EXHIBIT 10.1
CREDIT AGREEMENT
DATED AS OF JUNE 29, 2006
AMONG
COLLEGIATE PACIFIC INC.,
MERRILL LYNCH CAPITAL,
a Division of Merrill Lynch Business Financial Services Inc.,
as Administrative Agent, as a Lender and
as Sole Bookrunner and Sole Lead Arranger
AND
THE ADDITIONAL LENDERS
FROM TIME TO TIME PARTY HERETO
(MERRILL LYNCH LOGO) [d39562d3956201.gif]

 

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TABLE OF CONTENTS

              Page  
ARTICLE 1 DEFINITIONS
    1  
Section 1.1 Certain Defined Terms
    1  
Section 1.2 Accounting Terms and Determinations
    28  
Section 1.3 Other Definitional Provisions and References
    28  
 
       
ARTICLE 2 LOANS AND LETTERS OF CREDIT
    29  
Section 2.1 Term Loan
    29  
Section 2.2 Revolving Loans and Swingline Loans
    31  
Section 2.3 Interest, Interest Calculations and Certain Fees
    37  
Section 2.4 Notes
    39  
Section 2.5 Letters of Credit and Letter of Credit Fees
    40  
Section 2.6 General Provisions Regarding Payment; Loan Account
    43  
Section 2.7 Maximum Interest
    44  
Section 2.8 Taxes
    44  
Section 2.9 Capital Adequacy
    46  
Section 2.10 Mitigation Obligations
    46  
 
       
ARTICLE 3 REPRESENTATIONS AND WARRANTIES
    46  
Section 3.1 Existence and Power
    47  
Section 3.2 Organization and Governmental Authorization; No Contravention
    47  
Section 3.3 Binding Effect
    47  
Section 3.4 Capitalization
    47  
Section 3.5 Financial Information
    48  
Section 3.6 Litigation
    48  
Section 3.7 Ownership of Property
    49  
Section 3.8 No Default
    49  
Section 3.9 Labor Matters
    49  
Section 3.10 Regulated Entities
    49  
Section 3.11 Margin Regulations
    49  
Section 3.12 Compliance With Laws; Anti-Terrorism Laws
    49  
Section 3.13 Taxes
    50  
Section 3.14 Compliance with ERISA
    50  
Section 3.15 Brokers
    51  
Section 3.16 Material Contracts
    51  
Section 3.17 Compliance with Environmental Requirements; No Hazardous Materials
    52  
Section 3.18 Intellectual Property
    53  
Section 3.19 Real Property Interests
    53  
Section 3.20 Solvency
    53  
Section 3.21 Senior Debt
    53  
Section 3.22 Full Disclosure
    53  
Section 3.23 Representations and Warranties Incorporated from Other Operative
Documents
    54  

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              Page  
ARTICLE 4 AFFIRMATIVE COVENANTS
    54  
Section 4.1 Financial Statements and Other Reports
    54  
Section 4.2 Payment and Performance of Obligations
    58  
Section 4.3 Maintenance of Existence
    59  
Section 4.4 Maintenance of Property; Insurance
    59  
Section 4.5 Compliance with Laws
    60  
Section 4.6 Inspection of Property, Books and Records
    60  
Section 4.7 Use of Proceeds
    60  
Section 4.8 Lenders’ Meetings
    61  
Section 4.9 Intentionally omitted
    61  
Section 4.10 Hazardous Materials; Remediation
    61  
Section 4.11 Revolving Loan Commitment Increases and Syndications
    61  
Section 4.12 Further Assurances
    62  
 
       
ARTICLE 5 NEGATIVE COVENANTS
    64  
Section 5.1 Debt
    64  
Section 5.2 Liens
    64  
Section 5.3 Contingent Obligations
    65  
Section 5.4 Restricted Distributions
    66  
Section 5.5 Restricted Agreements
    66  
Section 5.6 Payments and Modifications of Subordinated Debt
    66  
Section 5.7 Consolidations, Mergers and Sales of Assets
    67  
Section 5.8 Purchase of Assets, Investments
    67  
Section 5.9 Transactions with Affiliates
    71  
Section 5.10 Modification of Organizational Documents
    72  
Section 5.11 Intentionally Omitted
    72  
Section 5.12 Fiscal Year
    72  
Section 5.13 Conduct of Business
    72  
Section 5.14 Intentionally Omitted
    72  
Section 5.15 Lease Payments
    72  
Section 5.16 Limitation on Sale and Leaseback Transactions
    72  
Section 5.17 Bank Accounts
    72  
Section 5.18 Compliance with Anti-Terrorism Laws
    73  
 
       
ARTICLE 6 ACCOUNTS AND INVENTORY REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS
    73  
Section 6.1 Accounts and Account Collections
    73  
Section 6.2 Inventory
    75  
 
       
ARTICLE 7 FINANCIAL COVENANTS
    76  
Section 7.1 Fixed Charge Coverage Ratio
    76  
Section 7.2 Senior Leverage Ratio
    76  
 
       
ARTICLE 8 CONDITIONS
    76  
Section 8.1 Conditions to Initial Closing
    76  
Section 8.2 Conditions to Acquisition Revolving Loan Commitment Increase
    78  

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              Page  
Section 8.3 Conditions to Each Loan, Support Agreement and Lender Letter of
Credit
    79  
 
       
ARTICLE 9 EVENTS OF DEFAULT
    80  
Section 9.1 Events of Default
    80  
Section 9.2 Acceleration and Suspension or Termination of Revolving Loan
Commitment
    82  
Section 9.3 Cash Collateral
    82  
Section 9.4 Default Rate of Interest and Suspension of LIBOR Rate Options
    82  
Section 9.5 Setoff Rights
    83  
Section 9.6 Application of Proceeds
    83  
 
       
ARTICLE 10 EXPENSES AND INDEMNITY
    84  
Section 10.1 Expenses
    84  
Section 10.2 Indemnity
    85  
 
       
ARTICLE 11 ADMINISTRATIVE AGENT
    86  
Section 11.1 Appointment and Authorization
    86  
Section 11.2 Administrative Agent and Affiliates
    86  
Section 11.3 Action by Administrative Agent
    86  
Section 11.4 Consultation with Experts
    86  
Section 11.5 Liability of Administrative Agent
    87  
Section 11.6 Indemnification
    87  
Section 11.7 Right to Request and Act on Instructions
    87  
Section 11.8 Credit Decision
    88  
Section 11.9 Collateral Matters
    88  
Section 11.10 Agency for Perfection
    89  
Section 11.11 Notice of Default
    89  
Section 11.12 Successor Administrative Agent
    89  
Section 11.13 Disbursements of Revolving Loans; Payment and Sharing of Payment
    90  
Section 11.14 Right to Perform, Preserve and Protect
    93  
Section 11.15 Additional Titled Agents
    93  
 
       
ARTICLE 12 MISCELLANEOUS
    94  
Section 12.1 Survival
    94  
Section 12.2 No Waivers
    94  
Section 12.3 Notices
    94  
Section 12.4 Severability
    95  
Section 12.5 Amendments and Waivers
    95  
Section 12.6 Assignments; Participations; Replacement of Lenders
    96  
Section 12.7 Headings
    99  
Section 12.8 Confidentiality
    99  
Section 12.9 Waiver of Consequential and Other Damages
    100  
Section 12.10 Marshaling; Payments Set Aside
    100  
Section 12.11 GOVERNING LAW; SUBMISSION TO JURISDICTION
    100  
Section 12.12 WAIVER OF JURY TRIAL
    101  

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              Page  
Section 12.13 Publication; Advertisement
    101  
Section 12.14 Senior Debt.
    102  
Section 12.15 Counterparts; Integration.
    102  
Section 12.16 No Strict Construction.
    102  

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ANNEXES, EXHIBITS AND SCHEDULES

          ANNEXES
 
       
Annex A
  -   Commitment Annex
Annex B
  -   Closing Checklist
 
        EXHIBITS
 
       
Exhibit A
  -   Assignment Agreement
Exhibit B
  -   Compliance Certificate
Exhibit C
  -   Borrowing Base Certificate
Exhibit D
  -   Notice of Borrowing
Exhibit E
  -   Payment Notification
 
        SCHEDULES
 
       
Schedule 3.1
  -   Existence, Organizational Identification Numbers, Foreign Qualification,
Prior Names
Schedule 3.4
  -   Capitalization
Schedule 3.6
  -   Litigation
Schedule 3.15
  -   Brokers
Schedule 3.16
  -   Material Contracts
Schedule 3.17
  -   Environmental Compliance
Schedule 3.18
  -   Intellectual Property
Schedule 3.19
  -   Owned Real Estate
Schedule 5.1
  -   Debt
Schedule 5.2
  -   Liens
Schedule 5.3
  -   Contingent Obligations
Schedule 5.8
  -   Investments
Schedule 5.9
  -   Affiliate Transactions
Schedule 5.13
  -   Business Description

 

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CREDIT AGREEMENT
     CREDIT AGREEMENT dated as of June 29, 2006 among COLLEGIATE PACIFIC INC., a
Delaware corporation, as Borrower, the financial institutions or other entities
from time to time parties hereto, each as a Lender, and MERRILL LYNCH CAPITAL, a
division of Merrill Lynch Business Financial Services Inc., individually as a
Lender, as Administrative Agent, Sole Bookrunner and Sole Lead Arranger.
RECITALS:
          WHEREAS, Borrower and Merrill Lynch Business Financial Services Inc.
(“MLBFS”) are parties to a WCMA Loan and Security Agreement No. 586-07067 dated
December 16, 2003, as amended and/or extended to date (the “MLBFS Credit
Agreement”), pursuant to which MLBFS has provided working capital and other
financing to Borrower; and
          WHEREAS, Borrower desires to refinance the financing provided by MLBFS
under the MLBFS Credit Agreement, and desires that Lenders extend certain term
credit and working capital facilities to Borrower to provide working capital
financing for Borrower, to provide funds for other general business purposes of
Borrower and for the other purposes set forth herein; and
          WHEREAS, Borrower desires to secure all of the Obligations under the
Financing Documents by granting to Administrative Agent, for the benefit of
Administrative Agent and Lenders, a security interest in and lien upon all of
its personal and real property, including without limitation all of the
outstanding capital stock or other equity securities, as applicable, of each
Subsidiary (as hereinafter defined) owned by Borrower; and
          WHEREAS, the Subsidiaries are each willing to guaranty all of the
Obligations of Borrower to Lenders under the Financing Documents, and to grant
to Administrative Agent, for the benefit of Administrative Agent and Lenders, a
security interest in and lien upon all of its personal and real property to
secure all of the Obligations.
          NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrower, Lenders and Administrative
Agent agree as follows:
ARTICLE 1
DEFINITIONS
     Section 1.1 Certain Defined Terms.
     The following terms have the following meanings:
     “Acceleration Event” means the occurrence of an Event of Default (i) in
respect of which Administrative Agent has declared all or any portion of the
Obligations to be immediately due and payable, in accordance with the provisions
of Section 9.2, (ii) pursuant to Section 9.1(a), and in respect of which
Administrative Agent has suspended or terminated the Revolving Loan Commitment
pursuant to Section 9.2 and/or (iii) pursuant to either Section 9.1(f) and/or
Section 9.1(g).

 

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     “Account Debtor” means “account debtor”, as defined in Article 9 of the
UCC.
     “Accounts” means “accounts” (as defined in Article 9 of the UCC), including
any and all rights to payment for the sale or lease of goods or rendition of
services, whether or not they have been earned by performance.
     “Acquisition Documents” means any merger agreement, purchase agreement or
other acquisition agreement in respect of a Permitted Section 5.8(b) Acquisition
or a Permitted Section 5.8(c) Acquisition, and all agreements, documents and
instruments executed and/or delivered pursuant thereto or in connection
therewith.
     “Acquisition Revolving Loan Commitment Increase” has the meaning set forth
in Section 2.2(g).
     “Acquisition Pro Forma” has the meaning set forth in Section 5.8(c).
     “Acquisition Projections” has the meaning set forth in Section 5.8(c).
     “Acquisition Revolving Loan Commitment Increase Conditions” has the meaning
set forth in Section 8.2.
     “Adjustment Date” means the first Business Day of each January, April, July
and October of each year, commencing with the first Business Day of
January 2007.
     “Adjustments to Advance Rates” means such reductions in the advance rates
of Eligible Accounts and Eligible Inventory and other assets, if applicable,
contained in the definition of Borrowing Base as Administrative Agent may from
time to time determine in its reasonable discretion, including, without
limitation: (a) to reflect events, conditions, contingencies or risks which, as
determined by Administrative Agent in the exercise of its sole reasonable
discretion: (i) adversely affect, or could reasonably be expected to adversely
affect, any of the Collateral or any other property which is security for the
Obligations or its value, (ii) materially and adversely affect, or could
reasonably be expected to materially and adversely affect, the assets, business
or prospects of any Credit Party, or (iii) adversely affect, or could reasonably
be expected to adversely affect, the Liens and other rights of Administrative
Agent or any Lender in the Collateral (including the enforceability, perfection
and priority thereof), (b) to reflect Administrative Agent’s belief that any
collateral report or financial information furnished by or on behalf of any
Credit Party to Administrative Agent is or may have been incomplete, inaccurate
or misleading in any material respect, (c) to reflect accrued and unpaid
interest and fees, or (d) otherwise in the reasonable credit judgment of
Administrative Agent.
     “Administrative Agent” means Merrill Lynch in its capacity as
administrative agent for the Lenders hereunder, as such capacity is established
in, and subject to the provisions of, Article 11, and the successors of Merrill
Lynch in such capacity.
     “Administrative Agent Fee Letter” means the letter agreement dated the date
hereof between Borrower and the Administrative Agent, pursuant to which, among
other things, Borrower shall pay to Administrative Agent, in such capacity and
in its capacity as a Lender, for

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its own account, certain fees, as the same may be amended, supplemented,
restated or otherwise modified from time to time.
     “Affected Lender” has the meaning set forth in Section 12.6(c).
     “Affiliate” means with respect to any Person (i) any Person that directly
or indirectly controls such Person, (ii) any Person which is controlled by or is
under common control with such controlling Person, (iii) each of such Person’s
(other than, with respect to any Lender, any Lender’s) officers or directors (or
Persons functioning in substantially similar roles) and the spouses, parents,
descendants and siblings of such officers, directors or other Persons. As used
in this definition, the term “control” of a Person means the possession,
directly or indirectly, of the power to vote at least a majority of any class of
voting securities of such Person or the power to direct or cause the direction
of the management or policies of a Person, whether through the ownership of
voting securities, by contract or otherwise.
     “Agreement” means this Credit Agreement, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
     “Anti-Terrorism Laws” means any Laws relating to terrorism or money
laundering, including Executive Order No. 13224 (effective September 24, 2001),
the USA PATRIOT Act, the Laws comprising or implementing the Bank Secrecy Act,
and the Laws administered by OFAC.
     “Approved Fund” means any (i) investment company, fund, trust,
securitization vehicle or conduit that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business or (ii) any Person
(other than a natural person) which temporarily warehouses loans for any Lender
or any entity described in the preceding clause (i) and that, with respect to
each of the preceding clauses (i) and (ii), is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) a Person (other than a natural
person) or an Affiliate of a Person (other than a natural person) that
administers or manages a Lender.
     “Asset Disposition” means any sale, lease, license, transfer, assignment or
other consensual disposition by any Credit Party of any asset, but excluding
(i) dispositions of Inventory in the Ordinary Course of Business, and
(ii) dispositions of Cash Equivalents.
     “Assignment Agreement” means an agreement substantially in the form of
Exhibit A hereto.
     “Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy”.
     “Base Rate” means a variable per annum rate, as of any date of
determination, equal to the greater of (i) the Federal Funds Rate plus one-half
of one percent (0.50%) per annum and (ii) the rate of interest which is
identified and normally published by Bloomberg Professional Service Page Prime
as the “Prime Rate” (or, if more than one rate is published as the Prime Rate,
then the highest of such rates). Any change in the Base Rate will become
effective as of the date the rate of interest which is so identified as the
“Prime Rate” is different from that published on

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the preceding Business Day. If Bloomberg Professional Service no longer reports
the Prime Rate, or if such Page Prime no longer exists, or Administrative Agent
determines in good faith that the rate so reported no longer accurately reflects
an accurate determination of the prevailing Prime Rate, Administrative Agent may
select a reasonably comparable index or source to use as the basis for the Base
Rate.
     “Base Rate Loans” means Loans which accrue interest by reference to the
Base Rate, in accordance with the terms of this Agreement.
     “Base Rate Margin” means (i) as of the Closing Date, 0.25% per annum,
(ii) thereafter, as of each Adjustment Date, the Base Rate Margin shall be
adjusted, if necessary, to the applicable percent per annum set forth in the
Pricing Table corresponding to the Senior Leverage Ratio for the twelve
(12) month period ending on such date; provided, that if an Event of Default has
occurred and is continuing on an Adjustment Date, no reduction in the Base Rate
Margin shall occur on such Adjustment Date.
     “Blocked Account” has the meaning set forth in Section 6.1.
     “Blocked Person” means any Person: (i) listed in the annex to, or is
otherwise subject to the provisions of, Executive Order No. 13224; (ii) a Person
owned or controlled by, or acting for or on behalf of, any Person that is listed
in the annex to, or is otherwise subject to the provisions of, Executive Order
No. 13224; (iii) a Person with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law; (iv) a Person
that commits, threatens or conspires to commit or supports “terrorism” as
defined in Executive Order No. 13224; or (v) a Person that is named a “specially
designated national” or “blocked person” on the most current list published by
OFAC or other similar list.
     “Borrower” means Collegiate Pacific Inc, a Delaware corporation.
     “Borrower Security Agreement” means the Security Agreement dated the date
hereof by the Borrower in favor of the Administrative Agent, as the same may be
amended, supplemented, restated or otherwise modified from time to time.
     “Borrower’s Account” means the account specified on the signature pages
hereof below Borrower’s name into which Loans shall, absent other instructions,
be made, or such other account as Borrower may specify by notice to
Administrative Agent.
     “Borrowing Base” means, as of any date of calculation, a dollar amount
calculated pursuant to the Borrowing Base Certificate most recently delivered to
Administrative Agent in accordance with the terms hereof, (i) prior to the
effectiveness of the Acquisition Revolving Loan Commitment Increase, a dollar
amount calculated pursuant to the Borrowing Base Certificate most recently
delivered to Administrative Agent in accordance with the terms hereof, equal to
the sum of (a) up to 85% of Eligible Accounts and (b) the lesser of (A) up to
50% of Eligible Inventory or (B) $10,000,000, minus (x) a Reserve in respect of
the Term Loan in the amount of $4,000,000 and (y) any Reserves then and from
time to time established by the Administrative Agent, and (ii) after the
effectiveness of the Acquisition Revolving Loan Commitment Increase, a dollar
amount calculated pursuant to the Borrowing Base Certificate

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most recently delivered to Administrative Agent in accordance with the terms
hereof, equal to the sum of (a) up to 85% of Eligible Accounts and (b) the
lesser of (A) up to 50% of Eligible Inventory or (B) $10,000,000, minus (x) a
Reserve in respect of the Term Loan in the amount of $3,000,000 and (y) any
Reserves then and from time to time established by the Administrative Agent.
     “Borrowing Base Certificate” means a certificate, duly executed by a
Responsible Officer, appropriately completed and substantially in the form of
Exhibit C hereto.
     “Business Day” means any day except a Saturday, Sunday or other day on
which either the New York Stock Exchange is closed, or on which commercial banks
in Chicago and New York City are authorized by law to close and, in the case of
a Business Day which relates to a LIBOR Loan, a day on which dealings are
carried on in the London interbank eurodollar market.
     “Capital Lease” of any Person means any lease of any property by such
Person as lessee which would, in accordance with GAAP, be required to be
accounted for as a capital lease on the balance sheet of such Person.
     “Cash Equivalents” means any Investment in (i) direct obligations of the
United States or any agency thereof, or obligations guaranteed by the United
States or any agency thereof with a maturity date of no more than one (1) year
from the date of acquisition, (ii) commercial paper with a duration of not more
than nine (9) months rated at least A-1 by Standard & Poor’s Ratings Service and
P-1 by Moody’s Investors Services, Inc., which is issued by a Person (other than
any Credit Party or an Affiliate of any Credit Party) organized under the laws
of any State of the United States or of the District of Columbia, (iii) time
deposits, certificates of deposit and banker’s acceptances with a duration of
not more than six (6) months issued by any office located in the United States
of any bank or trust company which is organized under the laws of the United
States or any State thereof, or is licensed to conduct a banking business in the
United States, and has capital, surplus and undivided profits of at least
$500,000,000 and which issues (or the parent of which issues) certificates of
deposit or commercial paper with a rating described in clause (ii) above,
(iv) repurchase agreements and reverse repurchase agreements with a duration of
not more than 30 days with respect to securities described in clause (i) above
entered into with an office of a bank or trust company meeting the criteria
specified in clause (iii) above, or (v) any money market or mutual fund which
invests only in the foregoing types of investments, has portfolio assets in
excess of $5,000,000,000 and is rated AAA by Standard & Poor’s Ratings Service
and Aaa by Moody’s Investors Services, Inc.
     “CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980.
     “Change of Control of the Borrower” means (i) (a) a change in the
beneficial ownership (as defined in Rule 13d-3 of the Securities Exchange Act of
1934, as amended) at any time by an entity or individual, either directly or
indirectly, of equity securities or interests of Borrower or of any parent
corporation of the Borrower, the voting power of which constitutes more than the
lesser of (A) fifty percent (50%) or more of the aggregate voting power of the
outstanding equity securities or interests, as the case may be, of Borrower or
of any parent corporation of the Borrower, or (B) that percentage of the
outstanding aggregate voting power

