

 

Fixed Charges
shall mean, for any period, the sum of (a) all interest
obligations (including the interest component of Capital Leases) of the
Companies and their respective Subsidiaries on a consolidated basis paid in
cash during such period, (b) the amount of principal repaid or scheduled to be
repaid in cash on Indebtedness of the Companies and their respective
Subsidiaries on a consolidated basis (other than the Revolving Loans) during
such period, excluding principal repayments of the Term Loan to the extent paid
from Net Proceeds as required by Section 4.4 of this Financing
Agreement, (c) unfinanced Capital Expenditures paid in cash by the Companies
and their respective Subsidiaries on a consolidated basis during such period,
(d) all federal, state and local tax expenses paid in cash by the Companies and
their respective Subsidiaries on a consolidated basis during such period, and
(e) redemptions of Capital Stock, distributions and dividends paid in cash
during such period, to the extent not paid from Net Proceeds.

 

Fixture  shall
mean a fixture (as defined in the UCC).

 

Foreign Subsidiary
shall mean a Subsidiary of a Company that is incorporated or formed under the
laws of a country or jurisdiction other than the laws of any state of the
United States.

 

Funds Administrator shall mean Under Armour in its capacity as
the borrowing agent and loan funds administrator on behalf of itself and the
other Companies.

 

GAAP shall
mean generally accepted accounting principles in the United States of America
as in effect from time to time and for the period as to which such accounting principles
are to apply.

 

General Intangibles
shall mean all of the Companies’ present and hereafter acquired general
intangibles (as defined in the UCC), and shall include, without limitation, all
present and future right, title and interest in and to: (a) all Trademarks, (b)
Patents, utility models, industrial models, and designs, (c) Copyrights, (d)
trade secrets, (e) licenses, permits and franchises, (f) any other forms of
intellectual property, (g) all customer lists, distribution agreements, supply
agreements, blueprints, indemnification rights and tax refunds, (h) all monies
and claims for monies now or hereafter due and payable in connection with the
foregoing, including, without limitation, payments for infringement and
royalties arising from any licensing agreement between any Company and any

 

12

 

licensee of any of such
Company’s General Intangibles, and (i) all Proceeds of any of the foregoing.

 

Goods shall
mean all of the Companies’ present and hereafter acquired goods (as defined in
the UCC), and all Proceeds thereof.

 

Indebtedness
shall mean, without duplication, all liabilities, contingent or otherwise,
which are either (a) obligations in respect of borrowed money or for the
deferred purchase price of property or other assets, other than Inventory or
for licenses of General Intangibles, or (b) obligations with respect to Capital
Leases.  For the avoidance of doubt, the
obligations of the Companies under the CARPA shall not constitute Indebtedness.

 

Indemnified Party shall have the meaning given to such term in
Section 10.5 of this Financing Agreement.

 

Intellectual
Property Security Agreement shall mean the Amended and
Restated Security Agreement - Intellectual Property, dated of even date
herewith, executed by Under Armour and the Agent, by which Under Armour grants
a lien in and security interest upon, as security for all of the Obligations,
all of its patents, trademarks and other intellectual property, as amended,
supplemented, restated or otherwise modified from time to time.

 

Intellectual
Property Use Agreement shall mean an Intellectual
Property Use Agreement, in form and substance reasonably satisfactory to the
Agent and the Companies and their respective counsel, executed by the Companies
and a holder of a lien and security interest in any Trademarks of the
Companies, by which, among other things, the holder of the proposed lien and
security interest upon the Companies’ Trademarks (a) grants the Agent for the
benefit of the Lenders a royalty-free, non-exclusive right and license to use
such Trademarks in connection with (i) the advertisement for sale, and the sale
or other disposition of any Collateral, and (ii) the manufacture, assembly,
completion and preparation for sale of any Collateral, (b) disclaims any
interest in any Accounts arising from the licensing by the Companies of the
Trademarks, (c) subordinates the lien and security interest of such holder to
the rights of all licensees of the Trademarks who are or may become obligated
on any Royalty Trade Accounts Receivables, and (d) agrees to provide the Agent
with written notice of any default with respect to the indebtedness secured by
such lien and security interest and the opportunity, but not the obligation, to
cure such default on behalf of the Companies, and (e) agrees that any
foreclosure sale of the Trademarks by such holder shall be made subject to the
rights of the Agent under such Intellectual Property Use Agreement.

 

Internal
Revenue Code means the United States Internal Revenue Code
of 1986, as amended from time to time and the rules and regulations promulgated
thereunder from time to time.

 

Interest Period shall mean
the period from the date of this Financing Agreement to the first day of the
month following the date hereof, and each successive one month period
thereafter.

 

Inventory
shall mean all of the Companies’ present and hereafter acquired inventory (as
defined in the UCC) including, without limitation, all merchandise and
inventory in all stages of production (from raw materials through work-in-process
to finished goods), and all additions,

 

13

 

substitutions and
replacements thereof, wherever located, together with all goods and materials
used or usable in manufacturing, processing, packaging or shipping of the
foregoing, and all Proceeds of any of the foregoing.

 

Inventory
Borrowing Base shall mean, at any date, the lesser of:
(i) up to fifty-five percent (55%) of the value of the Companies’ Eligible
Inventory consisting of raw materials at such date, plus up to
sixty-five percent (65%) of the value of the Companies’ Eligible Inventory
consisting of finished goods at such date, in each case calculated on the basis
of lower of cost or market with cost calculated on a first-in, first-out basis,
or (ii) eighty-five percent (85%) of the Net Orderly Liquidation Value of the
Companies’ Eligible Inventory of raw materials and finished goods at such date;
provided, however, the maximum amount of Eligible Inventory
consisting of raw materials that shall be included in the Inventory Borrowing
Base at any one time shall not exceed $5.0 million.

 

Inventory
Cap Amount shall mean an amount equal to (a) at all times
before the Revolving Line of Credit Increase Effective Date, $37.5 million, and
(b) at all times on and after the Revolving Line of Credit Increase Effective
Date, $50 million.

 

Investment
Property  shall mean all of the Companies’ present and
hereafter acquired investment property (as defined in the UCC), and all
Proceeds thereof; provided, however, with respect to the Capital
Stock of any Subsidiary of Under Armour, investment property shall only include
(a) 100% of the Capital Stock of each Domestic Subsidiary that is owned by
Under Armour or by any Domestic Subsidiary of Under Armour, and (b) 65% of the
Capital Stock of Under Armour Canada and each other First Tier Foreign
Subsidiary, and all Proceeds thereof.

 

IPO
shall mean a bonafide
underwritten public offering of stock of Under Armour (whether Common Stock or
other form of equity) pursuant to an effective registration statement under the
Securities Act of 1933, as amended, as a result of which Common Stock or other
equity of Under Armour is distributed to the public.

 

Issuing Bank
shall mean any one or more of Wachovia Bank, National Association, JP Morgan
Chase Bank, N.A., Bank of America, N.A., as selected by the Agent from time to
time in its discretion, or such other bank selected by the Agent, and, if no
Default or Event of Default exists, approved by the Funds Administrator (which
approval shall not be unreasonably withheld or delayed) that issues a Letter of
Credit for a Company.

 

Joinder
Agreement shall mean a Joinder Agreement, substantially
in the form of Exhibit F to this Financing Agreement, executed and
delivered by the Companies and the other parties thereto, by which a new
wholly-owned Domestic Subsidiary of a Company joins in the Financing Agreement
and in all Loan Documents, as a co-borrower and an additional “Company”
hereunder and thereunder, and is permitted to borrow from the Lenders pursuant
to the terms hereof and thereof.

 

Ledger
Debt shall mean the indebtedness for goods and services
purchased by any Company or any Subsidiary of any Company from any party whose
Accounts are factored or financed by CIT.

 

Letters of Credit
shall mean all letters of credit issued for or on behalf of a Company with

 

14

 

the assistance of the
Lenders (acting through the Agent) by an Issuing Bank in accordance with Section
5 hereof.

 

Letter of Credit Guaranty
shall mean any guaranty or similar agreement delivered by the Agent, on behalf
of the Lenders, to an Issuing Bank of a Company’s reimbursement obligation
under such Issuing Bank’s reimbursement agreement, application for letter of
credit or other like document.

 

Letter of Credit Guaranty Fee
shall mean the fee that the Agent, for the benefit of the Lenders, may charge
the Companies under Section 8.3(a) of this Financing Agreement for
issuing a Letter of Credit Guaranty or otherwise assisting the Companies in
obtaining Letters of Credit.

 

Letter
of Credit Reserve shall mean, at any time of
determination thereof, an amount equal to the sum of:

 

(a)           one
hundred percent (100%) of the amount of each Letter of Credit then outstanding;
less

 

(b)           with
respect to those outstanding documentary Letters of Credit issued to support
the purchase by a Company of Inventory consisting of finished goods for
importation and delivery directly into the United States which is not Eligible
Inventory solely because it is in transit, the amount by which the Inventory
Borrowing Base would be increased if the amount of such finished goods
Inventory were included in the Inventory Borrowing Base, provided that the
Companies, upon the Agent’s prior request, shall have delivered to the Agent
such documents and/or satisfied such other requirements or conditions as the
Agent may reasonably request with respect to such Letters of Credit and such
Inventory.

 

Letter of Credit Sub-Line
shall mean the aggregate commitment of the Lenders to assist the Companies in
obtaining Letters of Credit in an aggregate amount of up to $10 million.

 

Leverage
Ratio shall mean, as of any date of determination, the
ratio of (a) the Indebtedness of the Companies and their Subsidiaries on a consolidated
basis as of the date of the most recent available financial statement, to (b)
the Tangible Net Worth of the Companies and their Subsidiaries on a
consolidated basis as of the same date.

 

LIBOR
Rate shall mean, at any time of determination, and
subject to availability, with respect to an Interest Period, the rate of interest published in the
Wall Street Journal as the “London Interbank Offered Rate” for a one (1) month
period as of the last Business Day of the preceding month.

 

LIBOR
Rate Loan shall mean a Loan outstanding under this
Financing Agreement when the interest rate applicable thereto is based upon the
LIBOR Rate.

 

Line of
Credit shall mean the aggregate commitment of the Lenders
to (a) make Revolving Loans pursuant to Section 3 of this Financing
Agreement, (b) assist any Company in opening Letters of Credit pursuant to Section
5 of this Financing Agreement, and (c) make the Term Loan pursuant

 

15

 

to Section 4 of
this Financing Agreement.

 

Line of
Credit Fee shall mean, for any month, the product
obtained by multiplying the following:

 

(a)           for
the period from the Closing Date through December 31, 2006, the amount obtained
by multiplying (i) the lesser of (y) the sum of (1) the amount of the Revolving
Line of Credit then in effect, minus (2) the average daily principal
balance of Revolving Loans and the average daily undrawn amount of Letters of
Credit outstanding during such month, or (z) the sum of (1) the Average
Borrowing Base for such month, minus (2) the average daily principal
balance of Revolving Loans outstanding during such month, times (ii) the
Applicable Margin for the number of days in such month; and

 

(b)           for
all periods after December 31, 2006, the amount obtained by multiplying (i) the
sum of (y) the amount of the Revolving Line of Credit then in effect, minus
(z) the average daily principal balance of Revolving Loans and the average
daily undrawn amount
of Letters of Credit outstanding during such month, times (ii) the
Applicable Margin for the number of days in said month.

 

Loan Documents
shall mean this Financing Agreement, the Promissory Notes, the Agent Fee
Agreement, the CARPA, each Pledge Agreement, the Intellectual Property Security
Agreement, the Agent Lockbox Agreement, the Depository Account Control
Agreements, the Subordination Agreements, the CARPA Assignment of Proceeds,
each Joinder Agreement, each Intellectual Property Use Agreement, the mortgages
and deeds of trust on any Real Estate, and any other ancillary loan and
security agreements executed by the Companies from time to time in connection
with this Financing Agreement, each as may be renewed, amended, restated or
supplemented from time to time.

 

Loans
shall mean the Revolving Loans and the Term Loan.

 

Material Adverse Effect shall mean a material adverse effect on (a)
the business, condition (financial or otherwise), operations, performance or
properties of the Companies and their Subsidiaries, taken as a whole, (b) the
ability of the Companies to perform their obligations under this Financing
Agreement or any of the other Loan Documents, or to enforce their rights
against account debtors, or (c) the ability of the Agent or the Lenders to
enforce the Obligations or their rights and remedies under this Financing Agreement
or any of the other Loan Documents.

 

Moody’s
shall mean Moody’s Investors Service, Inc., or any successor thereto.

 

Net Availability
shall mean, at any time, the amount by which the Borrowing Base at such time
exceeds the principal amount of all outstanding Revolving Loans.

 

Net
Availability Minimum shall mean an amount equal to (a) at
all times before the Revolving Line of Credit Increase Effective Date, $15.0
million, and (b) at all times on and after the Revolving Line of Credit
Increase Effective Date, $20.0 million.

 

16

 

Net Availability Shortfall
shall mean, on any date, that Net Availability on such date falls below the Net
Availability Minimum for such date.

 

Net Orderly Liquidation Value shall mean, at any time, the ratio,
expressed as a percentage, of the orderly liquidation value of the Companies’
Inventory at such time to the total value of the Companies’ Inventory at such
time, taking into account all costs, fees and expenses estimated to be incurred
by the Agent and the Lenders in connection with such liquidation, based upon
the most recent appraisal of the Companies’ Inventory conducted by an appraiser
selected by the Agent after consultation with the Companies.

 

Net Issuance Proceeds  shall mean those Net Proceeds arising from an
issuance of the kind described in clause (b) of the definition of Net Proceeds.

 

Net Proceeds
shall mean the gross cash proceeds (including cash equivalents (when received)
by way of deferred or non-cash payment) received by the Companies from any of
the following:

 

(a)           the sale, conveyance
or other disposition of any assets, including, without limitation, insurance
proceeds and awards of compensation received with respect to the destruction or
condemnation of all or part of any assets, except for any disposition of assets
permitted by this Financing Agreement; and

 

(b)           the issuance after
the Closing Date of any Capital Stock or other equity or securities convertible
into Capital Stock, including, without limitation, any Capital Stock issued in
connection with an IPO, or the incurrence after the Closing Date of any
indebtedness in respect of borrowed money, except for the first $5.0 million of
cash received by Under Armour (computed on a cumulative basis for all periods
after the Closing Date) on account of the exercise of any warrants or options
issued by Under Armour for the purchase of any of its Common Stock,

 

less the sum of (i) in the case of Net
Proceeds arising under both clauses (a) and (b) above, reasonable and customary
fees and expenses with respect to legal, investment banking, brokerage and
accounting and other professional fees, sales commissions and disbursements and
all other reasonable fees, expenses and charges, in each case actually incurred
in connection with the transaction giving rise to such Net Proceeds; (ii) in
the case of Net Proceeds arising under clause (a) above, (1) amounts applied to
repayment of Indebtedness (other than the Obligations) secured by a Permitted
Encumbrance on the asset disposed of that is senior to the Agent’s liens and
security interests, (2) any tax liability arising from such transaction, and
(3) to the extent specifically identified and subsequently used to acquire
replacement assets as permitted by Section 6.6(b) of this Financing
Agreement or repair damaged or destroyed Property as permitted by Section
7.2(c) of this Financing Agreement.

 

Obligations  shall mean: (a) all loans, advances and other extensions of credit made by
the Agent for the account of the Lenders to the Companies (or any of them), or
to others for the Companies’ account (including, without limitation, all
Revolving Loans, the Term Loan and all

 

17

 

obligations of the Agent under
Letter of Credit Guaranties); (b) any and all other indebtedness, obligations
and liabilities which may be owed by the Companies (or any of them) to the
Agent or any Lender and arising out of, or incurred in connection with, this
Financing Agreement, the Agent Fee Agreement or any of the other Loan Documents
(including all Out-of-Pocket Expenses required to be reimbursed pursuant to
this Financing Agreement), whether (i) now in existence or incurred by the
Companies (or any of them) from time to time hereafter, (ii) secured by pledge, lien upon or security interest in any
Company’s assets or property or the assets or property of any other person,
firm, entity or corporation, (iii) such indebtedness is absolute or contingent,
joint or several, matured or unmatured, direct or indirect, or (iv) the
Companies are liable to the Agent or any Lender for such indebtedness as
principals, sureties, endorsers, guarantors or otherwise; (c) without
duplication, the Companies’ liabilities to the Agent under any instrument of
guaranty or indemnity, or arising under any guaranty, endorsement or
undertaking which the Agent, on behalf of the Lenders, may make or issue to
others for the account of the Companies (or any of them) in connection with the
Loan Documents, including any accommodations extended by the Agent with respect
to applications for Letters of Credit, the Agent’s acceptance of drafts or the
Agent’s endorsement of notes or other instruments for the Companies’ account
and benefit; and (d) any Ledger Debt owing to CIT.

 

Operating Leases shall mean all leases of
property (whether real, personal or mixed) other than Capital Leases.

 

Other Collateral shall mean all of the
Companies’: (a) present and hereafter established lockbox, blocked account and
other deposit accounts maintained with the Agent or any bank or financial
institution into which the proceeds of Collateral are or may be deposited
(including the Agent Lockbox and the Depository Accounts); (b) cash and other
monies and property in the possession or control of the Agent or any Lender
(including items received in the Agent Lockbox, negative balances in the Revolving
Loan Account and cash collateral held by the Agent pursuant this Financing
Agreement); (c) books, records, ledger cards, disks and related data processing
software at any time evidencing or containing information relating to any of
the Collateral described herein or otherwise necessary or helpful in the
collection thereof or realization thereon; and (d) all Proceeds of any of the
foregoing.

 

Out-of-Pocket Expenses shall
mean all of the Agent’s and the Lenders’ present and future reasonable and documented
out-of-pocket costs, fees and expenses incurred in connection with this
Financing Agreement and the other Loan Documents, including, without
limitation, (a) the reasonable cost of lien searches (including tax lien and
judgment lien searches), pending litigation searches and similar items, (b) reasonable fees and taxes imposed in connection with the
filing of any financing statements or other personal property security
documents; (c) all reasonable costs and expenses incurred by the Agent in
opening and maintaining the Agent Lockbox, the Depository Accounts and any
related lockboxes, and depositing checks, and receiving and transferring funds
(including charges imposed on the Agent for “insufficient funds” and the return
of deposited checks); (d) any amounts paid by, incurred by or charged to the
Agent by an Issuing Bank under any Letter of Credit or the reimbursement
agreement relating thereto, any application for Letter of Credit, Letter of
Credit Guaranty or other like document which pertains either directly or
indirectly to Letters of Credit, and the Agent’s standard fees relating to the
Letters of Credit and any drafts thereunder; (e) title insurance premiums, real
estate survey costs, note taxes, intangible taxes and mortgage or recording
taxes and fees; (f) all reasonable appraisal fees and expenses payable by the
Companies

 

18

 

pursuant to Section 7.2(a)
of this Financing Agreement, and all reasonable costs, fees and expenses
incurred by the Agent and the Lenders in connection with any action taken under
Section 7.2(a) hereof, including reasonable travel, meal and lodging
expenses of the Agent’s personnel; (g) all reasonable costs that the Agent may
incur to maintain the Required Insurance, and all reasonable costs, fees and
expenses incurred by the Agent in connection with the collection of Casualty
Proceeds and the monitoring of any repair or restoration of any Real Estate;
(h) all reasonable costs, fees, expenses and disbursements of outside counsel
hired by the Agent to consummate the transactions contemplated by this
Financing Agreement (including the documentation and negotiation of this
Financing Agreement, the other Loan Documents and all amendments, supplements
and restatements thereto or thereof), and to advise the Agent and/or the
Lenders as to matters relating to the transactions contemplated hereby; (i) all
reasonable costs, fees and expenses incurred by the Agent and the Lenders in
connection with any action taken under Section 10.3 hereof; and (j)
without duplication, all reasonable costs, fees and expenses incurred by the
Agent and the Lenders in connection with the collection, liquidation,
enforcement, protection and defense of the Obligations, the Collateral and the
rights of the Agent and the Lenders under this Financing Agreement, including,
without limitation, all reasonable fees and disbursements of in-house and
outside counsel to the Agent and the Lenders incurred as a result of a workout,
restructuring, reorganization, liquidation, insolvency proceeding and in any
appeals arising therefrom, whether incurred before, during or after the
termination of this Financing Agreement or the Commitments of the Lenders
hereunder or the commencement of any case with respect to the Companies (or any
of them) or any Subsidiary of a Company (as the case may be) under the United
States Bankruptcy Code or any similar statute.

 

Overadvances shall mean, at any time, the
amount by which (a) the principal amount of all outstanding Revolving Loans at
such time exceeds (b) the Borrowing Base at such time.

 

Patents shall mean all of the Companies’
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 Company with respect thereto, and all income, royalties
and other Proceeds of the foregoing.

 

Permitted Distributions shall mean:

 

(a)           dividends
from a wholly-owned Subsidiary of a Company to such Company;

 

(b)           redemptions of preferred Capital Stock of Under Armour,
and payment of accrued and unpaid dividends thereon, made exclusively from Net
Issuance Proceeds received in cash at any time after the Closing Date in an aggregate
redemption price for all such redemptions of no greater than $12.0 million,
provided that (i) each such redemption is made no later than ten (10) Business
Days after the receipt of the Net Issuance Proceeds being used for the payment
thereof, and (ii) no Default or Event of Default shall then exist;

 

(c)           dividends
payable solely in stock or other equity interests of the Companies; and

 

(d)           cash
distributions or cash dividends to Under Armour’s shareholders in
any fiscal year in an amount which, when added to all previous distributions or
dividends paid by Under

 

19

 

Armour at any time after January 1, 2005 (other than any distributions
or dividends permitted under clauses (a), (b) or (c) above), shall not exceed
fifty percent (50%) of the cumulative net income of the Companies and their
Subsidiaries for the period beginning January 1, 2005 and ending on the last
day of the immediately preceding fiscal year for which the Agent and the
Lenders have received the audited financial statements of the Companies and
their Subsidiaries required to be delivered pursuant to Section 7.2(h)(i)
of this Financing Agreement, all determined on a consolidated basis in
accordance with GAAP, provided that each of the following conditions shall
first be satisfied:  (i) no Default or
Event of Default shall exist immediately before, or immediately after giving
effect to, the payment of any distribution or dividend, (ii) any distribution or
dividend is approved by all necessary corporate action and is permitted by
applicable law and Under Armour’s governance documents, (iii) Under Armour
shall have obtained all necessary consents to the payment of any distribution
or dividend, including any required consents to be obtained from its preferred
stockholders, and (iv) Net Availability immediately before and immediately
after giving effect to the payment of any distribution or dividend shall be not
less than $20.0 million, with expenses, trade payables and other liabilities
being paid in the ordinary course of business and not being delinquent for more
than ten (10) days.

 

Permitted Encumbrances shall mean: (a) all
liens existing on the Closing Date on specific items of Equipment, Fixtures and
Real Estate; (b) Purchase Money Liens; (c) statutory liens of landlords and
liens of carriers, warehousemen, bailees, mechanics, materialmen and other like
liens imposed by law, created in the ordinary course of business and securing
amounts not yet due (or which are being contested in good faith, by appropriate
proceedings or other appropriate actions which are sufficient to prevent
imminent foreclosure of such liens), and with respect to which adequate
reserves or other appropriate provisions are being maintained by the Companies
in accordance with GAAP; (d) deposits made (and the liens thereon) in the
ordinary course of business of any Company (including, without limitation,
security deposits for leases, indemnity bonds, surety bonds and appeal bonds)
in connection with workers’ compensation, unemployment insurance and other
types of social security benefits or to secure the performance of tenders,
bids, contracts (other than for the repayment or guarantee of borrowed money or
purchase money obligations), statutory obligations and other similar obligations
arising as a result of progress payments under government contracts; (e) liens
granted to the Agent, for the benefit of the Lenders, by the Companies; (f)
liens of judgment creditors, provided that such liens are at all times
junior and subordinate in priority to the liens and security interests of the
Agent and the enforcement of such liens is stayed, bonded or otherwise insured
to the reasonable satisfaction of the Agent within sixty (60) days of the
docketing of the judgment; (g) Permitted Tax Liens; (h) easements (including, without limitation, reciprocal
easement agreements and utility agreements), encroachments, minor defects or
irregularities in title, variation and other restrictions, charges or
encumbrances (whether or not recorded) affecting the Real Estate, if
applicable, and which in the aggregate (i) do not materially interfere with the
occupation, use or enjoyment by any Company of its business or property so
encumbered and (ii) in the reasonable discretion of the Agent, do not materially
and adversely affect the value of such Real Estate; (i) liens arising from (i)
operating leases and precautionary Uniform Commercial Code financing statements
in respect thereof and (ii) Equipment or other property not owned by a Company
located on the premises of such Company (but not in connection with, or as part
of, the financing thereof) from time to time in the ordinary course of business
and any precautionary Uniform Commercial Code financing statements in respect
thereof; (j) liens or rights of setoff against

 

20

 

credit balances of a Company
with any credit card issuers or processors or amounts owing by credit card
issuers or processors to a Company in the ordinary course of business to secure
the obligations of such Company to such credit card issuer or processor as a
result of any fees and chargebacks; (k) 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 the Companies at
such bank; (l) leases of any Real Estate on commercially reasonable terms,
provided such leases and subleases are at all times junior and subordinate in
priority to the liens and security interests of the Agent in such Real Estate;
(m) licenses of Trademarks in the ordinary course of business; (n) to the
extent constituting a lien or security interest, the lien and security interest
created in favor of CIT under the CARPA; and (n) other liens (except liens securing
Taxes) securing indebtedness or obligations not to exceed $100,000 outstanding
at any one time.

 

Permitted Indebtedness  shall mean: (a)
current Indebtedness maturing in less than one year and incurred in the
ordinary course of business for raw materials, supplies, equipment, services,
Taxes or labor; (b) Indebtedness secured by Purchase Money Liens; (c) Indebtedness arising under the Letters of Credit and
this Financing Agreement; (d) deferred Taxes and other expenses incurred in the
ordinary course of business; (e) Subordinated Debt; (f) Permitted Intercompany
Loans; and (g) other Indebtedness existing on the Closing Date and listed on Schedule
1.1(a) attached hereto, and any renewals, extensions or refinancings of any
of the foregoing provided that the principal amount of such Indebtedness is not
increased as a result of such renewals, extensions or refinancings.

 

Permitted Intercompany Loan
shall mean a loan made by a Company to another Company, but only so long as
such loan is not evidenced by a promissory note, or, if such loan is evidenced
by a promissory note, the original of which shall be delivered to the Agent,
duly endorsed.

 

Permitted Investment
shall mean, without duplication, any of the following:  (a) cash and Cash Equivalents; (b) investments
in negotiable instruments acquired in the ordinary course of business for
collection; (c) Accounts arising in the ordinary course of business; (d)
investments received in settlement of Accounts arising in the ordinary course
of business or owing to a Company as a result of any dispute with customers or
suppliers or upon the foreclosure or enforcement of any lien in favor of a
Company as security for an Account, and investments made in exchange for
Accounts 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
Companies, 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 Agent to be held as security for the
Obligations; (e) payment under any guarantees of Indebtedness which are
permitted pursuant to Section 7.4(b) of this Financing Agreement; (f)
loans or advances to employees in the ordinary course of business so long as
the aggregate amount of such loans and advances outstanding by the Companies
and its Subsidiaries do not exceed the sum of $100,000 at any time; (g)
investments of the Companies in their respective Domestic Subsidiaries; and (h)
other investments, other than any outstanding investments in Foreign
Subsidiaries, in an aggregate outstanding amount not to exceed $500,000 at any
one time outstanding.

 

Permitted Tax Liens
shall mean liens for Taxes not due and payable and liens for Taxes that any
Company is contesting in good faith, by appropriate proceedings which are
sufficient to prevent imminent foreclosure of such liens, and with respect to
which adequate reserves are being

 

21

 

maintained by such Company in
accordance with GAAP; provided that in either case, such liens (a) are
not filed of record in any public office, (b) other than with respect to Real
Estate, are not senior in priority to the liens granted by such Company to the
Agent, for the benefit of the Lenders, or (c) do not secure taxes owed to the
United States of America (or any department or agency thereof) or any State or
State authority, if applicable State law provides for the priority of tax liens
in a manner similar to the laws of the United States of America.

 

Pledge Agreement shall
mean a stock pledge agreement, executed by a Company, as pledgor, in favor of
the Agent, as pledgee, by which such Company pledges to the Agent Capital Stock
of its Subsidiaries, in each case in form and substance satisfactory to the
Agent.

 

Pricing Leverage Ratio
shall mean, as of any date of determination at the end of any fiscal quarter,
the ratio of (a) the sum of (i) Indebtedness of the Companies and their
Subsidiaries on a consolidated basis as of such date, less (ii)
unrestricted cash of the Companies and their Subsidiaries on a consolidated
basis as of such date, to (b) EBITDA of the Companies and their Subsidiaries on
a consolidated basis for the period of four (4) fiscal quarters then ending.

 

Pro Rata Percentage shall mean, as to each Lender at any time, a fraction (expressed as a
percentage), the numerator of which is the amount of such Lender’s Commitments
at such time and the denominator of which is the aggregate amount of all
Commitments at such time (or in the event that the Commitments of the
Lenders hereunder have terminated, the numerator of which is the principal
amount of Loans then owed to such Lender hereunder and the denominator of which
is the principal amount of all Loans then owed to all Lenders hereunder, as
reflected by CIT’s System).

 

Proceeds shall have the meaning given to such term in the UCC, including, without
limitation, all Casualty Proceeds.

 

Promissory Notes shall mean, collectively,
the notes in the form of Exhibit B (in the case of the Revolving Line of
Credit), and Exhibit C (in the case of the Term Loan), each attached
hereto, delivered by the Companies (or any of them) to a Lender to evidence the
Loans made by such Lender to the Companies (or any of them) pursuant to this
Financing Agreement.

 

Purchase Money Liens shall mean liens on
any item of Equipment or Fixture acquired by a Company after the date of this
Financing Agreement, provided that (a) each such lien shall attach only
to the Equipment or Fixture acquired, and (b) a description of the Equipment or
Fixture so acquired is furnished by the Companies to the Agent.

 

Real Estate shall mean all of the
Companies’ present and future fee ownership interests in real property,
including the real property, if any, owned by the Companies as of the Closing
Date and described on Schedule 1.1(b) attached hereto.

 

Regulatory Change shall mean any change
after the Closing Date in United States federal, state or foreign law or
regulation (including, without limitation, Regulation D of the Board of
Governors of the Federal Reserve System), or the adoption or making after the
Closing Date of any interpretation, directive or request applying to a class of
lenders including the Agent or any Lender of

 

22

 

or under any United States
federal, state or foreign law or regulation, in each case whether or not having
the force of law and whether or not failure to comply therewith would be
unlawful.

 

Required Insurance  shall have the meaning
provided for in Section 7.1(m) of this Financing Agreement.