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necessary at all times to elect a majority of the board of directors (or similar
governing body) Borrower or of any parent corporation of the Borrower or to
direct the management policies and decisions of Borrower or of any parent
corporation of the Borrower, or (b) the majority of the seats (other than vacant
seats) on the Board of Directors of Borrower (or any parent corporation of the
Borrower) cease to be occupied by Persons who either (A) were members of the
Board of Directors of Borrower on the date hereof or (B) were nominated for
election by the Board of Directors of Borrower (or of any parent corporation of
the Borrower), a majority of whom were directors on the date hereof or whose
election or nomination for election was previously approved by a majority of
such directors; (ii) any merger, consolidation or reorganization of Borrower or
of any parent corporation of the Borrower in which the stockholders of Borrower
or of any parent corporation of the Borrower immediately before the transaction
do not own at least fifty percent (50%) of the combined voting power of the
voting securities of the surviving entity or its parent immediately after the
transaction; (iii) any sale or transfer of all or substantially all of the
assets of Borrower or of any parent corporation of the Borrower, to a purchaser
or other transferee in which the stockholders of the subject company immediately
before the transaction do not own at least fifty percent (50%) of the combined
voting power of the voting securities of the surviving entity or its parent
immediately after the transaction; (iv) a “Change of Control” shall occur under
any Change in Control, severance, termination or similar agreement to which
Borrower or any Subsidiary is a party; and (v) except as expressly permitted by
Section 5.7, Borrower shall cease to, directly or indirectly, own and control
one hundred percent (100%) of each class of the outstanding equity interests of
each Subsidiary.
     “Chattel Paper” means “chattel paper”, as defined in Article 9 of the UCC.
     “Closing Checklist” means Annex B to this Agreement.
     “Closing Date” means the date of this Agreement.
     “Code” means the Internal Revenue Code of 1986.
     “Collateral” means all property, now existing or hereafter acquired,
mortgaged or pledged to, or purported to be subjected to a Lien in favor of,
Administrative Agent, for the benefit of Administrative Agent and Lenders,
pursuant to the Security Documents.
     “Commitment Annex” means Annex A to this Agreement.
     “Commitment Expiry Date” means June 1, 2009.
     “Compliance Certificate” means a certificate, duly executed by a
Responsible Officer, appropriately completed and substantially in the form of
Exhibit B hereto.
     “Consolidated Subsidiary” means at any date any Subsidiary or other Person
the accounts of which would be consolidated with those of Borrower (or any other
Person, as the context may require hereunder) in its consolidated financial
statements if such statements were prepared as of such date.

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     “Contingent Obligation” means, with respect to any Person, any direct or
indirect liability of such Person: (i) with respect to any debt, lease, dividend
or other obligation of another Person if the purpose or intent of such Person
incurring such liability, or the effect thereof, is to provide assurance to the
obligee of such liability that such liability will be paid or discharged, or
that any agreement relating thereto will be complied with, or that any holder of
such liability will be protected, in whole or in part, against loss with respect
thereto; (ii) with respect to any undrawn portion of any letter of credit issued
for the account of such Person or as to which such Person is otherwise liable
for the reimbursement of any drawing; (iii) under any Swap Contract, to the
extent not yet due and payable; (iv) to make take-or-pay or similar payments if
required regardless of nonperformance by any other party or parties to an
agreement; or (v) for any obligations of another Person pursuant to any
agreement to purchase, repurchase or otherwise acquire any obligation or any
property constituting security therefor, to provide funds for the payment or
discharge of such obligation or to preserve the solvency, financial condition or
level of income of another Person. The amount of any Contingent Obligation shall
be equal to the amount of the obligation so guaranteed or otherwise supported
or, if not a fixed and determinable amount, the maximum amount so guaranteed or
otherwise supported.
     “Controlled Group” means all members of a group of corporations and all
members of a group of trades or businesses (whether or not incorporated) under
common control which, together with Borrower, are treated as a single employer
under Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA.
     “Convertible Senior Notes” has the meaning set forth in Section 5.6.
     “Credit Exposure” means any period of time during which the Revolving Loan
Commitment is outstanding or any Loan, Reimbursement Obligation or other
Obligation remains unpaid or any Letter of Credit or Support Agreement remains
outstanding; provided, that no Credit Exposure shall be deemed to exist solely
due to the existence of contingent indemnification liability, absent the
assertion of a claim, or the known existence of a claim reasonably likely to be
asserted, with respect thereto.
     “Credit Party” means any of Borrower and any Subsidiary of Borrower,
whether now existing or hereafter acquired or formed; and “Credit Parties” means
all such Persons, collectively.
     “Debt” of a Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising and paid on a timely
basis and in the Ordinary Course of Business, (iv) all Capital Leases of such
Person, (v) all non-contingent obligations of such Person to reimburse any bank
or other Person in respect of amounts paid under a letter of credit, banker’s
acceptance or similar instrument, (vi) all equity securities of such Person
subject to repurchase or redemption otherwise than at the sole option of such
Person, (vii) all obligations secured by a Lien on any asset of such Person,
whether or not such obligation is otherwise an obligation of such Person, (viii)
”earnouts” and similar payment obligations of such Person, and (ix) all Debt of
others Guaranteed by such Person. Without

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duplication of any of the foregoing, Debt of Borrower shall include any and all
Loans and Letter of Credit Liabilities.
     “Default” means any condition or event which with the giving of notice or
lapse of time or both would, unless cured or waived, become an Event of Default.
     “Defaulted Lender” means, so long as such failure shall remain in existence
and uncured, any Lender which shall have failed to make any Loan or other credit
accommodation, disbursement or reimbursement required pursuant to the terms of
any Financing Document.
     “Deposit Account Control Agreement” means an agreement, in form and
substance satisfactory to Administrative Agent, among Administrative Agent,
Borrower or a Subsidiary of Borrower maintaining a deposit account at any bank,
and such bank, which agreement provides that (x) such bank shall comply with
instructions originated by Administrative Agent directing disposition of the
funds in such deposit account without further consent by Borrower or such
Subsidiary (as applicable), and (y) such bank shall agree that it shall have no
Lien on, or right of setoff against, such deposit account or the contents
thereof, other than in respect of commercially reasonable fees and other items
expressly consented to by Administrative Agent, and containing such other terms
and conditions as Administrative Agent may reasonably require, including as to
any such agreement pertaining to any Blocked Account, acknowledging that the
Blocked Account and all items received or deposited in such Blocked Account are
subject to the Liens of Administrative Agent, as set forth in the Financing
Documents, and, to secure the Obligations upon notice from Administrative Agent
to such Bank, that such bank shall wire, or otherwise transfer, in immediately
available funds, on a daily basis to the Payment Account all funds received or
deposited into such Blocked Account.
     “Domestic Subsidiary” means a Subsidiary organized, incorporated or
otherwise formed under the laws of the United States or any State thereof.
     “EBITDA” has the meaning provided in the Compliance Certificate.
     “Eligible Accounts” means all Accounts of Borrower and its Domestic
Subsidiaries except for any Account:
     (A) that is unpaid more than sixty (60) days after the due date therefor,
not to exceed ninety (90) days after the date of the original invoice therefor,
in the case of dated accounts, or more than ninety (90) days after the date of
the original invoice therefor, in the case of undated accounts;
     (B) that is the obligation of an Account Debtor if fifty percent (50%) or
more of the dollar amount of all Accounts owing by that Account Debtor are
ineligible under the other criteria set forth herein;
     (C) that arises from a sale to any director, officer, other employee,
supplier, trade creditor or other creditor or Affiliate of any Credit Party, or
to any Person (other than a natural person) which has any common officer or
director with any Credit Party;

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     (D) that is the obligation of an Account Debtor located in a foreign
country unless (i) the Account Debtor has delivered to, and for the benefit of,
the Borrower or the applicable Subsidiary an irrevocable letter of credit issued
or confirmed by a bank satisfactory to Administrative Agent and payable only in
the United States and in United States dollars, sufficient to cover such
Account, in form and substance satisfactory to Administrative Agent and, if
required by Administrative Agent, the original of such letter of credit has been
delivered to Administrative Agent or Administrative Agent’s agent, and Borrower
or such Subsidiary has assigned the proceeds of such letter of credit to
Administrative Agent pursuant to documentation in form and substance acceptable
to Administrative Agent or otherwise named Administrative Agent as transferee
beneficiary thereunder, as Administrative Agent may specify, (ii) such Account
is subject to credit insurance payable to Administrative Agent issued by an
insurer and on terms and in an amount acceptable to Administrative Agent, or
(iii) such Account is otherwise acceptable in all respects to Administrative
Agent (subject to such limits or lending formulae with respect thereto as
Administrative Agent may determine);
     (E) that is the obligation of an Account Debtor that is the United States
government or a political subdivision thereof, or any state or municipality or
department, agency or instrumentality thereof unless Administrative Agent, in
its sole discretion, has agreed to the contrary and Borrower or the applicable
Subsidiary, if requested by Administrative Agent, has complied in a manner
acceptable to Administrative Agent with the Federal Assignment of Claims Act of
1940 or any applicable state statute or municipal ordinance of similar purpose
and effect, with respect to such obligation;
     (F) as to which any proceedings or actions known to any Credit Party (or to
Administrative Agent) are threatened or pending against an Account Debtor which
could reasonably be expected to have a material adverse change in any such
Account Debtor’s financial condition (including, without limitation, any
bankruptcy, dissolution, liquidation, reorganization or similar proceeding);
     (G) that consists of progress billings (such that the obligation of the
Account Debtors with respect to such Account is conditioned upon Borrower’s or
the applicable Subsidiary’s satisfactory completion of any further performance
under the agreement giving rise thereto), bill and hold invoices or retainage
invoices, except as to bill and hold invoices, if Administrative Agent shall
have received an agreement from the Account Debtor, in form and substance
satisfactory to Administrative Agent, confirming the unconditional obligation of
the Account Debtor to take the goods related thereto and pay such invoice;
     (H) owed by an Account Debtor obligated in respect of Accounts constituting
more than twenty percent (20%) of the aggregate amount of all Accounts (but the
portion of the Accounts not in excess of the applicable percentages may be
deemed Eligible Accounts);
     (I) to the extent any defense, counterclaim, setoff or dispute is asserted
as to such Account;

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     (J) to the extent such Account is evidenced by a judgment, Instrument or
Chattel Paper;
     (K) as to which Administrative Agent’s Lien therein, for the benefit of
itself and Lenders, is not a first priority perfected security interest, or as
to which the goods giving rise thereto are not, and were not at the time of the
applicable sale, subject to a first priority perfected security interest in
favor of Administrative Agent, on behalf of itself and Lenders;
     (L) that (i) is not owned by Borrower or the applicable Subsidiary or
(ii) is subject to any right, claim, Lien or other interest of any other Person,
other than Liens in favor of Administrative Agent, on behalf of itself and
Lenders;
     (M) upon which (i) Borrower’s or the applicable Subsidiary’s right to
receive payment is not absolute or is contingent upon the fulfillment of any
condition whatsoever (including any Account that arises from a sale on
consignment, guaranteed sale, sale and return, sale on approval or other terms
under which payment by the Account Debtor may be conditioned or contingent) or
(ii) Borrower or the applicable Subsidiary is not able to bring suit or
otherwise enforce its remedies against the Account Debtor through judicial
process;
     (N) that does not arise from the actual and bona fide sale and delivery of
goods or the performance of services by Borrower or the applicable Subsidiary in
the Ordinary Course of Business, which transactions are completed in accordance
with the terms and provisions contained in any documents related thereto;
     (O) that is payable in any currency other than United States dollars;
     (P) to the extent constituting the obligation of an Account Debtor in
respect of interest, service or similar charges or fees;
     (Q) that is reissued in respect of partial payment, including without
limitation debit memos and charge backs;
     (R) that arises in connection with cash on delivery or other cash sales;
     (S) to the extent such Account exceeds any credit limit established by
Administrative Agent, in its reasonable discretion;
     (T) owed by an Account Debtor having a credit standing unsatisfactory to
Administrative Agent, in its reasonable discretion;
     (U) to the extent credits are due to the applicable Account Debtor, or to
the extent any Credit Party is liable for goods sold or services rendered by the
applicable Account Debtor to such Credit Party, but only to the extent of the
potential offset;

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     (V) as to which any facts, events or occurrences exist which could
reasonably be expected to impair the validity, enforceability or collectability
of such Account or reduce the amount payable or delay payment thereunder;
     (W) as to which any of the representations or warranties pertaining to such
Account set forth in any Financing Document is untrue;
     (X) with respect to which an invoice, acceptable to Administrative Agent in
form and substance, has not been sent to the applicable Account Debtor; and
     (Y) that is otherwise unacceptable to Administrative Agent (including,
without limiting the generality of the foregoing, as a result of the
examinations, audits, analyses, and appraisals contemplated by Sections 4.1(t),
4.6 and 6.2) in the exercise of its reasonable credit judgment.
Notwithstanding the foregoing, Administrative Agent may, from time to time in
the exercise of its reasonable credit judgment, change the criteria for Eligible
Accounts as reflected on the Borrowing Base Certificate based on either: (i) an
event, condition or other circumstance arising after the Closing Date, or
(ii) an event, condition or other circumstance existing on the Closing Date to
the extent Administrative Agent has no written notice thereof from a Credit
Party prior to the Closing Date, in either case under clause (i) or (ii) which
adversely affects or, in the judgment of Administrative Agent, could reasonably
be expected to adversely affect, the Accounts as determined by Administrative
Agent in the exercise of its reasonable credit judgment. For purposes of this
Agreement, the amount of Eligible Accounts at any time shall be equal to the
face amount of such Eligible Accounts at such time less any and all returns,
rebates, discounts (which may, at Administrative Agent’s option, be calculated
on shortest terms), credits, allowances or excise taxes of any nature issued,
owing, claimed by Account Debtors, granted, outstanding or payable in connection
with such Accounts at such time. Any Accounts of Borrower and its Subsidiaries
which are not Eligible Accounts shall nevertheless be part of the Collateral. In
addition, and notwithstanding the foregoing or anything else contained in this
Agreement to the contrary, the eligibility as Eligible Accounts of Accounts of
any future parent corporation or Subsidiary (including, without limitation,
SSG), and the inclusion of such Eligible Accounts in the Borrowing Base shall be
determined by Administrative Agent in its reasonable discretion after the
completion of its due diligence with regard to such future parent corporation or
Subsidiary, which shall include, without limitation, the completion of a third
party field exam.
     “Eligible Assignee” means (i) a Lender, (ii) an Affiliate of a Lender,
(iii) an Approved Fund, and (iv) any other Person (other than a natural person)
approved by (a) Administrative Agent, (b) in the case of any assignment of any
portion of the Revolving Loan Commitment, Swingline Lender, and (c) unless an
Event of Default has occurred and is continuing and unless the proposed assignee
shall be an affiliate of a Lender or Administrative Agent, Borrower (such
approval of Borrower not to be unreasonably withheld or delayed, and shall be
deemed provided unless expressly withheld by Borrower within three (3) Business
Days of request therefor); provided that notwithstanding the foregoing, (x)
“Eligible Assignee” shall not include Borrower or any of Borrower’s Affiliates
or Subsidiaries and (y) no proposed assignee intending to assume all or any
portion of the Revolving Loan Commitment shall be an Eligible Assignee unless
such

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proposed assignee either already holds a portion of the Revolving Loan
Commitment, or has been approved as an Eligible Assignee by Administrative Agent
and Swingline Lender.
     “Eligible Inventory” means all Inventory of Borrower and its Domestic
Subsidiaries, except for any Inventory:
     (A) that consists of work-in-process or raw materials;
     (B) that in Administrative Agent’s reasonable determination or in the
determination of Borrower’s management is excess, obsolete, unsaleable,
shopworn, seconds, damaged or unfit for sale;
     (C) that is not of a type held for sale by Borrower or the applicable
Subsidiary in the Ordinary Course of Business;
     (D) as to which Administrative Agent’s security interest therein, on behalf
of itself and Lenders, is not a first priority perfected security interest;
     (E) that is not owned by Borrower or any applicable Subsidiary free and
clear of all Liens and rights of any other Person (including the rights of a
purchaser that has made progress payments and the rights of a surety that has
issued a bond to assure performance with respect to that Inventory), except the
Liens in favor of Administrative Agent, on behalf of itself and Lenders;
     (F) that (i) is located on Premises owned or operated by SSG, or where any
inventory or other properties or assets of SSG are located or (ii) is located on
premises leased by Borrower or any applicable Subsidiary, or stored with a
bailee, warehouseman, processor or similar Person, unless (a) Administrative
Agent has given its prior consent thereto, (b) a Lien waiver and collateral
access agreement, in form and substance satisfactory to Administrative Agent has
been delivered to Administrative Agent, together with any and all duly
authorized UCC financing statements required by Administrative Agent naming such
Person as debtor, Borrower or the applicable Subsidiary as secured creditor and
Administrative Agent as assignee or (c) Reserves satisfactory to Administrative
Agent have been established with respect thereto;
     (G) that is placed on consignment, is in transit, is outside the possession
or control of Borrower or the applicable Subsidiary (other than as described in
the preceding clause (F)) or is in possession of Borrower or any applicable
Subsidiary on a sale-on-approval or sale-on-return basis or subject to any other
repurchase or return agreement;
     (H) that is manufactured, assembled or otherwise produced in violation of
the Fair Labor Standards Act and subject to the “hot goods” provisions contained
in Title 25 U.S.C. 215(a)(i);
     (I) that is not covered by casualty insurance acceptable to Administrative
Agent;

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     (J) that consists of display items, samples or packing or shipping
materials, packaging, manufacturing supplies or replacement or spare parts;
     (K) that consists of goods which have been returned by the buyer;
     (L) that consists of any costs associated with “freight-in” charges;
     (M) as to which any of the representations or warranties pertaining to such
Inventory set forth in any Financing Document is untrue;
     (N) that consists of Hazardous Materials or goods that can be transported
or sold only with licenses that are not readily available;
     (O) that is covered by a negotiable document of title, unless such document
has been delivered to Administrative Agent;
     (P) that is bill and hold Inventory;
     (Q) that is located outside the United States of America; and
     (R) that is otherwise unacceptable to Administrative Agent in its
reasonable credit judgment (including, without limiting the generality of the
foregoing, as a result of the examinations, audits, analyses, and appraisals
contemplated by Sections 4.1(t), 4.6 and 6.2).
Notwithstanding the foregoing, Administrative Agent may, from time to time, in
the exercise of its reasonable credit judgment, change the criteria for Eligible
Inventory as reflected on the Borrowing Base Certificate, based on either:
(i) an event, condition or other circumstance arising after the Closing Date, or
(ii) an event, condition or other circumstance existing on the Closing Date to
the extent Administrative Agent has no written notice thereof from a Credit
Party prior to the Closing Date, in either case under clause (i) or (ii) which
adversely affects or, in the judgment of Administrative Agent, could reasonably
be expected to adversely affect, the Inventory as determined by Administrative
Agent in the exercise of its reasonable credit judgment. For purposes of this
Agreement, the amount of Eligible Inventory shall be determined on a first-in,
first-out, lower of cost or market basis in accordance with GAAP. Any Inventory
of Borrower and its Subsidiaries which is not Eligible Inventory shall
nevertheless be part of the Collateral. In addition, and notwithstanding the
foregoing or anything else contained in this Agreement to the contrary, the
eligibility as Eligible Inventory of Inventory of any future parent corporation
or Subsidiary (including, without limitation, SSG), and the inclusion of such
Eligible Inventory in the Borrowing Base shall be determined by Administrative
Agent in its reasonable discretion after the completion of its due diligence
with regard to such future parent corporation or Subsidiary, which shall
include, without limitation, the completion of a third party field exam.
     “Eligible Swap Counterparty” means Administrative Agent, any Affiliate of
Administrative Agent, any Lender and/or any Affiliate of any Lender that (i) at
any time it occupies such role or capacity enters into a Swap Contract with
Borrower or any Subsidiary and (ii) in the case of a Lender or an Affiliate of a
Lender other than Administrative Agent, is