 

Required Lenders shall mean (a) at all times while there are (2)
two or fewer Lenders hereunder, Lenders who in the aggregate hold at least
sixty-six and two-thirds percent (662/3%) of the total
Commitments under the Line of Credit (or sixty-six and two-thirds percent (662/3%)
of the outstanding principal amount of all Loans outstanding hereunder, as
reflected by CIT’s System, in the event that the Commitments of the Lenders
hereunder have terminated); and (b)
at all times while there are three (3) or more Lenders hereunder, two (2) or
more Lenders who in the aggregate hold at least fifty-one percent (51%) of the
total Commitments under the Line of Credit (or fifty-one percent (51%) of the
outstanding principal amount of all Loans outstanding hereunder, as reflected
by CIT’s System, in the event that the Commitments of the Lenders hereunder
have terminated).

 

Revolving Line of Credit shall mean the
Commitments of the Lenders to make Revolving Loans pursuant to Section 3 of
this Financing Agreement and assist the Companies in opening Letters of Credit
pursuant to Section 5 of this Financing Agreement, in an aggregate amount equal
to (a) at all times before the Revolving Line of Credit Increase Effective
Date, $75 million, and (b) at all times on and after the Revolving Line of
Credit Increase Effective Date, $100 million.

 

Revolving Line of Credit Commitment shall mean, for each Lender, the amount of
the commitment for such Lender to make Revolving Loans pursuant to the terms
and conditions of this Financing Agreement as set forth on the signature
page to this Financing Agreement or in the Assignment and Transfer Agreement to
which such Lender is a party, as such amount may be reduced or increased in
accordance with the provisions of Section 13.4(b) or any other
applicable provision of this Financing Agreement.

 

Revolving Line of Credit Increase
shall mean the meaning ascribed to such term in Section 3.1(b) of
this Financing Agreement.

 

Revolving Line of Credit Increase Effective
Date  shall mean the date on which the Revolving
Line of Credit Increase shall become effective pursuant to Section 3.1(b)
of this Financing Agreement.

 

Revolving Line of Credit Increase Notice
shall mean a written notice from the Funds Administrator, on behalf of the
Companies, to the Agent that the Companies have elected the Revolving Line of
Credit Increase, which shall be in the form of Exhibit E attached
hereto.

 

Revolving Loan Account shall mean the
account on the Agent’s books, in the name of the Funds Administrator on behalf
of the Companies, in which the Companies will be charged with all Obligations
when due or incurred by the Agent or any Lender.

 

Revolving Loans shall mean the loans and
advances made from time to time to or for the

 

23

 

account of the Companies by the
Agent, on behalf of the Lenders, pursuant to Section 3 of this Financing
Agreement.

 

Royalty Trade Accounts Receivables
shall mean those Trade Accounts Receivable of the Companies arising from the
licensing by the Companies of any Trademarks owned by the Companies.

 

Settlement Date shall mean the Friday of
each week (or if any Friday is not a Business Day on which all Lenders are open
for business, the immediately preceding Business Day on which all Lenders are
open for business), provided that the Agent, in its discretion, may at
any time require that the Settlement Date occur more frequently (even daily) so
long as such Settlement Date is a Business Day on which each Lender is open for
business.

 

Subordinated Debt shall mean all
indebtedness of the Companies and their respective Subsidiaries (and the
note(s) evidencing such indebtedness) that is subordinated to the prior payment
and satisfaction of the Obligations pursuant to a Subordination Agreement.

 

Subordination Agreement shall mean (a) an agreement (in form and substance
reasonably satisfactory to the Agent) among one or more of the Companies, a
subordinating creditor and the Agent, on behalf of the Lenders, pursuant to
which Subordinated Debt is subordinated to the prior payment and satisfaction
of the Obligations, and (b) any note, indenture, note purchase agreement or
similar instrument or agreement, pursuant to which the indebtedness evidenced
thereby or issued thereunder is subordinated to the Obligations by the express
terms of such note, indenture, note purchase agreement or similar instrument or
agreement.

 

Subsidiary shall
mean, with respect to any person or entity, any corporation or other entity of
which at least 50% of the outstanding Voting Stock is at the time directly or
indirectly owned or controlled by such person or entity or by one or more of
any entities directly or indirectly owned or controlled by such person or
entity.  For the purposes of this
definition, “control” of a person or entity means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such person or entity (whether by ownership of Capital Stock, by
contract or otherwise).

 

Tangible Net Worth
shall mean, at any date, a sum equal to: (a) the net book value (after
deducting related depreciation, obsolescence, amortization, valuation, and
other proper reserves) at which the Adjusted Tangible Assets of the Companies
and their Subsidiaries would be shown on a consolidated balance sheet at such
date in accordance with GAAP, minus (b) the amount at which the
liabilities of the Companies and their Subsidiaries (other than Capital Stock
and surplus) would be shown on such consolidated balance sheet in accordance
with GAAP, and including as liabilities all reserves for contingencies and
other potential liabilities.  For
purposes of determining Tangible Net Worth, all contingent and unmatured
reimbursement obligations of the Companies with respect to outstanding Letters
of Credit and Letter of Credit Guaranties shall not be deemed to be contingent
or potential liabilities and therefore not included in the determination of
Tangible Net Worth pursuant to the foregoing clause (b).

 

24

 

Taxes shall mean all federal, state,
municipal and other governmental taxes, levies, charges, claims and assessments
which are or may be owed or collected by the Companies with respect to their
business, operations, Collateral or otherwise.

 

Term Loan shall mean the term loan in the
principal amount of $25.0 million made by the Lenders to the Companies on the
Closing Date on the terms and conditions set forth in Section 4.2 of
this Financing Agreement.

 

Term Loan Commitment shall mean, for each Lender, the amount of
the commitment for such Lender to advance to the Companies its Pro Rata
Percentage of the Term Loan pursuant to
the terms and conditions of this Financing Agreement as set forth on the
signature page to this Financing Agreement or in the Assignment and Transfer
Agreement to which such Lender is a party, as such amount may be reduced or
increased in accordance with the provisions of Section13.4(b) or any
other applicable provision of this Financing Agreement.

 

Term Loan Reserve
shall mean a reserve to be established by the Agent, in the amount set forth in
the next sentence, if the Trademark Collateral Value, as reflected by the most
recently obtained Trademark Appraisal, is less than the outstanding principal
balance of the Term Loan.  The Term Loan
Reserve, if established, shall initially be in the amount by which such
Trademark Collateral Value is less than the outstanding principal balance of
the Term Loan and shall thereafter reduce on a dollar for dollar basis as and
when the outstanding principal balance of the Term Loan is reduced.

 

Termination Date  shall mean the date
occurring five (5) years from the Closing Date and the same date in every year
thereafter, unless such date is not a Business Day, in which case the
Termination Date shall mean the Business Day immediately preceding such date.

 

Testing Period  shall
mean a Current Four Quarters Trailing Period, a Trailing Four Quarters Testing
Period or a Twelve Months Testing Period, or any or all of them, as the context
may require.

 

Trade Accounts Receivable shall mean that
portion of each Company’s Accounts which arises from the sale of Inventory, the
rendition of services or the licensing of Trademarks, in each case in the
ordinary course of such Company’s business.

 

Trademarks shall mean all of the
Companies’ 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.

 

Trademark Appraisal
shall mean an appraisal of Under Armour’s registered United States Trademarks
upon which the Agent shall have a first priority perfected security interest
pursuant to the Loan Documents, which shall be completed and delivered to the
Agent by the Trademark Appraiser.

 

25

 

Trademark Appraiser
shall mean either Buxbaum Group, Houlihan Lokey Howard & Zukin or Gordon
Brothers Group, as selected by the Agent and, if no Default or Event of Default
exists, approved by the Funds Administrator (which approval shall not be
unreasonably withheld or delayed).

 

Trademark Collateral Value
shall mean eighty percent (80%) of the distressed sale value of Under Armour’s
registered United States Trademarks upon which the Agent shall have a first
priority perfected security interest, and shall specifically exclude those
Trademarks transferred to a Foreign Subsidiary of the Companies as permitted by
Section 7.4(c)(i)(2) of this Financing Agreement.

 

Trailing Four Quarters Testing Period
shall mean, for the purposes of testing compliance with each of the financial
covenants set forth in Section 7.3 hereof if a Net Availability
Shortfall occurs, the period of four (4) consecutive fiscal quarters ending
immediately before the quarter in which such Net Availability Shortfall occurs.

 

Twelve Months Testing Period
shall mean, for the purposes of testing compliance with each of the financial
covenants set forth in Section 7.3 hereof if a Net Availability
Shortfall occurs and the Companies fail to comply with any of the financial
covenants for the Trailing Four Quarters Testing Period, the period of twelve
(12) months ending immediately before the month in which such Net Availability
Shortfall occurs.

 

Type shall mean
the type of Loan, which shall either be a LIBOR Rate Loan or a Chase Bank Rate
Loan.

 

UCC shall mean the Uniform Commercial Code
as the same may be amended and in effect from time to time in the State of New
York.

 

Under Armour Canada shall
mean Under Armour Canada, Inc., a corporation organized under the laws of
Canada and a wholly owned First-Tier Subsidiary of Under Armour.

 

Voting Stock
shall mean, with respect to any person or entity, Capital Stock of such person
or entity of any class or classes, the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of members of the
Board of Directors (or persons performing similar functions) of such person or
entity.

 

Waiver Agreement
shall mean an agreement from the landlord of premises where any of the
Collateral is to be located, or from any warehousemen, bailee or third party
processor who may have possession of any Collateral, in form and substance
reasonably acceptable to the Agent, in which such landlord, warehousemen,
bailee or third party processor (a) waives in favor of the Agent any liens and
security interests such landlord, warehousemen, bailee or third party processor
may have in the Collateral, (b) agrees to provide the Agent with access to the
premises where the Collateral is located and the right to repossess or take
possession of the Collateral at any time free of any lien, charge or claim of
such landlord, warehousemen, bailee or third party processor, (c) agrees not to
hinder the Agent’s actions in exercising its rights and remedies against the
Collateral, and (d) grants

 

26

 

to the Agent such other
assurances as may be reasonably requested by the Agent.

 

SECTION 2.   Conditions
Precedent.

 

2.1          Conditions
Precedent to Initial Funding.  The obligation of the Agent and the Lenders
to make the Term Loan and the initial Revolving Loan and to assist the
Companies in obtaining initial Letters of Credit hereunder, immediately prior
to or concurrently with the making of such Loans or the issuance of such
Letters of Credit, is subject to the satisfaction or waiver in writing by the
Agent and the Lenders of the following conditions precedent:

 

(a)           Lien Searches. 
The Agent shall have received tax lien, judgment lien and UCC searches
from all jurisdictions reasonably required by the Agent, and such searches
shall verify that the Agent, for the benefit of the Lenders, has a first
priority security interest in the Collateral, subject to Permitted
Encumbrances.

 

(b)           Casualty Insurance. 
Each Company shall have
delivered to the Agent evidence satisfactory to the Agent that all Required
Insurance is in full force and effect, and the Agent shall have confirmed that
the Agent, for the benefit of the Lenders, has been named as a loss payee or
additional insured with respect to the Required Insurance in a manner
reasonably satisfactory to the Agent.

 

(c)           UCC Filings. 
All UCC financing statements and similar documents required to be filed
in order to create in favor of the Agent, for the benefit of the Lenders, a
first priority perfected security interest in all Collateral (to the extent
that such a security interest may be perfected by a filing under the UCC or
applicable law), shall have been properly filed in each office in each
jurisdiction required.   The Agent shall
have received (i) acknowledgement copies of all such filings (or, in lieu
thereof, the Agent shall have received other evidence satisfactory to the Agent
that all such filings have been made), and (ii) evidence that all necessary
filing fees, taxes and other expenses related to such filings have been paid in
full.

 

(d)           Resolutions. 
The Agent shall have received: a copy of the resolutions of the Board of
Directors of each Company authorizing the execution, delivery and performance
of the Loan Documents to be executed by each Company, certified by the
Secretary or Assistant Secretary of each Company as of the date hereof,
together with a certificate of such Secretary or Assistant Secretary as to the
incumbency and signature of the officer(s) executing the Loan Documents on
behalf of each Company.

 

(e)           Organizational
Documents.  The Agent shall have received: a
copy of the Certificate or Articles of Incorporation of each Company, certified
by the applicable authority in each Company’s State of incorporation, and
copies of the by-laws (as amended through the date hereof) of each
Company, certified by the respective Secretary or an Assistant Secretary
thereof.

 

(f)            Officer’s
Certificate.  The Agent shall have received an executed
Officer’s Certificate of each Company,
satisfactory in form and substance to the Agent, certifying that as of the Closing
Date (i) the representations and warranties contained herein are true and
correct in all material

 

27

 

respects, (ii) each Company is in compliance with all of
the terms and provisions set forth herein and (iii) no Default or Event of
Default has occurred.

 

(g)           Disbursement
Authorizations.  The Companies shall have delivered to
the Agent all information necessary for the Agent to issue wire transfer
instructions on behalf of each Company for the Term Loan and the initial
Revolving Loan and subsequent Revolving Loans to be made under this Financing
Agreement, including disbursement authorizations in form acceptable to the
Agent.

 

(h)           Net Availability.  The Agent shall be satisfied that after
giving effect to the Term Loan and the initial Revolving Loan and other
extensions of credit to be made at closing, the Companies shall have opening
Net Availability of not less than $25.0 million, with expenses, trade payables
and other liabilities being paid in the ordinary course of business and not
being delinquent for more than ten (10) days.

 

(i)            Agent Lockbox. 
The Agent and the Companies shall have entered into the Agent Lockbox
Agreement.

 

(j)            Opinions. 
Subject to the filing, priority and remedies provisions of the UCC, the
provisions of the Bankruptcy Code, insolvency statutes or other like laws, the
equity powers of a court of law and such other matters as may be agreed upon
with the Agent, counsel for the Companies shall have delivered to the Agent, on
behalf of the Lenders, opinion(s) satisfactory to the Agent and its counsel
opining, inter  alia, that (i) each Company is in existence and in
good standing under its respective jurisdiction of incorporation or formation,
(ii) each Loan Document to which each Company is a party is valid, binding and
enforceable in accordance with its terms, as applicable, (iii) the execution,
delivery and performance by each Company of the Loan Documents to which such
Company is a party are (x) duly authorized, (y) do not violate any terms,
provisions, representations or covenants in the articles of incorporation, by-laws
or other organizational agreement of such Company, and (z) to the best
knowledge of such counsel, do not violate any terms, provisions,
representations or covenants in any loan agreement, mortgage, deed of trust,
note, security agreement, indenture or other material contract which is
identified in such opinion or a certificate attached to such opinion; (iv) the
liens and security interests granted by each Company to the Agent for the
benefit of the Lenders under this Financing Agreement and the other Loan
Documents are valid and perfected; and (v) such other matters as the Agent or
its counsel may reasonably request.

 

(k)           Legal
Restraints/Litigation.  As of the Closing Date, there shall be no (x)
injunction, writ or restraining order restraining or prohibiting the
consummation of the financing arrangements contemplated under this Financing
Agreement, or (y) suit, action, investigation or proceeding (judicial or administrative)
pending against any Company, any Subsidiary of any Company or any of their
assets, which, if adversely determined, can reasonably be expected to have a
Material Adverse Effect.

 

(l)            Additional
Documents.  The Companies shall have executed and delivered
to the Agent all Loan Documents necessary to consummate the lending arrangement
contemplated by this Financing Agreement.

 

28

 

(m)          Promissory
Notes.  If
the Required Lenders elect to evidence their Revolving Line of Credit
Commitments with Promissory Notes, each Company shall have executed and
delivered to each Lender a Promissory Note in the form attached hereto as Exhibit
B; and if the Required Lenders elect to evidence their Term Loan
Commitments with Promissory Notes, each Company shall have executed and
delivered to each Lender a Promissory Note in the form attached hereto as Exhibit
C.

 

(n)           Pledge
Agreements.  Each
Company shall have executed and delivered to the Agent, for the benefit of the
Lenders, a Pledge Agreement covering all Capital Stock in such Company’s
Subsidiaries that is included within the defined term “Investment Property” and
therefore Collateral under the terms of this Financing Agreement.

 

(o)           Financial
Statements; Projections.  The Agent shall have received (i) interim
financial statements of the Companies and its respective Subsidiaries, on a
consolidated basis, for the monthly period ending closest to the Closing Date,
(ii) internally prepared projections on a monthly basis for the remainder of
fiscal year 2005, on a quarterly basis for fiscal year 2006, and on an annual
basis for fiscal years 2007-2009, and (iii) such other financial information
with respect to the Companies and each of its respective Subsidiaries as the
Agent may reasonably require.

 

(p)           Material
Adverse Change.  Since
April 30, 2005, there shall have occurred no material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or liabilities of the Companies and their Subsidiaries taken as a
whole.

 

(q)           Material
Adverse Change in Commercial Finance Loan Market.  Since the date of the Commitment Letter,
there shall have occurred no material adverse change or material disruption in
the market for commercial finance loans similar to the Line of Credit provided
for herein which could reasonably be expected to have a material adverse effect
on the Line of Credit or the syndication thereof.

 

(r)           Commitment Letter. 
Each Company shall have fully complied with all of the terms and
conditions of the Commitment Letter.

 

Upon the execution of this
Financing Agreement and the initial disbursement of the Term Loan and the
initial Revolving Loan hereunder, all of the above conditions precedent shall
have been deemed satisfied, except as the Companies and the Agent shall
otherwise agree in a separate writing.

 

SECTION 3.  
Revolving Loans and Collections

 

3.1          Funding Conditions and Procedures.

 

(a)           Amounts
and Requests.   
Subject to the terms and conditions of this Financing Agreement, the
Agent and the Lenders, pro  rata in accordance with their
respective Pro Rata Percentages, severally (and not jointly) agree to make
loans and advances to the Funds Administrator on behalf of each Company on a
revolving basis (i.e. subject to the limitations set forth herein, each
Company, through the Funds Administrator, may borrow, repay and re-borrow
Revolving Loans). In no event shall the Agent or any Lender have an obligation
to make a Revolving Loan to any

 

29

 

Company, nor shall the Funds
Administrator or any Company be entitled to request or receive a Revolving
Loan, if (i) a Default or Event of Default shall have occurred and remain
outstanding on the date of request for such Revolving Loan or the date of the
funding thereof, (ii) the amount of such Revolving Loan, when added to the
principal amount of the Revolving Loans outstanding plus the undrawn
amount of all Letters of Credit on the date of the request therefor or the
funding thereof, would exceed the amount of the Revolving Line of Credit then
in effect, or (iii) the amount of such Revolving Loan would exceed the Net
Availability of the Companies on the date of the request therefor or the
funding thereof.  Any request for a
Revolving Loan must be received from the Funds Administrator by an authorized
representative of the Agent no later than 11:00 a.m., eastern time, on the
Business Day on which such Revolving Loan is required.

 

(b)           Amount
of Revolving Line of Credit.  The
amount of the Revolving Line of Credit shall, on the Closing Date, be in the
amount of $75 million.  The Companies, at
their option exercisable by the giving by the Funds Administrator of a
Revolving Line of Credit Increase Notice to the Agent, shall have the right at
any time before the Termination Date to increase the amount of the Revolving
Line of Credit from $75 million to $100 million (such increase, the “Revolving
Line of Credit Increase”), to become effective upon the date set forth in
the Revolving Line of Credit Increase Notice (but in no event earlier than ten
(10) Business Days after the Agent’s receipt thereof), provided,
however, that no requested Revolving Line of Credit Increase shall become
effective until such time as each of the following conditions are first
satisfied: (i) no Default or Event of Default shall exist immediately before,
or immediately after giving effect to, the Revolving Line of Credit Increase,
(ii) the Companies shall have paid to the Agent for the ratable benefit of the
Lenders the “Additional Facility Fee” as defined in the Agent Fee Agreement
based on the amount of the Revolving Line of Credit Increase, (iii) immediately
before, and without giving effect to, the Revolving Line of Credit Increase,
the Companies are in compliance with all of the financial covenants set forth
in Section 7.3 of this Financing Agreement (irrespective of whether,
pursuant to the preamble of such Section 7.3, such financial covenants
are then being tested), and (iv) if requested by the Required Lenders, each Company
shall have executed and delivered to each Lender an amended and restated
Promissory Note, substantially in the form of Exhibit B to this
Financing Agreement in the amount of each Lender’s Pro Rata Percentage of its
Revolving Line of Credit Commitment, as so increased.  Upon receipt of the Revolving Line of Credit
Increase Notice from the Funds Administrator, the Agent shall promptly send a
copy thereof to each Lender.

 

(c)           Phone
and Electronic Loan Requests.  The
Companies hereby authorize the Agent and the Lenders to make Revolving Loans to
the Funds Administrator based upon a telephonic or e-mail request (or, if
permitted by the Agent, based upon a request posted on CIT’s System) made by
any officer or other employee of the Funds Administrator that the Funds
Administrator has authorized in writing to request Revolving Loans hereunder,
as reflected by the Agent’s records. 
Each telephonic, e-mail or posted request by the Funds Administrator
shall be irrevocable, and the Funds Administrator agrees to confirm any such
request for a Revolving Loan in a writing approved by the Agent and signed by
such authorized officer or employee, within one (1) Business Day of the Agent’s
request for such confirmation.  The Agent
shall have the right to rely on any telephonic, e-mail or posted request for a
Revolving Loan made by anyone purporting to be an officer or other employee of
the Funds Administrator that the Funds Administrator has authorized in writing
to request Revolving Loans hereunder, without further investigation.

 

30

 

(d)           Advances
by the Agent.  The
Agent, on behalf of the Lenders, shall disburse all Revolving Loans and other
advances to the Funds Administrator and shall handle all collections of
Collateral and repayment of all Obligations. 
It is understood that for purposes of advances to the Funds
Administrator and for purposes of this Section 3.1, the Agent will be
using the funds of the Agent, and pending settlement, all interest accruing on
such advances shall be payable to the Agent.

 

(e)           Settlement Among Lenders.

 

(i)            Unless the Agent
shall have been notified in writing by any Lender prior to any advance to the
Funds Administrator that such Lender will not make the amount which would
constitute its Pro Rata Percentage of the borrowing on such date available to
the Agent, the Agent may assume that such Lender shall make such amount
available to the Agent on a Settlement Date, and in reliance upon such
assumption, the Agent may make available to the Funds Administrator a
corresponding amount.  A certificate of
the Agent submitted to any Lender with respect to any amount owing under this
subsection shall be conclusive, absent manifest error.  If such Lender’s Pro Rata Percentage of such
borrowing is not in fact made available to the Agent by such Lender on the
Settlement Date, the Agent shall be entitled to recover from the Companies, on
demand, such Lender’s Pro Rata Percentage of such borrowing, together with
interest thereon (for the account of the Agent) at the rate per annum
applicable to such borrowing, without prejudice to any rights which the Agent
may have against such Lender under Section 13.3 hereof.  Nothing contained herein shall be deemed to
obligate the Agent to make available to the Companies the full amount of a
requested advance when the Agent has any notice (written or otherwise) that any
of the Lenders will not advance its Pro Rata Percentage thereof.

 

(ii)           On each Settlement
Date, the Agent and the Lenders shall each remit to the other, in immediately
available funds, all amounts necessary so as to ensure that, as of the
Settlement Date, the Lenders shall have advanced their respective Pro Rata
Percentages of all outstanding Revolving Loans and the Term Loan.  Each Lender’s obligation to make the
Revolving Loans referred to in Section 3.1(a) and to make the
settlements pursuant to this Section 3.1(e) shall be absolute and
unconditional and shall not be affected by any circumstance, including without
limitation (v) any set-off, counterclaim, recoupment, defense or other right
which any such Lender or the Companies may have against the Agent, the other
Companies, any other Lender or any other person, (w) the occurrence or
continuance of a Default or an Event of Default, (x) any adverse change in the
condition (financial or otherwise) of the Companies, or any of them, (y) any
breach of this Financing Agreement or any other Loan Document by the Companies,
or any of them, or any other Lender or (z) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.

 

(f)            Reaffirmation
of Representations and Warranties.  Except
for the representations and warranties set forth in Sections 6.6, 6.7,
6.8, and 7.1, all of the representations and warranties made by
the Companies in this Financing Agreement shall be deemed to be remade by the
Companies each time that the Funds Administrator requests a Revolving Loan or a
Letter of Credit under this Financing Agreement, and each such request shall
also constitute a representation and warranty by the Companies that, after
giving effect to the requested Revolving Loan or Letter of Credit, no Default
or Event of Default shall have occurred and remain outstanding.

 

31

 

(g)           Funds
Administrator Appointment.  Each
Company hereby irrevocably appoints the Funds Administrator, as the agent for
such Company on its behalf, to (i) request Revolving Loans from the Lenders, (ii) to give and receive
notices under the Loan Documents and (iii) take all other action which the
Funds Administrator or the Companies are permitted or required to take under
this Financing Agreement.

 

3.2          Handling
of Proceeds of Collateral; Cash Dominion.

 

(a)           Collection
of Accounts and Other Proceeds. 
The Companies, at their expense, will enforce and collect payments
and other amounts owing on all Accounts in the ordinary course of the
Companies’ business subject to the terms hereof.  The Companies agree to direct their account
debtors to send payments on all Accounts directly to the Agent Lockbox or other
lockbox associated with a Depository Account, and to include on all of the
Companies’ invoices the address of the Agent Lockbox or such other lockbox, as
the sole address for remittance of payment. Notwithstanding the foregoing,
should any Company ever receive any payment on an Account or other Proceeds of
the sale or other disposition of Collateral, including checks, cash, receipts
from credit card sales and receipts, notes or other instruments or property
with respect to any Collateral, such Company agrees to hold such proceeds in
trust for the Agent, for the benefit of the Lenders, separate from such
Company’s other property and funds, and to deposit such proceeds directly into
a Depository Account as promptly as practicable following receipt, but in no
event later than the next Business Day; provided, however, with
respect to credit card receipts due from American Express, until the Agent
requires that all sums due to the Companies from American Express be deposited
directly to a Depository Account or the Agent’s Bank Account pursuant to Section
3.2(f) of this Financing Agreement, the Companies shall deposit such credit
card receipts directly into a Depository Account no later than the end of the
week in which such payment is received or as more frequently as the Agent shall
require.

 

(b)           Transfer
of Funds from Depository Account.  
Funds remaining on deposit in a Depository Account shall be
transferred as follows:  (i) if and for
so long as Net Availability is less than $30 million, or an Event of Default
exists, such funds shall be transferred to the Agent’s Bank Account on each
Business Day in accordance with the terms and provisions of the applicable
Depository Account Control Agreement; and (ii) if and for so long as Net
Availability is more than $30 million, and no Event of Default exists, such
funds shall be transferred to an account of the Companies as the Funds
Administrator shall direct in accordance with the terms and provisions of the
applicable Depository Account Control Agreement.  The Agent and the Companies agree to take all
actions reasonably necessary or requested by the other party or by any bank at
which a Depository Account is maintained in order to effectuate the transfer of
funds in this manner.

 

(c)           Transfer
of Funds from Agent Lockbox.  All
items of payment constituting Proceeds of Collateral which are received by the
Agent in the Agent Lockbox shall be applied to the Obligations in accordance
with Section 3.5 hereof.

 

(d)           Receipt
of Funds by the Agent.  Subject to charges for Collection Days, all
items received from a Depository Account or in the Agent Lockbox and deposited
into the Agent’s Bank Account will, for purposes of calculating Net
Availability and interest, be credited to the Revolving

 

32

 

Loan Account on the date of
deposit in the Agent’s Bank Account.  No
checks, drafts or other instruments received by the Agent shall constitute
final payment to the Agent unless and until such instruments have actually been
collected.

 

(e)           New
Depository Accounts.  Each
Company agrees not to open any lockbox or new bank account into which Proceeds
of Collateral are to be delivered or deposited unless concurrently with the
opening of such lockbox and/or bank account, the Agent, such Company and the
bank which will maintain such lockbox or at which such account will be
maintained, execute a Depository Account Control Agreement with respect to such
lockbox and/or related bank account. 
Upon compliance with the terms set forth above, such lockbox and/or bank
account shall constitute a Depository Account for purposes of this Financing
Agreement.

 

(f)            Credit
Card Receipts.  Each
Company agrees, promptly upon the Agent’s request, to direct all credit card
processors handling proceeds of sale of such Company’s Inventory to transfer
all funds due to such Company pursuant to such arrangement directly to a
Depository Account or to the Agent’s Bank Account.  Promptly after the establishment of any
credit card processing or depository relationship, the Companies agree to
notify the Agent in writing of the establishment of such relationship and,
promptly upon the Agent’s request, shall cause the credit card processor to
execute and deliver to the Agent an agreement in form and substance
satisfactory to the Agent, pursuant to which the credit card processor agrees
to deposit all sums due to the Companies (or any of them) pursuant to such
arrangement directly to a Depository Account or the Agent’s Bank Account.

 

(g)           Effective
Date with Respect to Retail Operations.  The provisions of this Section 3.2 shall not
become effective with respect to the Proceeds of Collateral arising from the
operations of the Companies’ retail stores until sixty (60) days from the
Closing Date.

 

3.3          Collective Borrowing Arrangement; Revolving Loan
Account.

 

(a)           Collective Borrowing Arrangement.   The Companies have informed the Agent
that: (i) in order to increase the efficiency and productivity of each Company,
the Funds Administrator has established a centralized cash management system
for the Companies that entails, in part, central disbursement and operating
accounts in which the Funds Administrator provides the working capital needs of
each of the other Companies and manages and timely pays the accounts payable of
each of the other Companies; (ii) the Funds Administrator further enhances the
operating efficiencies of the other Companies by purchasing, or causing to be
purchased, in the Funds Administrator’s name for its account, all or
substantially all materials, supplies, inventory and services required by the
other Companies, resulting in a reduction in operating costs of the other
Companies; and (iii) all of the Companies presently engage in an integrated
operation that requires financing on an integrated basis, and each Company
expects to benefit from the continued successful performance of such integrated
operations.  Therefore, in order to best
utilize the borrowing powers of the Companies in the most effective and cost
efficient manner and to avoid adverse effects on the operating efficiencies of
each Company and the existing back-office practices of the Companies,
each Company has requested that all Revolving Loans, the Term Loan and other
advances be disbursed solely upon the request of the Funds Administrator and to
bank accounts managed solely by the Funds Administrator, it being the intent
and desire of the Companies that the Funds Administrator manage for the benefit
of each Company the expenditure and usage of such funds.

 

33

 

(b)           Revolving
Loan Account.  The Agent
shall charge the Revolving Loan Account for all Revolving Loans and other
advances made by the Agent and the Lenders to the Funds Administrator, or
otherwise for any Company’s account, principal payments on the Term Loan when
due, and for all any other Obligations, including Out-of-Pocket Expenses, when
due and payable hereunder.   Subject to
the provisions of Section 3.5 below, the Agent will credit the Revolving
Loan Account with all amounts received by the Agent from each Depository
Account or from others for each Company’s account, including, as set forth
above, all amounts received by the Agent in payment of Accounts, or deposited
by the Agent for the account of the Companies in the Agent’s Bank Account, and
such amounts will be applied to payment of the Obligations in the order and
manner set forth herein.  In no event
shall prior recourse to any Account or other security granted to or by the
Companies be a prerequisite to the Agent’s or the Lenders’ rights to demand
payment of any of the Obligations.  In
addition, the Companies agree that neither the Agent nor any Lender shall have
any obligation whatsoever to perform in any respect any Company’s contracts or
obligations relating to the Accounts.