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expressly identified by Administrative Agent as maintaining a reporting system
acceptable to Administrative Agent with respect to Swap Contract exposure and
agrees with Administrative Agent to provide regular reporting to Administrative
Agent, in form and content reasonably satisfactory to Administrative Agent, with
respect to such exposure.
     “Environmental Laws” means any and all Laws relating to the environment or
the effect of the environment on human health or to emissions, discharges or
releases of pollutants, contaminants, Hazardous Materials or wastes into the
environment, including ambient air, surface water, ground water or land, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, Hazardous
Materials or wastes or the clean-up or other remediation thereof.
     “Equipment” means, collectively, “equipment” and “fixtures” (as each term
is defined in Article 9 of the UCC).
     “ERISA” means the Employee Retirement Income Security Act of 1974.
     “ERISA Plan” means any “employee benefit plan”, as such term is defined in
Section 3(3) of ERISA (other than a Multiemployer Plan), which Borrower or any
of its Subsidiaries maintains, sponsors or contributes to, or, in the case of an
employee benefit plan which is subject to Section 412 of the Code or Title IV of
ERISA, to which Borrower, any of its Subsidiaries or any member of the
Controlled Group may have any liability, including any liability by reason of
having been a substantial employer within the meaning of Section 4063 of ERISA
at any time during the preceding five years, or by reason of being deemed to be
a contributing sponsor under Section 4069 of ERISA.
     “Event of Default” has the meaning set forth in Section 9.1.
     “Extraordinary Receipts” means any cash received by or paid to or for the
account of any Credit Party not in the Ordinary Course of Business (and not
consisting of proceeds described in any of clauses (ii), (iii) and/or (iv) of
Section 2.1(c)), including without limitation amounts received in respect of
foreign, United States, State or local tax refunds to the extent not included in
the calculation of EBITDA, pension plan reversions, purchase price and other
monetary adjustments made pursuant to any Acquisition Document and/or
indemnification payments made pursuant to any Acquisition Document (other than
such indemnification payments to the extent that the amounts so received are
applied by a Credit Party for the purpose of replacing, repairing or restoring
any assets or properties of a Credit Party, thereby satisfying the condition
giving rise to the claim for indemnification, or otherwise covering any
out-of-pocket expenses incurred by any Credit Party in obtaining such payments);
provided that Extraordinary Receipts shall exclude any single or related series
of amounts received in an aggregate amount less than $100,000.
     “Federal Funds Rate” means, for any day, the rate of interest per annum
(rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%)
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day, provided that (i) if

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such day is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day and (ii) if no
such rate is so published on such next preceding Business Day, the Federal Funds
Rate for such day shall be the average rate quoted to Administrative Agent on
such day on such transactions as determined by Administrative Agent.
     “Financing Documents” means this Agreement, any Notes, the Security
Documents, the Information Certificate, any fee letter between Merrill Lynch and
Borrower relating to the transactions contemplated hereby (including, without
limitation, the Administrative Agent Fee Letter), the Subordination Agreements,
the Information Certificate, any subordination or intercreditor agreement (other
than the Subordination Agreement) pursuant to which any Debt and/or any Liens
securing such Debt is subordinated to all or any portion of the Obligations and
all other documents, instruments and agreements contemplated herein or thereby
and heretofore executed, executed concurrently herewith or executed at any time
and from time to time hereafter, as any or all of the same may be amended,
supplemented, restated or otherwise modified from time to time.
     “Fiscal Year” means a fiscal year of Borrower, ending on June 30 of each
calendar year.
     “Fixed Charge Coverage Ratio” has the meaning provided in the Compliance
Certificate.
     “Foreign Lender” has the meaning set forth in Section 2.8(c).
     “GAAP” means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the United States
accounting profession), which are applicable to the circumstances as of the date
of determination.
     “Governmental Authority” means any nation or government, any state or other
political subdivision thereof, and any agency, department or Person exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government and any corporation or other Person owned or controlled
(through stock or capital ownership or otherwise) by any of the foregoing,
whether domestic or foreign.
     “Guarantee” by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Debt or other obligation of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or
(ii) entered into for the purpose of assuring in any other manner the obligee of
such Debt or other obligation of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part), provided that the term
Guarantee shall not include endorsements for collection or deposit in the

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Ordinary Course of Business. The term “Guarantee” used as a verb has a
corresponding meaning.
     “Hazardous Materials” means (i) any “hazardous substance” as defined in
CERCLA, (ii) any “hazardous waste” as defined by the Resource Conservation and
Recovery Act, (iii) asbestos, (iv) polychlorinated biphenyls, (v) petroleum, its
derivatives, by-products and other hydrocarbons, (vi) mold and (vii) any other
pollutant, toxic, radioactive, caustic or otherwise hazardous substance
regulated under Environmental Laws.
     “Hazardous Materials Contamination” means contamination (whether now
existing or hereafter occurring) of the improvements, buildings, facilities,
personalty, soil, groundwater, air or other elements on or of the relevant
property by Hazardous Materials, or any derivatives thereof, or on or of any
other property as a result of Hazardous Materials, or any derivatives thereof,
generated on, emanating from or disposed of in connection with the relevant
property.
     “Holding Company” means any holding company formed for the purpose of
holding the equity securities of Borrower.
     “Indemnitees” has the meaning set forth in Section 10.2.
     “Information Certificate” means that certain Information Certificate dated
as of the date hereof executed and delivered to Administrative Agent by
Borrower.
     “Instrument” means “instrument”, as defined in Article 9 of the UCC.
     “Intellectual Property” means, with respect to any Person, all patents,
trademarks, trade names, trade styles, trade dress, service marks, logos and
other business identifiers, copyrights, technology, know-how and processes,
computer hardware and software and all applications and licenses therefor, used
in or necessary for the conduct of business by such Person.
     “Interest Period” means, as to any LIBOR Loan, the period commencing on the
date such Loan is borrowed or continued as, or converted into, a LIBOR Loan and
ending on the date one (1), two (2), three (3) or six (6) months thereafter, as
selected by Borrower pursuant to Section 2.3(e); provided, that: (a) if any
Interest Period would otherwise end on a day that is not a Business Day, such
Interest Period shall be extended to the following Business Day unless the
result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the preceding
Business Day; (b) any Interest Period that begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period shall end on the last Business Day of the calendar month at the end of
such Interest Period; (c) Borrower may not select any Interest Period for a
Revolving Loan which would extend beyond the Commitment Expiry Date; and
(d) Borrower may not select any Interest Period for the Term Loan if, after
giving effect to such selection, the aggregate principal amount of the Term Loan
having Interest Periods ending after any date on which an installment of the
Term Loan is scheduled to be repaid would exceed the aggregate principal amount
of the Term Loan scheduled to be outstanding after giving effect to such
repayment.

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     “Inventory” means “inventory” (as defined in Article 9 of the UCC).
     “Investment” means any investment in any Person, whether by means of
acquiring (whether for cash, property, services, securities or otherwise) or
holding securities, capital contributions, loans, time deposits, advances,
Guarantees or otherwise. The amount of any Investment shall be the original cost
of such Investment plus the cost of all additions thereto, without any
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect thereto.
     “Laws” means any and all federal, state, local and foreign statutes, laws,
judicial decisions, regulations, guidances, guidelines, ordinances, rules,
judgments, orders, decrees, codes, plans, injunctions, permits, concessions,
grants, franchises, governmental agreements and governmental restrictions,
whether now or hereafter in effect.
     “LC Issuer” means one or more banks, trust companies or other Persons in
each case expressly identified by Administrative Agent from time to time, in its
sole discretion, as an LC Issuer for purposes of issuing one or more Letters of
Credit hereunder. Without limitation of Administrative Agent’s discretion to
identify any Person as an LC Issuer, no Person shall be designated as an LC
Issuer unless such Person maintains reporting systems acceptable to
Administrative Agent with respect to letter of credit exposure and agrees to
provide regular reporting to Administrative Agent satisfactory to it with
respect to such exposure.
     “Lender” means each of (i) Merrill Lynch, (ii) each other Person party
hereto in its capacity as a lender, (iii) each other Eligible Assignee that
becomes a party hereto pursuant to Section 12.6, (iv) Administrative Agent, to
the extent of any Revolving Loans made by Administrative Agent which have not
been settled among the Lenders pursuant to Section 11.13, and (v) the respective
successors of all of the foregoing, and “Lenders” means all of the foregoing. In
addition to the foregoing, solely for the purpose of identifying the Persons
entitled to share in payments and collections from the Collateral as more fully
set forth in this Agreement and the Security Documents (and not for purposes of
any other rights, including voting rights hereunder), the term “Lender” shall
include Eligible Swap Counterparties. In connection with any such distribution
of payments and collections, Administrative Agent shall be entitled to assume
that no amounts are due to any Eligible Swap Counterparty unless such Eligible
Swap Counterparty has notified Administrative Agent of the amount of any such
liability owed to it prior to such distribution.
     “Lender Letter of Credit” means a Letter of Credit issued by an LC Issuer
that is also, at the time of issuance of such Letter of Credit, a Lender.
     “Letter of Credit” means a documentary (trade) letter of credit issued for
the account of Borrower by an LC Issuer which expires by its terms within one
year after the date of issuance and in any event at least thirty (30) days prior
to the Commitment Expiry Date. Notwithstanding the foregoing, a Letter of Credit
may provide for automatic extensions of its expiry date for one or more
successive one (1) year periods provided that the LC Issuer that issued such
Letter of Credit has the right to terminate such Letter of Credit on each such
annual expiration date and no renewal term may extend the term of the Letter of
Credit to a date that is later than the thirtieth (30th) day prior to the
Commitment Expiry Date.

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     “Letter of Credit Liabilities” means, at any time of calculation, the sum
of (i) without duplication, the amount then available for drawing under all
outstanding Lender Letters of Credit and all Supported Letters of Credit, in
each case without regard to whether any conditions to drawing thereunder can
then be met plus (ii) without duplication, the aggregate unpaid amount of all
reimbursement obligations in respect of previous drawings made under all such
Lender Letters of Credit and Supported Letters of Credit.
     “LIBOR” means, with respect to any LIBOR Loan for any Interest Period, a
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal
to (i) the rate of interest which is identified and normally published by
Bloomberg Professional Service Page BBAM 1 as the offered rate for loans in
United States dollars for the applicable Interest Period under the caption
British Bankers Association LIBOR Rates as of 11:00 a.m. (London time), on the
second full Business Day next preceding the first day of such Interest Period
(unless such date is not a Business Day, in which event the next succeeding
Business Day will be used); divided by (ii) the sum of one minus the daily
average during such Interest Period of the aggregate maximum reserve requirement
(expressed as a decimal) then imposed under Regulation D of the Board of
Governors of the Federal Reserve System (or any successor thereto) for
“Eurocurrency Liabilities” (as defined therein). If Bloomberg Professional
Service no longer reports the LIBOR or Administrative Agent determines in good
faith that the rate so reported no longer accurately reflects the rate available
to Administrative Agent in the London Interbank Market or if such index no
longer exists or if Page BBAM 1 no longer exists or accurately reflects the rate
available to Administrative Agent in the London Interbank Market, Administrative
Agent may select a replacement index or replacement page, as the case may be.
     “LIBOR Loans” means any Loans, other than Swingline Loans, which accrue
interest by reference to the LIBOR, in accordance with the terms of this
Agreement.
     “LIBOR Margin” means (i) as of the Closing Date, 1.75% per annum, and
(ii) thereafter, as of each Adjustment Date, the LIBOR Margin shall be adjusted,
if necessary, to the applicable percent per annum set forth in the Pricing Table
corresponding to the Senior Leverage Ratio for the twelve (12) month period
ending on such date; provided, that if an Event of Default has occurred and is
continuing on an Adjustment Date, no reduction in the LIBOR Margin shall occur
on such Adjustment Date.
     “Lien” means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement and the
other Financing Documents, Borrower or any Subsidiary shall be deemed to own
subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, Capital
Lease or other title retention agreement relating to such asset.
     “Litigation” means any action, suit or proceeding before any court,
mediator, arbitrator or Governmental Authority.
     “Loan Account” has the meaning set forth in Section 2.6(b).

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     “Loans” means the Term Loan, the Revolving Loans and the Swingline Loans,
or any combination of the foregoing, as the context may require.
     “Major Casualty Proceeds” means (i) the aggregate insurance proceeds
received in connection with one or more related events under any Property
Insurance Policy or (ii) any award or other compensation with respect to any
eminent domain, condemnation of property or similar proceedings (or any transfer
or disposition of property in lieu of condemnation), if the amount of such
aggregate insurance proceeds or award or other compensation exceeds $250,000.
     “Margin Stock” has the meaning assigned thereto in Regulation U of the
Federal Reserve Board.
     “Material Adverse Effect” means, with respect to any event, act, condition
or occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), whether
singly or in conjunction with any other event or events, act or acts, condition
or conditions, occurrence or occurrences, whether or not related, a material
adverse change in, or a material adverse effect upon, any of (i) the condition
(financial or otherwise), operations, business, properties or prospects of any
of the Credit Parties, (ii) the rights and remedies of Administrative Agent or
Lenders under any Financing Document, or the ability of any Credit Party to
perform any of its obligations under any Financing Document to which it is a
party, (iii) the legality, validity or enforceability of any Financing Document,
or (iv) the existence, perfection or priority of any security interest granted
in any Financing Document or the value of any material Collateral. For purposes
of this definition, the term “prospects” shall not include the possibility of
obtaining business from a prospective customer of a Credit Party.
     “Material Contracts” has the meaning set forth in Section 3.16.
     “Maximum Lawful Rate” has the meaning set forth in Section 2.7(b).
     “Merrill Lynch” means Merrill Lynch Capital, a division of Merrill Lynch
Business Financial Services Inc., and its successors.
     “Multiemployer Plan” means a multiemployer plan, that is intended to meet
the definition set forth in Section 4001(a)(3) of ERISA, to which Borrower or
any member of the Controlled Group may have any liability.
     “Net Borrowing Availability” means, as of any date of calculation, the
total amount of Revolving Loans available to be borrowed by Borrower in
accordance with the terms of this Agreement, excluding any and all outstanding
Revolving Loans on such date of calculation.
     “Net Cash Proceeds” means, with respect to any transaction or event, an
amount equal to the cash proceeds received by any Credit Party from or in
respect of such transaction or event (including proceeds of any non-cash
proceeds of such transaction), less (i) any out-of-pocket expenses paid to a
Person that are reasonably incurred by such Credit Party in connection therewith
and (ii) in the case of an Asset Disposition, the amount of any Debt secured by
a Lien on the related asset and discharged from the proceeds of such Asset
Disposition and any taxes

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paid or reasonably estimated by the applicable Credit Party to be payable by
such Person in respect of such Asset Disposition (provided, that if the actual
amount of taxes paid is less than the estimated amount, the difference shall
immediately constitute Net Cash Proceeds).
     “Non-Funding Revolving Lender” means a Revolving Lender that has delivered
a notice to each of Administrative Agent and Swingline Lender stating that such
Revolving Lender shall cease making Revolving Loans due to the non-satisfaction
of one or more conditions set forth in Article 8, and specifying any such
non-satisfied conditions; provided, that any Revolving Lender delivering any
such notice shall be a Non-Funding Revolving Lender solely over the period
commencing on the Business Day following receipt by Administrative Agent and
Swingline Lender of such notice, and terminating on such date that such
Revolving Lender has either revoked the effectiveness of such notice or
acknowledged to each of Administrative Agent and Swingline Lender the
satisfaction of the condition specified in such notice.
     “Notes” means the Term Notes, the Revolving Loan Notes and the Swingline
Loan Note, or any combination of the foregoing, as the context may require.
     “Notice of Borrowing” means a notice of a Responsible Officer,
appropriately completed and substantially in the form of Exhibit D hereto.
     “Notice of LC Credit Event” means a notice from a Responsible Officer to
Administrative Agent with respect to any issuance, increase or extension of a
Letter of Credit specifying: (i) the date of issuance or increase of a Letter of
Credit; (ii) the identity of the LC Issuer with respect to such Letter of
Credit, (iii) the expiry date of such Letter of Credit; (iv) the proposed terms
of such Letter of Credit, including the face amount; and (v) the transactions
that are to be supported or financed with such Letter of Credit or increase
thereof.
     “Obligations” means all obligations, liabilities and indebtedness (monetary
(including post-petition interest, whether or not allowed) or otherwise) of each
Credit Party under this Agreement or any other Financing Document, in each case
howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due. In addition to,
but without duplication of, the foregoing, the Obligations shall include,
without limitation, all obligations, liabilities and indebtedness arising from
or in connection with (i) all Support Agreements, (ii) all Lender Letters of
Credit and (iii) all Swap Contracts entered into with any Eligible Swap
Counterparty.
     “OFAC” means the U.S. Department of Treasury Office of Foreign Assets
Control.
     “OFAC Lists” means, collectively, the Specially Designated Nationals and
Blocked Persons List maintained by OFAC pursuant to Executive Order No. 13224,
66 Fed. Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other
restricted Persons maintained pursuant to any of the rules and regulations of
OFAC or pursuant to any other applicable Executive Orders.
     “Operative Documents” means the Financing Documents and the Subordinated
Debt Documents.

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     “Optional Revolving Loan Commitment Increase” has the meaning set forth in
Section 2.2(f).
     “Ordinary Course of Business” means, in respect of any transaction
involving any Credit Party, the ordinary course of such Credit Party’s business,
as conducted by such Credit Party substantially in accordance with past
practices.
     “Organizational Documents” means, with respect to any Person other than a
natural person, the documents by which such Person was organized (such as a
certificate of incorporation, certificate of limited partnership or articles of
organization, and including, without limitation, any certificates of designation
for preferred stock or other forms of preferred equity) and which relate to the
internal governance of such Person (such as by-laws, a partnership agreement or
an operating, limited liability company or members agreement).
     “Overadvance Revolving Loans” has the meaning set forth in
Section 2.2(a)(ii).
     “Participant” has the meaning set forth in Section 12.6(b).
     “Payment Account” means the account specified on the signature pages hereof
into which all payments by or on behalf of Borrower to Administrative Agent
under the Financing Documents shall be made, or such other account as
Administrative Agent shall from time to time specify by notice to Borrower.
     “Payment Notification” means a written notification substantially in the
form of Exhibit E hereto.
     “PBGC” means the Pension Benefit Guaranty Corporation and any Person
succeeding to any or all of its functions under ERISA.
     “Pension Plan” means any ERISA Plan that is subject to Section 412 of the
Code or Title IV of ERISA.
     “Permits” has the meaning set forth in Section 3.1.
     “Permitted Contest” means a contest maintained in good faith by appropriate
proceedings promptly instituted and diligently conducted and with respect to
which such reserve or other appropriate provision, if any, as shall be required
in conformity with GAAP shall have been made; provided that compliance with the
obligation that is the subject of such contest is effectively stayed during such
challenge.
     “Permitted Liens” means Liens permitted pursuant to Section 5.2.
     “Person” means any natural person, corporation, limited liability company,
professional association, limited partnership, general partnership, joint stock
company, joint venture, association, company, trust, bank, trust company, land
trust, business trust or other organization, whether or not a legal entity, and
any Governmental Authority.