 

3.4          Repayment of Overadvances.    If
at any time (a) the sum of the outstanding
balance of Revolving Loans and undrawn amount of Letters of Credit exceed the
Revolving Line of Credit, or (b) an Overadvance exists, the amount of such
excess (in the case of clause (a)) or the amount of the Overadvance (in the
case of clause (b)) shall be immediately due and payable unless the Agent (as
permitted hereunder) or the Lenders otherwise agree in writing.  Should the Agent or the Lenders for any reason
honor requests for Overadvances, such Overadvances shall be made in the Agent’s
or the Lenders’ sole discretion and subject to any additional terms the Agent
or the Lenders deem necessary.

 

3.5          Application
of Proceeds of Collateral.

 

(a)           Generally.  Unless this Financing Agreement expressly
provides otherwise, so long as no Event of Default shall have occurred and
remain outstanding, the Agent agrees to apply (i) all Proceeds of Trade
Accounts Receivable and Inventory to the Revolving Loan Account, (ii) all
Proceeds of all other Collateral, to the last maturing installments of
principal of the Term Loan until fully repaid, and (iii) any other payment
received by the Agent with respect to the Obligations, in such order and manner
as the Agent shall elect in the exercise of its reasonable discretion.

 

(b)           Application of Proceeds During an Event of Default.  If an Event of Default shall have
occurred and remain outstanding, the Agent agrees to apply all Proceeds of
Collateral and all other payments received by the Agent to the payment of the
Obligations in the manner and order set forth in Section 10.4 hereof.

 

3.6          Monthly Statement.    After
the end of each month, the Agent agrees to prepare and make available to the
Companies (by mail, facsimile, e-mail or posting to CIT’s System, as mutually
agreed to by the Funds Administrator and the Agent) and the Lenders, a
statement showing the accounting for the charges, loans, advances and other
transactions occurring among the Agent, the Lenders, the Funds Administrator
and each Company during that month.  
Absent manifest error, each monthly statement shall be deemed correct
and binding upon each Company, the Funds Administrator and the Lenders, and
shall constitute accounts stated between the Companies and the

 

34

 

Funds Administrator on one
hand, and the Lenders and the Agent on the other hand, as the case may be,
unless the Agent receives a written statement of exception from the Companies,
the Funds Administrator or any Lender within sixty (60) days of the date of
such monthly statement.

 

3.7          Access
to CIT’s System.   The Agent shall
provide to the Funds Administrator access to CIT’s
System during normal business hours, for the purposes of (i) obtaining
information regarding loan balances and Net Availability, and (ii) if permitted
by the Agent, making requests for Revolving Loans and submitting borrowing base
certificates.  Such access shall be
subject to the following terms, in addition to all terms set forth on the website
for CIT’s System:

 

(a)           The Agent shall
provide to the Funds Administrator an initial password for secured access to
CIT’s System.  The Funds Administrator
shall provide the Agent with a list of officers and employees that are
authorized from time to time to access CIT’s System, and the Funds
Administrator agrees to limit access to the password and CIT’s System to such
authorized officers and employees.  After
the initial access, the Funds Administrator shall be solely responsible for (i)
changing and maintaining the integrity of the Funds Administrator’s password
and (ii) any unauthorized use of the Funds Administrator’s password or CIT’s
System by any Company’s officers and employees.

 

(b)           The Companies shall
use CIT’s System and the Companies’ information thereon solely for the purposes
permitted above, and shall not access CIT’s System for the benefit of third
parties or provide any information obtained from CIT’s System to third
parties.  The Agent makes no representation
that loan balance information is or will be available, accurate, complete,
correct or current at all times.  CIT’s
System may be inoperable or inaccessible from time to time, whether for
required website maintenance, upgrades to CIT’s System, or for other reasons,
and in any such event the Funds Administrator must obtain loan
balance, and (if permitted by the Agent) make requests for Revolving Loans and
submit borrowing base certificates using other available means.

 

(c)           The Companies hereby
confirm and agree that CIT’s System consist of proprietary software, data,
tools, scripts, algorithms, business logic, website designs and interfaces and
related intellectual property, information and documentation.  CIT’s System and related intellectual property,
information and documentation are the sole and exclusive property of the Agent,
and the Companies shall have no right, title or interest therein or thereto,
except for the limited right to access CIT’s System for the purposes permitted
above.  Upon termination of this
Financing Agreement or the Commitments of the Lenders hereunder, the Companies
agree to cease any use of CIT’s System.

 

(d)           All
agreements, covenants and representations and warranties made by the Funds
Administrator in any borrowing base certificate submitted to the Agent by means
of CIT’s System are incorporated herein by reference and shall be deemed to be
made by each Company.

 

SECTION 4.   Term Loan.

 

4.1          Promissory Notes Evidencing Term Loan.    If
the Required Lenders elect to evidence the Term Loan with Promissory Notes, the Companies agree to execute and deliver
to each Lender a Promissory Note to evidence the Pro Rata Percentage of the
Term Loan to be made to the

 

35

 

Companies by such Lender.

 

4.2          Funding of Term Loan.  Upon the satisfaction of the conditions set
forth in Section 2.1, each of the Lenders (severally and not jointly)
agrees to advance to the Companies such Lender’s Pro Rata Percentage of the
Term Loan.

 

4.3          Repayment of
Principal of the Term Loan.  If, on January
31, 2006, all or any part of the Term Loan remains unpaid, (a) the remaining
unpaid principal balance shall be repaid in equal quarterly installments,
commencing March 31, 2006, based on a seven (7) year amortization with the
remaining principal balance being due and payable in full on March 31, 2009,
and (b) no later than March 31, 2006, the Companies shall deliver to the Agent
the Trademark Appraisal and the Term Loan Reserve shall be established if
required.

 

4.4          Mandatory
Prepayments of the Term Loan.  In
addition to the payments on the Term Loan set forth in Section 4.3
hereof, if the Companies receive any Net Proceeds, the Companies shall pay to
the Agent, for the ratable benefit of the Lenders, no later than five (5)
Business Days after receipt thereof, as a mandatory prepayment of the principal
of the Term Loan, in each case without the payment of any prepayment premium or
penalty, a sum equal to one hundred percent (100%) of such Net Proceeds; provided,
however, if no Default or Event of Default shall exist, the first $12.0
million of Net Issuance Proceeds may be used by Under Armour, instead of making
a mandatory prepayment of the Term Loan pursuant to this Section 4.4, to
make a Permitted Distribution of the kind described in clause (b) of the
definition thereof.

 

4.5          Optional
Prepayments of the Term Loan.   The Companies, at their option, may prepay
the Term Loan at any time, in whole or in part, in each case without the
payment of any prepayment premium or penalty, provided that on the date
of such prepayment, there shall be due and payable accrued interest on the
principal so prepaid to the date of such prepayment.

 

4.6          Provisions Regarding the Term Loan.

 

(a)           Repayment
Upon Termination. In the event this Financing
Agreement or the Commitments of the Lenders hereunder are terminated by either
the Agent, the Required Lenders or the Companies for any reason whatsoever, the
Term Loan, together with all accrued interest thereon, shall be due and payable
in full on the effective date of such termination, notwithstanding any other
provision of this Financing Agreement or the Promissory Notes to the contrary.

 

(b)           Application of Prepayments.  Except as the Required Lenders and the
Companies shall otherwise agree in a separate writing, each prepayment of the
Term Loan (whether voluntary or mandatory) shall be applied to the last
maturing installments of principal of the Term Loan until fully repaid.

 

(c)           No
Reborrowing.  To
the extent repaid, the principal amount of the Term Loan may not be reborrowed
under this Section 4.

 

(d)           Authority to
Charge Revolving Loan Account.  The Companies hereby authorize

 

36

 

the Agent, without notice to
the Companies, to charge the Revolving Loan Account with all payments due under
this Section 4 as such amounts become due.  The Companies confirm that any charges which
the Agent may make to the Revolving Loan Account as provided herein will be
made as an accommodation to the Companies and solely at the Agent’s discretion.

 

SECTION
5.   Letters of Credit.

 

In order to assist the Companies (or any of them) in establishing or
opening Letters of Credit with an Issuing Bank, the Companies have requested
that the Lenders (acting through the Agent) join in the applications for such
Letters of Credit, and/or guarantee payment or performance of such Letters of
Credit and any drafts or acceptances thereunder through the issuance of one or
more Letter of Credit Guaranties, thereby lending the Lenders’ credit to the
Companies, and the Agent and the Lenders have agreed to do so.  These arrangements shall be handled by the
Agent subject to satisfaction of the conditions set forth in Section 2.1
hereof and the terms and conditions set forth below.

 

5.1          Assistance and Purpose.   Within the Revolving Line of Credit and
subject to sufficient Net Availability, the Lenders (acting through the Agent)
shall assist the Companies in obtaining Letters of Credit in an aggregate
undrawn amount outstanding at any time not to exceed the Letter of Credit Sub-Line.  The term, form and purpose of each Letter of
Credit and all documentation in connection therewith, and any amendments,
modifications or extensions thereof, must be mutually acceptable to the Agent,
the Issuing Bank and the Funds Administrator, provided that the
Companies shall not request a Letter of Credit to support the purchase of
domestic Inventory or to secure present or future indebtedness owed to
suppliers of domestic Inventory. 
Notwithstanding any other provision of this Financing Agreement to the
contrary, if a Default or an Event of Default shall have occurred and remain
outstanding, the Agent’s and the Lenders’ assistance in connection with any
Letter of Credit shall be in the discretion of the Required Lenders.

 

5.2          Authority to Charge Revolving Loan Account.
  The
Companies hereby authorize the Agent, without notice to the Companies, to
charge the Revolving Loan Account with the amount of all indebtedness,
liabilities and obligations of any kind incurred by the Agent or the Lenders
under a Letter of Credit Guaranty, including the charges of an Issuing Bank, as
and when such indebtedness, liabilities and obligations is paid by the Agent or
the Lenders, or, if earlier, upon the occurrence of an Event of Default.  Any amount charged to the Revolving Loan
Account shall be deemed a Chase Bank Rate Loan hereunder and shall incur
interest at the rate provided in Section 8.1 (or Section 8.2, if
applicable) of this Financing Agreement. 
The Companies confirm that any charges which the Agent may make to the
Revolving Loan Account as provided herein will be made as an accommodation to
the Companies and solely at the Agent’s discretion.

 

5.3          Indemnity Relating to Letters of Credit.
  Each
Company jointly and severally unconditionally indemnifies the Agent and the
Lenders, and holds the Agent and the Lenders harmless from any and all loss,
claim or liability incurred by the Agent or the Lenders arising from any
transactions or occurrences relating to Letters of Credit established or opened
for any Company’s account, the Collateral relating thereto and any drafts or
acceptances thereunder, and all Obligations thereunder, including any such
loss, claim or liability arising from any error, omission, negligence,
misconduct or other action taken by an Issuing Bank, other than for any such
loss, claim or liability

 

37

 

arising out of the gross
negligence or willful misconduct by the Agent with respect to a Letter of
Credit Guaranty.  This indemnity shall
survive the termination of this Financing Agreement and the Commitments of the
Lenders hereunder and the repayment of the Obligations.

 

5.4          Compliance of Goods, Documents and Shipments with
Agreed Terms.    The Agent shall not be responsible
for: (a) the existence, character, quality,
quantity, condition, packing, value or delivery of the goods purporting to be
represented by any documents relating to any Letter of Credit; (b) any difference or variation in the character, quality,
quantity, condition, packing, value or delivery of the goods from that
expressed in such documents; (c) the validity,
sufficiency or genuineness of such documents or of any endorsements thereon,
even if such documents should in fact prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (d) the
time, place, manner or order in which shipment is made; (e) partial
or incomplete shipment, or failure or omission to ship any or all of the goods
referred to in the Letters of Credit or documents relating thereto; (f) any
deviation from instructions; (g) delay, default, or fraud by the shipper and/or
anyone else in connection with the goods or the shipping thereof; or (h) any breach of contract between the shipper or vendors and
any Company.

 

5.5          Handling of Goods, Documents and Shipments.
  The
Companies agree that any action taken by the Agent, if taken in good faith, or
any action taken by the Issuing Bank of whatever nature, under or in connection
with the Letters of Credit, the Letter of Credit Guaranties, drafts or acceptances
relating to Letters of Credit, or the goods subject thereto, shall be binding
on each Company and shall not result in any liability whatsoever of the Agent
to the Companies.  The Agent shall have
the full right and authority, on behalf of the Lenders, to (a) clear and
resolve any questions of non-compliance of documents, (b) give any
instructions as to acceptance or rejection of any documents or goods, (c)
execute any and all steamship or airway guaranties (and applications therefor),
indemnities or delivery orders, (d) grant any extensions of the maturity of,
time of payment for, or time of presentation of, any drafts, acceptances, or
documents, and (e) agree to any amendments, renewals, extensions,
modifications, changes or cancellations of any of the terms or conditions of
any of the applications, the Letters of Credit, the Letter of Credit Guaranties
or drafts or acceptances relating to Letters of Credit.  An Issuing Bank shall be entitled to comply
with and honor any and all such documents or instruments executed by or
received solely from the Agent, without any notice to or any consent from the
Companies or the Funds Administrator.  Notwithstanding
any prior course of conduct or dealing with respect to the foregoing (including
amendments to and non-compliance with any documents, and/or the Companies’ or
the Funds Administrator’s instructions with respect thereto), the Agent may
exercise its rights under this Section 5.5 in its sole but reasonable
discretion.  In addition, each Company
and the Funds Administrator agree, unless consented to by the Agent in writing,
not to: (a) at any time, (i) execute any application for steamship or airway
guaranties, indemnities or delivery orders, (ii) grant any extensions of the
maturity of, time of payment for, or time of presentation of, any drafts,
acceptances or documents, or (iii) agree to any amendments, renewals,
extensions, modifications, changes or cancellations of any of the terms or
conditions of any of the applications, Letters of Credit, drafts or acceptances;
and (b) if an Event of Default shall have occurred and remain outstanding, (i)
clear and resolve any questions of non-compliance of documents or (ii)
give any instructions as to acceptances or rejection of any documents or goods.

 

5.6          Compliance with Laws; Payment of Levies and Taxes.   The Companies agree that

 

38

 

(a) all necessary import and
export licenses and certificates necessary for the import or handling of the
Collateral will be promptly procured, (b) all foreign and domestic governmental
laws and regulations in regard to the shipment and importation of the
Collateral or the financing thereof will be promptly and fully complied with in
all material respects, and (c) any certificate in that regard that the Agent
may at any time reasonably request will be promptly furnished to the Agent. 
In connection herewith, the Companies represent and
warrant to the Agent and the Lenders that, to the best of its knowledge, all
shipments made under any Letter of Credit are and will be in compliance in all
material respects with the laws and regulations of the countries in which the
shipments originate and terminate, and are not prohibited by any such laws and
regulations.  The Companies assume all
risk, liability and responsibility for, and agree to pay and discharge, all
present and future local, state, federal or foreign Taxes, duties, or levies
pertaining to the importation and delivery of the Collateral.  Any embargo, restriction, law, custom or
regulation of any country, state, city, or other political subdivision, where
the Collateral is or may be located, or wherein payments are to be made, or
wherein drafts may be drawn, negotiated, accepted, or paid, shall be solely the
Companies’ risk, liability and responsibility.

 

5.7          Subrogation Rights.   Upon any payments made to an Issuing Bank
under a Letter of Credit Guaranty, the Agent, for the benefit of the Lenders,
shall acquire by subrogation, any rights, remedies, duties or obligations
granted to or undertaken by the Companies, or any of them, to the Issuing Bank
in any application for Letter of Credit, any standing agreement relating to
Letters of Credit or otherwise, all of which shall be deemed to have been
granted to the Agent, for the benefit of the Lenders, and apply in all respects
to the Agent and shall be in addition to any rights, remedies, duties or
obligations contained herein.

 

39

 

SECTION 6.   Collateral

 

6.1          Grant of Security Interest.    (a) As
security for the prompt payment in full of all Obligations, each Company hereby
pledges and grants to the Agent, for the benefit of the Lenders, a continuing
general lien upon, and security interest in, all of the Collateral in which
such Company has rights.

 

(b)            Extent of Security Interests.  The security interests granted hereunder
shall extend and attach to:

 

(i)             all Collateral
which is presently in existence or hereafter acquired and which is owned by any
Company or in which any Company has any interest, whether held by such Company
or by others for such Company’s account, and wherever located, and, if any
Collateral is Equipment, whether such Company’s interest in such Equipment is
as owner, lessee or conditional vendee;

 

(ii)            all Equipment
whether the same constitutes personal property or fixtures, including, but
without limiting the generality of the foregoing, all dies, jigs, tools,
benches, molds, tables, accretions, component parts thereof and additions
thereto, as well as all accessories, motors, engines and auxiliary parts used
in connection with, or attached to, the Equipment; and

 

(iii)           all Inventory and
any portion thereof which may be returned, rejected, reclaimed or repossessed
by either the Agent or the Companies from the Companies’ customers, as well as
to all supplies, goods, incidentals, packaging materials, labels and any other
items which contribute to the finished goods or products manufactured or
processed by the Companies, or to the sale, promotion or shipment thereof.

 

6.2          Representations,
Covenants and Agreements Regarding Collateral Generally.

 

(a)           Representations
and Warranties.  The
Companies represent and warrant to the Agent and the Lenders that except for
the Permitted Encumbrances, (i) upon the filing of UCC financing statements covering
the Collateral in all required jurisdictions, this Financing Agreement creates
a valid, perfected and first priority security interest in all personal
property of the Companies as to which perfection may be achieved by filing,
(ii) the Agent’s security interests in the Collateral constitute, and will at
all times constitute, first priority liens on the Collateral, and (iii) each Company is, or will be at the time additional
Collateral is acquired by such Company, the absolute owner of such additional
Collateral with full right to pledge, sell, transfer and create a security
interest therein, free and clear of any and all claims or liens other than
Permitted Encumbrances.

 

(b)           Covenants.    The Companies, at their expense, agree
to forever warrant and defend the Collateral from any and all claims and
demands of any other person, other than holders of Permitted Encumbrances.

 

6.3          Representations Regarding Accounts and Inventory.   The Companies represent and warrant to the
Agent and the Lenders that:

 

(a)           each
Trade Account Receivable is based on an actual and bona fide sale and delivery

 

40

 

of Inventory or rendition of
services to customers, made by the Companies in the ordinary course of their
business;

 

(b)           the Inventory being
sold and the Trade Accounts Receivable created by such sales are the exclusive
property of the Companies and are not subject to any lien, consignment
arrangement, encumbrance, security interest or financing statement whatsoever,
other than Permitted Encumbrances;

 

(c)           the invoices
evidencing such Trade Accounts Receivable are in the name of the Companies;

 

(d)           the customers of the
Companies have accepted the Inventory or services, owe and are obligated to pay
the full amounts stated in the invoices according to their terms, without
dispute, offset, defense, counterclaim or contra, except for disputes and other
matters arising in the ordinary course of business of which the Companies are
required to notify, and have so notified, the Agent pursuant to Section
7.2(g) hereof;  and

 

(e)           the Companies’
Inventory is marketable in the ordinary course of the Companies’ businesses,
and no Inventory has been produced in violation of the Fair Labor Standards Act
(29 U.S.C. §201 et seq.), as amended.

 

6.4          Covenants
and Agreements Regarding Accounts and Inventory.

 

(a)           Each Company
confirms to the Agent and the Lenders that all Taxes and fees relating to such
Company’s business, such Company’s sales, and the Accounts or Inventory
relating thereto, are such Company’s sole responsibility, and that same will be
paid by such Company when due, subject to Section 7.2(d) hereof, and
that none of said Taxes or fees represents a lien on or claim against the
Accounts, other than a Permitted Tax Lien.

 

(b)           Each Company agrees
not to acquire any Inventory on a consignment basis, nor co-mingle its
Inventory with any goods of its customers or any other person (whether pursuant
to any bill and hold sale or otherwise).

 

(c)           Each Company agrees
to maintain such books and records regarding Accounts and Inventory as the
Agent reasonably may require and agrees that the books and records of such
Company will reflect the Agent’s interest in the Accounts and Inventory.  In
support of the continuing assignment and security interest of the Agent in the
Accounts and Inventory, the Companies agree to deliver to the Agent all of the
schedules, reports and other information described in Section 7.2(g) of
this Financing Agreement.  The Companies’
failure to maintain their books in the manner provided herein or to deliver to
the Agent any of the foregoing information shall in no way affect, diminish,
modify or otherwise limit the security interests granted to the Agent in the
Accounts and Inventory.

 

(d)           Each
Company agrees to issue credit memoranda promptly after accepting returns or
granting allowances, and to deliver to the Agent copies of such credit
memoranda as and when required to do so under Section 7.2(g) hereof.

 

41

 

(e)            Each Company agrees
to safeguard, protect and hold all Inventory for the account of the Agent, on
behalf of the Lenders, and to make no sale or other disposition thereof except
in the ordinary course of such Company’s business, on open account and on
commercially reasonable terms consistent with such Company’s past
practices.  Notwithstanding the ordinary
course of any Company’s business or any Company’s past practices, each Company
agrees not to sell Inventory on a consignment basis, nor retain any lien on or
security interest in any Inventory sold. 
As to any sale or other disposition of Inventory, the Agent shall have
all of the rights of an unpaid seller, including stoppage in transit, replevin,
rescission and reclamation.  Each Company
agrees to handle all Proceeds of sales of Inventory in accordance with the
provisions of Section 3.2 hereof.

 

6.5          Covenants and Agreements Regarding Equipment.

 

(a)           Maintenance
of Equipment.  Each
Company agrees to (i) maintain the Equipment, taken as a whole, in as good and
substantial repair and condition as the Equipment owned by such Company is now
maintained (or at the time that the Agent’s security interest may attach to
such Equipment), reasonable wear and tear excepted, (ii) make any and all
repairs and replacements when and where reasonably necessary, and (iii)
safeguard, protect and hold all Equipment owned by such Company in accordance
with the terms hereof and subject to the Agent’s security interest.  The Equipment will only be used by the
Companies in the operation of their respective businesses and will not be sold
or held for sale or lease, except as expressly provided in Section 6.6(b)
below.

 

(b)           Sales
of Equipment.  The
Companies and their Subsidiaries may sell obsolete Equipment or surplus
Equipment from time to time in the ordinary course of business, provided
that in each instance (i) no Default or Event of Default shall have occurred
and remain outstanding at the time of such sale; and (ii) in the case of sales
by the Companies, all of the Net Proceeds of such sales are either (x) no later
than 90 days after such sale, used to purchase replacement Equipment that the
Companies determine in their reasonable business judgment to have a value at
least equal to the Equipment sold or (y) if not specifically identified for use
by the Companies and so used pursuant to the foregoing clause (x), promptly
paid by the Companies to the Agent, for application against the Term Loan in
the manner provided in Section 4.6(b) hereof (and if the Term Loan has
been fully repaid, for application to other Obligations in such manner and in
such order as the Required Lenders may elect in the exercise of their
reasonable discretion).    Pending the
use by the Companies of the Proceeds as herein authorized, such Proceeds shall
not be commingled with the Companies’ other property, but shall be segregated
and held by the Companies in trust for the Agent, for the benefit of the
Lenders.

 

6.6          General Intangibles.    Each Company represents and warrants to the
Agent and the Lenders that, as of the date hereof, and to its knowledge, such
Company possesses all General Intangibles reasonably necessary to conduct its
business as presently conducted.  Each
Company agrees to maintain such Company’s rights in, and the value taken as a
whole, of its General Intangibles, and to pay when due all payments required to
maintain in effect any licensed rights (except as such would otherwise expire,
be abandoned or permitted to lapse, in each case in the ordinary course of
business).  The Companies shall provide
the Agent with adequate notice of the acquisition of any additional registered
or issued, or applications to register or issue, Patents, Trademarks and
Copyrights so that the Agent may, for the benefit of the Lenders and to the
extent

 

42

 

permitted under the
documentation granting such rights or applicable law, perfect the Agent’s
security interest in such rights in a timely manner.

 

6.7          Commercial
Tort Claims.   
Each Company represents and warrants to the Agent and the Lenders that
as of the date hereof, such Company has no interest in any commercial tort
claim.  If any Company at any time
acquires a commercial tort claim in an amount in excess of $100,000, such
Company agrees to promptly notify the Agent in writing of the details thereof,
and , if requested by the Agent, such Company shall grant to the Agent, for the
benefit of the Lenders, a security interest in such commercial tort claim and
in the Proceeds thereof, all upon the terms of this Financing Agreement.

 

6.8          Letter
of Credit Rights. 
Each Company represents and warrants to the Agent and the Lenders that
as of the date hereof, such Company is not the beneficiary of any letter of
credit having an undrawn amount in excess of $100,000.  If any Company becomes a beneficiary under
any letter of credit having an undrawn amount in excess of $100,000, such
Company agrees to promptly notify the Agent, and upon request by the Agent,
such Company agrees to either (a) cause the issuer of such letter of credit to consent
to the assignment of the proceeds of such letter of credit to the Agent, for
the benefit of the Lenders, pursuant to an agreement in form and substance
satisfactory to the Agent, or (b) cause the issuer of such letter of credit to
name the Agent, for the benefit of the Lenders, as the transferee beneficiary
of such letter of credit.

 

6.9          Real
Estate.     Upon the request of the Agent, each Company agrees
to execute and deliver to the Agent from time to time, a mortgage or deed of
trust (as appropriate) in form and substance satisfactory to the Agent on any
Real Estate acquired by such Company after the date hereof as the Agent shall
reasonably require to obtain a valid first priority lien thereon, subject only
to Permitted Encumbrances.

 

6.10        Reference
to Other Loan Documents.    Reference
is hereby made to the other Loan Documents for additional representations,
covenants and other agreements of the Companies regarding the Collateral
covered by such Loan Documents.

 

6.11        Credit Balances; Additional Collateral.

 

(a)           The rights and
security interests granted to the Agent and the Lenders hereunder shall
continue in full force and effect, notwithstanding the termination of this
Financing Agreement or the fact that the Revolving Loan Account may from time
to time be temporarily in a credit position, until the termination of this
Financing Agreement and the full and final payment and satisfaction of the
Obligations.  Any reserves or balances to
the credit of the Companies (in the Revolving Loan Account or otherwise), and
any other property or assets of the Companies (or any of them) in the
possession of the Agent or any Lender, may be held by the Agent or such Lender
as Other Collateral, and applied in whole or partial satisfaction of such
Obligations when due, subject to the terms of this Financing Agreement.  The liens and security interests granted to
the Agent, for the benefit of the Lenders, herein and any other lien or
security interest which the Agent or the Lenders may have in any other assets
of the Companies secure payment and performance of all present and future
Obligations.

 

43

 

(b)           Notwithstanding the Agent’s security
interests in the Collateral, to the extent that the Obligations are now or
hereafter secured by any assets or property other than the Collateral, or by
the guaranty, endorsement, assets or property of any other person, the Agent
shall have the right in its sole discretion to determine which rights,
security, liens, security interests or remedies the Agent shall at any time
pursue, foreclose upon, relinquish, subordinate, modify or take any other
action with respect to, without in any way modifying or affecting any of such
rights, security, liens, security interests or remedies, or any of the Agent’s
or the Lenders’ rights under this Financing Agreement.

 

6.12        Release of Trademarks.  Upon payment in full of the Term Loan,
provided no Default or Event of Default then exists, the Agent shall release,
at the sole expense of the Companies, its lien in all of the Trademarks of the
Companies, whereupon such Trademarks shall no longer constitute Collateral
under this Financing Agreement.

 

SECTION
7.   Representations, Warranties and
Covenants

 

7.1          Representations
and Warranties.   The
Companies represent and warrant to the Agent and the Lenders that as of the
date hereof:

 

(a)           Financial
Condition.  (i) The amount
of each Company’s assets, at fair valuation, exceeds the book value of such
Company’s liabilities, (ii) each Company is generally able to pay its debts as
they become due and payable, and (iii) each Company does not have unreasonably
small capital to carry on its business as currently conducted absent
extraordinary and unforeseen circumstances. 
The audited financial statements of Under Armour and its Subsidiaries as
of the fiscal year ended December 31, 2004 and for the period then ending, and
the unaudited financial statements of Under Armour and its Subsidiaries as of
July 30, 2005 and for the period then ending, present fairly, in all material
respects, the financial condition of United Armour and its Subsidiaries as of
the date of such financial statements, subject, in the case of the July 30,
2005 financial statements, to normal year-end adjustments.

 

(b)           Organization Matters; Collateral
Locations.  Schedule
7.1(b) attached hereto correctly and completely sets forth (w) each
Companies’ exact name, as currently reflected by the records of each Companies’
State of incorporation or formation, (x) each Companies’ State of incorporation
or formation, (y) each Companies’ federal employer identification number and
State organization identification number (if any), and (z) the address of each
Companies’ chief executive office and all locations of Collateral.

 

(c)           Power and Authority; Conflicts;
Enforceability; Consents.

 

(i)            Each Company has full power and
authority to execute and deliver this Financing Agreement and the other Loan
Documents to which such Company is a party, and to perform all of such Company’s
obligations thereunder.

 

(ii)            The execution and delivery by each
of this Financing Agreement and the other Loan Documents to which such Company
is a party, and the performance of such Company’s obligations hereunder and
thereunder, have been duly authorized by all necessary corporate or other
relevant action, and do not (w) require any consent or approval of any
director, shareholder, partner or

 

44

 

member of such
Company that has not been obtained, (x) violate any term, provision or covenant
contained in the organizational documents of such Company (such as the
certificate or articles of incorporation, certificate of origin, partnership
agreement, by-laws or operating agreement), (y) violate, or cause such Company
to be in default under, any law, rule, regulation, order, judgment or award
applicable to such Company or its assets, or (z) violate any term, provision,
covenant or representation contained in, or constitute a default under, or
result in the creation of any lien under, any loan agreement, lease, indenture,
mortgage, deed of trust, note, security agreement or pledge agreement to which
such Company a signatory or by which such Company or such Company’s assets are
bound or affected, except, in the case of the foregoing clauses (y) and (z),
where the effect of any such violation would not reasonably be expected to have
a Material Adverse Effect.

 

(iii)          This Financing Agreement and the other
Loan Documents to which the Companies (or any of them) are parties constitute
legal valid and binding obligations of the Companies, enforceable in accordance
with their respective terms, subject to applicable bankruptcy, insolvency,
moratorium, fraudulent transfer and other laws affecting creditors’ rights
generally, and subject to general principles of equity, regardless of whether
considered in a proceeding at law or in equity.

 

(iv)          No
authorization, consent, approval, license or exemption (other than such
exemptions that exist under applicable law, that are permitted, or that have
been obtained) of any person or filing or registration with any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, is necessary for the valid delivery or performance by a
Company of any Loan Document to which it is a party or for the grant of a
security interest in or mortgage on the Collateral covered by the Loan
Documents, except for (i) such matters relating to performance as would
ordinarily be done in the ordinary course of business after the date hereof and
(ii) UCC filings or other filings or registrations necessary to perfect the
Agent’s liens and security interests in the Collateral.

 

(d)           Schedules.  Each of the Schedules attached to this
Financing Agreement set forth a true, correct and complete description in all
material respects of the matter or matters covered thereby.