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     “Pricing Table” means the following tables, as applicable:
     Prior to the effectiveness of the Acquisition Revolving Loan Commitment
Increase, the following pricing table will be applicable:

                      Revolving Loans, Term Loan and all     other Obligations
Senior Leverage Ratio   Base Rate   LIBOR
Greater than or equal to 2.00 to 1.00
    0.50 %     2.00 %
Greater than or equal to 1.00 to 1.00, but less than or equal to 2.00 to 1.00
    0.25 %     1.75 %
Less than 1.00
    0.00 %     1.50 %

     After the effectiveness of the Acquisition Revolving Loan Commitment
Increase, the following pricing table will be applicable:

                                      Revolving Loans and all other        
Obligations (other than the Term         Loan )   Term Loan Senior Leverage
Ratio   Base Rate   LIBOR   Base Rate   LIBOR
Greater than or equal to 2.00 to 1.00
    0.50 %     2.00 %     0.75 %     2.25 %
Greater than or equal to 1.00 to 1.00, but less than or equal to 2.00 to 1.00
    0.25 %     1.75 %     0.50 %     2.00 %
Less than 1.00
    0.00 %     1.50 %     0.25 %     1.75 %

     For purposes of the Pricing Table, and without limiting the applicability
of Section 9.4, if Borrower shall at any time fail to timely deliver a
Compliance Certificate, then effective as of the tenth (10th) Business Day
following the date on which such Compliance Certificate was due, each applicable
Base Rate Margin and each applicable LIBOR Margin shall be conclusively presumed
to equal the highest applicable Base Rate Margin and the highest applicable
LIBOR Margin specified in the Pricing Table until the date of delivery of such
Compliance Certificate.
     “Property Insurance Policy” means any insurance policy maintained by any
Credit Party covering losses with respect to tangible real or personal property
or improvements or losses from business interruption.

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     “Pro Rata Share” means (i) with respect to a Lender’s right to receive
payments of principal and interest with respect to the Term Loan, the Term Loan
Commitment Percentage of such Lender, (ii) with respect to a Lender’s obligation
to make Revolving Loans, such Lender’s right to receive payments of principal
and interest with respect thereto, such Lender’s right to receive the unused
line fee described in Section 2.3(b), and such Lender’s obligation to share in
Letter of Credit Liabilities and to receive the related Letter of Credit fee
described in Section 2.5(b), the Revolving Loan Commitment Percentage of such
Lender, and (iv) for all other purposes (including without limitation the
indemnification obligations arising under Section 11.6) with respect to any
Lender, the percentage obtained by dividing (x) the sum of the Revolving Loan
Commitment Amount of such Lender (or, in the event the Revolving Loan Commitment
shall have been terminated, such Lender’s then existing Revolving Loan
Outstandings), plus such Lender’s then outstanding principal amount of the Term
Loan by (y) the sum of the Revolving Loan Commitment (or, in the event the
Revolving Loan Commitment shall have been terminated, the then existing
Revolving Loan Outstandings) of all Lenders, plus the then outstanding principal
amount of the Term Loan of all Lenders.
     “Reimbursement Obligations” means, at any date, the obligations of Borrower
then outstanding to reimburse (i) Administrative Agent for payments made by
Administrative Agent under a Support Agreement and/or (ii) any LC Issuer, for
payments made by such LC Issuer under a Lender Letter of Credit.
     “Reinvestment Reserve” has the meaning set forth in Section 2.1(c).
     “Replacement Lender” has the meaning set forth in Section 12.6(c).
     “Required Lenders” means, subject to the provisions of Section 11.13(d), at
any time Lenders holding (i) sixty-six and two thirds percent (66 2/3%) (one
hundred percent (100%) if the number of total Lenders shall be less than three
(3)) or more of the sum of the Revolving Loan Commitment and the outstanding
principal balance of the Term Loan (taken as a whole) or (ii) if the Revolving
Loan Commitment has been terminated, sixty-six and two thirds percent (66 2/3%)
(one hundred percent (100%) if the number of total Lenders shall be less than
three (3)) or more of the sum of (x) the then aggregate outstanding principal
balance of the Loans plus (y) the then aggregate amount of Letter of Credit
Liabilities.
     “Required Revolving Lenders” means, subject to the provisions of
Section 11.13(d), at any time Revolving Lenders holding (i) sixty-six and two
thirds percent (66 2/3%) or more of the Revolving Loan Commitment or (ii) if the
Revolving Loan Commitment has been terminated, sixty-six and two thirds percent
(66 2/3%) or more of the sum of (x) the then aggregate outstanding principal
balance of the Revolving Loans plus (y) the then aggregate amount of Letter of
Credit Liabilities.
     “Reserves” means such amounts as Administrative Agent may from time to time
establish and revise, in each case in the exercise of its reasonable discretion,
reducing the amount of Revolving Loans, Support Agreements and Lender Letters of
Credit which would otherwise be available to Borrower under the lending
formula(s) provided for herein: (a) to reflect events, conditions, contingencies
or risks which, as determined by Administrative Agent in the exercise of its
reasonable credit judgment: (i) adversely affect, or could reasonably be
expected to

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adversely affect, the Collateral or any other property which is security for the
Obligations or its value, (ii) materially adversely affect, or could reasonably
be expected to materially adversely affect, the assets, business or prospects of
any Credit Party or (iii) adversely affect, or could reasonably be expected to
adversely affect, the Liens and other rights of Administrative Agent or any
Lender in the Collateral (including the enforceability, perfection and priority
thereof), (b) to reflect Administrative Agent’s good faith belief that any
collateral report or financial information furnished by or on behalf of any
Credit Party to Administrative Agent is or may have been incomplete, inaccurate
or misleading in any material respect, (c) to reflect accrued and unpaid
interest and fees, or (d) otherwise in the reasonable credit judgment of
Administrative Agent. To the extent Administrative Agent may, in accordance with
any other terms hereof, revise the lending formula(s) used to determine the
Borrowing Base or establish new criteria or revise existing criteria for
Eligible Accounts or Eligible Inventory, Administrative Agent shall not also
establish a Reserve for the same purpose. The amount of any Reserve established
by Administrative Agent shall have a reasonable relationship to the event,
condition or other matter which is the basis for such Reserve as determined by
Administrative Agent in good faith. Without limitation of the foregoing,
Administrative Agent shall have the right to establish a Reserve in respect of
obligations arising under Swap Contracts.
     “Responsible Officer” means any of the Chief Executive Officer or Chief
Financial Officer of Borrower.
     “Restricted Distribution” means as to any Person (i) any dividend or other
distribution (whether in cash, securities or other property) on any equity
interest in such Person (except those payable solely in its equity interests of
the same class) or (ii) any payment by such Person on account of (a) the
purchase, redemption, retirement, defeasance, surrender, cancellation,
termination or acquisition of any equity interests in such Person or any claim
respecting the purchase or sale of any equity interest in such Person or (b) any
option, warrant or other right to acquire any equity interests in such Person.
     “Revolving Lender” means each Lender having a Revolving Loan Commitment
Amount in excess of zero (or, in the event the Revolving Loan Commitment shall
have been terminated at any time, each Lender at such time having Revolving Loan
Outstandings in excess of zero).
     “Revolving Loan Borrowing” means a borrowing of a Revolving Loan.
     “Revolving Loan Commitment” means the sum of each Lender’s Revolving Loan
Commitment Amount.
     “Revolving Loan Commitment Amount” means, as to any Lender, the dollar
amount set forth opposite such Lender’s name in the applicable table on the
Commitment Annex under the column “Revolving Loan Commitment Amount” (if such
Lender’s name is not so set forth thereon, then the dollar amount in the
applicable table on the Commitment Annex for the Revolving Loan Commitment
Amount for such Lender shall be deemed to be zero), as such amount may be
adjusted from time to time by any “Amounts Assigned” (with respect to such
Lender’s portion of Revolving Loans outstanding and its commitment to make
Revolving Loans) pursuant to the terms of any and all effective Assignment
Agreements to which such Lender is a party.

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     “Revolving Loan Commitment Percentage” means, as to any Lender, (i) on the
Closing Date, the percentage set forth opposite such Lender’s name in the
applicable table on the a Commitment Annex under the column “Revolving Loan
Commitment Percentage” (if such Lender’s name is not so set forth thereon, then,
on the Closing Date, such percentage for such Lender shall be deemed to be zero)
and (ii) on any date following the Closing Date, the percentage equal to the
Revolving Loan Commitment Amount of such Lender on such date divided by the
Revolving Loan Commitment on such date.
     “Revolving Loan Limit” means, at any time, the lesser of (i) the Revolving
Loan Commitment minus the amount of Swingline Loan Outstandings and (ii) the
Borrowing Base minus the amount of Swingline Loan Outstandings.
     “Revolving Loan Note” has the meaning set forth in Section 2.4.
     “Revolving Loan Outstandings” means at any time of calculation (i) the sum
of the then existing aggregate outstanding principal amount of Revolving Loans
and the then existing Letter of Credit Liabilities and (ii) when used with
reference to any single Lender, the sum of the then existing outstanding
principal amount of Revolving Loans advanced by, or for the account of, such
Lender and the then existing Letter of Credit Liabilities for the account of
such Lender.
     “Revolving Loans” has the meaning set forth in Section 2.2(a).
     “Section 5.8(b) Permitted Acquisition” has the meaning set forth in
Section 5.8(b).
     “Section 5.8(c) Permitted Acquisition” has the meaning set forth in
Section 5.8(c).
     “Security Documents” means any agreement, document or instrument executed
concurrently herewith or at any time hereafter pursuant to which one or more
Credit Parties or any other Person either (i) Guarantees payment or performance
of all or any portion of the Obligations and/or (ii) provides, as security for
all or any portion of the Obligations, a Lien on any of its assets in favor of
Administrative Agent for its own benefit and the benefit of the Lenders, as any
or all of the same may be amended, supplemented, restated or otherwise modified
from time to time.
     “Senior Leverage Ratio” means the ratio of (i) the difference between
(a) Total Debt less (b) Subordinated Debt to (ii) EBITDA.
     “Settlement Date” has the meaning set forth in Section 11.13(a).
     “Settlement Service” has the meaning set forth in Section 12.6(a).
     “Solvent” means, with respect to any Person, that such Person (i) owns and
will own assets the fair saleable value of which are (a) greater than the total
amount of its liabilities (including Contingent Obligations) and (b) greater
than the amount that will be required to pay the probable liabilities of its
then existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to it;
(ii) has capital that is not unreasonably small in relation to its business as
presently conducted or after

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giving effect to any contemplated transaction; and (iii) does not intend to
incur and does not believe that it will incur debts beyond its ability to pay
such debts as they become due.
     “SSG” means Sport Supply Group, Inc., a Delaware corporation.
     “Stated Rate” has the meaning set forth in Section 2.7(b).
     “Subordinated Debt” means Debt of Borrower owing to Kenneth L. Caravati,
Michael Caravati, Daniel F. Salkeld, and Albert A. Messier in an original
principal amount of $480,000 (together with capitalized interest, fees, costs
and other amounts) incurred pursuant to the terms of the Subordinated Debt
Documents.
     “Subordinated Debt Documents” means (i) the Promissory Note, dated July 26,
2004, executed by Borrower and payable to Kenneth L. Caravati in the stated
principal amount of $250,000, and the Subordination Agreement dated the date
hereof among Mr. Caravati, Borrower and Administrative Agent, (ii) the
Promissory Note, dated July 26, 2004, executed by Borrower payable to C. Michael
Caravati in the stated principal amount of $250,000, and the Subordination
Agreement dated the date hereof among Mr. Caravati, Borrower and Administrative
Agent, (iii) the Promissory Note, dated May 11, 2005, executed by Borrower
payable to Albert A. Messier in the stated principal amount of $100,000, and the
Subordination Agreement dated the date hereof among Mr. Messier, Borrower and
Administrative Agent, and (iv) Promissory Note, dated May 11, 2005, executed by
Borrower payable to Daniel F. Salkeld in the stated principal amount of $130,000
and the Subordination Agreement dated the date hereof among Mr. Salkeld,
Borrower and Administrative Agent.
     “Subordination Agreements” means (i) the Subordination Agreement dated the
date hereof among Kenneth L. Caravati, Borrower and Administrative Agent,
(ii) the Subordination Agreement dated the date hereof among Michael. Caravati,
Borrower and Administrative Agent, (iii) the Subordination Agreement dated the
date hereof among Albert A. Messier, Borrower and Administrative Agent, and
(iv) the Subordination Agreement dated the date hereof among Daniel F. Salkeld,
Borrower and Administrative Agent.
     “Subsidiary” means, with respect to any Person, (i) any corporation (other
than SSG as long as Borrower shall not own 100% of the issued and outstanding
shares of common stock of SSG), of which an aggregate of more than 50% of the
outstanding capital stock having ordinary voting power to elect a majority of
the board of directors of such corporation (irrespective of whether, at the
time, capital stock of any other class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at
the time, directly or indirectly, owned legally or beneficially by such Person
or one or more Subsidiaries of such Person, or with respect to which any such
Person has the right to vote or designate the vote of more than 50% of such
capital stock whether by proxy, agreement, operation of law or otherwise, and
(ii) any partnership or limited liability company in which such Person and/or
one or more Subsidiaries of such Person shall have an interest (whether in the
form of voting or participation in profits or capital contribution) of more than
50% or of which any such Person is a general partner or may exercise the powers
of a general partner. Unless the context otherwise requires, each reference to a
Subsidiary shall be a reference to a Subsidiary of Borrower.

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     “Support Agreement” has the meaning set forth in Section 2.5(a).
     “Supported Letter of Credit” means a Letter of Credit issued by an LC
Issuer in reliance on one or more Support Agreements.
     “Swap Contract” means any “swap agreement”, as defined in Section 101 of
the Bankruptcy Code, that is intended to provide protection against fluctuations
in interest or currency exchange rates.
     “Swingline Lender” means Merrill Lynch or any Lender expressly identified
by Merrill Lynch as the Swingline Lender or, if Merrill Lynch shall at any time
resign as Swingline Lender, a Lender other than Merrill Lynch selected by
Administrative Agent in its sole discretion and reasonably acceptable to
Borrower.
     “Swingline Loan” has the meaning set forth in Section 2.2(e).
     “Swingline Loan Borrowing” means a borrowing of a Swingline Loan.
     “Swingline Loan Limit” means, at any time, the smallest of the following
amounts: (i) $0, (ii) the Revolving Loan Commitment minus the amount of
Revolving Loan Outstandings and (iii) the Borrowing Base minus the amount of
Revolving Loan Outstandings.
     “Swingline Loan Note” has the meaning set forth in Section 2.4.
     “Swingline Loan Outstandings” means, at any time of calculation, the then
existing aggregate outstanding principal amount of Swingline Loans.
     “Target” has the meaning set forth in Section 5.8(c).
     “Taxes” has the meaning set forth in Section 2.8.
     “Term Loan” has the meaning set forth in Section 2.1(a).
     “Term Loan Commitment Percentage” means, as to any Lender, (i) on the
Closing Date, the percentage set forth opposite such Lender’s name in the
applicable table on the Commitment Annex under the column “Term Loan Commitment
Percentage” (if such Lender’s name is not so set forth thereon, then, on the
Closing Date, such percentage for such Lender shall be deemed to be zero) and
(ii) on any date following the Closing Date, the percentage equal to the
principal amount of the Term Loan held by such Lender on such date divided by
the aggregate principal amount of the Term Loan on such date.
     “Term Note” has the meaning set forth in Section 2.4.
     “Termination Date” has the meaning set forth in Section 2.2(c).
     “Total Debt” has the meaning provided in the Compliance Certificate.

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     “UCC” means the Uniform Commercial Code of the State of Illinois or of any
other state the laws of which are required to be applied in connection with the
perfection of security interests in any Collateral.
     “United States” means the United States of America.
     “Wholly-Owned Subsidiary” means, with respect to any Person, any Subsidiary
of such Person of which all of the equity securities (other than, in the case of
a corporation, directors’ qualifying shares, to the extent legally required) are
directly or indirectly owned and controlled by such Person or one or more
Wholly-Owned Subsidiaries of such Person.
     Section 1.2 Accounting Terms and Determinations.
     Unless otherwise specified herein, all accounting terms used herein shall
be interpreted, all accounting determinations hereunder (including without
limitation determinations made pursuant to the exhibits hereto) shall be made,
and all financial statements required to be delivered hereunder shall be
prepared on a consolidated basis in accordance with GAAP applied on a basis
consistent with the most recent audited consolidated financial statements of
Borrower and its Consolidated Subsidiaries delivered to Administrative Agent and
each of the Lenders. If at any time any change in GAAP would affect the
computation of any financial ratio or financial requirement set forth in any
Financing Document, and either Borrower or the Required Lenders shall so
request, the Administrative Agent, the Lenders and Borrower shall negotiate in
good faith to amend such ratio or requirement to preserve the original intent
thereof in light of such change in GAAP (subject to the approval of the Required
Lenders); provided that, until so amended, (i) such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such change therein and
(ii) Borrower shall provide to the Administrative Agent and the Lenders
financial statements and other documents required under this Agreement which
include a reconciliation between calculations of such ratio or requirement made
before and after giving effect to such change in GAAP.
     Section 1.3 Other Definitional Provisions and References.
     References in this Agreement to “Articles”, “Sections”, “Annexes”,
“Exhibits” or “Schedules” shall be to Articles, Sections, Annexes, Exhibits or
Schedules of or to this Agreement unless otherwise specifically provided. Any
term defined herein may be used in the singular or plural. “Include”, “includes”
and “including” shall be deemed to be followed by “without limitation”. Except
as otherwise specified or limited herein, references to any Person include the
successors and assigns of such Person. References “from” or “through” any date
mean, unless otherwise specified, “from and including” or “through and
including”, respectively. Unless otherwise specified herein, the settlement of
all payments and fundings hereunder between or among the parties hereto shall be
made in lawful money of the United States and in immediately available funds.
Time is of the essence in Borrower’s and each other Credit Party’s performance
under this Agreement and all other Financing Documents. All amounts used for
purposes of financial calculations required to be made herein shall be without
duplication. References to any statute or act shall include all related current
regulations and all amendments and any successor statutes, acts and regulations.
References to any statute or act, without additional reference, shall be deemed
to refer to federal statutes and acts of the United States.

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References to any agreement, instrument or document shall include all schedules,
exhibits, annexes and other attachments thereto. References to the “discretion”
or “election” of Administrative Agent, the Required Lenders, or the Required
Revolving Lenders shall be deemed to mean its or their sole and absolute
discretion or election (whether or not so stated with each particular use),
unless reasonable discretion is specified.
ARTICLE 2
LOANS AND LETTERS OF CREDIT
     Section 2.1 Term Loan.
     (a) Term Loan Amounts. On the terms and subject to the conditions set forth
herein, the Lenders hereby agree to make a term loan in an original principal
amount equal to $10,000,000 (“Term Loan”) on the Closing Date. Each Lender’s
obligation to fund the Term Loan shall be limited to such Lender’s Term Loan
Commitment Percentage of the Term Loan, and no Lender shall have any obligation
to fund any portion of the Term Loan required to be funded by any other Lender,
but not so funded. Borrower shall not have any right to reborrow any portion of
the Term Loan which is repaid or prepaid from time to time.
     (b) Scheduled Repayments. There shall become due and payable, and Borrower
shall repay the Term Loan through, twelve (12) scheduled payments, as follows:
the first eleven (11) installments shall be in the principal amount of $500,000
and shall be due and payable on the last day of each March, June, September and
December, commencing on September 30, 2006 and continuing through and including
March 31, 2009, and a twelfth (12th) and final payment of the remaining
outstanding principal amount of the Term Loan shall be due and payable on the
Commitment Expiry Date. Notwithstanding the payment schedule set forth above,
the outstanding principal amount of the Term Loan shall become immediately due
and payable in full on the Termination Date.
     (c) Mandatory Prepayments. There shall become due and payable and Borrower
shall prepay the Term Loan (and the Revolving Loans and Swingline Loans, to the
extent required by Section 2.1(e)(i)) in the following amounts and at the
following times:
          (i) on the date on which any Credit Party (or Administrative Agent as
loss payee or assignee) receives any Major Casualty Proceeds, an amount equal to
one hundred percent (100%) of such Major Casualty Proceeds; provided, that, so
long as no Default or Event of Default has occurred and is continuing, the
recipient (other than Administrative Agent) of any Major Casualty Proceeds may
reinvest the amount of such Major Casualty Proceeds within ninety (90) days, in
replacement assets comparable to the assets giving rise to such Major Casualty
Proceeds; provided, that the aggregate amount which may be reinvested by
Borrower and its Subsidiaries pursuant to the preceding proviso may not exceed
$250,000 in any Fiscal Year; provided, further, that if the applicable Credit
Party does not intend to fully reinvest such Major Casualty Proceeds, or if the
time period set forth in this sentence expires without such Credit Party having
reinvested such Major Casualty Proceeds, Borrower shall prepay the Loans

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in an amount equal to such Major Casualty Proceeds (to the extent not reinvested
or intended to be reinvested within such time period);
          (ii) upon receipt by any Credit Party of the proceeds from the
issuance and sale of any Debt or equity securities (other than (1) proceeds of
Debt securities expressly permitted pursuant to Section 5.1, (2) proceeds of the
issuance of equity securities to Borrower or any Wholly-Owned Subsidiary), and
(3) proceeds of the issuance of equity securities of Borrower (or a parent
company of Borrower) upon the exercise of any stock option to acquire securities
of Borrower, in each case in an amount equal to one hundred percent (100%) of
the Net Cash Proceeds of such issuance and sale;
          (iii) upon receipt by any Credit Party of the proceeds of any Asset
Disposition, an amount equal to one hundred percent (100%) of the Net Cash
Proceeds of such Asset Disposition; provided, that no prepayment shall be
required pursuant to this Section 2.1(c)(iii) unless and until the aggregate Net
Cash Proceeds received during any Fiscal Year from Asset Dispositions exceeds
$350,000 (in which case all Net Cash Proceeds in excess of such amount shall be
used to make prepayments pursuant to this Section 2.1(c)(iii)), and provided,
that, so long as no Default or Event of Default has occurred and is continuing,
the recipient of such Net Cash Proceeds may reinvest the amount of such Net Cash
Proceeds within ninety (90) days, in replacement fixed assets of a kind then
used or usable in the business of such Credit Party. If the applicable Credit
Party does not intend to so reinvest such Net Cash Proceeds, or if the time
period set forth in the immediately preceding sentence expires without such
Credit Party having reinvested such Net Cash Proceeds, Borrower shall prepay the
Loans in an amount equal to such Net Cash Proceeds; and
          (iv) upon receipt by any Credit Party of any Extraordinary Receipts,
an amount equal to one hundred percent (100%) of such Extraordinary Receipts.
Any amounts permitted to be reinvested pursuant to the preceding clauses (ii) or
(iii) shall be immediately applied by Borrower as a prepayment against then
outstanding Revolving Loans, and Administrative Agent shall establish a Reserve
(the “Reinvestment Reserve”) against the Revolving Loan Limit in an amount equal
to such permitted reinvestment amount. So long as no Default or Event of Default
then exists, Administrative Agent shall permit Revolving Loan Borrowings to
finance the making of reinvestments permitted pursuant to the preceding clauses
(ii) and (iii), and shall concurrently reduce the Reinvestment Reserve by an
equivalent amount. Any remaining portion of the Reinvestment Reserve shall be
reduced to zero (0) upon the expiration of the applicable reinvestment periods
pursuant to the preceding clauses (ii) and (iii).
     (d) Optional Prepayments. Borrower may from time to time, with at least two
(2) Business Days prior delivery to Administrative Agent of an appropriately
completed Payment Notification, prepay any Term Loan in whole or in part,
without premium or penalty; provided that any such partial prepayment shall be
in an amount equal to $100,000 or a higher integral multiple of $25,000.

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     (e) All Prepayments.
          (i) Any prepayment of a LIBOR Loan (including a prepayment in respect
of a permanent reduction of the Revolving Loan Commitment) on a day other than
the last day of an Interest Period therefor shall include interest on the
principal amount being repaid and shall be subject to Section 2.3(e)(iv). All
prepayments of a Loan (including a prepayment in respect of a permanent
reduction of the Revolving Loan Commitment) shall be applied first to that
portion of such Loan comprised of Base Rate Loans and then to that portion of
such Loan comprised of LIBOR Loans, in direct order of Interest Period
maturities. Any required prepayment in respect of either Major Casualty Proceeds
or Net Cash Proceeds of any Asset Disposition shall be applied first against
outstanding Revolving Loans and Swingline Loans, to the extent that, after
giving effect to the event giving rise to such proceeds, and any related
modification of the most recently delivered Borrowing Base Certificate to
reflect such event, a mandatory prepayment of Revolving Loans and/or Swingline
Loans would be required pursuant to either of Section 2.2(c)(ii) or
Section 2.2(e)(i), with the remaining amount of such proceeds being applied to
the Term Loan as provided herein. All prepayments of the Term Loan shall be
applied in the inverse order of maturity to the remaining installments thereof.
Following the payment in full of the Term Loan, any remaining amounts required
by Section 2.1(c) to be used to prepay the Term Loan shall instead be applied
first, as a repayment of the outstanding Revolving Loans pro rata among all
Lenders having a Revolving Loan Commitment Percentage and second, at any time
the Revolving Loans have been repaid in full, as a repayment of the outstanding
Swingline Loans.
          (ii) Borrower shall deliver to Administrative Agent an appropriately
completed Payment Notification at least two (2) Business Days prior to each
mandatory prepayment pursuant to Section 2.1(c) and each voluntary prepayment
pursuant to Section 2.1(d), and Administrative Agent shall promptly notify each
Lender of such notice.
     Section 2.2 Revolving Loans and Swingline Loans.
     (a) Revolving Loans and Borrowings.
     (i) On the terms and subject to the conditions set forth herein, each
Lender severally agrees to make Loans to Borrower from time to time as set forth
herein (each a “Revolving Loan”, and collectively, “Revolving Loans”) equal to
such Lender’s Revolving Loan Commitment Percentage of Revolving Loans requested
by Borrower hereunder, provided that after giving effect thereto, the Revolving
Loan Outstandings shall not exceed the Revolving Loan Limit. Within the
foregoing limits, Borrower may borrow under this Section 2.2(a)(i), may prepay
or repay Revolving Loans from time to time and may reborrow Revolving Loans
pursuant to this Section 2.2(a)(i).
     (ii) If Borrower requests that Revolving Lenders make, or permit to remain
outstanding, Revolving Loans in an aggregate principal amount in excess of the
then existing Revolving Credit Limit, Administrative Agent may in its discretion
(unless otherwise determined by Required Revolving Lenders) elect to cause all
Revolving Lenders to make, or permit to remain outstanding, such excess
Revolving Loans (such excess Revolving Loans being referred to as “Overadvance
Revolving Loans”), provided, however, that Revolving Lenders shall not

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make, or permit to remain outstanding, (a) Revolving Loans in excess of the
Revolving Loan Commitment less the sum at such time of (i) the Swingline Loan
Outstandings and (ii) the Letter of Credit Liabilities or (b) Overadvance
Revolving Loans in excess of 10% of the Revolving Loan Commitment. If
Overadvance Revolving Loans are made, or permitted to remain outstanding,
pursuant to the preceding sentence, then (a) clauses (i) and (ii) of the
definition of Revolving Loan Limit and clauses (ii) and (iii) of the definition
of Swingline Loan Limit, respectively, shall each be deemed increased by the
amount of such permitted Overadvance Revolving Loans, but only for so long as
such Overadvance Revolving Loans are outstanding and (b) all Revolving Lenders
shall be bound to make, or permit to remain outstanding such Overadvance
Revolving Loans based upon their Pro Rata Shares of the Revolving Loan
Commitment in accordance with the terms of this Agreement.
     (b) Advancing Revolving Loans.
          (i) Borrower shall deliver to Administrative Agent a Notice of
Borrowing with respect to each proposed Revolving Loan Borrowing (other than
Revolving Loans made pursuant to clause (iii) below), such Notice of Borrowing
to be delivered no later than noon (Chicago time) (1) on the day of such
proposed borrowing, in the case of Base Rate Loans in an aggregate principal
amount equal to or less than $5,000,000, (2) on the Business Day prior to such
proposed borrowing, in the case of Base Rate Loans in an aggregate principal
amount greater than $5,000,000 and (3) on the third (3rd) Business Day prior to
such proposed borrowing, in the case of all LIBOR Loans. Once given, except as
provided in Section 2.3(e)(ii), a Notice of Borrowing shall be irrevocable and
Borrower shall be bound thereby.
          (ii) Borrower hereby authorizes Lenders and Administrative Agent to
make Revolving Loans (other than LIBOR Loans) based on telephonic notices made
by any Person which Administrative Agent, in good faith, believes to be acting
on behalf of Borrower. Borrower agrees to deliver to Administrative Agent a
Notice of Borrowing in respect of each Revolving Loan requested by telephone no
later than one Business Day following such request. If the Notice of Borrowing
differs in any respect from the action taken by Administrative Agent and
Lenders, the records of Administrative Agent and the Lenders shall govern absent
manifest error. Borrower further hereby authorizes Lenders and Administrative
Agent to make Revolving Loans based on electronic notices made by any Person
which Administrative Agent, in good faith, believes to be acting on behalf of
Borrower, but only after Administrative Agent shall have established procedures
acceptable to Administrative Agent for accepting electronic Notices of
Borrowing, as indicated by Administrative Agent’s written confirmation thereof.
          (iii) Borrower and each Revolving Lender hereby authorizes
Administrative Agent to make Revolving Loans (which shall be Base Rate Loans) on
behalf of Revolving Lenders, at any time in its sole discretion, (x) as provided
in Section 2.2(e)(ii), with respect to obligations arising in respect of
Swingline Loans, (y) as provided in Section 2.5(c), with respect to obligations
arising under Support Agreements and/or Lender Letters of Credit, and (z) to pay
principal owing in respect of the Loans (excluding principal payments in respect
of the Loans, commencing one Business Day following receipt by Administrative
Agent of a written notice from any Lender, in accordance with the provisions of
Section 11.11, of the occurrence of an Event of Default) and interest, fees,
expenses and other charges of any Credit Party from time to time arising under
this Agreement or any other Financing Document, so long as, in each case

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after giving effect to any such Revolving Loans, the Revolving Loan Outstandings
do not exceed the Revolving Loan Limit; provided, that (1) Administrative Agent
shall have no obligation at any time to make any Revolving Loan pursuant to the
provisions of the preceding sub-clause (z) and (2) Administrative Agent shall
have no right to make Revolving Loans (A) as provided in each of Section
2.2(e)(ii) and Section 2.5(c) for the account of any Revolving Lender that was a
Non-Funding Revolving Lender at the time Swingline Lender advanced a Swingline
Loan, Administrative Agent executed a Support Agreement, or at the time of
issuance of any Lender Letter of Credit, for which, in any case, reimbursement
obligations have arisen pursuant to either Section 2.2(e)(ii) and/or
Section 2.5(c) and (B) for the account of any then existing Non-Funding
Revolving Lender to pay interest, fees, expenses and other charges of any Credit
Party (other than reimbursement obligations that have arisen pursuant to either
Section 2.2(e)(ii) and/or Section 2.5(c) in respect of Support Agreements
executed or Lender Letters of Credit issued at the time any such Non-Funding
Revolving Lender was not then a Non-Funding Revolving Lender). Subject to the
preceding provisions of this clause (iii), Administrative Agent shall have the
right to make Revolving Loans pursuant to the provisions of this clause
(iii) regardless of whether the conditions precedent set forth in Section 8.3
are then satisfied, including the existence of any Default or Event of Default
either before or after giving effect to the making of such Revolving Loans.
     (c) Mandatory Revolving Loan Repayments and Prepayments.
          (i) The Revolving Loan Commitment shall terminate upon the earlier to
occur of (i) the Commitment Expiry Date and (ii) any date on which
Administrative Agent or Required Lenders elect to terminate the Revolving Loan
Commitment pursuant to Section 9.2 (such earlier date being the “Termination
Date”). On the Termination Date, there shall become due, and Borrower shall pay
the entire outstanding principal amount of each Revolving Loan and of each
Swingline Loan, together with accrued and unpaid Obligations pertaining thereto.
          (ii) If at any time the Revolving Loan Outstandings exceed the
Revolving Loan Limit, then, on the next succeeding Business Day, Borrower shall
repay the Revolving Loans and/or Swingline Loans or cash collateralize Letter of
Credit Liabilities in the manner specified in Section 2.5(e) or cancel
outstanding Letters of Credit, or any combination of the foregoing, in an
aggregate amount equal to such excess.
     (d) Optional Prepayments; Permanent Reduction of Revolving Loan Commitment;
Early Termination.
          (i) Subject to the provisions of Section 2.3(e)(iv), Borrower may from
time to time prepay the Revolving Loans and/or Swingline Loans in whole or in
part, without premium or penalty; provided that any such partial prepayment
shall be in an amount equal to $100,000 or a higher integral multiple of
$25,000.
          (ii) After the effectiveness of the Acquisition Revolving Loan
Commitment Increase, Borrower may voluntarily elect to permanently reduce the
Revolving Loan Commitment, in part from time to time, by giving the
Administrative Agent an appropriately completed Payment Notification not less
then two (2) Business Days prior to the requested permanent reduction as
follows; (i) the aggregate amount of permanent reductions that Borrower

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may elect may not exceed (A) after the effectiveness of both the Optional
Revolving Loan Commitment Increase and the Acquisition Revolving Loan Commitment
Increase, $10,000,000, and (B) after the effectiveness of the Acquisition
Revolving Loan Commitment Increase, but before the effectiveness of the Optional
Revolving Loan Commitment Increase, $5,000,000; (ii) each such reduction shall
be $1,000,000 or an integral multiple of $1,000,000 in excess thereof; and
(iii) no such reduction shall be made that would result in the payment or
prepayment of any portion of any LIBOR Loan on any date other than the last day
of the Interest Period for such LIBOR Loan. Each such reduction shall be
accompanied by a prepayment of the Loans in the amount, if any, necessary to
make the aggregate outstanding principal balance of the Revolving Loan
Outstandings less then the Revolving Loan Limit. Each such reduction shall
reduce the Revolving Loan Commitment Amount between or among the Lenders pro
rata in accordance with each Lender’s Pro Rata Share. Except as otherwise
mutually agreed to by Borrower and the Administrative Agent, only one
(1) request by Borrower to permanently reduce the Revolving Credit Commitment
may be made by Borrower during any twelve (12) month period during the term of
this Agreement.
          (iii) Borrower may, upon not less than thirty (30) days’ prior written
notice to Administrative Agent, terminate this Agreement by making a full and
final payment to Administrative Agent, for its benefit and the benefit of all
Lenders and all LC Issuers, of all Obligations (including, without limitation,
at the option of Administrative Agent, providing cash collateral to be held by
Administrative Agent in respect of all outstanding Letter of Credit Liabilities
in the manner specified in Section 2.5(e), or canceling all outstanding Letters
of Credit, or any combination of the foregoing, all in form and substance
satisfactory to Administrative Agent). Upon termination of this Agreement in
accordance with this paragraph, the unused line fee required by Section 2.3(b)
shall not thereafter be payable.
     (e) Swingline Loans.
          (i) Swingline Lender may, from time to time, at its sole election and
without prior notice to or consent by any Lender or Borrower, convert any
request or deemed request by Borrower for a Revolving Loan that is a Base Rate
Loan into a request for an advance made by, and for the account of, Swingline
Lender in accordance with the terms of this Agreement (each such advance, a
“Swingline Loan”). Each Swingline Loan shall be a Base Rate Loan, and shall be
advanced by Swingline Lender in the same manner as Revolving Loans are advanced
hereunder, in accordance with the provisions of Section 2.2(b). Swingline Lender
shall have the right (but not the obligation) to advance Swingline Loans
regardless of whether the conditions precedent set forth in Section 8.3 are then
satisfied, including the existence of any Default or Event of Default either
before or after giving effect to the making of such Swingline Loan; provided,
that Swingline Lender shall not advance any Swingline Loan if the Swingline Loan
Outstandings exceed the Swingline Loan Limit, either before or after giving
effect to the making of any proposed Swingline Loan. If at any time the
Swingline Loan Outstandings exceed the Swingline Loan Limit, then, on the next
succeeding Business Day, Borrower shall repay Revolving Loans and/or Swingline
Loans or cash collateralize Letter of Credit Liabilities in the manner specified
in Section 2.5(e) or cancel outstanding Letters of Credit, or any combination of
the foregoing, in an aggregate amount equal to such excess.

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          (ii) Swingline Lender shall give Administrative Agent prompt notice of
each Swingline Loan advanced by Swingline Lender. In the event that on any
Business Day Swingline Lender desires that all or any portion of the outstanding
Swingline Loans should be reduced, in whole or in part, Swingline Lender shall
notify Administrative Agent to that effect and indicate the portion of the
Swingline Loan to be so reduced. Administrative Agent agrees to transmit to
Revolving Lenders the information contained in each notice received by
Administrative Agent from Swingline Lender regarding the reduction of
outstanding Swingline Loans and shall concurrently notify such Lenders of each
such Lender’s Pro Rata Share of the obligation to make a Revolving Loan to repay
outstanding Swingline Loans (or the applicable portion thereof). Each of the
Revolving Lenders, other than any Revolving Lender that was a Non-Funding
Revolving Lender at the time the applicable Swingline Loans were advanced,
hereby unconditionally and irrevocably agrees to fund to the Payment Account,
for the benefit of Swingline Lender, not later than noon (Chicago time) on the
Business Day immediately following the Business Day of such Lender’s receipt of
such notice from Administrative Agent (provided that if any Revolving Lender
shall receive such notice at or prior to 10:00 a.m. (Chicago time) on a Business
Day, such funding shall be made by such Lender on such Business Day), such
Lender’s Pro Rata Share of a Revolving Loan (which Revolving Loan shall be a
Base Rate Loan and shall be deemed to be requested by Borrower) in the principal
amount of such portion of the Swingline Loan which is required to be paid to
Swingline Lender under this Section 2.2(e). The proceeds of any such Revolving
Loans shall be immediately paid over to Administrative Agent for the benefit of
Swingline Lender for application against then outstanding Swingline Loans. For
purposes of this clause (ii), Swingline Lender shall be conclusively entitled to
assume that, at the time of the advance of any Swingline Loan, each Revolving
Lender, other than any then existing Non-Funding Revolving Lender, will fund its
Pro Rata Share of the Revolving Loans provided for in this clause (ii).
          (iii) In the event that, at any time any Swingline Loans are
outstanding, either (1) an Event of Default pursuant to either Section 9.1(f) or
9.1(g) has occurred or (2) the Revolving Loan Commitment has been suspended or
terminated in accordance with the provisions of this Agreement, then in either
case, each of the Revolving Lenders (other than Swingline Lender and any
Revolving Lender that was a Non-Funding Revolving Lender at the time the
applicable Swingline Loans were advanced) shall be deemed to have irrevocably
and immediately purchased and received from Swingline Lender, without recourse
or warranty, an undivided interest and participation in the Swingline Loan in an
amount equal to such Lender’s Revolving Loan Commitment Percentage (but
recalculated to disregard any interest of any Non-Funding Revolving Lender in
the Revolving Loans) multiplied by the total amount of the Swingline Loans
outstanding. Any purchase obligation arising pursuant to the immediately
preceding sentence shall be absolute and unconditional and shall not be affected
by any circumstances whatsoever. In the event that on any Business Day Swingline
Lender desires to effect settlement of any such purchase, Swingline Lender shall
promptly notify Administrative Agent to that effect and indicate the payment
amounts required by each Lender to effect such settlement. Administrative Agent
agrees to transmit to Revolving Lenders the information contained in each notice
received by Administrative Agent from Swingline Lender and shall concurrently
notify such Lenders of each such Lender’s Pro Rata Share of the required payment
settlement amount. Each such Lender (other than Non-Funding Revolving Lenders,
as specified above) shall effect such settlement upon receipt of any such notice
by transferring to the