 

(e)           Compliance
with Laws.  Each
Company and such Company’s properties are in compliance with all federal, state
and local acts, rules and regulations, and all orders of any federal, state or
local legislative, administrative or judicial body or official, except to the
extent the failure to so comply would not have a Material Adverse Effect.  Each Company has obtained and maintains all
permits, approvals, authorizations and licenses necessary to conduct its
business as presently conducted, except to the extent the failure to have such
permits, approvals, authorizations or licenses would not have a Material
Adverse Effect.

 

(f)            Environmental
Matters.  Except as set
forth on Schedule 7.1(f):

 

(i)            To the knowledge of the Companies,
none of the operations of any Company are the subject of any federal, state or
local investigation to determine whether any remedial action is needed to
address the presence or disposal of any environmental pollution, hazardous
material or environmental clean-up of the Real Estate or such Company’s leased
real property.  No enforcement proceeding, complaint, summons, citation, notice,
order, claim, litigation, letter or other

 

45

 

communication from a
federal, state or local authority has been filed against or delivered to any
Company, regarding or involving any release of any environmental pollution or
hazardous material on any real property now or previously owned or operated by
such Company.

 

(ii)           No Company has any known contingent
liability of more than $100,000 with respect to any release of any environmental
pollution or hazardous material on any real property now or previously owned or
operated by such Company.

 

(iii)          Each Company is in compliance with all
environmental statutes, acts, rules, regulations and orders applicable to the
operation of such Company’s business, except to the extent that the failure to
so comply would not have a Material Adverse Effect.

 

(g)           Pending Litigation.  Except
as previously disclosed by the Companies to the Agent in writing, there exist
no actions, suits or proceedings of any kind by or against any Company pending
in any court or before any arbitrator or governmental body, that, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect.

 

(h)           Title to Assets and Properties.  Each
Company has good title to all of its personal property and good and
indefeasible title to or a subsisting leasehold interest in, all real estate as
reflected as of the date hereof on its books and records as being owned or
leased by it after giving effect to the transaction contemplated herein.  All of such assets are being maintained by
the appropriate person in good working condition in accordance with industry
standards.

 

(i)            Default.  No Company is in default (i)
under any material provisions of any instrument evidencing any Indebtedness or
of any agreement relating thereto in such manner as to cause a Material Adverse
Effect on the business, operation, assets, financial condition or Collateral of
any Companies or (ii) in any respect under or in violation of any order, writ,
injunction or decree of any court or governmental instrumentality, in such
manner as to cause a Material Adverse Effect on the business, operation,
assets, financial condition or Collateral of the Companies or (iii) under any
provision of any material contract to which any Company is a party, which
default would reasonably be expected to have a Material Adverse Effect on the
business, operation, assets, financial condition or Collateral of the
Companies. The Companies will give the Agent written notice of any event or
circumstance that may constitute such a default no later than three (3)
Business Days after an officer of the Companies obtaining knowledge thereof,
and will also provide the Agent promptly after receipt of copies of all
material notices received from landlords or other property owners with respect
to any business location or operation of the Companies.

 

(j)            Investment Company.  No
Company is an “investment company,” as such term is defined in, or subject to
registration under, the Investment Company Act of 1940, as amended.

 

(k)           Benefit Plans.  The
Companies do not maintain or contribute to any Benefit Plan other than those
listed on Schedule 7.1(k).  Each
Benefit Plan has been and is being maintained and funded in accordance with its
terms and in compliance in all material respects with all provisions of ERISA
and the Internal Revenue Code applicable thereto. The Companies and each ERISA
Affiliate have fulfilled all obligations related to the minimum funding
standards of ERISA and the Internal Revenue Code for each Benefit Plan and no “accumulated
funding deficiency,” as such term is

 

46

 

defined
in Section 302 of ERISA and Section 412 of the Internal Revenue Code, has occurred
or is reasonably likely to occur, nor do the conditions for imposition of a
lien under Section 302(f) of ERISA exist or are they reasonably likely to
exist, with respect to any Benefit Plan, and neither the Companies nor any
ERISA Affiliate has incurred any liability (other than routine liability for
premiums) under Title IV of ERISA with respect to any Benefit Plan.  No event or events have occurred with respect
to any Benefit Plan in connection with which the Companies would be subject to
any material liability (other than routine liability for premiums,
contributions (if required) and benefits), individually or in the aggregate,
under ERISA or the Internal Revenue Code.

 

(l)            Use of Loan Proceeds.  The proceeds of the Term
Loan and the initial Revolving Loan made under this Financing Agreement shall
be used to refinance the Indebtedness owing under the Existing Financing
Agreement and to pay the costs of the closing of the transactions contemplated
by this Financing Agreement, and the proceeds of each subsequent Revolving Loan
made under this Financing Agreement will be used solely for working capital and
general corporate purposes of the Companies and their respective
Subsidiaries.  None of the proceeds of
the Revolving Loans will be used directly or indirectly for the purpose of
purchasing or carrying any “margin stock” within the meaning of Regulation U of
the Board of Governors of the Federal Reserve (herein called “Margin Stock”)
or for the purpose of reducing or retiring any Indebtedness which was originally
incurred to purchase or carry Margin Stock, or for any other purpose which
might constitute this transaction as a “purpose credit” within the meaning of
Regulation U of the Board of Governors of the Federal Reserve.  Neither the Companies nor any agent acting on
their behalf have taken or will take any action which might cause this
Financing Agreement or any other Loan Document to violate Regulations U or X of
the Board of Governors of the Federal Reserve or any other regulation of the
Board of Governors of the Federal Reserve.

 

(m)          Insurance.  The
Companies maintain insurance of such types as is usually carried by
corporations of established reputation engaged in the same or similar
businesses and similarly situated with financially sound, responsible and
reputable insurance companies or associations (or, as to workers’ compensation
or similar insurance, with an insurance fund or by self-insurance authorized by
the jurisdiction in which their operations are carried on) and in such amounts
(and with co-insurance and deductibles) as such insurance is usually carried by
corporations of established reputation and engaged in the same or similar
businesses and similarly situated, but in any event, with respect to all Real
Estate and other improvements to real property, Equipment, Inventory and other
tangible personal property, in amounts reasonably acceptable to the Agent (the
foregoing required insurance being herein called the “Required Insurance”).  Each Company and its respective Subsidiaries
maintains formalized self-insurance programs with respect to its respective
assets or operations or material risks with respect thereto, as more
particularly described on Schedule 7.1(m) attached hereto.

 

(n)           Indebtedness.  Except as set forth in Schedule
7.1(n) attached hereto, the Companies do not have any outstanding
Indebtedness (excluding the Revolving Loans) or material contractually assumed
contingent liabilities, in each case other than Permitted Indebtedness.

 

(o)           Liens in Collateral; Priority.  This Financing Agreement
and the other Loan Documents create valid security interests and liens in all
of the Collateral described therein in favor of the Agent securing the
Obligations and constitute (subject to (i) the filing of UCC financing

 

47

 

statements, (ii) delivery
of any Collateral after the date hereof as provided herein or any other Loan
Document, (iii) the execution of Depository Account Control Agreements with the
banks which maintain Depository Accounts and (iv) delivery and recordation of
mortgages to obtain liens on any Real Estate) and, except for Permitted
Encumbrances, perfected first priority liens and security interests in
substantially all of such Collateral described therein subject to no liens other
than Permitted Encumbrances

 

(p)           Anti-Money and
Laundering and Terrorism Laws. 
Neither the making of the Revolving Loans hereunder (or the extension of
any other credit contemplated hereunder) nor any Company’s use of the proceeds
thereof will violate any applicable
anti-money laundering and terrorism laws, regulations and executive orders in
effect from time to time (including, without limitation, the USA Patriot Act
and Executive Order 13224 (issued
September 23, 2001)).

 

7.2          Affirmative
Covenants.   Until the termination of this Financing
Agreement and the full and final payment and satisfaction of the Obligations,
the Companies covenant and agree that, unless otherwise consented to by the
Required Lenders in writing, they shall comply with, and shall cause each
Subsidiary of each Company, to comply with, each of the following affirmative
covenants:

 

(a)           Maintenance
of Financial Records; Inspections. 
Each Company and its respective Subsidiaries agrees to maintain
books and records pertaining to such Company’s or Subsidiary’s financial
matters in such detail, form and scope as is required for the reporting of its
financial information in accordance with GAAP (or, in the case of a Foreign
Subsidiary, the equivalent thereof in the country where such Foreign Subsidiary
maintains its principal headquarters). 
Each Company agrees that the Agent, accompanied
by any Lender (at such Lender’s expense), and/or any agent designated by the
Agent, may enter upon any premises of any Company or any Subsidiary of a Company
at any time during normal business hours, and from time to time upon reasonable
advance notice, in order to (i) examine and inspect the books and records of
any Company and its Subsidiaries, and make copies thereof and take extracts
therefrom, and (ii) verify,
inspect and perform physical counts and other valuations of the Collateral and
any and all records pertaining thereto. 
All costs, fees and expenses incurred by the Agent in connection with
such examinations, inspections, physical counts and other valuations shall
constitute Out-of-Pocket Expenses for purposes of this Financing Agreement, but
the Companies shall only be obligated to reimburse the Agent for the
Out-of-Pocket Expenses incurred in connection with no more than two (2)
examinations and inspections conducted during a Contract Year while no Event of
Default exists.  All Out-of-Pocket
Expenses incurred with any examination or inspection conducted while an Event
of Default exits shall not be subject to the foregoing limitation.

 

(b)           Further Assurances.  Each Company agrees to comply with the
requirements of all state and federal laws in order to grant to the Agent, for
the benefit of the Lenders, valid and perfected first priority security
interests in the Collateral, subject only to the Permitted Encumbrances.  The Agent is hereby authorized to file any
financing statements, continuations and amendments covering the Collateral
without the Companies’ signatures in accordance with the provisions of the
UCC.  The Companies hereby consent to and
ratify the filing of any financing statements covering the Collateral by the
Agent on or prior to the Closing Date. 
The Companies agree to do whatever the Agent reasonably may request from
time to time, by way of (i) filing notices

 

48

 

of liens, financing
statements, amendments, renewals and continuations thereof, (ii) cooperating with agents and employees of the Agent, (iii) keeping Collateral records, (iv) transferring
proceeds of Collateral to the Agent’s possession in accordance with the terms
hereof and (v) performing such further acts as
the Agent reasonably may require in order to effect the purposes of this
Financing Agreement, including the execution of control agreements with respect
to Depository Accounts and Investment Property.

 

(c)           Insurance and Condemnation.

 

(i)            Required Insurance.  The
Companies agree to maintain the Required Insurance.  All policies covering the Real Estate,
Equipment and Inventory are, subject to the rights of any holder of a Permitted
Encumbrance having priority over the security interests of the Agent, to be
made payable solely to the Agent, for the benefit of the Lenders, in case of
loss, under a standard non-contributory “mortgagee”, “secured party” or “lender’s
loss payable” clause or endorsement. 
Each loss payable endorsement in favor of the Agent shall provide (x)
for not less than thirty (30) days prior written notice to the Agent of the
exercise of any right of cancellation and (y) that the Agent’s right to payment
under any property insurance policy will not be invalidated by any act or
neglect of, or any breach of warranty or condition by, the Companies (or any of
them) or any other party.  If an Event of
Default shall have occurred and remain outstanding, the Agent, subject to the
rights of any holder of a Permitted Encumbrance having priority over the
security interests of the Agent, shall have the sole right, in the name of the
Agent or the Companies (or any of them), to file claims under any insurance
policies, to receive, receipt and give acquittances for any payments that may
be payable thereunder, and to execute any and all endorsements, receipts,
releases, assignments, reassignments or other documents that may be necessary
to effect the collection, compromise or settlement of any claims under any such
insurance policies.

 

(ii)           The
Agent’s Purchase of Insurance. 
In the event the Companies fail to maintain the Required Insurance,
the Agent may purchase insurance at the Companies’ expense to protect the Agent’s
interests in the Collateral.  The
insurance purchased by the Agent may, but need not, protect the Companies’
interests in the Collateral, and therefor such insurance may not pay any claim
which the Companies may make or any claim which is made against the Companies
in connection with the Collateral.  The
Companies may later request that the Agent cancel any insurance purchased by
the Agent, but only after providing the Agent with satisfactory evidence that
the Companies have the Required Insurance. 
If the Agent purchases insurance covering all or any portion of the
Collateral, the Companies shall be responsible for the costs of such insurance
and any other charges accruing on the purchase price therefor, until the
effective date of the cancellation or the expiration of the insurance, and the
Agent may charge all of such costs and other charges to the Revolving Loan
Account.  The costs of the premiums of
any insurance purchased by the Agent may exceed the costs of insurance which
the Companies may be able to purchase on their own.  In the event that the Agent purchases
insurance, the Agent will notify the Companies of such purchase within five (5)
Business Days after the date of such purchase. 
If, within thirty (30) days after the date of receipt of such notice,
the Companies provide the Agent with proof that the Companies had the Required
Insurance as of the date on which the Agent purchased insurance and the
Companies have continued at all times thereafter to have the Required
Insurance, then the Agent agrees to cancel the insurance purchased by the Agent
and credit the Revolving Loan Account for the amount of all costs and other
charges associated with such insurance that the Agent previously charged to the
Revolving Loan

 

49

 

Account.

 

(iii)         Application
of Insurance and Condemnation Proceeds.  So long as no Default or Event of Default
shall have occurred and remain outstanding as of the date of the Agent’s
receipt of any Casualty Proceeds:

 

(w)          In the event of any loss or damage to
any Inventory by condemnation, fire or other casualty, the Agent agrees to
apply the Casualty Proceeds first to repay the outstanding Revolving Loans, and
then to repay the Term Loan in the manner set forth in Section 4.4(d).

 

(x)            In the event of any loss or damage
to any item of Collateral other than Inventory by condemnation, fire or other
casualty, if the Casualty Proceeds relating to such condemnation, fire or other
casualty are less than or equal to $100,000, the Agent agrees to apply such
Casualty Proceeds to repay the outstanding Revolving Loans.

 

(y)           In the event of any loss or damage to
any item of Equipment by condemnation, fire or other casualty, if the Casualty
Proceeds relating to such condemnation, fire or other casualty exceed $100,000,
the Companies may elect (by delivering written notice to the Agent within ten
(10) Business Days following the Agent’s receipt of such Casualty Proceeds) to
replace or repair such item of Equipment. If the Companies elect to replace or
repair any item of Equipment, the Agent initially shall apply all such Casualty
Proceeds to the outstanding Revolving Loans and will establish an Availability
Reserve in an amount equal to such Casualty Proceeds.  The Agent agrees to reduce this Availability
Reserve dollar-for-dollar as and when payments then are due under
the contract(s) for the purchase of replacement Equipment or the repair of such
item of Equipment.  Upon the replacement
or completion of repair of such item of Equipment, the Agent will eliminate any
remaining Availability Reserve established hereunder.

 

(z)            In the event of any loss or damage
to any real property leased by the Companies by condemnation, fire or other
casualty, the Companies may use the Casualty Proceeds in the manner required or
permitted by the lease agreement relating thereto.  In the event of any loss or damage to any
Real Estate owned by the Companies by condemnation, fire or other casualty, if
the Casualty Proceeds relating to such condemnation, fire or other casualty exceed
$100,000, and so long as the Companies have sufficient business interruption
insurance to replace the lost profits of the facilities affected by the
condemnation, fire or other casualty, the Companies may elect to repair or
replace such Real Estate. If the Companies reasonably determine that the Real
Estate may be repaired to substantially the same or improved condition of the
Real Estate prior to the condemnation, fire or other casualty, or that
replacement Real Estate may be obtained, the Companies may elect to repair the
Real Estate or replace the Real Estate by delivering written notice to the
Agent within thirty (30) days following the Agent’s receipt of such Casualty
Proceeds.  The Agent initially shall
apply all such Casualty Proceeds to the outstanding Revolving Loans and will
establish an Availability Reserve in an amount equal to such Casualty
Proceeds.  If the Companies elect to
repair the Real Estate, the Companies shall provide the Agent with a repair plan,
the contract(s) for repair and a total budget certified by an independent third
party experienced in construction costing. 
If such budget indicates that there are insufficient Casualty Proceeds
to cover the full cost of repair of the Real Estate, the Companies shall fund
such deficiency before the Availability Reserve established hereunder shall be
reduced.  The Agent agrees to reduce this
Availability Reserve dollar-for-dollar as

 

50

 

and when payments
are due under the contract(s) for repair. 
Upon completion of the repair of the Real Estate (as determined by the
Agent in the exercise of its reasonable discretion), the Agent will eliminate
any remaining Availability Reserve established hereunder.  On the other hand, if the Companies elect to replace
the Real Estate, then this Availability Reserve shall be eliminated at such
time as the Companies acquire the replacement Real Estate and shall have
granted the Agent, for the benefit of the Lenders, a mortgage lien in the
replacement Real Estate as required by Section 6.10 of this Financing
Agreement.

 

If a Default or an Event of Default shall have
occurred and remain outstanding as of the date of the Agent’s receipt of any
Casualty Proceeds, or if the Companies do not or cannot elect to use the Casualty
Proceeds in the manner set forth in paragraphs (y) or (z) above, the Agent may,
subject to the rights of any holder of a Permitted Encumbrance having priority
over the security interests of the Agent, apply the Casualty Proceeds to the
payment of the Obligations in such manner and in such order as the Agent may
elect in its sole discretion.

 

(d)           Payment
of Taxes.  The Companies
agree to pay and cause each of their respective Subsidiaries to pay when due
all Taxes lawfully levied, assessed or imposed upon the Companies or their
Subsidiaries or the Collateral (including all sales taxes collected by the
Companies or their Subsidiaries on behalf of the Companies’ or their
Subsidiaries’ customers in connection with sales of Inventory and all payroll
taxes collected by the Companies or their Subsidiaries on behalf of the
Companies’ or their Subsidiaries’ employees), unless the Companies or their
Subsidiaries are contesting such Taxes in good faith, by appropriate
proceedings, and are maintaining adequate reserves for such Taxes in accordance
with GAAP.  Notwithstanding the
foregoing, if a lien securing any Taxes is filed in any public office and such
lien is not a Permitted Tax Lien, then the Companies shall pay all Taxes
secured by such lien immediately and remove such lien of record promptly.  Pending the payment of such Taxes and removal
of such lien, the Agent may, at its election and without curing or waiving any
Event of Default which may have occurred as a result thereof, (i) establish an
Availability Reserve in the amount of such Taxes (or such other amount as the
Agent shall deem appropriate in the exercise of its reasonable discretion) or
(ii) pay such Taxes on behalf of the Companies, and the amount paid by the
Agent shall become an Obligation which is due and payable on demand by the
Agent.

 

(e)           Compliance
With Laws.

 

(i)            The Companies agree to comply with, and cause each of their
respective Subsidiaries to comply with, all federal, state and local acts,
rules and regulations, and all orders of any federal, state or local
legislative, administrative or judicial body or official, if the failure to so
comply would have a Material Adverse Effect, provided that the Companies
or their Subsidiaries may contest any acts, rules, regulations, orders and
directions of such bodies or officials in any reasonable manner which the Agent
determines, in the exercise of its reasonable discretion, will not materially
and adversely effect the Agent’s or the Lenders’ rights or priorities in the
Collateral.

 

(ii)           Without limiting the generality of
the foregoing, each Company agrees to comply with, and cause each of its
respective Subsidiaries to comply with, all environmental statutes, acts,
rules, regulations or orders, as presently existing or as adopted or amended in
the future, applicable to the ownership and/or use of such Company’s or any
such Subsidiary’s real property and operation

 

51

 

of its business, if the
failure to so comply would have a Material Adverse Effect.  No Company nor any Subsidiary of any Company
shall be deemed to have breached any provision of this Section 7.2(e) if
(x) the failure to comply with the requirements of this Section 7.2(e)
resulted from good faith error or innocent omission, (y) such Company or
Subsidiary promptly commences and diligently pursues a cure of such breach and
(z) such failure is cured within thirty (30) days following the Companies’ or
their Subsidiaries’ receipt of notice from the Agent of such failure, or if
such breach cannot in good faith be cured within thirty (30) days following the
Companies’ or their Subsidiaries’ receipt of such notice, then such breach is
cured within a reasonable time frame based on the extent and nature of the
breach and the necessary remediation, and in conformity with any applicable
consent order, consensual agreement and applicable law.

 

(f)            Notices Concerning Environmental,
Employee Benefit and Pension Matters.  
The Companies agree to notify the Agent in writing of:

 

(i)            any expenditure (actual or
anticipated) in excess of $100,000 for environmental clean-up,
environmental compliance or environmental testing and the impact of said
expenses on the any Company’s or any of their Subsidiary’s working capital that
could reasonably be expected to have a Material Adverse Effect;

 

(ii)           the receipt by any Company or any
Subsidiary of any Company of notice from any local, state or federal authority
advising the Companies or any of their Subsidiaries of any environmental
liability (real or potential) arising from such Company’s or such Subsidiary’s
operations, its premises, its waste disposal practices, or waste disposal sites
used by such Company or such Subsidiary; and

 

(iii)          the receipt by any Company or any
Subsidiary of any Company of notice from any governmental agency or any sponsor
of any “multiemployer plan” (as that term is defined in ERISA) to which such
Company or such Subsidiary has contributed, relating to any of the events
described in Section 10.1(g) hereof.

 

The Companies agree to provide, and cause each of their Subsidiaries to
provide, the Agent promptly with copies of all such notices and other
information pertaining to any matter set forth above if the Agent so requests.

 

(g)           Collateral Reporting – SEE ANNEX
A.

 

(h)           Financial Reporting.  The Companies agree to
furnish to the Agent:

 

(i)            within ninety (90) days after the
end of each fiscal year of the Companies (or, if earlier, the date on which the
Companies are required to deliver their financial statements to the U.S.
Securities and Exchange Commission), a Consolidated Balance Sheet of the
Companies and their Subsidiaries as at the close of such year, and consolidated
statements of profit and loss and cash flow of the Companies and their
Subsidiaries for such year, prepared on a consolidated basis in accordance with
GAAP, all audited by a recognized firm of independent certified public
accountants selected by the Companies and reasonably acceptable to the Agent,
reported on without (a) a “going concern” or like qualification or exception,
or (b) any qualification indicating that the scope of the

 

52

 

audit was
inadequate to permit such independent certified public accountants to certify
such financial statements without qualification;

 

(ii)           at the same time as the Companies are
required to deliver to the Agent the audited financial statements of the
Companies and their Subsidiaries as set forth in clause (i) above, a
Consolidating Balance Sheet of the Companies and their Subsidiaries as at the close
of such year, and consolidating statements of profit and loss and cash flow of
the Companies and their Subsidiaries for such year, prepared on a consolidating
basis in accordance with their customary and historical practices;

 

(iii)          within forty-five (45) days after the
end of each fiscal quarter, (x) a Consolidated Balance Sheet and a
Consolidating Balance Sheet of the Companies and their Subsidiaries as at the
end of such fiscal quarter, (y) consolidated and consolidating statements of
profit and loss and cash flow of the Companies and their Subsidiaries for such
fiscal quarter and for the period commencing on the first day of the current
fiscal year through the end of such fiscal quarter, and (z) comparative
statements of profit and loss and cash flow of the Companies and their
Subsidiaries for the same fiscal quarter and same fiscal year-to-date period in
the prior fiscal year, certified by an authorized financial or accounting
officer of the Funds Administrator (or any other authorized officer satisfactory
to the Agent);

 

(iv)          within thirty (30) days after the end
of each month, (x) a Consolidated Balance Sheet and a Consolidating Balance
Sheet of the Companies and their Subsidiaries as at the end of such month, (y)
consolidated and consolidating statements of profit and loss and cash flow of
the Companies and their Subsidiaries for such month and for the period
commencing on the first day of the current fiscal year through the end of such
month, and (z) comparative statements of profit and loss and cash flow of the
Companies and their Subsidiaries for the same month and same fiscal
year-to-date period in the prior fiscal year, certified by an authorized
financial or accounting officer of the Funds Administrator (or any other
authorized officer satisfactory to the Agent);

 

(v)           as and when filed by each Company,
copies of all (x) financial reports, registration statements and other
documents filed by the Companies with the U.S. Securities and Exchange
Commission, as and when filed by the Companies, and (ii) annual reports filed
pursuant to ERISA in connection with each benefit plan of each Company subject
to ERISA; and

 

(vi)          no later than thirty (30) days prior
to the beginning of each fiscal year of the Companies, monthly projections of
the Consolidated Balance Sheet and Consolidating Balance Sheet of the Companies
and their Subsidiaries prepared by management in accordance with their
customary and historical practices, and consolidated and consolidating
statements of profits and loss and cash flow of the Companies and their
Subsidiaries, as well as monthly projected Net Availability for the Companies
for such fiscal year.

 

Each financial statement
which the Companies are required to submit pursuant to clauses (i), (ii), (iii)
and (iv) above must be accompanied by an officer’s certificate substantially in
the form set forth on Exhibit D-1 attached hereto, signed by an
authorized financial or accounting officer of the Funds Administrator (or any
other authorized officer satisfactory to the Agent).  In addition, should a

 

53

 

Net Availability
Shortfall occur during any fiscal quarter after the Companies shall have
submitted the required financial statements and officer’s certificate for the
immediately preceding fiscal quarter, then no later than five (5) Business Days
after the occurrence of such Net Availability Shortfall, the Funds
Administrator, on behalf of the Companies, shall submit to the Agent and the
Lenders a special compliance certificate substantially in the form set forth on
Exhibit D-2 attached hereto, signed by an authorized financial or
accounting officer of the Funds Administrator (or any other authorized officer
satisfactory to the Agent).  If the
special compliance certificate reflects that the Companies have failed to
comply with any of the financial covenants set forth in Sections 7.4(a), (b)
or (c) hereof for the Trailing Four Quarters Testing Period covered by such
certificate, then, concurrently with the delivery to the Agent of the financial
statements which the Companies are required to submit pursuant to clause (iv)
above for the month immediately before the month in which the Net Availability
Shortfall occurs and for the period then ending, the Funds Administrator, on
behalf of the Companies, shall submit to the Agent an additional special
compliance certificate substantially in the form set forth on Exhibit D-3
attached hereto, signed by an authorized financial or accounting officer of the
Funds Administrator (or any other authorized officer satisfactory to the
Agent). Also, should the Companies modify in any material respect their
accounting principles and procedures from those in effect on the Closing Date,
then, no later than thirty (30) days after the date of such modification, the
Companies shall prepare and deliver to the Agent a statement of reconciliation
in form and substance reasonably satisfactory to the Agent.

 

(i)            Asset Appraisals.  From time to time upon the request of the
Agent, the Companies agree to permit the Agent to perform appraisals of the
Companies’ Inventory and Trademark Appraisals. 
The Companies agree to reimburse the Agent for the Out-of-Pocket costs
relating to such appraisals of the Companies’ Inventory; provided, however,
the maximum number of Inventory appraisals for which the Companies shall be
responsible to reimburse the Agent for its costs and expenses shall be one (1)
Inventory appraisal conducted in any Contract Year while no Event of Default
exists.  Any Inventory appraisal
conducted while an Event of Default exists shall not be subject to the
foregoing limitation. The Companies also agree to reimburse the Agent for the
Out-of-Pocket Costs relating to the initial Trademark Appraisal required to be
delivered to the Agent pursuant to Section 4.3 of this Financing Agreement.

 

(j)            Business
Qualification.  The
Companies agree to qualify to do business, and to remain qualified to do
business and in good standing, and cause each of their respective Subsidiaries
to qualify to do business, and remain qualified to do business and in good
standing, in each jurisdiction where the failure to so qualify, or to remain
qualified or in good standing, would have a Material Adverse Effect.

 

(k)           Anti-Money Laundering and Terrorism Regulations.   The Companies agree to comply
with all applicable anti-money laundering and terrorism laws, regulations and
executive orders in effect from time to time (including, without limitation,
the USA Patriot Act).  The Companies also
agree to ensure that no person who owns a controlling interest in or otherwise
controls the Companies (or any of them) is a person designated under Section
1(b), (c) or (d) of Executive Order No. 13224 (issued September 23, 2001) or
any other similar Executive Order. The Companies acknowledge that the Agent’s
and each Lender’s performance hereunder is subject to compliance with all such
laws, regulations and executive orders, and in furtherance of the foregoing,
the Companies agree to provide to the Agent and the Lenders all information
about the Companies’

 

54

 

ownership,
officers, directors, customers and business structure as the Agent and the
Lenders reasonably may require to comply with, such laws, regulations and
executive orders.

 

(l)            Notice of Change in Management.  The Companies agree to give the Agent not less than ninety (90) days
prior written notice if Kevin Plank intends to no longer be actively engaged in
the management of the Companies.

 

7.3          Financial Covenants.    Until termination of
this Financing Agreement and the full and final payment and satisfaction of all
Obligations, the Companies and their Subsidiaries agree, on a consolidated basis, that, if a Net
Availability Shortfall occurs at any time, unless otherwise consented to by the
Required Lenders in writing, they shall comply with each of the financial
covenants set forth in Sections 7.3(a), (b) and (c) below, in each case
tested and applied in the manner set forth in Section 7.3(d) below:

 

(a)           Leverage
Ratio.   The Companies and
their Subsidiaries shall maintain, on a consolidated basis, a Leverage Ratio as
of the end of each Testing Period of no greater than the Leverage Ratio set
forth below corresponding to such Testing Period:

 

	
  Testing Period Ending

  	
   

  	
  Leverage
  Ratio

  
	
   

  	
   

  	
   

  
	
  Any Testing Period ending at
  the end of or during Third Fiscal Quarter 2005

  	
   

  	
  2.25 to 1.0

  
	
   

  	
   

  	
   

  
	
  Any Testing Period ending at
  the end of or during Fourth Fiscal Quarter 2005

  	
   

  	
  2.25 to 1.0

  
	
   

  	
   

  	
   

  
	
  Any Testing Period ending at
  the end of or during First Fiscal Quarter 2006

  	
   

  	
  2.25 to 1.0

  
	
   

  	
   

  	
   

  
	
  Any Testing Period ending at
  the end of or during Second Fiscal
  Quarter 2006 or at the end of
  or during any Fiscal Quarter
  ending thereafter

  	
   

  	
  1.50 to 1.0

  

 

(b)           Fixed
Charge Coverage Ratio.    The
Companies and their Subsidiaries shall maintain, on a consolidated basis, at
the end of or during each Testing Period a Fixed Charge Coverage Ratio of not
less than 1.1 to 1.0.

 

(c)           Capital Expenditures.   The Companies and their
Subsidiaries shall not contract for, purchase, make expenditures for, lease
pursuant to a Capital Lease or otherwise incur obligations with respect to
Capital Expenditures (whether subject to a security interest or otherwise)
which in the aggregate amount for each Testing Period shall exceed the amount set
forth below corresponding to such fiscal quarter:

 

55

 

	
  Testing Period Ending

  	
   

  	
  Maximum
  Amount

  
	
   

  	
   

  	
   

  
	
  Any Testing Period ending in
  the fiscal year 2005

  	
   

  	
  $

  	
  15,000,000

  
	
   

  	
   

  	
   

  
	
  Any Testing Period ending in
  the fiscal year 2006

  	
   

  	
  $

  	
  15,000,000

  
	
   

  	
   

  	
   

  
	
  Any Testing Period ending in
  the fiscal year 2007

  	
   

  	
  $

  	
  16,000,000

  
	
   

  	
   

  	
   

  
	
  Any Testing Period ending in
  the fiscal year 2008

  	
   

  	
  $

  	
  17,000,000

  
	
   

  	
   

  	
   

  
	
  Any Testing Period ending in
  the fiscal year 2009

  	
   

  	
  $

  	
  18,000,000

  
	
   

  	
   

  	
   

  
	
  Any Testing Period ending in
  the fiscal year 2010

  	
   

  	
  $

  	
  19,000,000

  

 

(d)           Testing of Financial Covenants.  If a Net Availability
Shortfall occurs at any time, compliance with the financial covenants set forth
in Sections 7.3(a), (b) and (c) shall be determined and tested for both
the Trailing Four Quarters Testing Period and the Current Four Quarters Testing
Period.  If the Companies and their
Subsidiaries are in compliance with all of the financial covenants for the
Trailing Four Quarters Testing Period, then none of the financial covenants
shall be tested for the Twelve Months Testing Period.  If, on the other hand, the Companies and
their Subsidiaries fail to comply with any of the financial covenants for the
Trailing Four Quarters Testing Period, then the financial covenants shall be
tested for the Twelve Months Testing Period. 
The Companies and their Subsidiaries shall not be deemed to have
violated any of the financial covenants for the Trailing Four Quarters Testing
Period, unless the Companies and their Subsidiaries shall also fail to comply
with one or more of the financial covenants for the Twelve Months Testing
Period.  Testing of financial covenants
for any Testing Period shall be at such time as the Companies are required to
furnish to the Agent the financial statements for such Testing Period pursuant
to Section 7.2(h) of this Financing Agreement.

 

7.4          Negative
Covenants.    Until termination of this
Financing Agreement and full and final payment and satisfaction of all
Obligations, each Company covenants and agrees that, unless otherwise consented
to by the Required Lenders in writing, it will not and will not permit any of
its respective Subsidiaries to:

 

(a)           Liens
and Encumbrances.  Mortgage,
assign, pledge, transfer or otherwise permit any lien, charge, security
interest or encumbrance (whether as a result of a purchase money or title
retention transaction, or other security interest, or otherwise) to exist on
any of the Collateral or any of its other assets, whether now owned or
hereafter acquired (specifically including, for the avoidance of doubt, all of
the Trademarks of the Companies regardless of whether the lien of the Agent has
been released pursuant to Section 6.12 of this Financing Agreement),
except for Permitted

 

56

 

Encumbrances. If, after
the lien of the Agent in the Trademarks is released pursuant to Section 6.12
hereof (whereupon such Trademarks shall no longer constitute Collateral), the
Required Lenders grant their consent to the grant by the Companies of a lien
and security interest in any of the Companies’ Trademarks, then, as an
additional condition of any such consent, the Companies and the holder of the
proposed lien and security interest in the Trademarks shall execute and deliver
to the Agent an Intellectual Property Use Agreement.

 

(b)           Indebtedness.  Incur or create any Indebtedness other than
(i) Permitted Indebtedness; and (ii) the Indebtedness set forth on Schedule
7.1(n) hereto.   In determining
whether to grant or withhold their consent to the granting by the Companies of
a lien and security interest in any of the Companies’ Trademarks pursuant to Section
7.4(a) hereof, then, as an integral part of such consent, the Required
Lenders shall also grant or withhold their consent to the incurring or creation
of Indebtedness by the Companies secured by such lien and security interest. If
the Required Lenders grant the consent, then such Indebtedness shall be
Permitted Indebtedness hereunder.

 

(c)           Sale
of Assets.  Sell, lease,
assign, transfer or otherwise dispose of the Collateral or any of its other
assets, except for the following: (i) sales of Eligible Approved Accounts
Receivable to CIT pursuant to the CARPA; (ii) provided no Default or Event of
Default exists, transfers to one or more Foreign Subsidiaries of a Company of
those Trademarks of the Companies solely used in connection with sales of such
Foreign Subsidiaries outside of the United States and Canada; (iii) sales
otherwise specifically permitted by Section 6.5 of this Financing
Agreement; (iv) sales of Inventory in the ordinary course of business, provided
(y) no Event of Default exists, and, (z) in the case of sales by any Company to
a Subsidiary of any Company that is not a Company hereunder, each such sale of
Inventory is for a price of not less than the value of such Inventory, valued
at the lower of cost or market with cost calculated on a first-in, first-out
basis, and the aggregate amount of all unpaid Accounts due from such
Subsidiaries arising from such sales does not, at any time, when added to the
aggregate amount of all advances, loans and investments then outstanding from
the Companies to such Subsidiaries, does not exceed $5.0 million; (v) the grant
by a Company or a Subsidiary of a Company of a license for the use of any
Trademarks; and (vi) the sale, transfer or conveyance of any Inventory,
Equipment or General Intangibles by a Company to another Company.

 

(d)           IPO;
Corporate Change.  (i)
Consummate an IPO unless the Net Issuance Proceeds are in a sum sufficient to
pay in full the outstanding balance of the Term Loan; (ii) merge or consolidate
with any other entity, except that any Company (other than Under Armour) may
merge with and into another Company; (iii) change its name or principal places
of business, provided that any Company and any Subsidiary of a Company may
change its name or its principal place of business so long as the Companies
provide the Agent with thirty (30) days prior written notice thereof and the
appropriate parties execute and deliver to the Agent, prior to making such
change, all documents and agreements reasonably requested by the Agent in order
to ensure that the liens and security interests granted to the Agent, for the
benefit of the Lenders, hereunder or under any other Loan Document continue in
effect without any break or lapse in perfection; (iv) change
its structure or organizational form, or reincorporate or reorganize in a new
jurisdiction, or (v) enter into or engage in any line of business materially
different from any line of business presently being conducted by any Company
(including, in each such case, any reasonably related line of business);

 

(e)           Guaranty
Obligations.  Assume,
guarantee, endorse, or otherwise become liable

 

57

 

upon the obligations of
any person, firm, entity or corporation, except for the following:  (i)
guarantees of the Obligations pursuant to this Financing Agreement and the
other Loan Documents; (ii) guaranties by the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business; (iii) guaranties of the obligations of any Company or a
Subsidiary of any Company; and (iv) guaranties arising from performance,
surety, appeal or similar bonds obtained in the ordinary course of business.

 

(f)            Dividends
and Distributions. 
Declare or pay any dividend or distribution of any kind on, or purchase,
acquire, redeem or retire, any of its Capital Stock (of any class or type
whatsoever), whether now or hereafter issued and outstanding, except for
Permitted Distributions.

 

(g)           Subsidiaries;
Investments; Acquisitions.   (i) Create any new Subsidiary, unless (1) in the case of a new
wholly-owned Domestic Subsidiary, the Companies and such new Domestic
Subsidiary execute and deliver a Joinder Agreement and satisfy each of the
other conditions to such new Domestic Subsidiary’s becoming a co-borrower and “Company”
under this Financing Agreement and the other Loan Documents that are set forth
in Article II of the Joinder Agreement; provided, however, in the
case of Under Armour Retail of Florida, LLC, a Florida limited liability
company, which is a wholly-owned Domestic Subsidiary of Under Armour (“Under
Armour Florida”), but which is not a co-borrower hereunder, Under Armour
Florida shall, within thirty (30) days of the date of this Financing Agreement,
execute and deliver such Joinder Agreement and satisfy all other conditions to
becoming a co-borrower and “Company” under this Financing Agreement and the
other Loan Documents, (2) in the case of a new Domestic Subsidiary that is not
wholly-owned, the Company or Domestic Subsidiary owing the Capital Stock of
such Domestic Subsidiary executes and delivers to the Agent, for the benefit of
the Lenders, a Pledge Agreement covering all of the Capital Stock of such
Domestic Subsidiary owned by such Company or Domestic Subsidiary, together with
all stock certificates and duly executed stock powers (undated and in-blank)
with respect thereto, and (3) in the case of a new Foreign Subsidiary, if it is
a First-Tier Foreign Subsidiary, the Company or Domestic Subsidiary owing the
Capital Stock of such First-Tier Foreign Subsidiary executes and delivers to
the Agent, for the benefit of the Lenders, a Pledge Agreement covering
sixty-five percent (65%) of the Capital Stock of such First-Tier Foreign
Subsidiary, together with all stock certificates and duly executed stock powers
(undated and in-blank) with respect thereto; (ii) make
any advance or loan to, or any investment in, any firm, entity, person or
corporation except for (x) Permitted Intercompany Loans, (y) Permitted
Investments, and (z) advances, loans and investments outstanding at any one
time from the Companies to Subsidiaries of the Companies that are not Companies
hereunder up to an aggregate amount which, when added to the then outstanding
aggregate amount of all unpaid Accounts of the Companies arising from sales of
Inventory by the Companies to Subsidiaries of the Companies that are not
Companies hereunder, does not exceed $5.0 million; or (iii) except as otherwise
permitted in clauses (i) or (ii) above, acquire all or substantially all of the
assets of, or any Capital Stock or any equity interests in, any firm, entity or
corporation.

 

(h)           Related Party Transactions.  Enter into any transaction,
including, without limitation, any purchase, sale, lease, loan or exchange of
property, with any shareholder, officer, director, parent (direct or indirect),
Subsidiary (direct or indirect) or Affiliate of any Company, except for
transactions between a Company and another Company, unless in each case (i)
such transaction is not prohibited by the provisions of this Financing
Agreement, (ii) such transaction is in

 

58

 

the ordinary course of
business and pursuant to the reasonable requirements of a Company or any Subsidiary of a Company, as the
case may be, and upon standard terms and conditions and fair and reasonable
terms, no less favorable to such entity than such entity could obtain in a
comparable arms length transaction with an unrelated third party; provided,
however, in the case of a sale of Inventory by a Company to a Subsidiary
of a Company that is not a Company hereunder, such sale shall be deemed to
satisfy the requirement of this clause (ii) if such sale otherwise complies
with the requirements of Section 7.4(c)(iv) hereof, and (iii) no Event
of Default shall have occurred and remain outstanding at the time such
transaction occurs, or would occur after giving effect to such transaction.

 

(i)            Restricted Payments.   (i) Make any payment of the
principal of, or interest on, any Subordinated Debt, or purchase, acquire or
redeem any of the Subordinated Debt, unless (x) such payment, purchase,
acquisition or redemption is expressly permitted by the terms of the applicable
Subordination Agreement and (y) no Default or Event of Default shall have
occurred and remain outstanding on the date on which such payment or
transaction occurs, or would occur as a result thereof; (ii) pay any management, consulting or other
similar fees to any shareholder, director, parent (direct or indirect),
Subsidiary (direct or indirect) or Affiliate of a Company, except for the
payment of any such management, consulting or similar fee in an amount no
greater than the comparable fee that would be payable for such services on an
arms-length basis to a party that is not affiliated in any way with a Company
or any Subsidiary of a Company.

 

(j)            Prohibited Uses of Proceeds.   Use the proceeds of any
Loan made under this Financing Agreement, directly or indirectly, in violation
of Regulations T, U or X of the Board of Governors of the Federal Reserve
System as from time to time in effect (and any successor regulation or official
interpretation of such Board), or in violation of any other laws or regulations
that would reasonably be expected to have a Material Adverse Effect, or to
purchase or carry any “margin stock,” as defined in Regulations U and X, or any
“margin security,” “marginable OTC stock” or “foreign margin stock” within the
meaning of Regulation T, U or X,

 

SECTION
8.         Interest, Fees and Expenses

 

8.1          Interest.

 

(a)           Interest on Revolving Loans. Interest
on the Revolving Loans shall be due and payable monthly in arrears on the last
day of each month and shall accrue on the net principal balance of the
Revolving Loans at the close of each day during the immediately preceding
month, as reflected by CIT’s System.  The
rate of interest in any given Interest Period shall be either (i) the
Applicable Margin plus the Chase Bank Rate in effect for such Interest
Period or (ii) if so elected by the Companies as provided in Section 8.1(d)
below, the Applicable Margin plus the LIBOR Rate in effect for such
Interest Period.

 

(b)             Interest on Term Loan.  Interest on the outstanding
principal balance of the Term Loan shall be due and payable monthly in arrears
on the last day of each month.  The rate
of interest in any given Interest Period shall be either (i) the Chase Bank
Rate in effect for such Interest Period plus three percent (3.0%) per
annum or (ii) if so elected by the Companies as provided in Section 8.1(d)
below, the LIBOR Rate in effect for such Interest Period plus five and
one-half percent

 

59

 

(5.5%) per annum.

 

(c)           Calculation of Interest.  The
applicable Chase Bank Rate for the Interest Period in which the Closing Date
occurs shall be the Chase Bank Rate in effect on the last Business Day of the
month preceding the Closing Date and the applicable Chase Bank Rate for each
Interest Period thereafter shall be the Chase Bank Rate in effect on the last
Business Day of the preceding month. The applicable LIBOR Rate for the Interest
Period in which the Closing Date occurs shall be the LIBOR Rate in effect on
the last Business Day of the month preceding the Closing Date and the applicable
LIBOR Rate for each Interest Period thereafter shall be the LIBOR Rate in
effect on the last Business Day of the preceding month. All interest rates
shall be calculated based on a 360-day year and actual days elapsed.

 

(d)           Election.   Provided no Default or Event of Default has
occurred and is continuing, the Funds Administrator, on behalf of the
Companies, may, on at least three (3) Business Days prior written notice prior
to the end of an Interest Period, elect to change the Type of all (but not less
than all) Loans outstanding from Chase Bank Rate Loans to LIBOR Rate Loans or
from LIBOR Rate Loans to Chase Bank Rate Loans. 
Absent such timely notification of change from the Funds Administrator,
the Type of Loans outstanding with respect to each subsequent Interest Period
shall remain of the same Type as the previous Interest Period. On or prior to
the Closing Date, the Companies shall elect the Type of Loans that will be
outstanding for the Interest Period in which the Closing Date occurs.

 

(e)           Match Funding.  No Lender shall be required
to purchase United States dollars in the London interbank market or from any
other applicable LIBOR Rate market or source or otherwise “match funds” to fund
any LIBOR Rate Loans.

 

8.2          Default Interest Rate.    During the continuance of an Event of
Default, provided that the Agent has given the Companies written notice
of such Event of Default (other than an Event of Default described in Section
10.1(c) of this Financing Agreement, for which no written notice shall be
required), all overdue Obligations may, at the election of the Agent or
Required Lenders, bear interest at the Default Rate of Interest until such
Event of Default is waived.

 

8.3          Fees
and Expenses Relating to Letters of Credit.

 

(a)           Letter
of Credit Guaranty Fee. 
In consideration of the issuance of any Letter of Credit Guaranty by the
Agent or other assistance of the Agent and the Lenders in obtaining Letters of
Credit pursuant to Section 5 hereof, the Companies agree to pay: (a) to
the Agent, for the ratable benefit of the Lenders, a Letter of Credit Guaranty
Fee equal to the Applicable Margin per annum for Revolving Loans that are LIBOR
Rate Loans on the face amount of each Letter of Credit, and (b) to the Agent,
for its own account and without sharing with any of the other Lenders, a
fronting fee equal to 0.125% per annum times the face amount of each Letter of
Credit. All Letter of Credit Guaranty Fees set forth in the foregoing clause
(a) shall be due and payable monthly on the last day of each month, and all
fronting fees set forth in the foregoing clause (b) shall be due and payable
upon the issuance of each Letter of Credit.

 

(b)           Charges
of Issuing Bank.  The
Companies agree to reimburse the Agent for any

 

60

 

and all charges, fees,
commissions, costs and expenses charged to the Agent for any Company’s account
by an Issuing Bank in connection with, or arising out of, Letters of Credit or
out of transactions relating thereto, when charged to or paid by the Agent, or
as may be due upon any termination of this Financing Agreement.

 

8.4          Out-of
Pocket Expenses.    The Companies agree to reimburse
the Agent and the Lenders for all Out-of-Pocket Expenses when
charged to or paid by the Agent or the Lenders.

 

8.5          Line
of Credit Fee; Collection Days.  
On the last day of each month, commencing on the last day of the month
in which the Closing Date occurs, the Companies agree to pay to the Agent, for
the ratable benefit of the Lenders, the Line of Credit Fee, and interest at the
rate set forth in Section 8.1 (or Section 8.2, if applicable)
hereof on the Collection Days for the month then ended.

 

8.6          Agent
Fee Agreement.    The Companies shall pay to the Agent, for its
own account and without sharing with any of the other Lenders, the fees in the
amounts and on the dates as set forth in the Agent Fee Agreement, each of which
shall be fully earned when paid.

 

8.7          Standard Operational Fees.  In addition to the fees set forth in the Fee
Agreement and all Out-of-Pocket Expenses incurred by the Agent in connection
with any action taken under Section 7.2(a) hereof (but without
duplication), the Companies agree to pay to the Agent, for its own account, (a)
all Documentation Fees; (b) a fee in the amount of $850 per person, per day, for
any employee of the Agent used to conduct any of the examinations,
verifications, inspections, physical counts and other valuations described in Section
7.2(a) hereof; provided, however, the maximum number of
examinations, verifications, inspections and other valuations described in
Section 7.2(a) for which the Companies shall be responsible to pay any fees,
costs or expenses of the Agent shall be two (2) examinations, verifications and
inspections, and one (1) Inventory appraisal conducted in any Contract Year
while no Event of Default exists; and  provided  further,
that the foregoing limitation shall not apply to any such examinations,
verifications, inspections, physical counts, Inventory appraisals and other
valuations conducted while an Event of Default exists; and (c) the Agent’s
standard charges for each wire transfer made by the Agent to or for the benefit
of the Companies and for Dunn and Bradstreet searches conducted by the Agent
for the Companies’ account.  Such charges
shall be due and payable in accordance with the Agent’s standard practices, as
in effect from time to time.

 

8.8          LIBOR
Rate Loans.

 

(a)           Restrictions
Affecting the Making or Funding of LIBOR Rate Loans.  Notwithstanding any other provision of
this Financing Agreement to the contrary, if any applicable law, regulation,
treaty or directive, or any amendment thereto or change in the interpretation
or application thereof, shall make it unlawful for any Lender to make or
maintain LIBOR Rate Loans, then (x) the LIBOR Rate Loans shall convert
automatically to Chase Bank Rate Loans at the end of the applicable Interest
Period, or such earlier date as may be required by such law, regulation, treaty
or directive, and (y) the obligation of the Agent or the Lenders thereafter to
make or continue LIBOR Rates Loans and to convert Chase Bank Rate Loans into
LIBOR Rate Loans hereunder shall be suspended until the Agent determines that
it is no longer unlawful for any Lender to make and maintain LIBOR Rate Loans
as contemplated herein.  In addition, in the
event that, by reason of any

 

61

 

Regulatory Change, any
Lender either (x) incurs any material additional costs based on or measured by
the excess above a specified level of the amount of a category of deposits or
other liabilities of such Lender which includes deposits by reference to which
the interest rate on LIBOR Rate Loans is determined hereunder, or a category of
extensions of credit or other assets of such Lender which includes LIBOR Rate
Loans, or (y) becomes subject to any material restrictions on the amount of
such a category of liabilities or assets which such Lender may hold, then if
the Agent so elects by notice to the Companies, the obligations of the Agent
and the Lenders thereafter to make or continue LIBOR Rate Loans and to convert
Chase Bank Rate Loans into LIBOR Rate Loans hereunder shall be suspended until
such Regulatory Change ceases to be in effect.

 

(b)           Inability
to Determine LIBOR Rate.   Notwithstanding any other provision of this Financing
Agreement to the contrary, if the Agent determines in the exercise of its
reasonable business judgment (which determination shall be conclusive and
binding upon each Company) that by reason of circumstances affecting the
interbank LIBOR Rate market, adequate and reasonable means do not exist for
ascertaining the LIBOR Rate applicable to an Interest Period, the Agent shall
give written notice of such determination to the Companies and, effective on
the first Interest Period following the giving of such notice, the Type of all
Loans outstanding under this Financing Agreement shall be changed to Chase Bank
Rate Loans and thereafter continue to be Chase Bank Rate Loans until the Agent
determines that adequate and reasonable means once again exist for ascertaining
the LIBOR Rate applicable to an Interest Period and rescinds the earlier
notice.  Effective for the Interest
Period following the Agent’s rescission of such earlier notice, the Funds
Administrator, on behalf of the Companies, may once again make an election
pursuant to Section 8.1(d) of this Financing Agreement of the Type of
Loans that will be outstanding for an Interest Period.

 

(c)           Loan
Participants. For purposes of this Section 8.8, the term “Lender”
shall include any financial institution that purchases from any Lender a
participation in the Loans made by such Lender to the Companies hereunder.

 

8.9          Capital
Adequacy.    In the event that any Lender,
subsequent to the Closing Date, determines in the exercise of its reasonable
business judgment that (x) any change in applicable law, rule, regulation or
guideline regarding capital adequacy, or (y) any change in the interpretation
or administration thereof, or (z) compliance by such Lender with any new
request or directive regarding capital adequacy (whether or not having the
force of law) of any central bank or other governmental or regulatory
authority, has or would have the effect of reducing the rate of return on such
Lender’s capital as a consequence of its obligations hereunder to a level below
that which such Lender could have achieved but for such change or compliance
(taking into consideration such Lender’s policies with respect to capital
adequacy) by an amount deemed material by such Lender in the exercise of its
reasonable business judgment, the Companies agree to pay to such Lender, no
later than five (5) days following demand by such Lender, such additional
amount or amounts as will compensate such Lender for such reduction in rate of
return.   In determining such amount or
amounts, such Lender may use any reasonable averaging or attribution
methods.   The protection of this Section
8.9 shall be available to any Lender regardless of any possible contention
of invalidity or inapplicability with respect to the applicable law, regulation
or condition.   A certificate of a Lender
setting forth such amount or amounts as shall be necessary to compensate such
Lender with respect to this Section 8.9 and the calculation thereof,
when delivered to the Companies, shall be conclusive and binding on

 

62

 

each Company absent
manifest error.  In the event a Lender
exercises its rights pursuant to this Section 8.9, and subsequent
thereto determines that the amounts paid by the Companies exceeded the amount which
such Lender actually required to compensate such Lender for any reduction in
rate of return on its capital, such excess shall be promptly returned to the
Companies by such Lender.

 

8.10        Taxes,
Reserves and Other Conditions.
   In
the event that any applicable law, treaty or governmental regulation, or any
change therein or in the interpretation or application thereof, or compliance
by any Lender with any new request or directive (whether or not having the
force of law) of any central bank or other governmental or regulatory
authority, shall:

 

(a)           subject such Lender to any tax of any
kind whatsoever with respect to this Financing Agreement or change the basis of
taxation of payments to such Lender of principal, fees, interest or any other
amount payable hereunder or under any other Loan Documents (except for taxes
imposed on the overall net income of such Lender);

 

(b)           impose or require any reserve,
special deposit, assessment or similar requirement against assets held by, or
deposits in or for the account of, advances or loans by, or other credit
extended by such Lender by reason of or in respect to this Financing Agreement
and the Loan Documents, including (without limitation) pursuant to Regulation D
of the Board of Governors of the Federal Reserve System; or

 

(c)           impose on such Lender any other
condition with respect to this Financing Agreement or any other document;

 

and the result of any of the foregoing is to (i) increase the cost to
such Lender of making, renewing or maintaining such Lender’s Loans hereunder by
an amount deemed material by such Lender in the exercise of its reasonable
business judgment, or (ii) reduce the amount of any payment (whether of
principal, interest or otherwise) in respect of any of the Loans made hereunder
by an amount that such Lender deems to be material in the exercise of its
reasonable business judgment, the Companies agree to pay to such Lender, no
later than five (5) days following demand by such Lender, such additional
amount or amounts as will compensate such Lender for such increase in cost or
reduction in payment, as the case may be. 
A certificate of any Lender setting forth such amount or amounts as
shall be necessary to compensate such Lender with respect to this Section
8.10 and the calculation thereof, when delivered to the Companies, shall be
conclusive and binding on the Companies absent manifest error.  In the event any Lender exercises its rights
pursuant to this Section 8.10, and subsequent thereto determines that
the amounts paid by the Companies in whole or in part exceeded the amount which
such Lender actually required to compensate such Lender for any increase in
cost or reduction in payment, such excess shall be returned to the Companies by
such Lender.

 

8.11        Authority to Charge
Revolving Loan Account.    The Companies hereby authorize the
Agent to charge the Revolving Loan Account with the amount of all payments due
under this Section 8 as such payments become due.  Any amount charged to the Revolving Loan
Account shall be deemed a Chase Bank Rate Loan hereunder and shall bear
interest at the rate provided in Section 8.1 (or Section 8.2, if
applicable) of this Financing Agreement. 
The Companies confirm that any charges which the Agent may make to the
Revolving Loan Account as provided herein will be made as an accommodation to
the Companies and solely at the Agent’s discretion.

 

63

 

SECTION 9.         Powers

 

9.1          Authority.    The Companies hereby authorize the
Agent, or any person or agent which the Agent may designate, at the Companies’
cost and expense, to exercise all of the following powers, which authority
shall be irrevocable until the termination of this Financing Agreement and the
full and final payment and satisfaction of the Obligations:

 

(a)           To receive, endorse, and sign, all in
the name of the Agent or the Companies (or any of them), any and all checks,
notes, drafts, and other documents or instruments relating to the Collateral
which come into the possession of the Agent or under the Agent’s control;

 

(b)           To receive, open and dispose of all
mail addressed to the Companies (or any of them), and to notify postal
authorities to change the address for delivery thereof to such address as the
Agent may designate;

 

(c)           To request from customers indebted on
Accounts at any time, in the name of the Agent, information concerning the
amounts owing on the Accounts;

 

(d)           To request from customers indebted on
Accounts at any time, in the name of the Companies (or any of them), any
certified public accountant designated by the Agent or any other designee of
the Agent, information concerning the amounts owing on the Accounts;

 

(e)           To transmit to customers indebted on
Accounts notice of the Agent’s interest therein and to notify customers
indebted on Accounts to make payment directly to the Agent for the Companies’
account; and

 

(f)            To take or bring, in the name of the
Agent, the Lenders or the Companies (or any of them), all steps, actions, suits
or proceedings deemed by the Agent necessary or desirable to enforce or effect
collection of the Accounts.

 

9.2          Limitations
on Exercise.  
Notwithstanding any other provision of this Financing Agreement to the
contrary, the powers set forth in Sections 9.1(b), (c), (e)
and  (f) may only be exercised if an Event of Default shall have
occurred and remain outstanding.

 

SECTION
10.   Events of Default and Remedies

 

10.1        Events
of Default.    Each of the following events shall
constitute an “Event of Default” under this Agreement:

 

(a)           the cessation of the business of
Under Armour, or the calling of a meeting of the creditors of Under Armour for
purposes of compromising its debts and obligations;

 

(b)           the failure of Under Armour to
generally meet its debts as those debts mature;

 

(c)           (i) the commencement by any Company
of any bankruptcy, insolvency, arrangement,

 

64

 

reorganization,
receivership, assignment for the benefit of creditors or similar proceedings
under any federal or state law; or (ii) the commencement against any Company of
any bankruptcy, insolvency, arrangement, reorganization, receivership,
assignment for the benefit of creditors or similar proceeding under any federal
or state law by creditors of any of them, but only if such proceeding is not
contested by such Company within thirty (30) days and not dismissed or vacated
within sixty (60) days of commencement, or any of the actions or relief sought
in any such proceeding shall occur or be authorized by such Company;

 

(d)           the breach or violation by any
Company of any warranty, representation or covenant contained in this Financing
Agreement (other than those referred to in Section 10.1(e) or (f)
below), provided that such breach or violation shall not be deemed to be
an Event of Default unless such Company fails to cure such breach or violation
within thirty (30) days from the date of such breach or violation;

 

(e)           the breach or violation by any
Company of any warranty, representation or covenant contained in Sections
3.2, 4.3(b), 6.3, 6.4, 6.5, 7.2(c), 7.2(d),
7.2(g)(i), 7.2(h), 7.3 and 7.4;

 

(f)            the failure of the Companies to pay
any of the Obligations within five (5) Business Days of the due date thereof, provided
that the Agent may charge such amounts to the Revolving Loan Account on the due
date thereof;

 

(g)           any Company shall (i)
engage in any “prohibited transaction” as defined in ERISA, (ii) incur any “accumulated
funding deficiency” as defined in ERISA, (iii) incur any “reportable event” as
defined in ERISA, (iv) terminate any “plan”, as defined in ERISA or (v) become
involved in any proceeding in which the Pension Benefit Guaranty Corporation
shall seek appointment, or is appointed, as trustee or administrator of any “plan”,
as defined in ERISA, and with respect to this Section 10.1(g), such
event or condition (x) remains uncured for a period of thirty (30) days from
date of occurrence and (y) would, in the Agent’s reasonable discretion, subject
any Company to any tax, penalty or other liability any of which may have a
Material Adverse Effect;

 

(h)           the occurrence of any default or
event of default (after giving effect to any applicable grace or cure period)
under any of the other Loan Documents, or any of the other Loan Documents
ceases to be valid, binding and enforceable in accordance with its terms;

 

(i)            the occurrence of any “Default” or “Event
of Default” (after giving effect to any applicable grace or cure period) under
any instrument or agreement evidencing or governing (i) the Subordinated Debt
or (ii) other Indebtedness of the Companies (or any of them) having a principal
amount in excess of $500,000;

 

(j)            the Companies (or any of them) shall
modify the terms or provisions of any agreement, instrument or other document
relating to any Subordinated Debt without the Agent’s prior written consent,
unless such modification is permitted by the applicable Subordination
Agreement;

 

(k)           a Change of Control shall occur; or

 

65

 

(l)            one or more final judgments for the
payment of money in an aggregate amount in excess of $500,000 shall be rendered against the Companies
(or any one of them) (other than a judgment as to which a financially sound and
reputable insurance company has acknowledged coverage of such claim in
writing), and, within thirty (30) days after the entry of such judgment, shall
not have been discharged or stayed pending appeal (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).

 

10.2        Remedies
With Respect to Outstanding Loans.   Upon the occurrence of a Default or an Event
of Default, at the option of the Agent or the Required Lenders, all loans,
advances and extensions of credit provided for in Sections 3, 4
and 5 of this Financing Agreement thereafter shall be made in the Agent’s
and the Lenders’ discretion, and the obligation of the Agent and the Lenders to
make Revolving Loans, and to assist the Companies in opening Letters of Credit,
shall cease unless such Default is cured to the satisfaction of the Required
Lenders or such Event of Default is waived in accordance herewith.  In addition, upon the occurrence of an Event
of Default, the Agent may, at its option, and the Agent shall, upon the request
of the Required Lenders, (a) declare all Obligations immediately due and
payable, (b) charge the Companies the Default Rate of Interest on all overdue
Obligations in lieu of the interest provided for in Sections 8.1 of this
Financing Agreement, provided that the Agent has given the Companies
written notice of such Event of Default if required by Section 8.2, and
(c) immediately terminate the Commitments of the Agent and the Lenders to make
loans, advances and extensions of credit provided for in Sections 3, 4
and 5 of this Financing Agreement upon notice to the Companies.  Notwithstanding the foregoing, (x) the Agent’s
and the Lenders’ Commitments to make loans, advances and extensions of credit
provided for in Sections 3, 4 and 5 of this Financing
Agreement automatically shall terminate without any declaration, notice or
demand by the Agent or the Lenders upon the commencement of any proceeding
described in clause (ii) of Section 10.1(c), and (y) the Agent’s and the
Lenders’ Commitments to make loans, advances and extensions of credit provided
for in Sections 3, 4 and 5 of this Financing Agreement
automatically shall terminate and all Obligations shall become due and payable
immediately, in each case without any declaration, notice or demand by the
Agent or the Lenders, upon the commencement of any proceeding described in
clause (i) of Section 10.1(c) or the occurrence of an Event of Default
described in clause (ii) of Section 10.1(c).  The exercise of any option is not exclusive
of any other option that may be exercised at any time by the Agent or the
Lenders.