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Payment Account not later than noon (Chicago time) on the Business Day
immediately following the Business Day of receipt of such notice (provided that
if any such Lender shall receive such notice at or prior to 10:00 a.m. (Chicago
time) on a Business Day, such funding shall be made by such Lender on such
Business Day), an amount equal to such Lender’s participation in the Swingline
Loan.
          (iv) In the event any Revolving Lender (other than Non-Funding
Revolving Lenders, as specified above) fails to make available to Swingline
Lender when due the amount of such Lender’s participation in the Swingline
Loans, Swingline Lender shall be entitled to recover such amount on demand from
such Lender together with interest at the Federal Funds Rate, for the first
three (3) days following the due date, and thereafter at the Base Rate plus the
Base Rate Margin in respect of Swingline Loans. Any Lender’s failure to make any
payment requested under this Section 2.2(e) shall not relieve any other Lender
of its obligations hereunder, but no Lender shall be responsible for the failure
of any other Lender to make available to Swingline Lender such other Lender’s
required payment hereunder. The obligations of the Lenders under this
Section 2.2(e) shall be deemed to be binding upon Administrative Agent,
Swingline Lender and Lenders notwithstanding the occurrence of any Default or
Event of Default, or any insolvency or bankruptcy proceeding pertaining to
Borrower or any other Credit Party.
     (f) Optional Revolving Loan Commitment Increase Request. Provided no
Default or Event of Default shall have occurred and shall be continuing,
Borrower may request that the Lenders increase the Revolving Loan Commitment by
an amount not greater than $10,000,000 in the aggregate (the “Optional Revolving
Loan Commitment Increase”), as set forth on the Commitment Annex in the table
under the heading “After Effectiveness of the Optional Revolving Loan Commitment
Increase”. The Optional Revolving Loan Commitment Increase shall be subject to
the approval of Administrative Agent and the Lenders in their respective sole
discretion, and shall also be subject to the terms and provisions of
Section 4.11, including, without limitation, such modifications to the Financing
Documents as Administrative Agent shall reasonably request as necessary to
effect the Optional Revolving Loan Commitment Increase, and other matters
considered appropriate by Agent in its reasonable discretion. Only one such
increase in the Revolving Loan Commitment may be requested by Borrower pursuant
to this Section 2.2(f).
     (g) Acquisition Revolving Loan Commitment Increase Request. Provided no
Default or Event of Default shall have occurred and shall be continuing, upon
the satisfaction of the Acquisition Revolving Loan Commitment Increase
Conditions, Borrower may request that the Lenders increase the Revolving Loan
Commitment by $15,000,000 as set forth on the Commitment Annex in the table
under the heading “After Effectiveness of Acquisition Revolving Loan Commitment
Increase” (the “Acquisition Revolving Loan Commitment Increase”). The
Acquisition Revolving Loan Commitment shall be subject to the approval of
Administrative Agent and the Lenders in their respective sole discretion, and
shall also be subject to the terms and provisions of Section 4.11, including,
without limitation, such modifications to the Financing Documents as
Administrative Agent shall reasonably request as necessary to effect the
Acquisition Revolving Loan Commitment Increase, and other matters

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considered appropriate by Agent in its reasonable discretion. Only one such
increase in the Revolving Loan Commitment may be requested by Borrower pursuant
to this Section 2.2(g).
     Section 2.3 Interest, Interest Calculations and Certain Fees.
     (a) Interest. From and following the Closing Date, depending upon
Borrower’s election from time to time, subject to the terms hereof, to have
portions of the Loans accrue interest determined by reference to the Base Rate
or the LIBOR, the Loans and the other Obligations shall bear interest at the
applicable rates set forth below:
          (i) If a Base Rate Loan, or any other Obligation other than a LIBOR
Loan, then at the sum of the Base Rate plus the applicable Base Rate Margin.
          (ii) If a LIBOR Loan, then at the sum of the LIBOR plus the applicable
LIBOR Margin.
     (b) Unused Line Fee. From and following the Closing Date, Borrower shall
pay Administrative Agent, for the benefit of all Lenders committed to make
Revolving Loans, in accordance with their respective Pro Rata Shares, a fee in
an amount equal to (1) (a) the Revolving Loan Commitment less (b) the average
daily balance of the Revolving Loan Outstandings during the preceding month,
multiplied by (2) 0.375% per annum. Such fee is to be paid quarterly in arrears
on the last day of each calendar quarter.
     (c) Administrative Agent Fee Letter. Borrower shall pay Administrative
Agent the fees set forth in the Administrative Agent Fee Letter in accordance
with the terms and provisions thereof.
     (d) Computation of Interest and Related Fees. All interest and fees under
each Financing Document shall be calculated on the basis of a 360-day year for
the actual number of days elapsed. The date of funding of a Base Rate Loan and
the first day of an Interest Period with respect to a LIBOR Loan shall be
included in the calculation of interest. The date of payment of a Base Rate Loan
and the last day of an Interest Period with respect to a LIBOR Loan shall be
excluded from the calculation of interest. If a Loan is repaid on the same day
that it is made, one (1) day’s interest shall be charged. Interest on all Base
Rate Loans is payable in arrears on the last day of each month and on the
maturity of such Loans, whether by acceleration or otherwise. Interest on LIBOR
Loans shall be payable on the last day of the applicable Interest Period, unless
the Interest Period is greater than three (3) months, in which case interest
will be payable on the last day of each three (3) month interval. In addition,
interest on LIBOR Loans is due on the maturity of such Loans, whether by
acceleration or otherwise.
     (e) LIBOR Provisions.
          (i) LIBOR Election. All Loans made on the Closing Date shall be Base
Rate Loans and shall remain so until three (3) Business Days after the Closing
Date. Thereafter, subject to the provisions of Section 9.4, Borrower may request
that Revolving Loans permitted to be made hereunder be LIBOR Loans, that
outstanding portions of Revolving Loans permitted to be made hereunder and
outstanding portions of each Term Loan be converted to LIBOR Loans

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and that all or any portion of a LIBOR Loan be continued as a LIBOR Loan upon
expiration of the applicable Interest Period. Any such request will be made by
submitting a Notice of Borrowing to Administrative Agent. Once given, and except
as provided in clause (ii) below, a Notice of Borrowing shall be irrevocable and
Borrower shall be bound thereby. Upon the expiration of an Interest Period, in
the absence of a new Notice of Borrowing submitted to Administrative Agent not
less than three (3) Business Days prior to the end of such Interest Period, the
LIBOR Loan then maturing shall be automatically converted to a Base Rate Loan.
There may be no more than six (6) LIBOR Loans outstanding at any one time. Each
request for a LIBOR Loan, whether by original issuance, conversion or
continuation, shall be in a minimum amount of $250,000 and, if in excess of such
amount, in an integral multiple of $50,000 in excess of such amount. Loans which
are not requested as LIBOR Loans in accordance with this Section 2.3(e)(i) shall
be Base Rate Loans. Administrative Agent shall notify Lenders, by telephonic or
facsimile notice, of each Notice of Borrowing received by Administrative Agent
not less than two (2) Business Days prior to the first day of the Interest
Period of the LIBOR Loan requested thereby.
          (ii) Inability to Determine LIBOR. In the event, prior to commencement
of any Interest Period relating to a LIBOR Loan, Administrative Agent shall
determine or be notified by Required Lenders that adequate and reasonable
methods do not exist for ascertaining LIBOR, Administrative Agent shall promptly
provide notice of such determination to Borrower and Lenders (which shall be
conclusive and binding on Borrower and Lenders). In such event (1) any request
for a LIBOR Loan or for a conversion to or continuation of a LIBOR Loan shall be
automatically withdrawn and shall be deemed a request for a Base Rate Loan,
(2) each LIBOR Loan will automatically, on the last day of the then current
Interest Period relating thereto, become a Base Rate Loan and (3) the
obligations of Lenders to make LIBOR Loans shall be suspended until
Administrative Agent or Required Lenders determine that the circumstances giving
rise to such suspension no longer exist, in which event Administrative Agent
shall so notify Borrower and Lenders.
          (iii) Illegality. Notwithstanding any other provisions hereof, if any
Law shall make it unlawful for any Lender to make, fund or maintain LIBOR Loans,
such Lender shall promptly give notice of such circumstances to Administrative
Agent, Borrower and the other Lenders. In such an event, (1) the commitment of
such Lender to make LIBOR Loans, continue LIBOR Loans as LIBOR Loans or convert
Base Rate Loans to LIBOR Loans shall be immediately suspended and (2) such
Lender’s outstanding LIBOR Loans shall be converted automatically to Base Rate
Loans on the last day of the Interest Period thereof or at such earlier time as
may be required by law.
          (iv) LIBOR Breakage Fee. Upon (i) any default by Borrower in making
any borrowing of, conversion into or continuation of any LIBOR Loan following
Borrower’s delivery to Administrative Agent of any applicable Notice of
Borrowing or (ii) any payment of a LIBOR Loan on any day that is not the last
day of the Interest Period applicable thereto (regardless of the source of such
prepayment and whether voluntary, by acceleration or otherwise), Borrower shall
promptly pay Administrative Agent, for the benefit of all Lenders that funded or
were prepared to fund any such LIBOR Loan, an amount equal to the amount of any
losses, expenses and liabilities (including, without limitation, any loss
(including interest paid) in

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connection with the re-employment of such funds) that any Lender may sustain as
a result of such default or such payment. For purposes of calculating amounts
payable to a Lender under this paragraph, each Lender shall be deemed to have
actually funded its relevant LIBOR Loan through the purchase of a deposit
bearing interest at LIBOR in an amount equal to the amount of that LIBOR Loan
and having a maturity and repricing characteristics comparable to the relevant
Interest Period; provided, however, that each Lender may fund each of its LIBOR
Loans in any manner it sees fit, and the foregoing assumption shall be utilized
only for the calculation of amounts payable under this subsection.
          (v) Increased Costs. If, after the Closing Date, the adoption or
taking effect of, or any change in, any Law, or any change in the
interpretation, administration or application of any Law by any Governmental
Authority, central bank or comparable agency charged with the interpretation,
administration or application thereof, or compliance by any Lender with any
request, guideline or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency: (1) shall impose, modify or
deem applicable any reserve (including any reserve imposed by the Board of
Governors of the Federal Reserve System, or any successor thereto, but excluding
any reserve included in the determination of the LIBOR pursuant to the
provisions of this Agreement), special deposit, compulsory loan, insurance
charge or similar requirement against assets of, deposits with or for the
account of, or credit extended or participated in by any Lender; or (2) shall
impose on any Lender any other condition affecting its LIBOR Loans, any of its
Notes (if any) or its obligation to make LIBOR Loans; and the result of anything
described in clauses (1) above and (2) is to increase the cost to (or to impose
a cost on) such Lender of making or maintaining any LIBOR Loan, or to reduce the
amount of any sum received or receivable by such Lender under this Agreement or
under any of its Notes (if any) with respect thereto, then upon demand by such
Lender (which demand shall be accompanied by a statement setting forth the basis
for such demand and a calculation of the amount thereof in reasonable detail, a
copy of which shall be furnished to Administrative Agent), Borrower shall
promptly pay directly to such Lender such additional amount as will compensate
such Lender for such increased cost or such reduction, so long as such amounts
have accrued on or after the day which is one hundred eighty (180) days prior to
the date on which such Lender first made demand therefor.
     Section 2.4 Notes.
     The portion of the Term Loan made by each Lender shall be evidenced, if so
requested by such Lender, by a promissory note executed by Borrower (a “Term
Note”), and the portion of the Revolving Loans made by each Lender shall be
evidenced, if so requested by such Lender, by a promissory note executed by
Borrower (a “Revolving Loan Note”) in an original principal amount equal to such
Lender’s Pro Rata Share of the Term Loan, and the Revolving Loan Commitment,
respectively. The Swingline Loans made by Swingline Lender shall be evidenced,
if so requested by Swingline Lender, by a promissory note executed by Borrower
(a “Swingline Loan Note”) in an original principal amount equal to the amount
identified in clause (i) of the definition of Swingline Loan Limit.

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     Section 2.5 Letters of Credit and Letter of Credit Fees.
     (a) Letter of Credit. On the terms and subject to the conditions set forth
herein, the Revolving Loan Commitment may be used by Borrower, in addition to
the making of Revolving Loans hereunder, for the issuance, prior to the
Termination Date, by (i) Administrative Agent, of letters of credit, guarantees
or other agreements or arrangements (each, a “Support Agreement”) to induce an
LC Issuer to issue or increase the amount of, or extend the expiry date of, one
or more Letters of Credit and (ii) a Lender, identified by Administrative Agent,
as an LC Issuer, of one or more Lender Letters of Credit, so long as, in each
case:
          (i) Administrative Agent shall have received a Notice of LC Credit
Event at least two (2) Business Days before the relevant date of issuance,
increase or extension; and
          (ii) after giving effect to such issuance, increase or extension,
(x) the aggregate Letter of Credit Liabilities under all Letters of Credit do
not exceed $4,000,000 and (y) the Revolving Loan Outstandings do not exceed the
Revolving Loan Limit.
Nothing in this Agreement shall be construed to obligate any Lender to issue,
increase the amount of or extend the expiry date of any letter of credit, which
act or acts, if any, shall be subject to agreements to be entered into from time
to time between Borrower and such Lender. Each Lender that is an LC Issuer
hereby agrees to give Administrative Agent prompt written notice of each
issuance of a Lender Letter of Credit by such Lender and each payment made by
such Lender in respect of Lender Letters of Credit issued by such Lender.
     (b) Letter of Credit Fee. Borrower shall pay to Administrative Agent, for
the benefit of the Revolving Lenders, a letter of credit fee with respect to the
Letter of Credit Liabilities for each Letter of Credit, computed for each day
from the date of issuance of such Letter of Credit to the date that is the last
day a drawing is available under such Letter of Credit, at a rate per annum
equal to the LIBOR Margin then applicable to Revolving Loans. Such fee shall be
payable in arrears on the last day of each calendar month prior to the
Termination Date and on such date. In addition, Borrower agrees to pay promptly
to the LC Issuer any fronting or other fees that it may charge in connection
with any Letter of Credit.
     (c) Reimbursement Obligations of Borrower. If either (x) Administrative
Agent shall make a payment to an LC Issuer pursuant to a Support Agreement, or
(y) any Lender shall honor any draw request under, and make payment in respect
of, a Lender Letter of Credit, (i) Borrower shall promptly reimburse
Administrative Agent or such Lender, as applicable, for the amount of such
payment and (ii) Borrower shall be deemed to have immediately requested that
Revolving Lenders make a Revolving Loan, which shall be a Base Rate Loan, in a
principal amount equal to the amount of such payment (but solely to the extent
Borrower shall have failed to directly reimburse Administrative Agent or, with
respect to Lender Letters of Credit, the applicable LC Issuer, for the amount of
such payment). Administrative Agent shall promptly notify Revolving Lenders of
any such deemed request and each Revolving Lender (other than any such Revolving
Lender that was a Non-Funding Revolving Lender at the time the applicable
Supported Letter of Credit or Lender Letter of Credit was issued) hereby agrees
to make available to Administrative Agent not later than noon (Chicago time) on
the Business Day following such notification from Administrative Agent such
Revolving Lender’s Pro Rata Share of such Revolving Loan

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(calculated to disregard any interest of any Non-Funding Revolving Lender in the
Revolving Loans). Each Revolving Lender (other than any applicable Non-Funding
Revolving Lender specified above) hereby absolutely and unconditionally agrees
to fund such Revolving Lender’s Pro Rata Share of the Loan described in the
immediately preceding sentence, unaffected by any circumstance whatsoever,
including (without limitation) (i) the occurrence and continuance of a Default
or Event of Default, (ii) the fact that, whether before or after giving effect
to the making of any such Revolving Loan, the Revolving Loan Outstandings exceed
or will exceed the Revolving Loan Limit and/or (iii) the non-satisfaction of any
conditions set forth in Section 8.3. Administrative Agent hereby agrees to apply
the gross proceeds of each Revolving Loan deemed made pursuant to this
Section 2.5(c) in satisfaction of Borrower’s reimbursement obligations arising
pursuant to this Section 2.5(c). Borrower shall pay interest, on demand, on all
amounts so paid by Administrative Agent for each day until Borrower reimburses
Administrative Agent therefor at a rate per annum equal to the then current
interest rate applicable to Revolving Loans (which are Base Rate Loans) for such
day.
     (d) Reimbursement and Other Payments by Borrower. The obligations of
Borrower to reimburse Administrative Agent and/or the applicable LC Issuer
pursuant to Section 2.5(c) shall be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the terms of this Agreement,
under all circumstances whatsoever, including the following:
          (i) any lack of validity or enforceability of, or any amendment or
waiver of or any consent to departure from, any Letter of Credit or any related
document;
          (ii) the existence of any claim, set-off, defense or other right which
Borrower may have at any time against the beneficiary of any Letter of Credit,
the LC Issuer (including any claim for improper payment), Administrative Agent,
any Lender or any other Person, whether in connection with any Financing
Document or any unrelated transaction, provided that nothing herein shall
prevent the assertion of any such claim by separate suit or compulsory
counterclaim;
          (iii) any statement or any other document presented under any Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect
whatsoever;
          (iv) any affiliation between the LC Issuer and Administrative Agent;
or
          (v) to the extent permitted under applicable Law, any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing.
     (e) Deposit Obligations of Borrower. In the event any Letters of Credit are
outstanding at the time that Borrower prepays or is required to repay the
Obligations or the Revolving Loan Commitment is terminated, Borrower shall
(i) deposit with Administrative Agent for the benefit of all Revolving Lenders
cash in an amount equal to one hundred and five percent (105%) of the aggregate
outstanding Letter of Credit Liabilities to be available to Administrative
Agent, for its benefit and the benefit of issuers of Lender Letters of Credit,
to reimburse payments of drafts drawn under such Letters of Credit and pay any
fees and expenses related thereto and (ii) prepay the fee payable under
Section 2.5(b) with respect to such Letters of

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Credit for the full remaining terms of such Letters of Credit. Upon termination
of any such Letter of Credit and provided no Event of Default then exists, the
unearned portion of such prepaid fee attributable to such Letter of Credit shall
be refunded to Borrower, together with the deposit described in the preceding
clause attributable to such Letter of Credit, but only to the extent not
previously applied by Administrative Agent in the manner described herein.
     (f) Participations in Support Agreements and Lender Letters of Credit.
          (i) Concurrently with the issuance of each Supported Letter of Credit,
Administrative Agent shall be deemed to have sold and transferred to each
Revolving Lender (other than any Non-Funding Revolving Lenders at the time of
such issuance), and each such Revolving Lender shall be deemed irrevocably and
immediately to have purchased and received from Administrative Agent, without
recourse or warranty, an undivided interest and participation in, to the extent
of such Lender’s Pro Rata Share of the Revolving Loan Commitment, Administrative
Agent’s Support Agreement liabilities and obligations in respect of such Letters
of Credit and Borrower’s Reimbursement Obligations with respect thereto
(calculated to disregard any interest of any Non-Funding Revolving Lender in the
Revolving Loans). Concurrently with the issuance of each Lender Letter of
Credit, the LC Issuer in respect thereof shall be deemed to have sold and
transferred to each Revolving Lender (other than any Non-Funding Revolving
Lenders at the time of such issuance), and each such Revolving Lender shall be
deemed irrevocably and immediately to have purchased and received from such LC
Issuer, without recourse or warranty, an undivided interest and participation
in, to the extent of such Lender’s Pro Rata Share of the Revolving Loan
Commitment, such Lender Letter of Credit and Borrower’s Reimbursement
Obligations with respect thereto (calculated to disregard any interest of any
Non-Funding Revolving Lender in the Revolving Loans). Any purchase obligation
arising pursuant to the immediately two preceding sentences shall be absolute
and unconditional and shall not be affected by any circumstances whatsoever.
          (ii) If either (x) Administrative Agent makes any payment or
disbursement under any Support Agreement and/or (y) an LC Issuer makes any
payment or disbursement under any Lender Letter of Credit, and (A) Borrower has
not reimbursed Administrative Agent or, as applicable, the applicable LC Issuer,
with respect to any Lender Letter of Credit in full for such payment or
disbursement in accordance with Section 2.5(c), or (B) any reimbursement
received by Administrative Agent or any LC Issuer from Borrower is or must be
returned or rescinded upon or during any bankruptcy or reorganization of any
Credit Party or otherwise, each Revolving Lender (other than any Revolving
Lender that was a Non-Funding Revolving Lender at the time of the issuance of
such Supported Letter of Credit or Lender Letter of Credit) shall be irrevocably
and unconditionally obligated to pay to Administrative Agent, or the applicable
LC Issuer, as applicable, its Pro Rata Share of such payment or disbursement
(but no such payment shall diminish the Obligations of Borrower under
Section 2.5(c)), calculated to disregard any interest of any Non-Funding
Revolving Lender in the Revolving Loans. To the extent any such Revolving Lender
shall not have made such amount available to Administrative Agent, or the
applicable LC Issuer, as applicable, by noon (Chicago time) on the Business Day
on which such Lender receives notice from Administrative Agent, or the
applicable LC Issuer, as applicable, of such payment or disbursement, such
Lender agrees to pay interest on such amount to Administrative Agent, or the
applicable LC Issuer, as applicable, forthwith on demand