 

10.3        Remedies
With Respect to Collateral. 
Immediately upon the occurrence and during the continuance of an Event
of Default, the Agent may, at its option, and the Agent shall, upon the request
of the Required Lenders, to the extent permitted by applicable law: (a) remove
from any premises where same may be located any and all books and records,
computers, electronic media and software programs associated with any
Collateral (including electronic records, contracts and signatures pertaining
thereto), documents, instruments and files, and any receptacles or cabinets
containing same, relating to the Accounts, and the Agent may use, at the
Companies’ expense, such of the Companies’ personnel, supplies or space at any
Company’s place of business or otherwise, as may be necessary to properly
administer and control the Accounts or the handling of collections and
realizations thereon; (b) bring suit, in the name of the Companies (or any of
them), the Lenders or the Agent on behalf of the Lenders, and generally shall
have all other rights respecting the Accounts, including, without limitation,
the right to (i) accelerate or extend the time of payment, (ii) settle,
compromise, release in whole or in part any amounts owing on any Accounts and
(iii) issue credits in

 

66

 

the name of the Companies
(or any of them) or the Agent; (c) sell, assign and deliver the Collateral and
any returned, reclaimed or repossessed merchandise, with or without
advertisement, at public or private sale, for cash, on credit or otherwise, at
the Agent’s sole option and discretion, and the Agent, on behalf of the
Lenders, may bid or become a purchaser at any such sale, free from any right of
redemption, which right is hereby expressly waived by the Companies; (d)
foreclose the Agent’s security interests in the Collateral by any available
judicial procedure, or take possession of any or all of the Collateral without
judicial process, and to enter any premises where any Collateral may be located
for the purpose of taking possession of or removing the same; and (e) exercise
any other rights and remedies provided in law, in equity, by contract or
otherwise.  During the existence of an
Event of Default, the Agent shall also have the right, without notice or
advertisement, to sell, lease, or otherwise dispose of all or any part of the
Collateral whether in its then condition or after further preparation or
processing, in the name of the Companies (or any of them) or the Agent, on
behalf of the Lenders, or in the name of such other party as the Agent may
designate, either at public or private sale or at any broker’s board, in lots
or in bulk, for cash or for credit, with or without warranties or
representations (including, without limitation, warranties of title,
possession, quiet enjoyment and the like), and upon such other terms and
conditions as the Agent in its sole discretion may deem advisable, and the
Agent shall have the right to purchase at any such sale on behalf of the
Lenders.  If any Inventory and Equipment
shall require rebuilding, repairing, maintenance or preparation, the Agent
shall have the right (during the existence of an Event of Default), at its
option, to do such of the aforesaid as is necessary, for the purpose of putting
the Inventory and Equipment in such saleable form as the Agent shall deem
appropriate.  The Companies agree, at the
request of the Agent made while an Event of Default exists, to assemble the
Inventory and Equipment, and to make it available to the Agent at premises of
the Companies or elsewhere and to make available to the Agent the premises and
facilities of the Companies for the purpose of the Agent’s taking possession
of, removing or putting the Inventory and Equipment in saleable form.  If notice of intended disposition of any
Collateral is required by law, it is agreed that ten (10) days notice shall
constitute reasonable notification and full compliance with the law.  The net cash proceeds resulting from the
Agent’s exercise of any of the foregoing rights (after deducting all
Out-of-Pocket Expenses relating thereto) shall be applied by the Agent to the
payment of the Obligations in the order set forth in Section 10.4
hereof, and the Companies shall remain liable to the Agent and the Lenders for
any deficiencies, and the Agent in turn agrees to remit to the Companies or
their successors or assigns, any surplus resulting therefrom.  The enumeration of the foregoing rights is
not intended to be exhaustive and the exercise of any right shall not preclude
the exercise of any other right of the Agent or the Lenders under applicable
law or the other Loan Documents, all of which shall be cumulative.

 

10.4        Limited License.   Regardless of whether the
Agent’s security interests in any of the General Intangibles has attached or is
perfected, each Company hereby irrevocably grants to the Agent, for the benefit
of the Lenders, for use solely by the Agent (and its agents and
representatives) during the existence of an Event of Default, a limited
royalty-free, non-exclusive license to use such Company’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 Agent in accordance with
the provisions of Section 10 of this Financing Agreement, and (ii) the
manufacture, assembly, completion and preparation for sale of any unfinished
Inventory by the Agent in accordance with this Financing Agreement.  In exercising its rights pursuant to the
foregoing clause (ii), the Agent shall use commercially reasonable efforts to
maintain the Inventory that is finished by the Agent of a quality commensurate
with the quality of the

 

67

 

other Inventory of the
Companies.

 

10.5        Application
of Proceeds.      The Agent agrees to apply the net cash
proceeds resulting from the Agent’s exercise of any of the foregoing rights
(after deducting all Out-of-Pocket Expenses relating thereto) to the payment of
the Obligations in the following order:

 

(a)           first, to all unpaid Out of Pocket
Expenses;

 

(b)           second, to all accrued and unpaid
fees owed to the Agent and the Lenders under this Financing Agreement and the
other Loan Documents;

 

(c)           third, to accrued and unpaid interest
on the Obligations other than the Ledger Debt owing to CIT;

 

(d)           fourth, to the unpaid principal
amount of the Obligations other than the Ledger Debt owing to CIT; and

 

(e)           fifth, the unpaid principal amount
of, and accrued and unpaid interest on, the Ledger Debt owing to CIT.

 

10.6        General Indemnity.   In addition to the Companies’ agreement to
reimburse the Agent and the Lenders for Out-of-Pocket Expenses, but without
duplication, the Companies hereby agree to indemnify the Agent and the Lenders,
and each of their respective officers, directors, employees, attorneys and
agents (each, an “Indemnified Party”) from, and to defend and hold each
Indemnified Party harmless against, any and all losses, liabilities,
obligations, claims, actions, judgments, suits, damages, penalties, costs,
fees, expenses (including reasonable attorney’s fees) of any kind or nature
which at any time may be imposed on, incurred by, or asserted against, any
Indemnified Party:

 

(a)           as a result of the Agent’s or the
Lenders, exercise of (or failure to exercise) any of their respective rights
and remedies hereunder, including, without limitation, (i) any sale or transfer
of the Collateral, (ii) the preservation, repair, maintenance, preparation for
sale or securing of any Collateral, and (iii) the defense of the Agent’s
interests in the Collateral (including the defense of claims brought by the
Companies (or any of them) as a debtor-in-possession or otherwise, any secured
or unsecured creditors of the Companies (or any of them), or any trustee or
receiver in bankruptcy);

 

(b)           as a result of any environmental
pollution, hazardous material or environmental clean-up relating to the
Real Estate, the Companies’ operation and use of the Real Estate, and the
Companies’ off-site disposal practices;

 

(c)           arising from or relating to (i) the
maintenance and operation of the Agent’s Lockbox or any Depository Account,
(ii) the Agent Lockbox Agreement, (iii) any Depository Account Control
Agreements, and (iv) any action taken (or failure to act) by any Indemnified
Party with respect thereto;

 

68

 

(d)           in connection with any regulatory investigation
or proceeding by any regulatory authority or agency having jurisdiction over
the Companies (or any of them); and

 

(e)           otherwise relating to or arising out
of the transactions contemplated by this Financing Agreement and the other Loan
Documents, or any action taken (or failure to act) by any Indemnified Party
with respect thereto;

 

provided that an Indemnified Party’s
conduct in connection with the any of the foregoing matters does not constitute
gross negligence or willful misconduct, as finally determined by a court of
competent jurisdiction.  This
indemnification shall survive the termination of this Financing Agreement and
the payment and satisfaction of the Obligations.  The Agent may from time to time establish
Availability Reserves with respect to this indemnity as the Agent may deem
advisable in the exercise of its reasonable discretion, and upon termination of
this Financing Agreement, the Agent may hold such reserves as cash reserves as
security for this indemnity.

 

SECTION 11.   Termination

 

Except as otherwise
provided in Section 10.2 hereof, the Required Lenders (acting through
the Agent) may terminate this Financing Agreement and the Line of Credit only
as of the initial or any subsequent Termination Date, and then only by the
Agent giving the Companies at least sixty (60) days prior written notice of
termination.  The Companies, or any one
of them, may terminate this Financing Agreement as of a date prior to any
Termination Date (an “Early Termination Date”) upon not less than thirty
(30) days prior written notice to the Agent, without the payment of any early
termination fee.  Once given, such notice
of termination shall, except as set forth in the next sentence, be irrevocable
and this Financing Agreement shall terminate on the Early Termination
Date.   No later than three (3) Business
Days before the Early Termination Date, the Companies may, by written notice to
the Agent, either rescind such notice of termination, in which event this
Financing Agreement shall not terminate on the Early Termination Date, or
extend the Early Termination Date to a new Early Termination Date (the “Extended
Early Termination Date”) that is no later than sixty (60) days from the
original Early Termination Date.  This
Financing Agreement shall terminate on the Extended Early Termination Date
unless, no later than three (3) Business Days before the Extended Early
Termination Date, the Companies, by written notice to the Agent, rescind such
notice of termination.  The Companies may
not extend the Extended Early Termination Date. 
A termination by one Company shall be deemed to be a termination by all
Companies.  THIS FINANCING AGREEMENT, UNLESS TERMINATED AS HEREIN PROVIDED, SHALL
AUTOMATICALLY CONTINUE FROM TERMINATION DATE TO TERMINATION DATE.  All Obligations, other than Ledger Debt owing
to CIT, shall become due and payable in full on the date of the termination of
this Financing Agreement by the Required Lenders (acting through the Agent) or
the Companies pursuant to this Section 11 and, pending a final accounting of
such Obligations, the Agent may withhold any credit balances in the Revolving
Loan Account (unless supplied with an indemnity satisfactory to the Agent) as a
cash reserve to cover any contingent Obligation then outstanding, including,
but not limited to, an amount equal to 105% of the face amount of any
outstanding Letters of Credit.  All of the
Agent’s and the Lenders’ rights, liens and security interests granted pursuant
to the Loan Documents shall continue after any termination of this Financing
Agreement pursuant to this Section 11 until all Obligations, other than
Ledger Debt owing to CIT, have been fully and finally paid and satisfied.

 

69

 

SECTION 12.   Miscellaneous

 

12.1        Waivers.    Except as otherwise expressly required by the terms of this Financing
Agreement, the Companies hereby waive diligence, demand, presentment,
protest and any notices thereof as well as notices of nonpayment, intent to
accelerate and acceleration.  No waiver
of an Event of Default shall be effective unless such waiver is in writing and
signed by the Agent and the Required Lenders. 
No delay or failure of the Agent or the Lenders to exercise any right or
remedy hereunder, whether before or after the happening of any Event of
Default, shall impair any such right or remedy, or shall operate as a waiver of
such right or remedy, or as a waiver of such Event of Default.  A waiver on any occasion shall not be
construed as a bar to or waiver of any right or remedy on any future occasion.
No single or partial exercise by the Agent or the Lenders of any right or
remedy precludes any other or further exercise thereof, or precludes any other
right or remedy.

 

12.2        Entire
Agreement; Amendments; Counterparts.    This Financing
Agreement and the other Loan Documents: (a) constitute the
entire agreement among the Companies, the Agent and/or the Lenders; (b)
supersede any prior agreements (including the agreements set forth in the Commitment
Letter); (c) subject to the provisions of Section 14.10 hereof that
relate to matters subject to the approval of all Lenders, may be amended only
by a writing signed by the Companies, the Agent and the Required Lenders; and
(d) shall bind and benefit the Companies, the Agent, the Lenders and their
respective successors and assigns. 
Should the provisions of any other Loan Document conflict with the
provisions of this Financing Agreement, the provisions of this Financing
Agreement shall apply and govern.  This
Financing Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement.  Delivery of an
executed counterpart of this Financing Agreement by fax shall be equally as
effective as delivery of an original executed counterpart of this Financing
Agreement. Any party delivering an executed counterpart of this Financing
Agreement by fax also shall deliver an original executed counterpart of this
Financing Agreement but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability, and binding effect of this
Financing Agreement.  The foregoing shall
also apply to each and every other Loan Document.

 

12.3        Usury
Limit.   In no event shall
the Companies, upon demand by the Agent for payment of any indebtedness
relating hereto, by acceleration of the maturity thereof, or otherwise, be
obligated to pay interest and fees in excess of the amount permitted by
law.  Regardless of any provision herein
or in any agreement made in connection herewith, the Agent and the Lenders
shall never be entitled to receive, charge or apply, as interest on any
indebtedness relating hereto, any amount in excess of the maximum amount of
interest permissible under applicable law. 
If the Agent or the Lenders ever receive, collect or apply any such
excess, it shall be deemed a partial repayment of principal and treated as such.  If as a result, the entire principal amount
of the Obligations is paid in full, any remaining excess shall be refunded to
the Companies.  This Section 12.3
shall control every other provision of the Financing Agreement, the other Loan
Documents and any other agreement made in connection herewith.

 

12.4        Severability.   If any provision hereof or of any other Loan
Document is held to be illegal or unenforceable, such provision shall be fully
severable, and the remaining provisions of the applicable agreement shall
remain in full force and effect and shall not be affected by such

 

70

 

provision’s
severance.  Furthermore, in lieu of any
such provision, there shall be added automatically as a part of the applicable
agreement a legal and enforceable provision as similar in terms to the severed
provision as may be possible.

 

12.5        WAIVER OF JURY TRIAL; SERVICE OF
PROCESS; LIMITATION OF LIABILITY.    EACH COMPANY, THE AGENT AND THE LENDERS EACH
HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
THEREUNDER.  EACH COMPANY HEREBY
IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO SERVICE OF
PROCESS BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED.  UNDER NO CIRCUMSTANCES SHALL THE AGENT OR THE
LENDERS OR ANY OF THEIR RESPECTIVE AFFILIATES BE LIABLE FOR ANY PUNITIVE,
EXEMPLARY, CONSEQUENTIAL OR INDIRECT DAMAGES.

 

12.6        Notices.    Except as otherwise herein provided, any notice or other communication
required hereunder shall be in writing (messages sent by e-mail or other
electronic transmission (other than by telecopier) shall not constitute a
writing, however any signature on a document or other writing that is
transmitted by e-mail or telecopier shall constitute a valid signature for
purposes hereof), and shall be deemed to have been validly served, given or
delivered when received by the recipient if hand delivered, sent by commercial
overnight courier or sent by facsimile, or three (3) Business Days after
deposit in the United States mail, with proper first class postage prepaid and
addressed to the party to be notified as follows:

 

(a)           if
to the Agent, at:

 

The CIT Group/Commercial Services, Inc.

Two Wachovia Center, 25th Floor

301 South Tryon Street

Charlotte, North Carolina 28202

Attn:  Regional
Credit Manager

Fax No.: 
704-339-2250

 

(b)           if
to the Companies at:

 

Under Armour, Inc.

1020 Hull Street

Baltimore, Maryland 21230

Attn: Chief Financial Officer

Fax No.: 410-468-2516

 

(c)           if to any Lender, at its address set
forth below its signature to this Financing Agreement or its address specified
in the Assignment and Transfer Agreement executed by such Lender; or

 

(d)           to
such other address as any party may designate for itself by like notice.

 

71

 

12.7        Joint and Several Liability.

 

(a)           Joint
and Several Liability. 
All Revolving Loans and the Term Loan made to the Companies shall be
deemed jointly funded to, and received by, the Companies.  Each Company jointly and severally agrees to
pay, and shall be jointly and severally liable for the payment and performance
of, all Obligations.  Each Company
acknowledges and agrees that the joint and several liability of the Companies
is provided as an inducement to the Agent and the Lenders to provide loans and
other financial accommodations to the Companies, and that each such loan or
other financial accommodation shall be deemed to have been done or extended by
the Agent and the Lenders in consideration of, and in reliance upon, the joint
and several liability of the Companies. 
The joint and several liability of each Company hereunder is absolute,
unconditional and continuing, regardless of the validity or enforceability of
any of the Obligations, or the fact that a security interest or lien in any
Collateral may not be enforceable or subject to equities or defenses or prior
claims in favor of others, or may be invalid or defective in any way and for
any reason.  Each Company hereby waives
to the fullest extent permitted by applicable law: (i) all notices (other than
notices expressly required by the terms of this Financing Agreement) to which
such Company may be entitled as a co-obligor with respect to the Obligations,
including, without limitation, notice of (x) acceptance of this Financing
Agreement, (y) the making of loans or other financial accommodations under this
Financing Agreement, or the creation or existence of the Obligations, and (z)
presentment, demand, protest, notice of protest and notice of non-payment; and
(ii) all defenses based on (w) any modification (or series of modifications) of
this Financing Agreement or the other Loan Documents that may create a
substituted contract, or that may fundamentally alter the risks imposed on such
Company hereunder, (x) the release of any other Company from its duties this
Financing Agreement or the other Loan Documents, or the extension of the time
of performance of any other Company’s duties hereunder or thereunder, (y) the
taking, releasing, impairment or abandonment of any Collateral, or the
settlement, release or compromise of the Obligations or any other Company’s
liabilities with respect to all or
any portion of the Obligations, or (z) any other act (or any failure to act)
that fundamentally alters the risks imposed on such Company by virtue of its
joint and several liability hereunder. 
It is the intent of each Company by this paragraph to waive any and all
suretyship defenses available to such Company with respect to the Obligations,
whether or not specifically enumerated above.

 

(b)           Subrogation and Contribution Rights.  Each Company hereby agrees
that until the full and final payment and satisfaction of the Obligations and
the expiration and termination of the Commitments of the Lenders under this
Financing Agreement, such Company will not exercise any subrogation,
contribution or other right or remedy against any other Company or any security
for any of the Guaranteed Obligations arising by reason of such Company’s
performance or satisfaction of its joint and several liability hereunder.  In addition, each Company agrees that (i)
such Company’s right to receive any payment of amounts due with respect to such
subrogation, contribution or other rights is subordinated to the full and final
payment and satisfaction of the Obligations, and (ii) such Company agrees not
to demand, sue for or otherwise attempt to collect any such payment until the
full and final payment and satisfaction of the Obligations and the expiration
and termination of the Commitments of the Lenders under this Financing
Agreement.

 

(c)           Accommodation
Payments.  The
Companies are obligated to repay the Obligations

 

72

 

as joint and
several obligors under this Financing Agreement.  To the extent that any Company shall, under
this Agreement as a joint and several obligor, repay any of the Obligations
made to another Company hereunder or other Obligations incurred directly and
primarily by any other Company (an “Accommodation Payment”), then the
Company making such Accommodation Payment shall be entitled to contribution and
indemnification from, and be reimbursed by, each of the other Companies in an
amount, for each of such other Companies, equal to a fraction of such
Accommodation Payment, the numerator of which fraction is such other Company’s “Allocable
Amount” (as defined below) and the denominator of which is the sum of the
Allocable Amounts of all of the Companies. 
As of any date of determination, the “Allocable Amount” of each Company
shall be equal to the maximum amount of liability for Accommodation Payments
which could be asserted against such Company hereunder without (a) rendering
such Company “insolvent” within the meaning of Section 101 (31) of the
Bankruptcy Code, Section 2 of the Uniform Fraudulent Transfer Act (“UFTA”)
or Section 2 of the Uniform Fraudulent Conveyance Act (“UFCA”), (ii)
leaving such Company with unreasonably small capital or assets, within the
meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or
Section 5 of the UFCA, or (iii) leaving such Company unable to pay its debts as
they become due within the meaning of Section 548 of the Bankruptcy Code or
Section 4 of the UFTA, or Section 5 of the UFCA.  All rights and claims of contribution,
indemnification and reimbursement hereunder shall be subordinate in right of
payment to the prior payment in full of the Obligations.

 

12.8        CHOICE OF LAW.    THE VALIDITY, INTERPRETATION AND ENFORCEMENT
OF THIS  FINANCING AGREEMENT AND
THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK, EXCEPT TO THE EXTENT THAT ANY OTHER LOAN DOCUMENT INCLUDES AN EXPRESS
ELECTION TO BE GOVERNED BY THE LAWS OF ANOTHER JURISDICTION.

 

12.9        Reasonable Discretion. 
In each case
where applicable under this Financing Agreement, the exercise of the Agent’s “reasonable
discretion” or “reasonable judgment” or words of similar import shall be viewed
from the perspective of a secured asset-based lender, acting in accordance with
its customary practices.

 

12.10      Non-Disclosure by the Companies.  The Companies shall not disclose the
existence of this Financing Agreement or any of its contents or the Line of
Credit, without the prior written consent of the Agent, except: (a) as may be
compelled to be disclosed in a judicial or administrative proceeding or as
otherwise required by applicable law, rule or regulation, or (b) on a
confidential and “need to know” basis, to each Company’s directors, officers,
employees, attorneys, accountants, financial advisors and agents.  The Companies agree that they will not issue
any press release or other public disclosure using the name of the Agent or its
affiliates or referring to this Financing Agreement without at least three (3)
Business Days’ prior notice to the Agent and without the prior written consent
of the Agent unless (and only to the extent that) the Companies are required to
do so under applicable law and then, in any event, the Companies will consult
with the Agent before issuing such press release or other public disclosure.

 

12.11  Consent by Agent and Lenders.  The Agent and each Lender
hereby consents to the disclosure of this Financing Agreement in any
registration statement filed with the United States

 

73

 

Security and Exchange
Commission and the filing of this Financing Agreement as an exhibit to such
registration statement, to the extent required by applicable law.

 

12.12 Payments.  The Companies shall each make all payments under this Financing Agreement
and the other Loan Documents on the day when due in immediately
available funds in U.S. Dollars.  If the
Agent or the Lenders receive any payment from the Companies or on behalf of any of them in a currency other than in
U.S. Dollars, the Agent and the Lenders shall convert the payment (including
the monetary proceeds of realization upon any Collateral) into the Equivalent
Amount of U.S. Dollars as determined on the Business Day immediately preceding
the date of receipt of such actual payment. 
The Obligations shall be satisfied only to the extent of the amount
actually received by the Agent and the Lenders upon such conversion.

 

SECTION 13.  Agreements Regarding the
Lenders

 

13.1        Copies of
Statements and Financial Information.      The Agent shall forward to each
Lender a copy of the monthly loan account statement delivered by the Agent to
the Companies. In addition, the Agent agrees to provide the Lenders with copies
of all financial statements, projections and business plans of the Companies
that the Agent receives from the Companies from time to time, without any duty
to confirm or verify that such information is true, correct or complete.

 

13.2        Payments
of Principal, Interest and Fees.      After the Agent’s receipt of, or charging of,
any Term Loan principal payment, or interest and fees earned under this
Financing Agreement, the Agent agrees to remit promptly to the Lenders its
respective Pro Rata Percentages of:

 

(a)           fees
payable by the Companies hereunder, provided that the Lenders shall not
share the Documentation Fees, the other fees set forth in Section 8.8 of
this Financing Agreement, or, except as otherwise agreed in writing between the
Agent and any Lender, the fees set forth in the Agent Fee Agreement;

 

(b)           interest paid on the
outstanding principal amount of Revolving Loans, calculated based on the
outstanding amount of Revolving Loans advanced by each of the Lenders as of
each Settlement Date during the period for which interest is paid; and

 

(c)           principal
and interest paid on the Term Loan.

 

13.3        Defaulting Lender. 
In the event that any Lender fails to make available
to the Agent such Lender’s Pro Rata Percentage of any borrowing by the
Companies on the applicable Settlement Date in accordance with the provisions
of Section 3.1(d) hereof, and the Companies do not repay to the Agent
such Lender’s Pro Rata Percentage of the borrowing within three (3) Business
Days of such borrowing, the Agent shall have the right to recover such Lender’s
Pro Rata Percentage of the borrowing directly from such Lender, together with
interest thereon from the date of the borrowing at the rate per annum
applicable to such borrowing.  In
addition, until the Agent recovers such amount, (x) such Lender shall not be
entitled to receive any payments under Section 13.2 hereof, and (y) for
purposes of voting on or consenting to other matters with respect to this
Agreement or the other Loan Documents, such Lender’s Commitment shall be deemed
to be zero and such Lender shall not be considered to be a Lender.

 

74

 

13.4        Participations and Assignments.

 

(a)           Participations.  With the prior written consent of the Agent
(which consent shall not unreasonably be withheld), the Lenders may sell to one
or more commercial banks, commercial finance lenders or other financial
institutions, participations in the loans and other extensions of credit made
and to be made to the Companies hereunder. 
The Companies acknowledge that in selling such participations, the
Lenders may grant to participants certain rights to consent to waivers,
amendments and other actions with respect to this Financing Agreement, provided
that the consent of any participant shall be limited solely to matters as to
which all Lenders must consent under Section 14.10 hereof.  Except for the consent rights set forth
above, no participant shall have any rights as a Lender hereunder, and
notwithstanding the sale of any participation by a Lender, such Lender shall
remain solely responsible to the other parties hereto for the performance of
such Lender’s obligations hereunder, and the Companies, the Agent and the other
Lenders may continue to deal solely with such Lender with respect to all
matters relating to this Financing Agreement and the transactions contemplated
hereby.  In addition, all amounts payable
under this Financing Agreement to a Lender which sells a participation in
accordance with this paragraph shall continue to be paid directly to such
Lender.

 

(b)           Assignments.  With the prior written consent of the Agent
and, for so long as no Default or Event of Default exists, the Companies (each
of which consents shall not unreasonably be withheld), the Lenders may assign
all or any portion of their respective rights and obligations under this
Financing Agreement to commercial banks, commercial finance lenders or other
financial institutions, provided that (i) the principal amount of the
Loans assigned to any institution shall not be less than $5.0 million, (ii)
such assignment shall be allocated ratably between such Lender’s Revolving Line
of Credit Commitment and its Term Loan Commitment hereunder, and (iii) the
selling or purchasing Lender shall pay to the Agent an assignment processing
and recording fee of Three Thousand Five Hundred Dollars ($3,500) for the Agent’s
own account.  Each assignment of a
Commitment hereunder must be made pursuant to an Assignment and Transfer
Agreement.  From and after the effective
date of an Assignment and Transfer Agreement, (i) the assignee thereunder shall
become a party to this Financing Agreement and, to the extent that rights and
obligations hereunder have been assigned to such assignee pursuant to such
assignment, shall have all rights and obligations of a Lender hereunder, and
(ii) the assigning Lender, to the extent that rights and obligations hereunder
have been assigned by such Lender pursuant to such assignment, shall relinquish
its rights and be released from its obligations under this Financing Agreement.

 

(c)           Cooperation of Companies.  If necessary, the Companies agree to (i)
execute any documents (including new Promissory Notes) reasonably required to
effectuate and acknowledge each assignment of a Commitment made pursuant to an
Assignment and Transfer Agreement, (ii) make the Companies’ management
available to meet with the Agent and prospective participants and assignees of
Commitments, and (iii) assist the Agent or the Lenders in the preparation of
information relating to the financial affairs of the Companies as any
prospective participant or assignee of a Commitment reasonably may reasonably
request.  Subject to the provisions of Section
13.7, the Companies authorize each Lender to disclose to any prospective
participant or assignee of a Commitment, any and all information in such Lender’s
possession concerning the Companies and their respective financial affairs
which has been delivered to such Lender by or on behalf of the

 

75

 

Companies pursuant to
this Financing Agreement, or which has been delivered to such Lender by or on
behalf of the Companies in connection with such Lender’s credit evaluation of
the Companies prior to entering into this Financing Agreement, subject to
appropriate confidentiality undertakings on the part of each prospective
participant or assignee.

 

13.5        Sharing of
Liabilities.
    In the event that the Agent, the Lenders or
any of them is sued or threatened with a suit, action or claim by the
Companies, or any of one of them, or by a creditor, committee of creditors,
trustee, receiver, liquidator, custodian, administrator or other similar
official acting for or on behalf of the Companies (or any of them), on account
of (a) any preference, fraudulent conveyance or other voidable transfer alleged
to have occurred or been received as a result of the operation of this
Financing Agreement or the transactions contemplated hereby, or (b) any lender
liability theory based on any action taken or not taken by such person in
connection with this Financing Agreement or the transactions contemplated hereby,
any money paid in satisfaction or compromise of such suit, action, claim or
demand, and any expenses, costs and attorneys’ fees paid or incurred in
connection therewith (whether by the Agent, the Lenders or any of them), shall
be shared proportionately by the Lenders according to their respective Pro Rata
Percentages, except to the extent that such person’s own gross negligence or
willful misconduct directly gave rise to such suit, action or claim.  In addition, any costs, expenses, fees or
disbursements incurred by agents or attorneys retained by the Agent to collect
the Obligations or enforce any rights in the Collateral, including enforcing,
preserving or maintaining rights under this Financing Agreement, shall be
shared among the Lenders according to their respective Pro Rata Percentages to
the extent not reimbursed by the Companies or from the Proceeds of
Collateral.  The provisions of this Section
13.5 shall not apply to any suits, actions, proceedings or claims that (a)
are filed or asserted prior to the Closing Date or (b) are based on
transactions, actions or omissions occurring prior to the date of this
Financing Agreement.

 

13.6        Exercise of Setoff Rights.      The
Companies authorize each Lender, and each Lender shall have the right, after
the occurrence of an Event of Default, without notice, to set-off and apply
against any and all property or assets of any Company held by, or in the
possession of such Lender, any of the Obligations owed to such Lender.  Promptly after the exercise of any
right to set-off, the Lender exercising such right irrevocably agrees to
purchase for cash (and the other Lenders irrevocably agree to sell)
participation interests in each other Lender’s outstanding Revolving Loans as
would be necessary to cause such Lender to share the amount of the property
set- off with the other Lenders based on each Lender’s Pro Rata
Percentage.  The Companies agree, to the
fullest extent permitted by law, that any Lender also may exercise its right to
set-off with respect to amounts in excess of such Lender’s Pro Rata Percentage
of the Obligations then outstanding, and may purchase participation interests
in the amounts so set-off from the other Lenders, and upon doing so shall
deliver such excess to Agent, for distribution to the other Lenders in
settlement of the participation purchases described above in this Section
13.6.  Notwithstanding the foregoing,
each Lender hereby agrees with each other Lender that no Lender shall
independently take any action to enforce or protect its rights arising out of
this Financing Agreement or any other Loan Document (including the exercise of
any right of set-off) without first obtaining the prior written consent of the
Agent or the Required Lenders, it being the intent of the Lenders that any such
action shall be taken in concert and at the direction of the Agent or the
Required Lenders.