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accruing daily at the Federal Funds Rate, for the first three (3) days following
such Lender’s receipt of such notice, and thereafter at the Base Rate plus the
Base Rate Margin in respect of Revolving Loans. Any Revolving Lender’s failure
to make available to Administrative Agent or the applicable LC Issuer, as
applicable, its Pro Rata Share of any such payment or disbursement shall not
relieve any other Lender of its obligation hereunder to make available such
other Revolving Lender’s Pro Rata Share of such payment, but no Revolving Lender
shall be responsible for the failure of any other Lender to make available such
other Lender’s Pro Rata Share of any such payment or disbursement.
     Section 2.6 General Provisions Regarding Payment; Loan Account.
     (a) All payments to be made by Borrower under any Financing Document,
including payments of principal and interest made hereunder and pursuant to any
other Financing Document, and all fees, expenses, indemnities and
reimbursements, shall be made without set-off or counterclaim. If any payment
hereunder becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension (it being understood and agreed that,
solely for purposes of calculating financial covenants and computations
contained herein and determining compliance therewith, if payment is made, in
full, on any such extended due date, such payment shall be deemed to have been
paid on the original due date without giving effect to any extension thereto).
Any payments received in the Payment Account before noon (Chicago time) on any
date shall be deemed received by Administrative Agent on such date, and any
payments received in the Payment Account after noon (Chicago time) on any date
shall be deemed received by Administrative Agent on the next succeeding Business
Day. Any optional or mandatory prepayment of the Term Loan shall be accompanied
by timely delivery to Administrative Agent of an appropriately completed Payment
Notification, as provided in Section 2.1(e). In the absence of receipt by
Administrative Agent of an appropriately completed Payment Notification on or
prior to such prepayment, Borrower and each Lender hereby fully authorizes and
directs Administrative Agent, notwithstanding any contrary application
provisions contained herein, to apply payments and/or prepayments received from
Borrower against then outstanding Revolving Loans, and second, if no Revolving
Loans are then outstanding, pro rata against the outstanding Term Loan in
accordance with the provisions of Section 2.1(e); provided, that (i) if
Administrative Agent receives an appropriately completed Payment Notification
within two (2) Business Days of the making of any such payment or prepayment,
Administrative Agent shall be fully authorized by Borrower and each Lender to
apply such amounts received in accordance with the terms of such Payment
Notification and to make any corresponding Loan Account reversals in respect
thereof and (ii) if Administrative Agent at any time determines that payments
received by Administrative Agent were in respect of a mandatory prepayment
event, Administrative Agent shall apply such payments in accordance with the
provisions of Section 2.1(e), and shall be fully authorized by Borrower and each
Lender to make any corresponding Loan Account reversals in respect thereof.
     (b) Administrative Agent shall maintain a loan account (the “Loan Account”)
on its books to record Loans and other extensions of credit made by the Lenders
hereunder or under any other Financing Document, and all payments thereon made
by Borrower. All entries in the

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Loan Account shall be made in accordance with Administrative Agent’s customary
accounting practices as in effect from time to time. The balance in the Loan
Account, as recorded on Administrative Agent’s most recent printout or other
written statement, shall be conclusive and binding evidence of the amounts due
and owing to Administrative Agent by Borrower absent clear and convincing
evidence to the contrary; provided that any failure to so record or any error in
so recording shall not limit or otherwise affect Borrower’s duty to pay all
amounts owing hereunder or under any other Financing Document. Unless Borrower
notifies Administrative Agent of any objection to any such printout or statement
(specifically describing the basis for such objection) within thirty (30) days
after the date of receipt thereof, it shall be deemed final, binding and
conclusive upon Borrower in all respects as to all matters reflected therein.
     Section 2.7 Maximum Interest.
     (a) In no event shall the interest charged with respect to the Notes (if
any) or any other obligations of Borrower under any Financing Document exceed
the maximum amount permitted under the laws of the State of Illinois or of any
other applicable jurisdiction.
     (b) Notwithstanding anything to the contrary herein or elsewhere, if at any
time the rate of interest payable hereunder or under any Note or other Financing
Document (the “Stated Rate”) would exceed the highest rate of interest permitted
under any applicable law to be charged (the “Maximum Lawful Rate”), then for so
long as the Maximum Lawful Rate would be so exceeded, the rate of interest
payable shall be equal to the Maximum Lawful Rate; provided, that if at any time
thereafter the Stated Rate is less than the Maximum Lawful Rate, Borrower shall,
to the extent permitted by law, continue to pay interest at the Maximum Lawful
Rate until such time as the total interest received is equal to the total
interest which would have been received had the Stated Rate been (but for the
operation of this provision) the interest rate payable. Thereafter, the interest
rate payable shall be the Stated Rate unless and until the Stated Rate again
would exceed the Maximum Lawful Rate, in which event this provision shall again
apply.
     (c) In no event shall the total interest received by any Lender exceed the
amount which it could lawfully have received had the interest been calculated
for the full term hereof at the Maximum Lawful Rate. If, notwithstanding the
prior sentence, any Lender has received interest hereunder in excess of the
Maximum Lawful Rate, such excess amount shall be applied to the reduction of the
principal balance of the Loans or to other amounts (other than interest) payable
hereunder, and if no such principal or other amounts are then outstanding, such
excess or part thereof remaining shall be paid to Borrower.
     (d) In computing interest payable with reference to the Maximum Lawful Rate
applicable to any Lender, such interest shall be calculated at a daily rate
equal to the Maximum Lawful Rate divided by the number of days in the year in
which such calculation is made.
     Section 2.8 Taxes.
     (a) All payments of principal and interest on the Loans and all other
amounts payable hereunder shall be made free and clear of and without deduction
for any present or future income, excise, stamp, documentary, property or
franchise taxes and other taxes, fees, duties,

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levies, assessments, withholdings or other charges of any nature whatsoever
(including interest and penalties thereon) imposed by any taxing authority,
excluding taxes imposed on or measured by Administrative Agent’s or any Lender’s
net income by the jurisdiction under which Administrative Agent or such Lender
is organized or conducts business (other than solely as the result of entering
into any of the Financing Documents or taking any action thereunder) (all
non-excluded items being called “Taxes”). If any withholding or deduction from
any payment to be made by Borrower hereunder is required in respect of any Taxes
pursuant to any applicable Law, then Borrower will: (i) pay directly to the
relevant authority the full amount required to be so withheld or deducted; (ii)
promptly forward to Administrative Agent an official receipt or other
documentation satisfactory to Administrative Agent evidencing such payment to
such authority; and (iii) pay to Administrative Agent for the account of
Administrative Agent and Lenders such additional amount or amounts as is
necessary to ensure that the net amount actually received by Administrative
Agent and each Lender will equal the full amount Administrative Agent and such
Lender would have received had no such withholding or deduction been required.
If any Taxes are directly asserted against Administrative Agent or any Lender
with respect to any payment received by Administrative Agent or such Lender
hereunder, Administrative Agent or such Lender may pay such Taxes and Borrower
will promptly pay such additional amounts (including any penalty, interest or
expense) as is necessary in order that the net amount received by such Person
after the payment of such Taxes (including any Taxes on such additional amount)
shall equal the amount such Person would have received had such Taxes not been
asserted so long as such amounts have accrued on or after the day which is
ninety (90) days prior to the date on which Administrative Agent or such Lender
first made demand therefor.
     (b) If Borrower fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to Administrative Agent, for the account of
Administrative Agent and the respective Lenders, the required receipts or other
required documentary evidence, Borrower shall indemnify Administrative Agent and
Lenders for any incremental Taxes, interest or penalties that may become payable
by Administrative Agent or any Lender as a result of any such failure.
     (c) Each Lender that (i) is organized under the laws of a jurisdiction
other than the United States and (ii)(A) is a party hereto on the Closing Date
or (B) purports to become an assignee of an interest pursuant to Section 12.6(a)
after the Closing Date (unless such Lender was already a Lender hereunder
immediately prior to such assignment) (each such Lender a “Foreign Lender”)
shall execute and deliver to each of Borrower and Administrative Agent one or
more (as Borrower or Administrative Agent may reasonably request) United States
Internal Revenue Service Forms W-8ECI, W-8BEN, W-8IMY (as applicable) and other
applicable forms, certificates or documents prescribed by the United States
Internal Revenue Service or reasonably requested by Administrative Agent
certifying as to such Lender’s entitlement to a complete exemption from
withholding or deduction of Taxes. Borrower shall not be required to pay
additional amounts to any Lender pursuant to this Section 2.8 with respect to
United States withholding and income Taxes to the extent that the obligation to
pay such additional amounts would not have arisen but for the failure of such
Lender to comply with this paragraph other than as a result of a change in law.

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     Section 2.9 Capital Adequacy.
     If any Lender shall reasonably determine that the adoption or taking effect
of, or any change in, any applicable Law regarding capital adequacy, in each
instance, after the Closing Date, or any change after the Closing Date in the
interpretation, administration or application thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation,
administration or application thereof, or the compliance by any Lender or any
Person controlling such Lender with any request, guideline or directive
regarding capital adequacy (whether or not having the force of law) of any such
Governmental Authority, central bank or comparable agency adopted or otherwise
taking effect after the Closing Date, has or would have the effect of reducing
the rate of return on such Lender’s or such controlling Person’s capital as a
consequence of such Lender’s obligations hereunder or under any Support
Agreement or Lender Letter of Credit to a level below that which such Lender or
such controlling Person could have achieved but for such adoption, taking
effect, change, interpretation, administration, application or compliance
(taking into consideration such Lender’s or such controlling Person’s policies
with respect to capital adequacy) then from time to time, upon demand by such
Lender (which demand shall be accompanied by a statement setting forth the basis
for such demand and a calculation of the amount thereof in reasonable detail, a
copy of which shall be furnished to Administrative Agent), Borrower shall
promptly pay to such Lender such additional amount as will compensate such
Lender or such controlling Person for such reduction, so long as such amounts
have accrued on or after the day which is ninety (90) days prior to the date on
which such Lender first made demand therefor.
     Section 2.10 Mitigation Obligations.
     If any Lender requests compensation under either Section 2.3(e)(v) or
Section 2.9, or requires Borrower to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to
Section 2.8, then, upon the written request of Borrower, such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder
(subject to the provisions of Section 12.6) to another of its offices, branches
or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or materially reduce amounts payable pursuant to
any such Section, as the case may be, in the future and (ii) would not subject
such Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender (as determined in its sole discretion). Without
limitation of the provisions of Section 10.1, Borrower hereby agrees to pay all
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
     To induce Administrative Agent and Lenders to enter into this Agreement and
to make the Loans and other credit accommodations contemplated hereby, Borrower
hereby represents and warrants to Administrative Agent and each Lender that:

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     Section 3.1 Existence and Power.
     Each Credit Party is an entity as specified on Schedule 3.1, is duly
organized, validly existing and in good standing under the laws of the
jurisdiction specified on Schedule 3.1, has the same legal name as it appears in
such Credit Party’s Organizational Documents as amended to the date of this
Agreement and an organizational identification number (if any), in each case as
specified on Schedule 3.1, and has all powers and all governmental licenses,
authorizations, registrations, permits, consents and approvals required under
all applicable Laws and required in order to carry on its business as now
conducted (collectively, “Permits”), except where the failure to have such
Permits could not reasonably be expected to have a Material Adverse Effect. Each
Credit Party is qualified to do business as a foreign entity in each
jurisdiction in which it is required to be so qualified, which jurisdictions as
of the Closing Date are specified on Schedule 3.1, except where the failure to
be so qualified could not reasonably be expected to have a Material Adverse
Effect. Except as set forth on Schedule 3.1, no Credit Party (i) has had, over
the five (5) year period preceding the Closing Date, any name other than its
current name or (ii) was incorporated or organized under the laws of any
jurisdiction other than its current jurisdiction of incorporation or
organization.
     Section 3.2 Organization and Governmental Authorization; No Contravention.
     The execution, delivery and performance by each Credit Party of the
Operative Documents to which it is a party are within its powers, have been duly
authorized by all necessary action pursuant to its Organizational Documents,
require no further action by or in respect of, or filing with, any Governmental
Authority and do not violate, conflict with or cause a breach or a default under
(i) any Law or any of the Organizational Documents of any Credit Party or
(ii) any agreement or instrument binding upon it, except for such violations,
conflicts, breaches or defaults as could not, with respect to this clause (ii),
reasonably be expected to have a Material Adverse Effect.
     Section 3.3 Binding Effect.
     Each of the Operative Documents to which any Credit Party is a party
constitutes a valid and binding agreement or instrument of such Credit Party,
enforceable against such Credit Party in accordance with its respective terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency or
other similar laws relating to the enforcement of creditors’ rights generally
and by general equitable principles.
     Section 3.4 Capitalization.
     The authorized equity securities of each of the Credit Parties as of the
Closing Date is as set forth on Schedule 3.4. All issued and outstanding equity
securities of each of the Credit Parties (other than Borrower) are duly
authorized and validly issued, fully paid, nonassessable, free and clear of all
Liens other than those in favor of Administrative Agent for the benefit of
Administrative Agent and Lenders, and such equity securities were issued in
compliance with all applicable Laws. The identity of the holders of the equity
securities of each of the Credit Parties (other than Borrower) and the
percentage of their fully-diluted ownership of the equity securities of each of
the Credit Parties (other than Borrower) as of the Closing Date is set forth on

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Schedule 3.4. No shares of the capital stock or other equity securities of any
Credit Party (other than Borrower), other than those described above, are issued
and outstanding as of the Closing Date. Except as set forth on Schedule 3.4, as
of the Closing Date there are no preemptive or other outstanding rights,
options, warrants, conversion rights or similar agreements or understandings for
the purchase or acquisition from any Credit Party (other than Borrower) of any
equity securities of any such entity.
     Section 3.5 Financial Information.
     (a) The consolidated balance sheet of Borrower and its Consolidated
Subsidiaries as of June 30, 2005 and the related consolidated statements of
operations, stockholders’ equity (or comparable calculation, if such Person is
not a corporation) and cash flows for the fiscal year then ended, reported on by
Grant Thornton LLP, copies of which have been delivered to Agent, fairly
present, in conformity with GAAP, the consolidated financial position of
Borrower and its Consolidated Subsidiaries as of such date and their
consolidated results of operations, changes in stockholders’ equity (or
comparable calculation) and cash flows for such period.
     (b) The unaudited consolidated balance sheet of Borrower and its
Consolidated Subsidiaries as of March 31, 2006 and the related unaudited
consolidated statements of operations and cash flows for the nine months then
ended, copies of which have been delivered to Agent, fairly present, in
conformity with GAAP applied on a basis consistent with the financial statements
referred to in Section 3.5(a), the consolidated financial position of Borrower
and its Consolidated Subsidiaries as of such date and their consolidated results
of operations and cash flows for the nine months then ended (subject to normal
year-end adjustments and the absence of footnote disclosures).
     (c) The information contained in the most recently delivered Borrowing Base
Certificate is complete and correct in all material respects and the amounts
shown therein as “Eligible Receivables” and “Eligible Inventory” have been
determined as provided in the Financing Documents.
     (d) Since March 31, 2006 there has been no material adverse change in the
business, operations, properties, prospects or condition (financial or
otherwise) of Borrower and its Consolidated Subsidiaries, taken as a whole;
provided, that the term “prospects” shall not include the possibility of
obtaining business from a prospective customer of a Credit Party.
     Section 3.6 Litigation.
     Except as set forth on Schedule 3.6, as of the Closing Date there is no
Litigation pending against, or to Borrower’s knowledge threatened against or
affecting, any Credit Party or, to Borrower’s knowledge, any party to any
Operative Document other than a Credit Party. There is no Litigation pending in
which an adverse decision could reasonably be expected to have a Material
Adverse Effect or which in any manner draws into question the validity of any of
the Operative Documents.

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     Section 3.7 Ownership of Property.
     Borrower and each of its Subsidiaries is the lawful owner of, has good and
marketable title to and is in lawful possession of, or has valid leasehold
interests in, all properties and other assets (real or personal, tangible,
intangible or mixed) purported or reported to be owned or leased (as the case
may be) by such Person, except as may have been disposed of in the Ordinary
Course of Business or otherwise in compliance with the terms hereof.
     Section 3.8 No Default.
     No Default or Event of Default has occurred and is continuing. No Credit
Party is in breach or default under or with respect to any contract, agreement,
lease or other instrument to which it is a party or by which its property is
bound or affected, which breach or default could reasonably be expected to have
a Material Adverse Effect.
     Section 3.9 Labor Matters.
     As of the Closing Date, there are no strikes or other labor disputes
pending or, to Borrower’s knowledge, threatened against any Credit Party. Hours
worked and payments made to the employees of the Credit Parties have not been in
violation of the Fair Labor Standards Act or any other applicable Law dealing
with such matters. All payments due from the Credit Parties, or for which any
claim may be made against any of them, on account of wages and employee and
retiree health and welfare insurance and other benefits have been paid or
accrued as a liability on their books, as the case may be. The consummation of
the transactions contemplated by the Financing Documents and the other Operative
Documents will not give rise to a right of termination or right of renegotiation
on the part of any union under any collective bargaining agreement to which it
is a party or by which it is bound.
     Section 3.10 Regulated Entities.
     No Credit Party is an “investment company” or a company “controlled” by an
“investment company” or a “subsidiary” of an “investment company,” all within
the meaning of the Investment Company Act of 1940.
     Section 3.11 Margin Regulations.
     None of the proceeds from the Loans have been or will be used, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock, for the
purpose of reducing or retiring any indebtedness which was originally incurred
to purchase or carry any Margin Stock or for any other purpose which might cause
any of the Loans to be considered a “purpose credit” within the meaning of
Regulation T, U or X of the Federal Reserve Board.
     Section 3.12 Compliance With Laws; Anti-Terrorism Laws.
     (a) Each Credit Party is in compliance with the requirements of all
applicable Laws, except for such Laws the noncompliance with which could not
reasonably be expected to have a Material Adverse Effect.

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     (b) None of the Credit Parties, their Affiliates or any of their respective
agents acting or benefiting in any capacity in connection with the transactions
contemplated by this Agreement is (i) in violation of any Anti-Terrorism Law,
(ii) engages in or conspires to engage in any transaction that evades or avoids,
or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law, (iii) a Blocked Person, or is
controlled by a Blocked Person, (iv) acting or will act for or on behalf of a
Blocked Person, (v) associated with, or will become associated with, a Blocked
Person or (vi) is providing, or will provide, material, financial or
technological support or other services to or in support of acts of terrorism of
a Blocked Person. No Credit Party nor, to the knowledge of any Credit Party, any
of its Affiliates or agents acting or benefiting in any capacity in connection
with the transactions contemplated by this Agreement, (x) conducts any business
or engages in making or receiving any contribution of funds, goods or services
to or for the benefit of any Blocked Person, or (y) deals in, or otherwise
engages in any transaction relating to, any property or interest in property
blocked pursuant to Executive Order No. 13224, any similar executive order or
other Anti-Terrorism Law.
     Section 3.13 Taxes.
     All Federal, state, local and foreign tax returns, reports and statements
required to be filed by or on behalf of each Credit Party have been filed with
the appropriate Governmental Authorities in all jurisdictions in which such
returns, reports and statements are required to be filed and, except to the
extent subject to a Permitted Contest, all Taxes (including real property Taxes)
and other charges shown to be due and payable in respect thereof have been
timely paid prior to the date on which any fine, penalty, interest, late charge
or loss may be added thereto for nonpayment thereof. Except to the extent
subject to a Permitted Contest, all state and local sales and use Taxes required
to be paid by each Credit Party have been paid. All Federal and state returns
have been filed by each Credit Party for all periods for which returns were due
with respect to employee income tax withholding, social security and
unemployment taxes, and, except to the extent subject to a Permitted Contest,
the amounts shown thereon to be due and payable have been paid in full or
adequate provisions therefor have been made.
     Section 3.14 Compliance with ERISA.
     (a) Each ERISA Plan (and the related trusts and funding agreements)
complies in form and in operation with, has been administered in compliance
with, and the terms of each ERISA Plan satisfy, the applicable requirements of
ERISA and the Code in all material respects. Each ERISA Plan which is intended
to be qualified under Section 401(a) of the Code is so qualified, and the United
States Internal Revenue Service has issued a favorable determination letter with
respect to each such ERISA Plan which may be relied on currently. No Credit
Party has incurred liability for any material excise tax under any of
Sections 4971 through 5000 of the Code.
     (b) During the thirty-six (36) month period prior to the Closing Date or
the making of any Loan or the issuance of any Letter of Credit, (i) no steps
have been taken to terminate any Pension Plan and (ii) no contribution failure
has occurred with respect to any Pension Plan sufficient to give rise to a Lien
under Section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which could result in the incurrence
by

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any Credit Party of any material liability, fine or penalty. No Credit Party has
incurred liability to the PBGC (other than for current premiums) with respect to
any employee Pension Plan. All contributions (if any) have been made on a timely
basis to any Multiemployer Plan that are required to be made by any Credit Party
or any other member of the Controlled Group under the terms of the plan or of
any collective bargaining agreement or by applicable Law; no Credit Party nor
any member of the Controlled Group has withdrawn or partially withdrawn from any
Multiemployer Plan, incurred any withdrawal liability with respect to any such
plan or received notice of any claim or demand for withdrawal liability or
partial withdrawal liability from any such plan, and no condition has occurred
which, if continued, could result in a withdrawal or partial withdrawal from any
such plan, and no Credit Party nor any member of the Controlled Group has
received any notice that any Multiemployer Plan is in reorganization, that
increased contributions may be required to avoid a reduction in plan benefits or
the imposition of any excise tax, that any such plan is or has been funded at a
rate less than that required under Section 412 of the Code, that any such plan
is or may be terminated, or that any such plan is or may become insolvent.
     Section 3.15 Brokers.
     Except as set forth on Schedule 3.15, and except for fees payable to
Administrative Agent and/or Lenders, no broker, finder or other intermediary has
brought about the obtaining, making or closing of the transactions contemplated
by the Operative Documents, and no Credit Party has or will have any obligation
to any Person in respect of any finder’s or brokerage fees in connection
herewith or therewith.
     Section 3.16 Material Contracts.
     Except for the Operative Documents and the other agreements set forth on
Schedule 3.16 (collectively with the Operative Documents, the “Material
Contracts”), as of the Closing Date there are no (i) employment agreements
covering the management of any Credit Party, (ii) collective bargaining
agreements or other labor agreements covering any employees of any Credit Party,
(iii) agreements for managerial, consulting or similar services to which any
Credit Party is a party or by which it is bound, (iv) agreements regarding any
Credit Party, its assets or operations or any investment therein to which any of
its equityholders is a party or by which it is bound, (v) real estate leases,
Intellectual Property licenses or other lease or license agreements to which any
Credit Party is a party, either as lessor or lessee, or as licensor or licensee,
or (vi) customer, distribution, marketing or supply agreements to which any
Credit Party is a party, in each case with respect to the preceding clauses (i),
(iii), (iv), (v) and (vi) requiring payment of more than $100,000 in any year,
(vii) partnership agreements to which any Credit Party is a general partner or
joint venture agreements to which any Credit Party is a party or (viii) any
other agreements or instruments to which any Credit Party is a party, and the
breach, nonperformance or cancellation of which, or the failure of which to
renew, could reasonably be expected to have a Material Adverse Effect.
Schedule 3.16 sets forth, with respect to each real estate lease agreement to
which any Credit Party is a party as of the Closing Date, the address of the
subject property and the annual rental (or, where applicable, a general
description of the method of computing the annual rental). The consummation of
the transactions contemplated by the Financing Documents and the other Operative
Documents will not give rise to a right of termination in favor of any party to
any Material Contract (other than any Credit Party).