 

13.7        Confidentiality.
    For
the purposes of this Section 13.7, “Confidential Information”

 

76

 

means all financial
projections and all other information delivered to the Agent or any Lender by
or on behalf of the Companies in connection with the transactions contemplated
by or otherwise pursuant to this Financing Agreement that is clearly marked or
labeled (or otherwise adequately identified) as being confidential information
of the Companies, provided that such term does not include information
that (a) was publicly known or otherwise known to the Agent or any of the
Lenders prior to the time of such disclosure, (b) subsequently becomes publicly
known through no act or
omission by the Agent or the Lenders or any person acting on their behalf, (c)
otherwise becomes known to the Agent or the Lenders other than through
disclosure by the Companies, or (d) constitutes financial statements delivered
under Section 7.2(h) that are otherwise publicly available.  The Agent and the Lenders will maintain the
confidentiality of such Confidential Information in accordance with
commercially reasonable procedures adopted by the Agent and the Lenders in good
faith to protect confidential information of third parties delivered to them, provided
that the Agent and the Lenders may deliver or disclose Confidential Information
to:

 

(a)           their respective directors, officers,
employees, agents, attorneys and affiliates (to the extent such disclosure
reasonably relates to the administration of the Line of Credit);

 

(b)           their
respective financial advisors and other professional advisors who are advised
to hold confidential the Confidential Information substantially in accordance
with the terms of this Section 13.7 (to the extent such disclosure
reasonably relates to the administration of the Line of Credit);

 

(c)           any other
Lender;

 

(d)           a commercial bank, commercial finance
lender or other financial institution to which the Agent or a Lender sells or
offers to sell a portion of their rights and obligations under this Financing
Agreement or any participation therein, provided that such entity agrees
in writing prior to their receipt of such Confidential Information to be bound
by the provisions of this Section 13.7; or

 

(e)           any other person or entity (including
bank auditors and other regulatory officials) to which such delivery or
disclosure may be necessary or appropriate (i) to
comply with any applicable law, rule, regulation or order, (ii) in response to
any subpoena or other legal process, (iii) in connection with any litigation to
which the Agent or a Lender is a party or (iv) if an Event of Default shall
have occurred and remain outstanding, to the extent the Agent may reasonably
determine such delivery and disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies under this
Financing Agreement.

 

Each Lender becoming a
Lender subsequent to the initial execution and delivery of this Financing
Agreement, by its execution and delivery of an Assignment and Transfer
Agreement, will be deemed to have agreed to be bound by, and to be entitled to
the benefits of, this Section 13.7.

 

SECTION
14.  Agency

 

14.1        Appointment
of Agent; Powers.

 

(a)           Each Lender hereby
irrevocably designates and appoints CIT to act as the Agent for

 

77

 

such Lender under this
Financing Agreement and the other Loan Documents, and irrevocably authorizes
CIT, as Agent for such Lender, to take such action on its behalf under the
provisions of this Financing Agreement and the other Loan Documents, and to
exercise such powers and perform such duties as are expressly delegated to the
Agent by the terms of this Financing Agreement and the other Loan Documents,
together with such other powers as are reasonably incidental thereto. In
performing its functions under this Financing Agreement, the Agent is acting
solely as an agent of the Lenders, and the Agent (i) does not assume, (ii)
shall not be deemed to have assumed and (iii) expressly disclaims an agency, an
advisory or any other fiduciary relationship with the Companies or any
Lender.  The Agent shall not have any (a) duty, responsibility, obligation
or liability to any Lender or the Companies, except for those duties,
responsibilities, obligations and liabilities expressly set forth in this
Financing Agreement or the other Loan Documents, or (b) fiduciary or advisory
relationship with any Lender or the Companies, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Financing Agreement or the other Loan Documents, or otherwise exist
against the Agent.

 

(b)           Each Lender
irrevocably designates and appoints Wachovia to act as the Documentation Agent
for each Lender under this Financing Agreement and the other Loan Documents and
SunTrust to act as the Syndication Agent for each Lender under this Financing
Agreement and the other Loan Documents. 
In such capacities, neither the Documentation Agent nor the Syndication
Agent shall have any rights, powers, responsibilities, obligations or
liabilities under this Financing Agreement or the other Loan Documents, except
for the duties, responsibilities, obligations and liabilities of a Lender
hereunder.

 

14.2        Delegation
of Agent’s Duties.
    The
Agent may execute any of its duties under this Financing Agreement and all
ancillary documents by or through agents or attorneys, and shall be entitled to
the advice of counsel concerning all matters pertaining to such duties.

 

14.3        Disclaimer
of Agent’s Liabilities.
    Neither
the Agent nor any of its officers, directors, employees, agents, or attorneys
shall be liable to any Lender for any action lawfully taken or not taken by the
Agent or such person under or in connection with the Financing Agreement and
the other Loan Documents (except for the Agent’s or such person’s gross
negligence or willful misconduct). 
Without limiting the generality of the foregoing, the Agent shall not be
liable to the Lenders for (i) any recital, statement, representation or
warranty made by the Companies or any officer thereof contained in (x) this
Financing Agreement, (y) any other Loan Document or (z) any certificate,
report, audit, statement or other document referred to or provided for in this
Financing Agreement or received by the Agent under or in connection with this
Financing Agreement, (ii) the value, validity, effectiveness, enforceability or
sufficiency of this Financing Agreement, the other Loan Documents or the Agent’s
security interests in the Collateral, (iii) any failure of the Companies to
perform their respective obligations under this Financing Agreement and the
other Loan Documents, (iv) any loss or depreciation in the value of, delay in
collecting the Proceeds of, or failure to realize on, any Collateral, (v) the
Agent’s delay in the collection of the Obligations or enforcing the Agent’s
rights against the Companies, or the granting of indulgences or extensions to
the Companies or any account debtor of the Companies, or (vi) any mistake,
omission or error in judgment in passing upon or accepting any Collateral.  In addition, the Agent shall have no duty or
responsibility to ascertain or to inquire as to the observance or performance
of any of the terms, conditions, covenants or other agreements of the Companies
contained in this Financing Agreement

 

78

 

or the other Loan
Documents, or to inspect, verify, examine or audit the assets, books or records
of the Companies at any time.

 

14.4        Reliance
and Action by Agent.      The Agent shall be entitled to
rely, and shall be fully protected in relying, upon legal counsel, independent
public accountants and experts selected by Agent, and shall not be liable to
the Lenders for any action taken or not taken in good faith based upon the
advice of such counsel, accountants or experts. 
In addition, the Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order or other document believed by the Agent in good faith to be genuine and
correct, and to have been signed, sent or made by the proper person or
persons.  The Agent shall be fully
justified in taking or refusing to take any action under this Financing
Agreement and the other Loan Documents unless the Agent (a) receives the advice
or consent of the Lenders or the Required Lenders, as the case may be, in a
manner that the Agent deems appropriate, or (b) is indemnified by the Lenders
to the Agent’s satisfaction against any and all liability, cost and expense
which may be incurred by the Agent by reason of taking or refusing to take any
such action.  The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Financing Agreement and the other Loan Documents in accordance with a request
of all Lenders or the Required Lenders, as the case may be, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all Lenders.

 

14.5        Events of
Default.      The Agent shall
not be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless the Agent has received notice from the
Companies or a Lender describing such Default or Event of Default with
specificity.  In the event that the Agent
receives such a notice, the Agent shall promptly give notice thereof to all
Lenders.  The Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Lenders or Required Lenders, as the case may be, provided
that (a) if appropriate, the Agent may require indemnification from the Lenders
under Section 14.4 prior to taking such action, (b) under no
circumstances shall the Agent have an obligation to take any action that the
Agent believes in good faith would violate any law or any provision of this
Financing Agreement or the other Loan Documents, and (c) unless and until the
Agent shall have received direction from the Lenders or Required Lenders, as
the case may be, the Agent may (but shall not be obligated to) take such action
or refrain from taking action with respect to such Default or Event of Default
as the Agent shall deem advisable and in the best interests of the Lenders.

 

14.6        Lenders’
Due Diligence.      Each Lender expressly
acknowledges that neither the Agent, nor any of its officers, directors,
employees or agents, has made any representation or warranty to such Lender
regarding the transactions contemplated by this Financing Agreement or the
financial condition of the Companies, and such Lender agrees that no action
taken by the Agent hereafter, including any review of the business or financial
affairs of the Companies, shall be deemed to constitute a representation or
warranty by the Agent to any Lender. 
Each Lender also acknowledges that such Lender has, independently and
without reliance upon the Agent or any other Lender and based on such documents
and information as such Lender has deemed appropriate, made its own credit
analysis, appraisal of and investigation into the business, operations,
property, financial condition and creditworthiness of the Companies, and made
its own decision to enter into this Financing Agreement.  Each Lender agrees, independently and without
reliance upon the Agent or any other Lender and based on such documents and
information as such Lender shall deem

 

79

 

appropriate at the time,
(a) to continue to make its own credit analyses and appraisals in deciding
whether to take or not take action under this Financing Agreement and (b) to
make such investigations as such Lender deems necessary to inform itself as to
the business, operations, property, financial condition and creditworthiness of
the Companies.

 

14.7        Right to Indemnification.      The Lenders agree
to indemnify the Agent (to the extent not reimbursed by the Companies and
without limiting the obligation of the Companies to do so), from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time be imposed on, incurred by or asserted against the Agent in any
way relating to or arising out of (a) this Financing Agreement or any other
Loan Document, (b) the transactions contemplated hereby or (c) any action taken
or not taken by the Agent under or in connection with any of the foregoing, provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting solely from the Agent’s gross
negligence or willful misconduct.

 

14.8        Other Transactions.      The Agent and any
Lender may make loans to and generally engage in any kind of business with the
Companies, as though the Agent or such Lender were not the Agent or a Lender
hereunder.  With respect to Loans made by
the Agent under this Financing Agreement as a Lender, the Agent shall have the
same rights and powers, duties and liabilities under this Financing Agreement
and the other Loan Documents as any other Lender, and may exercise the same as
though it was not the Agent, and the term “Lender” and “Lenders” shall include
the Agent in its individual capacity as such.

 

14.9        Resignation
of Agent.      The Agent may resign as the
Agent upon 30 days notice to the Lenders, and such resignation shall be
effective on the earlier of (a) the appointment of a successor Agent by the
Lenders or (b) the date on which such 30-day period expires.  If the Agent provides the Lenders with notice
of its intention to resign as Agent, the Lenders agree to appoint a successor
to the Agent as promptly as possible thereafter, whereupon such successor shall
succeed to the rights, powers and duties of the Agent, and the term “Agent”
shall mean such successor effective upon its appointment.  Upon the effective date of an Agent’s
resignation, such Agent’s rights, powers and duties as Agent hereunder
immediately shall terminate, without any other or further act or deed on the
part of such former Agent or any of the parties to this Financing
Agreement.  After an Agent’s resignation
hereunder, the provisions of this Section 14 shall continue to inure to
such Agent’s benefit as to any actions taken or not taken by such Agent while
acting as the Agent.

 

14.10      Voting
Rights; Agent’s Discretionary Rights.      Notwithstanding anything
contained in this Financing Agreement to the contrary, without the prior
written consent of all Lenders, the Agent will not agree to:

 

(a)           amend
or waive the Companies’ compliance with any term or provision of this Financing
Agreement, if the effect of such amendment or waiver would be to (i) increase
the Revolving Line of Credit or the Line of Credit, (ii) reduce the principal
of, or rate of interest on, the Revolving Loans or the Term Loan or reduce the
regularly scheduled amortization amount of the Term Loan, (iii) reduce or waive
the payment of any fee in which all Lenders share hereunder or (iv) extend the
maturity date of any of the Obligations, including, without limitation, the
maturity date of

 

80

 

the Term Loan, or the
date fixed for payment of any installment thereof;

 

(b)           alter
or amend (i) this Section 14.10 or (ii) the definitions of “Availability
Reserve”, “Eligible Accounts Receivable”, “Eligible Inventory”,
“Collateral”, “Letter of Credit Reserve”, “Net Availability”,
“Net Average Availability” or “Required Lenders”;

 

(c)           amend the definition of “Borrowing
Base”, “Accounts Borrowing Base”, “Inventory Borrowing Base”
or “Inventory Cap Amount” or modify the Agent’s criteria for determining
compliance with the definitions of “Eligible Accounts Receivable” or “Eligible
Inventory”, if the effect thereof would be to increase Net Availability;

 

(d)           except
as otherwise expressly permitted or required hereunder, release any Collateral
having a value (as determined by the Agent in its reasonable discretion) of
more than $1.0 million in any fiscal year of the Companies (exclusive of the
amount of any Eligible Approved Accounts sold to CIT under the CARPA for which
CIT has paid the purchase price);

 

(e)           grant
an extension of time past March 31, 2006 for the Companies to deliver to the
Agent the Trademark Appraisal pursuant to Section 4.3 of this Financing
Agreement; or

 

(f)            knowingly
make any Revolving Loan to the Companies if after giving effect thereto the
principal amount of all outstanding Revolving Loans plus the undrawn
amount of all outstanding Letters of Credit would exceed the lesser of (i) the
Revolving Line of Credit or (ii) one
hundred ten percent (110%) of the Borrowing Base of the Companies; provided
that in no event shall the Agent continue to knowingly make Overadvances
under this Section 14.10(f) for a period in excess of ninety (90)
consecutive days without the consent of all Lenders, and provided  further
that after the occurrence of an Event of Default, the Agent in its sole
discretion shall have the right to make Overadvances in the amount of up to
$5,000,000 in excess of the limitation set forth in clause (ii) above in order
to preserve, protect and realize upon the Collateral if such Overadvance, when
added to the outstanding Revolving Loans then outstanding, would not exceed the
amount of the Revolving Line of Credit then in effect.

 

In all other respects the Agent is authorized to take or to refrain
from taking any action which the Agent, in the exercise of its reasonable
discretion, deems to be advisable and in the best interest of the Lenders,
unless this Financing Agreement specifically requires the Companies or the
Agent to obtain the consent of, or act at the direction of, the Required
Lenders.  Without limiting the generality
of the foregoing sentence, and notwithstanding any other provision of this
Financing Agreement to the contrary, the Agent shall have the right in its sole
discretion to (i) determine whether the requirements for eligibility set forth
in the definitions of “Eligible Accounts Receivable” and “Eligible
Inventory” are satisfied, (ii) establish, adjust and release the amount of
reserves provided for in the definitions of “Availability Reserve”, “Eligible
Accounts Receivable” and “Eligible Inventory”, (iii) make
Overadvances in accordance with clause (f) of this Section 14.10, (iv)
release any Collateral having a value (as determined by the Agent in its
reasonable discretion) of up to $1.0 million in each fiscal year of the
Companies (exclusive of the amount of any Eligible Approved Accounts sold to
CIT under the CARPA for which CIT has paid the purchase price or any sale
expressly permitted hereunder); or (v) amend any provision of this Financing
Agreement or the other Loan Documents in order to cure any error, ambiguity,
defect or inconsistency set forth therein.

 

81

 

In the event the
Agent terminates the Commitments pursuant to the terms hereof, the Agent agrees
to cease making additional Loans or advances upon the effective date of
termination, except for Loans or advances which the Agent in its sole
discretion determines are reasonably required to preserve, protect or realize
upon the Collateral.

 

14.11      Deemed
Consent.      If a Lender’s consent to a
waiver amendment or other course of action is required under the terms of this
Financing Agreement and such Lender does not respond to any request by the
Agent for such consent within ten (10) Business Days after the date of such
request, such failure to respond shall be deemed a consent to the requested
course of action.

 

14.12      Notice of Termination of Commitments.     Each Lender agrees
that notwithstanding the provisions of Section 11 of this Financing Agreement,
such Lender, acting alone, may terminate its Commitment only as of the initial
or any subsequent Termination Date, and then only by giving the Agent ninety
(90) days prior written notice thereof. Within 30 days after receipt of such
termination notice, the Agent at its option agrees to either (a) give notice of
termination of this Financing Agreement and the Line of Credit to the Companies
hereunder, or (b) purchase such Lender’s entire Commitment hereunder for the
full amount thereof as of the date of such purchase, plus accrued interest to
the date of such purchase.

 

14.13      Survival of Agreements of the Lenders.
    The obligations of the Lenders set forth in Sections
13.3, 13.5, 13.6, 14.4 and 14.7 hereof shall
survive the termination of this Financing Agreement and the Commitments of the
Lenders hereunder.

 

[Rest of Page
Intentionally Left Blank]

 

82

 

IN WITNESS WHEREOF,
each of the parties hereto have caused this Financing Agreement to be duly
executed and delivered by its proper and duly authorized officers as of the
date set forth above.

 

	
   

  	
  COMPANIES:

  
	
   

  	
   

  
	
   

  	
  UNDER ARMOUR, INC.,

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Kevin A. Plank

  	
   

  
	
   

  	
  Title:

  	
     President of Under Armour, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
  UNDER ARMOUR RETAIL, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Kevin A. Plank

  	
   

  
	
   

  	
  Title:

  	
    President of Under Armour Retail, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
  UNDER ARMOUR RETAIL OF MARYLAND, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Kevin A. Plank

  	
   

  
	
   

  	
  Title:

  	
  President of Under Armour Retail, Inc., Sole Member

  
	
   

  	
   

  	
  of UA Retail of Maryland LLC

  	
   

  
	
   

  	
   

  
	
   

  	
  UNDER ARMOUR RETAIL OF VIRGINIA, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Kevin A. Plank

  	
   

  
	
   

  	
  Title:

  	
  President of Under Armour Retail, Inc., Sole Member

  
	
   

  	
   

  	
  of UA Retail of Virginia LLC

  	
   

  
	
   

  	
   

  
	
   

  	
  UNDER ARMOUR HONG KONG, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Kevin A. Plank

  	
   

  
	
   

  	
  Title:

  	
  President of Under Armour, Inc., Sole Member of

  
	
   

  	
   

  	
  Under Armour Hong Kong LLC

  	
   

  
	
   

  	
   

  
	
   

  	
  AGENT:

  
	
   

  	
   

  
	
   

  	
  THE CIT GROUP/COMMERCIAL SERVICES,
  INC.,

  
	
   

  	
  as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Timothy E. Cooper

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
					

 

83

 

	
   

  	
  DOCUMENTATION AGENT:

  
	
   

  	
   

  
	
   

  	
  WACHOVIA BANK, NATIONAL
  ASSOCIATION,

  
	
   

  	
  as Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Christopher S. Hendrick

  	
   

  
	
   

  	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
  SYNDICATION AGENT:

  
	
   

  	
   

  
	
   

  	
  SUNTRUST BANK,

  
	
   

  	
  as Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   [illegible]

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
					

 

84

 

	
   

  	
  LENDERS:

  
	
   

  	
  THE CIT GROUP/COMMERCIAL SERVICES,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Timothy E. Cooper

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
					

 

	
  COMMITMENT

  	
   

  	
  AMOUNT

  	
   

  	
  PRO RATA
  PERCENTAGE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Revolving Line of Credit Commitment

  (Before the Revolving Line of Credit Increase Effective Date)

  	
   

  	
  $

  	
  37,500,000

  	
   

  	
  50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Revolving Line of Credit Commitment

  (After the Revolving Line of Credit Increase Effective Date)

  	
   

  	
  $

  	
  50,000,000

  	
   

  	
  50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Term Loan Commitment:

  	
   

  	
  $

  	
  12,500,000

  	
   

  	
  50

  	
  %

  

 

 

Address for Notices:

 

The CIT Group/Commercial Services, Inc.

Two Wachovia Center, 25th Floor

301 South Tryon Street

Charlotte, North Carolina 28202

Attn:  Regional Credit Manager

Fax No.:  704-339-2250

 

85

 

	
   

  	
  WACHOVIA BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Christopher S. Hendrick

  	
   

  
	
   

  	
  Title:

  	
  Director

  	
   

  
					

 

	
  COMMITMENT

  	
   

  	
  AMOUNT

  	
   

  	
  PRO RATA
  PERCENTAGE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Revolving Line of Credit Commitment

  (Before the Revolving Line of Credit Increase Effective Date)

  	
   

  	
  $

  	
  18,750,000

  	
   

  	
  25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Revolving Line of Credit Commitment

  (After the Revolving Line of Credit Increase Effective Date)

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Term Loan Commitment:

  	
   

  	
  $

  	
  6,250,000

  	
   

  	
  25

  	
  %

  

 

 

Address for Notices:

 

Wachovia Bank, National Association

1133 Avenue of the Americas

New York, New York  10036

Attn: Portfolio Manager

Fax No.: 212-545-4283

 

86

 

	
   

  	
  SUNTRUST BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   [illegible]

  	
   

  
	
   

  	
  Title:

  	
   Vice President

  	
   

  
					

 

	
  COMMITMENT

  	
   

  	
  AMOUNT

  	
   

  	
  PRO RATA
  PERCENTAGE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Revolving Line of Credit Commitment (Before the
  Revolving Line of Credit Increase Effective Date)

  	
   

  	
  $

  	
  18,750,000

  	
   

  	
  25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Revolving Line of Credit Commitment (After the
  Revolving Line of Credit Increase Effective Date)

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Term Loan Commitment:

  	
   

  	
  $

  	
  6,250,000

  	
   

  	
  25

  	
  %

  

 

 

Address for Notices:

 

SunTrust Bank

120 East Baltimore Street, 25th Floor

Baltimore, Maryland  21202

Attn: John E. Hehir, Vice President

Fax No.: 410-986-1927

 

87

 

EXHIBIT A

 

FORM OF ASSIGNMENT AND TRANSFER AGREEMENT

 

ASSIGNMENT AND TRANSFER AGREEMENT

 

Reference is made
to the Second Amended and Restated Financing Agreement dated as of September
28, 2005 (as amended, restated supplemented or otherwise modified and in effect
from time to time, the “Financing Agreement”) among Under Armour, Inc.,
a Maryland corporation, and its wholly-owned Domestic Subsidiaries that are
from time to time party thereto, as borrowers (individually, a “Company”
and collectively the “Companies”), the financial institutions from time to
time party thereto, as lenders (collectively, the “Lenders”, and
individually, each a “Lender”), and The CIT Group/Commercial Services,
Inc, a New York corporation, as agent for the Lenders (in such capacity, the “Agent”).  Capitalized terms used in this Assignment and
Transfer Agreement (this “Agreement”) and not otherwise defined shall
have the meanings given to such terms in the Financing Agreement.  This Agreement, between the Assignor (as
defined and set forth on Schedule 1,
which is made a part of this Agreement) and the Assignee (as defined and set
forth on Schedule 1) is
effective as of Effective Date (as set forth on Schedule 1).

 

1.             The Assignor hereby irrevocably
sells and assigns to the Assignee, without recourse to the Assignor, and the
Assignee hereby irrevocably purchases and assumes from the Assignor, without
recourse to the Assignor, as of the Effective Date, an undivided interest (the “Assigned
Interest”) in and to
all of the Assignor’s rights and obligations under the Financing Agreement
respecting those, and only those, portions of the financing facilities
contained in the Financing Agreement as are set forth on Schedule 1 (collectively, the “Assigned Facilities”), in an
amount for each of the Assigned Facilities as set forth on Schedule 1.

 

2.             The Assignor: (i) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Financing
Agreement or any other instrument, document or agreement executed or delivered
in connection therewith (collectively the “Loan Documents”), or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Financing Agreement,
any Collateral thereunder or any of the other Loan Documents, other than a
representation and warranty that the Assignor is the legal and beneficial owner
of the Assigned Interest and that the Assigned Interest is free and clear of
any adverse claim; and (ii) makes no representation or warranty and assumes no
responsibility with respect to (x) the financial condition of the Companies, or
(y) the performance or observance by the Companies of any of its/their
respective obligations under the Financing Agreement or any of the Loan
Documents.

 

3.             The Assignee (i) represents and warrants that it is
legally authorized to enter into this Agreement, (ii) confirms that it has received a copy of the Financing
Agreement as amended through the Effective Date, together with the copies of
the most recent financial statements of the Companies, and such other documents
and information as the Assignee has deemed appropriate to make its own credit
analysis, (iii) agrees that the
Assignee will, independently and without reliance upon the

 

1

 

Agent, the Assignor or
any other Lender and based on such documents and information as the Assignee
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Financing Agreement, (iv) appoints and authorizes the Agent
to take such action as agent on the Assignee’s behalf and to exercise such
powers under the Financing Agreement as are delegated to the Agent by the terms
thereof, together with such powers as are reasonably incidental thereto, (v) agrees that the Assignee will be
bound by the provisions of the Financing Agreement and will perform in
accordance with its terms all the obligations which by the terms of the
Financing Agreement are required to be performed by it as Lender, and (vi) if the Assignee is organized
under the laws of a jurisdiction outside the United States, attaches the forms
prescribed by the IRS certifying as to the Assignee’s exemption from United
States withholding taxes with respect to all payments to be made to the
Assignee under the Financing Agreement or such other documents as are necessary
to indicate that all such payments are subject to such tax at a rate reduced by
an applicable tax treaty.

 

4.             Following the execution of this
Assignment and Transfer Agreement, such agreement will be delivered to the
Agent for acceptance by the Agent, and, if required by the Financing Agreement,
for acceptance by the Companies, effective as of the Effective Date.

 

5.             Upon such acceptance, from and
after the Effective Date, the Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignee, whether such amounts have accrued prior to the
Effective Date or accrue subsequent to the Effective Date.  The Assignor and the Assignee shall make all
other appropriate adjustments in payments for periods prior to the Effective
Date made by the Agent or with respect to the making of this assignment
directly between themselves.

 

6.             From and after the Effective Date, (i) the Assignee shall be a party to
the Financing Agreement and, to the extent provided in this Agreement, have the
rights and obligations of a Lender thereunder, and (ii) the Assignor shall, to the extent provided in this Agreement,
relinquish its rights and be released from its obligations under the Financing
Agreement.

 

7.             THIS
ASSIGNMENT AND TRANSFER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES.

 

2

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by its respective duly authorized officers on Schedule 1 hereto.

 

 

	
  ASSIGNOR:

  	
   

  	
  ASSIGNEE:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  	
   

  

 

 

Accepted by the Agent:

 

THE CIT GROUP/COMMERCIAL SERVICES, INC.,

as Agent

 

 

	
  By:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Accepted by the Companies:

 

UNDER ARMOUR, INC.

UNDER ARMOUR RETAIL, INC.

UNDER ARMOUR RETAIL OF MARYLAND, L.L.C.

UNDER ARMOUR RETAIL OF VIRGINIA, LLC

UNDER ARMOUR HONG KONG, LLC

[Other wholly-owned Domestic Subsidiaries
that are parties to Financing Agreement]

 

 

	
  By:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  
							

 

3

 

Schedule 1 to Assignment
and Transfer Agreement

 

Name of Assignor:                                        

 

Name of Assignee:                                       

 

Effective Date of Assignment:                   ,
200 

 

	
  Assigned Facilities

  	
   

  	
  Percentage of Facilities Assigned

  	
   

  	
  Dollar Amount Assigned

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Revolving Line of Credit Commitment

  (Before the Revolving Line of Credit Increase Effective Date)

  	
   

  	
   

  	
  %

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Revolving Line of Credit Commitment

  (After the Revolving Line of Credit Increase Effective Date)

  	
   

  	
   

  	
  %

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Term Loan Commitment:

  	
   

  	
   

  	
  %

  	
  $

  	
   

  

 

4

 

EXHIBIT B

 

FORM OF REVOLVING LOAN PROMISSORY
NOTE

 

 

	
  $                            

  	
                         ,
  2005

  

 

FOR VALUE RECEIVED, the undersigned, undersigned,
UNDER ARMOUR, INC. (“Under Armour”), UNDER ARMOUR RETAIL, INC. (“Under
Armour Retail”), UNDER ARMOUR RETAIL OF MARYLAND, L.L.C. (“Under Armour
Maryland”), UNDER ARMOUR RETAIL OF VIRGINIA, LLC (“Under Armour Virginia”),
and UNDER ARMOUR HONG KONG, LLC (“Under Armour Hong Kong” and, together
with Under Armour, Under Armour Retail, Under Armour Maryland and Under Armour
Virginia, individually, a “Company” and collectively the “Companies”),
jointly and severally, absolutely and unconditionally, promise to pay to the
order of                                                              
(“Lender”), at the offices of the Agent located at Two Wachovia Center,
25th Floor, 301 South Tryon Street, Charlotte, North Carolina 28202, in lawful
money of the United States of America and in immediately available funds, the
principal amount of                                    
Dollars ($                ),
or such lesser amount as may be advanced to the Companies by Lender as
Revolving Loans under the Financing Agreement (as defined below) and remain
unpaid, on the Termination Date.

 

The
Companies jointly and severally, absolutely and unconditionally, further agree
to pay interest at said office, in like money, on the unpaid principal amount
of Revolving Loans outstanding from time to time on the dates and at the rates
specified in Section 8 of the Financing Agreement of even date herewith
among the Companies, the Lenders that are parties thereto and The CIT
Group/Commercial Services, Inc., as Agent for the Lenders (the “Financing
Agreement”).  Capitalized terms used
in this Note and defined in the Financing Agreement shall have the meanings
given to such terms in the Financing Agreement unless otherwise specifically
defined herein.

 

This
Note is one of the Promissory Notes referred to in the Financing Agreement,
evidences the Lender’s Pro Rata Percentage of all Revolving Loans made to the
Companies by the Lender thereunder, and is subject to, and entitled to, all
provisions and benefits thereof, including optional and mandatory prepayment,
in whole or in part, as provided therein.

 

Notwithstanding
any other provision of this Note to the contrary, upon the occurrence of any
Event of Default specified in the Financing Agreement, or upon termination of
the Financing Agreement for any reason, all amounts then remaining unpaid on
this Note may become, or be declared to be, at the sole election of Agent or
the Required Lenders, immediately due and payable as provided in the Financing
Agreement.

 

[Rest of Page
Intentionally Left Blank]

 

1

 

IN WITNESS
WHEREOF, the Companies have each caused this Promissory Note to be executed on
the date first above written.

 

	
   

  	
  COMPANIES:

  
	
   

  	
   

  
	
   

  	
  UNDER ARMOUR, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNDER ARMOUR RETAIL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNDER ARMOUR RETAIL OF
  MARYLAND, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNDER ARMOUR RETAIL OF VIRGINIA, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNDER ARMOUR HONG KONG, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

2

 

EXHIBIT C

 

TERM LOAN PROMISSORY NOTE

 

 

	
  $                            

  	
  September     ,
  2005

  

 

FOR VALUE RECEIVED, the undersigned, UNDER ARMOUR,
INC. (“Under Armour”), UNDER ARMOUR RETAIL, INC. (“Under Armour
Retail”), UNDER ARMOUR RETAIL OF MARYLAND, L.L.C. (“Under Armour
Maryland”), UNDER ARMOUR RETAIL OF VIRGINIA, LLC (“Under Armour Virginia”),
and UNDER ARMOUR HONG KONG, LLC (“Under Armour Hong Kong” and, together
with Under Armour, Under Armour Retail, Under Armour Maryland and Under Armour
Virginia, individually, a “Company” and collectively the “Companies”),
jointly and severally, absolutely and unconditionally, promise to pay to the
order of                                                             
(“Lender”), at the offices of the Agent located at Two Wachovia Center,
25th Floor, 301 South Tryon Street, Charlotte, North Carolina 28202, in lawful
money of the United States of America and in immediately available funds, the
principal amount of                    
Dollars ($               ),
together with interest on the unpaid principal balance outstanding, all on the
dates and at the rates specified in Section 8 of the Financing Agreement
(as such term is defined below).

 

This
Note is one of the Promissory Notes referred to in the Financing Agreement of
even date herewith among the Companies, the Lenders that are parties thereto
and The CIT Group/Commercial Services, Inc., as Agent for the Lenders (the “Financing
Agreement”), evidences the Lender’s Pro Rata Percentage of the Term Loan
made to the Companies thereunder, and is subject to, and entitled to, all
provisions and benefits thereof, including optional and mandatory prepayment,
in whole or in part, as provided therein. 
Capitalized terms used in this Note and defined in the Financing
Agreement shall have the meanings given to such terms in the Financing Agreement
unless otherwise specifically defined herein.

 

Notwithstanding any other provision of this Note to
the contrary, upon the occurrence of any Event of Default specified in the
Financing Agreement, or upon termination of the Financing Agreement for any reason,
all amounts then remaining unpaid on this Note may become, or be declared to
be, at the sole election of Agent or the Required Lenders, immediately due and
payable as provided in the Financing Agreement.

 

[Rest of Page
Intentionally Left Blank]

 

1

 

IN
WITNESS WHEREOF, the Companies have each caused this Promissory Note to be
executed on the date first above written.

 

	
   

  	
  COMPANIES:

  
	
   

  	
   

  
	
   

  	
  UNDER ARMOUR, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNDER ARMOUR RETAIL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNDER ARMOUR RETAIL OF
  MARYLAND, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNDER ARMOUR RETAIL OF VIRGINIA, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNDER ARMOUR HONG KONG, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

2

 

EXHIBIT D-1

 

COMPLIANCE CERTIFICATE

 

[Date]

 

The CIT Group/Commercial Services, Inc., as Agent

Two Wachovia Center, 25th Floor

301 South Tryon Street

Charlotte, North Carolina 28202

 

Each of the Lenders to the Financing Agreement

described below

 

Re:                               Second
Amended and Restated Financing Agreement dated as of September 28, 2005 (the “Financing
Agreement”) among Under Armour, Inc., a Maryland corporation, and its
wholly-owned Domestic Subsidiaries that are from time to time party thereto, as
borrowers (individually, a “Company” and collectively the “Companies”),
The CIT Group/Commercial Services, Inc., as Agent (the “Agent”), and the
lenders that are parties thereto (collectively, the “Lenders”)

 

Ladies and Gentlemen:

 

Reference is made to the Financing Agreement.
Capitalized terms used herein and not specifically defined shall have the
meanings given to such terms in the Financing Agreement.

 

Pursuant to Section 7.2(h) of the Financing
Agreement, I enclose the Companies’ financial statements for the          
ended        , 200   (the “Reporting
Period”) and the fiscal year-to-date period then ended.  As the                   
of the Funds Administrator, I hereby certify to the Agent and the Lenders, on
behalf of the Companies, that:

 

1.             The
financial statements fairly and accurately reflect the Companies’ financial
condition at the end of the particular accounting periods covered by such
financial statements, as well as the Companies’ operating results during such
accounting periods, in each case, in accordance with GAAP and subject to year-end
audit adjustments.

 

2.             During
the Reporting Period, to my knowledge, (i) there has occurred no Default or
Event of Default under the Financing Agreement, or, if I have knowledge that
any Default or Event of Default has occurred during such period, a detailed
description thereof is set forth on the Exhibit     
attached hereto, and (ii) the Companies have not received any notice of
cancellation with respect to their property insurance policies during such
period, or, if I have knowledge of the Companies’ receipt of any such notice, a
copy thereof is attached hereto.

 

1

 

3.             [Check
Applicable Section 3]:*

 

               A
Net Availability Shortfall did not occur on any day during the Reporting Period
or on any day after the end of the Reporting Period but before the date of this
certificate.  As a result, the Companies
are not currently required to maintain compliance with the financial covenants
set forth in Section 7.3 of the Financing Agreement for the period
ending on the last day of the Reporting Period.

 

               A
Net Availability Shortfall did occur on any day during the Reporting Period or
on any day after the end of the Reporting Period but before the date of this
certificate.  As a result, the Companies
are required to maintain compliance with the financial covenants set forth in Section
7.3 of the Financing Agreement for the period ending on the last day of the
Reporting Period.  Exhibit   
attached hereto sets forth detailed calculations showing compliance with all
financial covenants contained in Section 7.3 of the Financing Agreement
for the period ending on the last day of the Reporting Period.

 

Very truly yours,

 

 

[attach
appropriate exhibits]

 

*Section 3 may be
omitted in a Compliance Certificate that is submitted for a month end Reporting
Period that is not the last month of a fiscal quarter.

 

2

 

EXHIBIT D-2

 

SPECIAL COMPLIANCE CERTIFICATE

 

[Date]

 

The CIT Group/Commercial Services, Inc., as Agent

Two Wachovia Center, 25th Floor

301 South Tryon Street

Charlotte, North Carolina 28202

 

Each of the Lenders to the Financing Agreement

described below

 

Re:                               Second
Amended and Restated Financing Agreement dated as of September 28, 2005 (the “Financing
Agreement”) among Under Armour, Inc., a Maryland corporation, and its
wholly-owned Domestic Subsidiaries that are from time to time party thereto, as
borrowers (individually, a “Company” and collectively the “Companies”),
The CIT Group/Commercial Services, Inc., as Agent (the “Agent”), and the
lenders that are parties thereto (collectively, the “Lenders”)

 

Ladies and Gentlemen:

 

Reference is made to the Financing Agreement.
Capitalized terms used herein and not specifically defined shall have the
meanings given to such terms in the Financing Agreement.

 

By Compliance Certificate dated                     ,
20    , I have previously furnished to you the Companies’
financial statements for the fiscal quarter ended                     ,
200    (the “Reporting Period”) and the fiscal
year-to-date period then ended as required by Section 7.2(h) of the
Financing Agreement.  As the                     
of the Funds Administrator, I hereby certify to the Agent and the Lenders, on
behalf of the Companies, that:

 

1.             The
financial statements continue to fairly and accurately reflect the Companies’
financial condition at the end of the particular accounting periods covered by
such financial statements, as well as the Companies’ operating results during
such accounting periods, subject to year-end audit adjustments.

 

2.             A
Net Availability Shortfall occurred on              ,
20  .

 

3.             Because
of such Net Availability Shortfall, the Companies are required to maintain
compliance with the financial covenants set forth in Section 7.3 of the
Financing Agreement for the Trailing Four Quarters Testing Period ending on the
last day of the Reporting Period. Exhibit    attached hereto sets
forth detailed calculations showing compliance with all financial covenants

 

3

 

contained in Section 7.3 of the Financing
Agreement for the Trailing Four Quarters Testing Period ending on the last day
of the Reporting Period.

 

Very truly yours,

 

 

[attach
appropriate exhibits]

 

4

 

EXHIBIT D-3

 

ADDITIONAL SPECIAL COMPLIANCE
CERTIFICATE

 

[Date]

 

The CIT Group/Commercial Services, Inc., as Agent

Two Wachovia Center, 25th Floor

301 South Tryon Street

Charlotte, North Carolina 28202

 

Each of the Lenders to the Financing Agreement

described below

 

Re:                               Second
Amended and Restated Financing Agreement dated as of September 28, 2005 (the “Financing
Agreement”) among Under Armour, Inc., a Maryland corporation, and its
wholly-owned Domestic Subsidiaries that are from time to time party thereto, as
borrowers (individually, a “Company” and collectively the “Companies”),
The CIT Group/Commercial Services, Inc., as Agent (the “Agent”), and the
lenders that are parties thereto (collectively, the “Lenders”)

 

Ladies and Gentlemen:

 

Reference is made to the Financing Agreement.
Capitalized terms used herein and not specifically defined shall have the
meanings given to such terms in the Financing Agreement.

 

By Compliance Certificate dated                 ,
20    , I have previously furnished to you the Companies’
financial statements for the fiscal quarter ended                 ,
200    and the fiscal year-to-date period then ended as required
by Section 7.2(h) of the Financing Agreement.  In that Compliance Certificate or a
subsequent Special Compliance Certificate furnished to you, I reported that the
Companies had failed to comply with the financial covenants set forth in Section
7.3 of the Financing Agreement for the Trailing Four Quarters Testing
Period ending on the last day of such fiscal quarter.

 

Pursuant to Section 7.2(h) of the Financing
Agreement, I enclose the Companies’ financial statements for the month ended              ,
200   (the “Reporting Period”) and the fiscal year-to-date
period then ended.  As the                  
of the Funds Administrator, I hereby certify to the Agent and the Lenders, on
behalf of the Companies, that:

 

1.             The
financial statements fairly and accurately reflect the Companies’ financial
condition at the end of the particular accounting periods covered by such
financial statements, as well as the Companies’ operating results during such
accounting periods, subject to year-end audit adjustments.

 

5

 

2.             Exhibit
   attached hereto sets forth detailed calculations showing
compliance with all financial covenants contained in Section 7.3 of the
Financing Agreement for the Twelve Months Testing Period ending on the last day
of the Reporting Period.

 

Very truly yours,

 

 

[attach
appropriate exhibits]

 

6

 

EXHIBIT E

 

FORM OF REVOLVING LINE OF CREDIT
INCREASE NOTICE

 

REVOLVING LINE OF CREDIT INCREASE NOTICE

 

[Date]

The CIT Group/Commercial Services, Inc., as Agent

Two Wachovia Center, 25th Floor

301 South Tryon Street

Charlotte, North Carolina 28202

 

RE:                              Second
Amended and Restated Financing Agreement dated as of September 28, 2005 (the “Financing
Agreement”) among Under Armour, Inc., a Maryland corporation, and its
wholly-owned Domestic Subsidiaries that are from time to time party thereto, as
borrowers (individually, a “Company” and collectively the “Companies”),
The CIT Group/Commercial Services, Inc., as Agent (the “Agent”), and the
lenders that are parties thereto (collectively, the “Lenders”)

 

Ladies and Gentlemen:

 

This Revolving Line of Credit Increase Notice is
delivered to the Agent pursuant to the Financing Agreement.  Unless otherwise defined herein, capitalized
terms used herein shall have the meanings assigned thereto in the Financing
Agreement.

 

The Funds Administrator hereby requests that the
Lenders increase the amount of the Revolving Line of Credit from the sum of $75
million to the sum of $100 million to become effective on                        ,
20   [insert a date no earlier than ten (10) Business Days from the
date of this notice].

 

The Funds Administrator, on behalf of each Company,
hereby ratifies and reaffirms all of each Company’s liabilities and obligations
under the Loan Documents and hereby certifies to the Agent on behalf of the
Lenders that:

 

1.             No
Default or Event of Default exists on the date hereof.

 

2.             Exhibit
   attached hereto sets forth detailed calculations showing
compliance with all financial covenants contained in Section 7.3 of the
Financing Agreement for the most recent period of four (4) consecutive fiscal
quarters ending (irrespective of whether, pursuant to the preamble to such Section
7.3, such financial covenants are then being tested).

 

1

 

IN WITNESS WHEREOF, the Funds Administrator has caused
this Revolving Line of Credit Increase Notice to be executed and delivered by
its duly authorized officer on the date first above written.

 

	
   

  	
  UNDER ARMOUR, INC.,

  
	
   

  	
  as Funds Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

 

[attach
exhibits]

 

2

 

EXHIBIT F

 

FORM OF JOINDER AGREEMENT

 

JOINDER AGREEMENT

 

THIS
JOINDER AGREEMENT (this “Agreement”), dated as of the          
day of            , 200  ,
made by and among

 

UNDER
ARMOUR, INC., a
Maryland corporation (“Under Armour”), and its wholly-owned Domestic
Subsidiaries UNDER ARMOUR RETAIL, INC.,
a Maryland corporation (“Under Armour Retail”), UNDER ARMOUR RETAIL OF MARYLAND, L.L.C., a Maryland limited liability company (“Under
Armour Maryland”), UNDER ARMOUR RETAIL OF
VIRGINIA, LLC, a Virginia limited liability company “Under Armour
Virginia”), and UNDER ARMOUR HONG KONG,
LLC, a Maryland limited liability company (“Under Armour Hong Kong”
and, together with Under Armour, Under Armour Retail, Under Armour Maryland and
Under Armour Virginia, being herein collectively referred to as the “Original
Companies” and, individually, as an “Original Company”)[if a
previous Joinder Agreement has been signed, and                                                                               
(the “Previous Joining Companies” and, together with the Original
Companies, the “Existing Companies” and, individually, as an “Existing
Company”);  and

 

                                                                                                           ,
a           
[corporation][limited liability company] (the “Joining Company”); and

 

THE CIT GROUP/ COMMERCIAL
SERVICES, INC., a New York corporation, in its capacity as
agent (in such capacity, the “Agent”) for itself and the other lenders
(the “Lenders”) that are parties to the Financing Agreement described
below.

 

RECITALS

 

A.            The Existing
Companies, the Lenders and the Agent are parties to that certain Financing
Agreement, dated as of September 28, 2005. 
All capitalized terms used herein without definition shall have the
meanings ascribed to such terms in the Financing Agreement.

 

B.            Pursuant
to the Financing Agreement, the Lenders have agreed to make Loans and extend
credit to the Existing Companies secured by the Collateral.

 

C.            The
Joining Company is a new Domestic Subsidiary of Under Armour.  In recognition of the future business
relationship and financial benefits with the Existing Companies, the Existing
Companies and the Joining Company have requested that the Joining Company be
permitted to join in the Financing Agreement and in all Loan Documents, as a
co-borrower and an additional “Company” thereunder, and be permitted to borrow
from the Lenders pursuant to the

 

1

 

terms thereof, the
Lenders and the Agent have consented thereto, subject to the terms and
conditions hereof.

 

D.            To
accomplish the foregoing, the Existing Companies, the Joining Company and the
Agent, on behalf of the Lenders, have agreed to enter into this Agreement.

 

STATEMENT OF AGREEMENT

 

NOW, THEREFORE, in
consideration of the premises and for other good and valuable consideration,
the receipt and sufficiency of which are hereby expressly acknowledged, the
Existing Companies, the Joining Company and the Agent hereby agree as follows:

 

ARTICLE I

 

JOINDER AND ASSUMPTION OF
OBLIGATIONS; JOINT AND SEVERAL LIABILITY; GRANT OF COLLATERAL

 

1.1.          Joinder and
Assumption of Obligations.  The Joining
Company joins in, assumes, adopts and becomes a co-borrower under the Financing
Agreement and all other Loan Documents. 
All references to “Company” or “Companies” in the Financing Agreement
and the other Loan Documents, shall, for all purposes, also refer to and
include the Joining Company.  The Joining
Company hereby agrees to all of the terms and conditions of the Financing
Agreement and the other Loan Documents, including, without limitation, the
grant and creation of a lien and security interest in the Collateral of the
Joining Company (the “Joining Company Collateral”) to the Agent for the
benefit of the Lenders, with the same legal effect as if the Joining Company
were an original signatory to the Financing Agreement and the other Loan
Documents.

 

1.2.          Joint and Several
Liability.  Without limiting the
generality of Section 1.1 hereof:

 

(a)            the Existing Companies and the Joining Company shall each
be directly liable to the Agent and the Lenders, jointly and severally, for all
present and future Obligations, whether incurred by the Existing Companies or
the Joining Company;

 

(b)           the Joining Company agrees to perform, comply with and be
bound by all terms, conditions and covenants of the Financing Agreement and the
other Loan Documents with the same force and effect as if the Joining Company
had originally executed and been an original Company party signatory thereto;

 

(c)           the Joining Company is deemed to make, and is, in all
respects, bound by all representations and warranties made by the Existing Companies
to the Agent and the Lenders set forth in the Financing Agreement or in any of
the other Loan Documents.  The Existing
Companies and the Joining Company each agrees that all such representations and
warranties are true and correct in all material respects as of the date
hereof except to the extent that such representations and

 

2

 

warranties relate solely
to or are specifically expressed as of a particular date or period which is
past or expired;

 

(d)           the Joining Company agrees that the Agent and the Lenders
shall have all rights, remedies and interests, including liens and security
interests in and to the Joining Company Collateral granted pursuant to the
Financing Agreement and the other Loan Documents, and by Section 1.3 of this
Agreement, with the same force and effect as the Agent and the Lenders have
with respect to the Collateral of the Existing Companies, as if the Joining
Company had originally executed and had been an original Company party signatory
to the Financing Agreement and the other Loan Documents.

 

1.3.           Grant of Lien in Joining Company
Collateral.  Without limiting the
generality of the provisions of Sections 1.1 or 1.2 hereof, as security
for the prompt payment in full of all Obligations, the Joining Company hereby
pledges and grants to the Agent, for the benefit of the Lenders, a continuing
general lien upon, and security interest in, all of the Joining Company
Collateral in which the Joining Company has rights.  The liens and security interests granted
hereunder shall extend and attach to all Joining Company Collateral which is
presently in existence or hereafter acquired and which is owned by the Joining
Company or in which the Joining Company has any interest, wherever located.

 

1.4.          Amount of Obligations Currently Outstanding.  The Existing Companies and the Joining
Company each hereby jointly and severally acknowledges and agrees with the
Agent and the Lenders that, as of the opening of business on           ,
200  , the aggregate principal balance of the outstanding Obligations
under the Financing Agreement is in the sum of $                ,
consisting of an unpaid principal balance of Revolving Loans in the sum
of $                  ,
an unpaid principal balance of the Term Loan in the sum of $             ,
and reimbursement and other Obligations with respect to outstanding Letters of
Credit in the sum of $              ,
and that all such outstanding and unpaid Loans and Obligations are owed to the
Agent and the Lenders, in accordance with the terms of the Financing Agreement,
without any offset, deduction, defense or counterclaim of any nature.

 

1.5.          Conforming Amendments to the Financing Agreement and
other Loan Documents.  All
references in the Financing Agreement or any of the other Loan Documents to “Company”
or “Companies” are amended to include, in addition and not in limitation, the
Joining Company within such definitions.

 

ARTICLE
II

 

CONDITIONS
PRECEDENT

 

It shall be a condition precedent to the effectiveness
of this Agreement that the Agent shall have received the following documents,
each to be in form and substance reasonably satisfactory to the Agent and its
counsel:

 

3

 

(a)           This Agreement duly executed by the
Companies;

 

(b)           All UCC financing statements and
similar documents required to be filed in order to create in favor of the
Agent, for the benefit of the Lenders, a first priority perfected security
interest in all Joining Company Collateral (to the extent that such a security
interest may be perfected by a filing under the UCC or applicable law), shall
have been properly filed in each office in each jurisdiction required.   The Agent shall have received (i)
acknowledgement copies of all such filings (or, in lieu thereof, the Agent
shall have received other evidence satisfactory to the Agent that all such
filings have been made), and (ii) evidence that all necessary filing fees,
taxes and other expenses related to such filings have been paid in full;

 

(c)           Copies of the Certificate or Articles
of Incorporation of the Joining Company, and all amendments thereto, certified
by the secretary of the state of its formation or incorporation;

 

(d)           Good standing certificate for the
Joining Company issued by the secretary of the state of its formation or
incorporation;

 

(e)           A closing certificate signed by an
authorized officer of the Joining Company stating that (i) the representations
and warranties of the Joining Company set forth in the Financing Agreement and
the other Loan Documents are true and correct in all material respects on and
as of the date of this Agreement except to the extent that such representations
and warranties relate solely to or are specifically expressed as of a
particular date or period which is past or expired, (ii) the Joining Company is
on such date in compliance in all material respects with all the terms and
provisions set forth in the Financing Agreement and the other Loan Documents,
and (iii) on such date no Default or Event of Default exists;

 

(f)            Certificate of the Secretary or an
Assistant Secretary of each Company certifying (i) that attached thereto is a
true and complete copy of the Bylaws of such Company, as in effect on the date
of such certification, (ii) that attached thereto is a true and complete copy
of the resolutions adopted by the Board of Directors of such Company
authorizing the execution, delivery and performance of this Agreement, the
joinder by the Joining Company in the Financing Agreement and the other Loan
Documents, the guaranty by each Company of the Obligations of the other
Companies, and the consummation of the transactions contemplated hereby and
thereby, and (iii) as to the incumbency and genuineness of the signature of
each officer of each Company executing this Agreement or any of the Loan
Documents;

 

(g)           An opinion of counsel to the
Companies in form reasonably satisfactory to the Agent opining, inter  alia,
that (i) each Company is in existence and in good standing under its respective
jurisdiction of incorporation or formation, (ii) this Agreement is the valid
and binding obligation of each Company, enforceable

 

4

 

against each Company in accordance with its terms,
(iii) the execution, delivery and performance by each Company of this
Agreement, and the joinder by the Joining Company in the Financing Agreement
and the other Loan Documents as contemplated hereby, (x) have been duly
authorized by all necessary company action, (y) do not violate any terms,
provisions, representations or covenants in the articles of incorporation, by-laws
or other organizational agreement of any Company, and (z) to the best knowledge
of such counsel, do not violate any terms, provisions, representations or
covenants in any loan agreement, mortgage, deed of trust, note, security
agreement, indenture or other material contract which is identified in such
opinion or a certificate attached to such opinion; (iv) the liens and security
interests granted by the Joining Company to the Agent for the benefit of the
Lenders under the Financing Agreement and the other Loan Documents to which the
Joining Company is or has become a party are perfected; and (v) such other
matters as the Agent or its counsel may reasonably request; and

 

(h)           Such other documents, instruments and
agreements as the Agent shall reasonably request in connection with the
foregoing matters.

 

ARTICLE
III

 

GENERAL

 

3.1.          Full Force and Effect.  As expressly amended hereby, the Financing
Agreement and the Loan Documents shall each continue in full force and effect
in accordance with the provisions thereof.

 

3.2.          Applicable Law.  This Amendment shall be governed by and
construed in accordance with the internal laws and judicial decisions of the
State of New York.

 

3.3.          Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one and the same instrument.

 

3.4.          Expenses.  The Companies shall reimburse the Agent for
all reasonable costs, fees and expenses, including legal fees and expenses,
incurred by the Agent in connection with the preparation, negotiation,
execution and delivery of this Agreement and all other agreements and documents
or contemplated hereby and the consummation of the transactions contemplated
hereby.

 

3.5.          Headings.  The headings in this Agreement are for the
purpose of reference only and shall not affect the construction of this
Agreement.

 

3.6.          WAIVER OF JURY TRIAL;
SERVICE OF PROCESS.    EACH COMPANY AND THE AGENT EACH HEREBY WAIVES
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS

 

5

 

AGREEMENT, THE FINANCING
AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
THEREUNDER.  EACH COMPANY HEREBY
IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO SERVICE OF
PROCESS BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED.  IN NO EVENT WILL THE AGENT OR THE LENDERS BE
LIABLE FOR LOST PROFITS OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES.

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed and
delivered on the date first above written.

 

	
   

  	
  EXISTING COMPANIES:

  
	
   

  	
   

  
	
   

  	
  UNDER ARMOUR, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNDER ARMOUR RETAIL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNDER ARMOUR RETAIL OF MARYLAND, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNDER
  ARMOUR RETAIL OF VIRGINIA, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNDER
  ARMOUR HONG KONG, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

6

 

	
   

  	
  JOINING COMPANY:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AGENT:

  
	
   

  	
   

  
	
   

  	
  THE CIT GROUP/COMMERCIAL SERVICES,
  INC.,

  
	
   

  	
  as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

7

 

ANNEX A – Collateral Reporting Provisions

 

(g)           Collateral Reporting and Information.  (i) The Companies agree to furnish to
the Agent:

 

(1)           For so long as Net Availability is less than
$30.0 million, no less frequently than weekly, by no later than
Wednesday of each week for the previous week ended, and for so long as Net
Availability is more than $30.0 million, no less frequently than monthly, by no
later than the 10th day of each month for the previous month ended (or, in each
case, more frequently if requested by the Agent while an Event of Default
exists), a borrowing base certificate in form and substance satisfactory to the
Agent, certified by the treasurer or chief financial officer of the Funds
Administrator (or any other authorized officer reasonably satisfactory to the
Agent), together with such confirmatory schedules of Trade Accounts Receivable
and Inventory (in form and substance reasonably satisfactory to the Agent) as
the Agent may request, including, without limitation, sales journals, invoice
registers, cash receipts journals or collection reports, deposit and receipts
detail, copies of invoices and shipping evidence, credit and debit memos and/or
adjustment registers, and updated inventory reports.

 

(2)           For so long as Net Availability is less than
$30.0 million, no less frequently than weekly, by no later than
Wednesday of each week for the previous week, and for so long as Net
Availability is more than $30.0 million, no less frequently than monthly, by no
later than the 10th day of each month for the previous month ended (or, in each
case, more frequently if requested by the Agent while an Event of Default
exists), a detailed and summary aging report of Trade Accounts Receivable
existing as of the last Business Day of the preceding week or month, as the
case may be, all in such form as the Agent reasonably shall require, certified
by the treasurer or the chief financial officer of the Companies (or any other
authorized officer reasonably satisfactory to the Agent).

 

(3)           On
or before the 10th day of each month, a detailed and summary aging report of
Trade Accounts Receivable existing as of the last day of the preceding month
and a roll-forward of Trade Accounts Receivable from the first day of the
preceding month through the last day of the preceding month, all in such form as
the Agent reasonably shall require, certified by the treasurer or the chief
financial officer of the Funds Administrator (or any other authorized officer
reasonably satisfactory to the Agent), together with (x) a reconciliation, as
of the last day of the preceding month, of the Companies’ Trade Accounts
Receivable aging report to the Companies’ general ledger, and (y) information
sufficient to allow the Agent to (A) reconcile, as of the date of such report,
the Companies’ Trade Accounts Receivable aging report to the applicable
borrowing base certificate delivered by the Companies to the Agent, and (B)
update the amount of ineligible Trade Accounts Receivable.

 

(4)           For so long as Net Availability is less than
$30.0 million, no less frequently than weekly, by no later than
Wednesday of each week for the previous week, and for so long as Net
Availability is more than $30.0 million, no less frequently than monthly, by no
later than the 10th

 

1

 

day of each month for the
previous month ended (or, in each case, more frequently if requested by the
Agent while an Event of Default exists), a summary of Inventory (containing
such detail from the Companies’ perpetual inventory as the Agent may require)
as of the last Business Day of the preceding week or month, as the case may be,
together with information sufficient to allow the Agent to update the amount of
ineligible Inventory.

 

(5)           On
or before the 10th day of each month, a detailed perpetual report of the
Inventory of the Companies as of the last day of the preceding month, together
with information sufficient to allow the Agent to calculate the amount of
ineligible Inventory.

 

(6)           On or before the 10th day of each
month, an aged trial balance of the Companies’ accounts payable as of the last
day of the preceding month.

 

(7)           Together
with the collateral information described in clause (i) above, disclosure of
(x) all matters known to the Companies adversely affecting the value,
enforceability or collectibility of the Trade Accounts Receivable of the
Companies, (y) all customer disputes, offsets, defenses, counterclaims,
returns, rejections and all reclaimed or repossessed merchandise or goods, and
(z) all matters known to the Companies adversely effecting the value of the
Inventory, all in such detail and format as the Agent reasonably may require.

 

(8)           Prior
written notice of any changes in the locations at which any Collateral is
located and any material change in
type, quantity, quality or mix of the Inventory.

 

(9)           From
time to time, access to the Companies’ computers, electronic media, software
programs (including any electronic records, contracts and signatures) and such
other documentation and information relating to the Trade Accounts Receivable,
Inventory and other Collateral as the Agent reasonably may require.

 

(ii) The Companies may deliver to the Agent any
borrowing base certificate, collateral report or other material that the
Companies are required to deliver to the Agent under clauses (1), (2), (3) and
(4) of Section 7.2(g)(i) by e-mail or other electronic transmission (an “Electronic
Transmission”), subject to the following terms:

 

(1)           Each Electronic Transmission must be
sent by the treasurer or chief financial officer of the Funds Administrator (or
any other authorized officer reasonably satisfactory to the Agent), and must be
addressed to the loan officer and the collateral analyst of the Agent that
handle the Companies’ account, as designated by the Agent from time to
time.  If any Electronic Transmission is
returned to the sender as undeliverable, the material included in such
Electronic Transmission must be delivered to the intended recipient in the
manner required by Section 12.6 hereof.

 

(2)            Each certificate, collateral report
or other material contained in an
Electronic Transmission must be in a “pdf” or other imaging format and,
to the extent that such material must

 

2

 

be certified by an officer of the Companies under this
Section 7.2(g), must contain the signature of the officer submitting the
Electronic Transmission.  As provided in Section
12.6, any signature on a certificate,
collateral report or other material
contained in an Electronic Transmission shall constitute a valid signature for
purposes hereof.  The Agent may
rely upon, and assume the authenticity of, any such signature, and any material
containing such signature shall constitute an “authenticated” record for
purposes of the Uniform Commercial Code and, to the extent permitted by applicable
law, shall satisfy the requirements of any applicable statute of frauds.

 

(3)           Each Electronic Transmission must
contain the name and title of the officer of the Companies transmitting the
Electronic Transmission, and shall include following text in the body of the
Electronic Transmission:

 

“Pursuant to the Second
Amended and Restated Financing Agreement dated September 28, 2005 among Under
Armour, Inc. and its wholly-owned Domestic Subsidiaries that are from time to
time party thereto, the Lenders that are parties thereto and The CIT
Group/Commercial Services, Inc., as Agent for the Lenders (the “Agent”), the
undersigned                   
[title of submitting officer] of
the Funds Administrator hereby delivers to the Agent the Companies’                      
[describe submitted reports]. The
Funds Administrator, on behalf of the Companies, represents and warrants to the
Agent and the Lenders that the materials included in this Electronic
Transmission are true, correct, and complete in all material respects.  The name of the officer of the Funds
Administrator set forth in this e-mail constitutes the signature of such
officer, and this e-mail shall constitute an authenticated record of the
Companies.”

 

(4)           The
Funds Administrator agrees to maintain the original versions of all
certificates, collateral reports and other materials delivered to the Agent by
means of an Electronic Transmission and agrees to furnish to the Agent
such original versions within five (5) Business Days of the Agent’s request for
such materials, signed and certified (to the extent required hereunder) by the
officer submitting the Electronic Transmission.

 

(iii)          Each
Company authorizes the Funds Administrator, on behalf of such Company, to
deliver to the Agent all borrowing base certificates, collateral reports and
other material that the Companies are required to deliver to the Agent under
this Section 7.2(g).  Each Company
hereby authorize the Agent to regard the Companies’ printed name or rubber
stamp signature on assignment schedules or invoices as the equivalent of a
manual signature by one of the Companies’ authorized officers or agents.  The Companies’ failure to promptly deliver to
the Agent any schedule, report, statement or other information set forth in
this Section 7.2(g) shall not affect, diminish, modify or otherwise
limit the Agent’s security interests in the Collateral.

 

3

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