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     Section 3.17 Compliance with Environmental Requirements; No Hazardous
Materials.
     Except in each case as set forth on Schedule 3.17:
     (a) to Borrower’s knowledge, no Hazardous Materials are located on any
properties now or previously owned, leased or operated by any Credit Party or
have been released into the environment, or deposited, discharged, placed or
disposed of at, on, under or near any of such properties in a manner that would
require the taking of any action under any Environmental Law and have given rise
to, or could reasonably be expected to give rise to, remediation costs and
expenses on the part of the Credit Parties in excess of $50,000. No portion of
any such property is being used, or, to the knowledge of Borrower, has been used
at any previous time, for the disposal, storage, treatment, processing or other
handling of Hazardous Materials in violation of any Environmental Law nor is any
such property affected by any Hazardous Materials Contamination;
     (b) no notice, notification, demand, request for information, citation,
summons, complaint or order has been issued, to Borrower’s knowledge, no
complaint has been filed, no penalty has been assessed and no investigation or
review is pending, or to Borrower’s knowledge, threatened by any Governmental
Authority or other Person with respect to any (i) alleged violation by any
Credit Party of any Environmental Law, (ii) alleged failure by any Credit Party
to have any Permits required in connection with the conduct of its business or
to comply with the terms and conditions thereof, (iii) any generation,
treatment, storage, recycling, transportation or disposal of any Hazardous
Materials or (iv) release of Hazardous Materials;
     (c) to the knowledge of Borrower, all oral or written notifications of a
release of Hazardous Materials required to be filed by or on behalf of any
Credit Party under any applicable Environmental Law have been filed or are in
the process of being timely filed by or on behalf of the applicable Credit
Party;
     (d) no property now owned or leased by any Credit Party and, to the
knowledge of Borrower, no such property previously owned or leased by any Credit
Party, to which any Credit Party has, directly or indirectly, transported or
arranged for the transportation of any Hazardous Materials, is listed or, to
Borrower’s knowledge, proposed for listing, on the National Priorities List
promulgated pursuant to CERCLA, or CERCLIS (as defined in CERCLA) or any similar
state list or is the subject of Federal, state or local enforcement actions or,
to the knowledge of Borrower, other investigations which may lead to claims
against any Credit Party for clean-up costs, remedial work, damage to natural
resources or personal injury claims, including, but not limited to, claims under
CERCLA;
     (e) there are no underground storage tanks located on any property owned
or, to Borrower’s knowledge, leased by any Credit Party that are not properly
registered or permitted under applicable Environmental Laws or that are leaking
or disposing of Hazardous Materials; and
     (f) there are no Liens under or pursuant to any applicable Environmental
Laws on any real property or other assets owned or leased by any Credit Party,
and no actions by any

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Governmental Authority have been taken or, to the knowledge of Borrower, are in
process which could subject any of such properties or assets to such Liens.
For purposes of this Section 3.17, each Credit Party shall be deemed to include
any business or business entity (including a corporation) which is, in whole or
in part, a predecessor of such Credit Party.
     Section 3.18 Intellectual Property.
     Each Credit Party owns, is licensed to use or otherwise has the right to
use, all Intellectual Property that is material to the condition (financial or
other), business or operations of such Credit Party. All such Intellectual
Property existing as of the Closing Date and registered with any United States
or foreign Governmental Authority is set forth on Schedule 3.18. All
Intellectual Property of each Credit Party is fully protected and/or duly and
properly registered, filed or issued in the appropriate office and jurisdictions
for such registrations, filings or issuances. To Borrower’s knowledge, each
Credit Party conducts its business without infringement or claim of infringement
of any Intellectual Property rights of others and there is no infringement or
claim of infringement by others of any Intellectual Property rights of any
Credit Party, which infringement or claim of infringement could reasonably be
expected to have a Material Adverse Effect.
     Section 3.19 Real Property Interests.
     Except for leasehold interests disclosed on Schedule 3.16, and except for
the ownership or other interests set forth on Schedule 3.19, no Credit Party
has, as of the Closing Date, any ownership, leasehold or other interest in real
property. Schedule 3.19 sets forth, with respect to each parcel of real estate
owned by any Credit Party as of the Closing Date, the address and legal
description of such parcel.
     Section 3.20 Solvency.
     Borrower and each additional Credit Party is Solvent.
     Section 3.21 Senior Debt.
     The Obligations constitute “Senior Debt” under that certain Indenture dated
as of November 26, 2004, as amended to date, between Borrower and The Bank of
New York Trust Company, N.A., as Trustee, and within the meaning of the
Convertible Senior Notes.
     Section 3.22 Full Disclosure.
     None of the information (financial or otherwise) furnished by or on behalf
of any Credit Party to Administrative Agent or any Lender in connection with the
consummation of the transactions contemplated by the Operative Documents,
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained herein or therein not misleading
in light of the circumstances under which such statements were made. All
financial projections delivered to Administrative Agent and the Lenders have
been prepared

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on the basis of the assumptions stated therein. Such projections represent
Borrower’s best estimate of Borrower’s future financial performance and such
assumptions are believed by Borrower to be fair and reasonable in light of
current business conditions; provided that Borrower can give no assurance that
such projections will be attained.
     Section 3.23 Representations and Warranties Incorporated from Other
Operative Documents.
     As of the Closing Date, each of the representations and warranties made in
the Operative Documents by each of the parties thereto is true and correct in
all material respects, and such representations and warranties are hereby
incorporated herein by reference with the same effect as though set forth in
their entirety herein, as qualified therein, except to the extent that such
representation or warranty relates to a specific date, in which case such
representation and warranty shall be true as of such earlier date.
ARTICLE 4
AFFIRMATIVE COVENANTS
     Borrower agrees that, so long as any Credit Exposure exists:
     Section 4.1 Financial Statements and Other Reports.
     Borrower will maintain a system of accounting established and administered
in accordance with sound business practices to permit preparation of financial
statements in accordance with GAAP and to provide the information required to be
delivered to Administrative Agent and the Lenders hereunder, and will deliver to
Administrative Agent, and, in the case of the deliveries required by paragraphs
(a) through (f) and (m) through (t), each Lender:
     (a) as soon as practicable and in any event within forty-five (45) days
(fifty (50) days if Borrower shall obtain an extension of time for the filing of
its Quarterly Report on Form 10-Q for an applicable fiscal quarter pursuant to
Rule 12b-25 under the Securities Exchange Act of 1934, as amended) after the end
of each calendar quarter (including the last quarter of Borrower’s Fiscal Year),
a consolidated and consolidating balance sheet of Borrower and its Consolidated
Subsidiaries as at the end of such quarter and the related consolidated and
consolidating statements of operations and cash flows for such quarter, and for
the portion of the Fiscal Year ended at the end of such quarter setting forth in
each case in comparative form the figures for the corresponding periods of the
previous Fiscal Year and the figures for such quarter and for such portion of
the Fiscal Year ended at the end of such quarter set forth in the annual
operating and capital expenditure budgets and cash flow forecast delivered
pursuant to Section 4.1(m), all in reasonable detail and certified by a
Responsible Officer as fairly presenting the financial condition and results of
operations of Borrower and its Consolidated Subsidiaries and as having been
prepared in accordance with GAAP applied on a basis consistent with the audited
financial statements of Borrower, subject to changes resulting from audit and
normal year-end adjustments and the absence of footnote disclosures;

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     (b) as soon as available and in any event within ninety (90) days
(ninety-five (95) days if Borrower shall obtain an extension of time for the
filing of its Annual Report on Form 10-K for an applicable fiscal year pursuant
to Rule 12b-25 under the Securities Exchange Act of 1934, as amended) after the
end of each Fiscal Year, a consolidated and consolidating balance sheet of
Borrower and its Consolidated Subsidiaries as of the end of such Fiscal Year and
the related consolidated and consolidating statements of operations,
stockholders’ equity (or the comparable item, if Borrower is not a corporation)
and cash flows for such Fiscal Year, setting forth in each case in comparative
form the figures for the previous Fiscal Year and the figures for such Fiscal
Year set forth in the annual operating and capital expenditure budgets and cash
flow forecast delivered pursuant to Section 4.1(m), certified (solely with
respect to such consolidated statements) without qualification by Grant
Thornton, LLP or such other independent registered public accountants of
nationally recognized standing acceptable to Administrative Agent;
     (c) together with each delivery of financial statements pursuant to
Sections 4.1(a) and 4.1(b), a Compliance Certificate;
     (d) with each delivery of financial statements pursuant to 4.1(b) above, a
written statement by the independent registered public accountants giving the
report thereon stating that their audit examination has included a review of the
terms of this Agreement as it relates to accounting matters;
     (e) promptly upon receipt thereof, copies of all reports submitted to any
Credit Party by independent registered public accountants in connection with
each annual, interim or special audit of the financial statements of any Credit
Party made by such accountants, including the comment letter submitted by such
accountants to management in connection with any audit;
     (f) promptly upon their becoming available, copies of (i) all financial
statements, reports, notices and proxy statements sent or made available
generally by any Credit Party to its security holders, (ii) all regular and
periodic reports and all registration statements and prospectuses filed by any
Credit Party with any securities exchange or with the Securities and Exchange
Commission or any successor, (iii) all press releases and other statements made
available generally by any Credit Party concerning material developments in the
business of any Credit Party and (iv) all Swap Contracts entered into by any
Credit Party;
     (g) promptly upon such information becoming available, a summary of all
purchase price and other monetary adjustments that are made pursuant to any of
the Acquisition Documents;
     (h) promptly upon any officer of any Credit Party obtaining knowledge
(i) of the existence of any Event of Default or Default, or becoming aware that
the holder of any Debt of any Credit Party in excess of $100,000 has given any
notice or taken any other action with respect to a claimed default thereunder,
(ii) of any change in any Credit Party’s independent registered public
accountant or any resignation, or decision not to stand for re-election, by any
member of any Credit Party’s board of directors (or comparable body), (iii) that
any Person has given any notice to any Credit Party or taken any other action
with respect to a claimed default under any material agreement or instrument
(other than the Financing Documents) to which any Credit Party is a party or by
which any of its assets is bound, (iv) of the institution of any

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Litigation with regard to the Acquisition, or seeking equitable relief, or
involving an alleged liability of any Credit Party equal to or greater than
$150,000, or any adverse determination in any Litigation involving the
Acquisition, or equitable relief, or a potential liability of any Credit Party
equal to or greater than $150,000, or (v) any loss, damage or destruction of any
Collateral having a fair market value in excess of $100,000, whether or not
covered by insurance, a certificate of a Responsible Officer specifying the
nature and period of existence of any such condition or event, or specifying the
notice given or action taken by such holder or Person and the nature of such
claimed default (including any Event of Default or Default), event or condition,
and what action the applicable Credit Party has taken, is taking or proposes to
take with respect thereto;
     (i) promptly upon any officer of any Credit Party obtaining knowledge of
(i) the institution of any steps by any member of the Controlled Group or any
other Person to terminate any Pension Plan, (ii) the failure of any member of
the Controlled Group to make a required contribution on a timely basis to any
ERISA Plan or to any Multiemployer Plan, (iii) the taking of any action with
respect to a Pension Plan which could result in the requirement that Borrower or
any Subsidiary furnish a bond or other security to the PBGC or such Pension
Plan, (iv) the occurrence of a reportable event under Section 4043 of ERISA (for
which a reporting requirement is not waived) with respect to any Pension Plan,
(v) the occurrence of any event with respect to any ERISA Plan, Pension Plan or
Multiemployer Plan which could result in the incurrence by any member of the
Controlled Group of any material liability, fine or penalty (including any claim
or demand for withdrawal liability or partial withdrawal from any Multiemployer
Plan), (vi) any material increase in the liability or contingent liability of
Borrower or any Subsidiary with respect to any post-retirement welfare plan
benefit or (vii) the receipt by any Credit Party of any notice that any
Multiemployer Plan is in reorganization, that increased contributions may be
required to avoid a reduction in plan benefits or the imposition of an excise
tax, that any such plan is or has been funded at a rate less than that required
under Section 412 of the Code, that any such plan is or may be terminated, or
that any such plan is or may become insolvent, a certificate of a Responsible
Officer specifying the nature and period of existence of any such condition or
event, or specifying the notice given or action taken by such holder or Person,
and what action the applicable Credit Party has taken, is taking or proposed to
take with respect thereto;
     (j) promptly upon any officer of any Credit Party obtaining knowledge of
any complaint, order, citation, notice or other written communication from any
Person delivered to any Credit Party with respect to, or if any officer of any
Credit Party becomes aware of (i) the existence or alleged existence of a
violation of any applicable Environmental Law, (ii) any release of any Hazardous
Materials into the environment, (iii) the commencement of any cleanup of any
Hazardous Materials, (iv) any pending legislative or threatened proceeding for
the termination, suspension or non-renewal of any Permit required under any
applicable Environmental Law, or (v) any property of any Credit Party that is or
will be subject to a Lien imposed pursuant to any Environmental Law, a
certificate of a Responsible Officer specifying the nature and period of
existence of any such condition or event, or specifying the notice given or
action taken by such holder or Person, and what action the applicable Credit
Party has taken, is taking or proposes to take with respect thereto;

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     (k) promptly upon any officer of any Credit Party obtaining knowledge that
any Credit Party has either (x) registered or applied to register any
Intellectual Property with any Governmental Authority or (y) acquired any
interest in real property (including leasehold interests in real property), a
certificate of a Responsible Officer describing such Intellectual Property
and/or such real property in such detail as Administrative Agent shall
reasonably require;
     (l) promptly upon receipt or filing thereof, copies of any reports or
notices related to any material taxes and any other material reports or notices
received by any Credit Party from, or filed by any Credit Party with, any
Governmental Authority;
     (m) within ten (10) days prior to the conclusion of each Fiscal Year,
Borrower’s annual consolidated and consolidating operating plans, operating and
capital expenditure budgets, and financial forecasts, including cash flow
projections covering proposed fundings, repayments, additional advances,
investments and other cash receipts and disbursements, each for the following
three (3) Fiscal Years presented on a quarterly basis for the next Fiscal Year
and annually for the two (2) subsequent Fiscal Years, all of which shall be in a
format reasonably consistent with projections, budgets and forecasts theretofore
provided to the Lenders, and promptly following the preparation thereof, updates
to any of the foregoing from time to time prepared by management of Borrower;
     (n) as soon as available and in any event no later than noon (Chicago time)
within fifteen (15) days after the end of each month, and from time to time upon
the request of Administrative Agent (which request may be made as frequently as
daily), a Borrowing Base Certificate as of the last day of the week most
recently ended (or, in the case of Borrowing Base Certificates requested more
frequently than weekly, as of the second preceding Business Day);
     (o) as soon as available after the end of each month (but in any event
within fifteen (15) Business Days after the end thereof), and from time to time
upon the request of Administrative Agent (which request may be made as
frequently as daily) schedules of sales made, credits issued and cash received
for and during such month (or, in the case of such schedules requested more
frequently than monthly, as of the second preceding Business Day);
     (p) as soon as available after the end of each month (but in any event
within fifteen (15) Business Days after the end thereof), on a monthly basis or
more frequently as Administrative Agent may reasonably request, (i) perpetual
Inventory reports, (ii) Inventory reports by location and category (and
including the amounts of Inventory and the value thereof at, any leased
locations and at premises of warehouses, consignees, processors or other third
parties), (iii) agings of Accounts, (iv) agings of accounts payable (and
including information indicating the amounts owing to owners and lessors of
leased premises, warehouses, consignees, processors and other third parties from
time to time in possession of any Collateral) and (v) such reconciliation
reports from time to time reasonably requested by Administrative Agent with
respect to the Borrowing Base Certificate most recently delivered to
Administrative Agent, the financial statements of Borrower delivered to
Administrative Agent, Borrower’s general ledger and/or the reports required
pursuant to this paragraph, each in form and substance, and with such supporting
detail and documentation, as may be reasonably requested by Administrative
Agent;

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     (q) upon Administrative Agent’s reasonable request, (i) copies of customer
statements and credit memos, remittance advices and reports and copies of
deposit slips and bank statements, (ii) copies of shipping and delivery
documents, and (iii) copies of purchase orders, invoices and delivery documents
for Inventory and Equipment acquired by any Credit Party;
     (r) within two (2) Business Days after any request therefor, such
additional information in such detail concerning the amount, composition and
manner of calculation of the Borrowing Base as Administrative Agent or any
Lender may reasonably request;
     (s) upon the request of Administrative Agent, a report of an independent
collateral auditor satisfactory to Administrative Agent (which may be, or be
affiliated with, a Lender) with respect to the components of the Borrowing Base
(which Borrower acknowledges will be performed at least once per calendar
quarter), which report shall (i) indicate whether or not the information set
forth in the Borrowing Base Certificate most recently delivered is accurate and
complete in all material respects based upon a review by such auditors of the
Accounts of Borrower and its Subsidiaries (including verification with respect
to the amount, aging, identity and credit of the respective Account Debtors and
the billing practices of Borrower and its Subsidiaries) and Inventory of
Borrower and its Subsidiaries (including verification as to the value, location
and respective types) and (ii) be addressed to, or otherwise provide for express
reliance by, Administrative Agent and the Lenders;
     (t) from time to time, appraisal reports in form and substance and from
appraisers satisfactory to Administrative Agent, which reports shall (i) state
the then current fair market values of all or any portion of the real estate
owned by Borrower or any Subsidiaries and (ii) be addressed to, or otherwise
provide for express reliance by, Administrative Agent and the Lenders. In
addition to the foregoing, on a quarterly basis with respect of Inventory, and
on an annual basis with respect to all other property (or, in each case, more
frequently as considered necessary by Administrative Agent) Borrower shall
obtain and deliver to Administrative Agent appraisal reports in form and
substance and from appraisers satisfactory to Administrative Agent, which
reports shall (i) state the then current market values of all or any portion of
the real estate and personal property owned by Borrower or any Subsidiaries and
(ii) be addressed to, or otherwise provide for express reliance by,
Administrative agent and the Lenders; and
     (u) with reasonable promptness, such other information and data with
respect to any Credit Party as from time to time may be reasonably requested by
Administrative Agent or any Lender.
     Section 4.2 Payment and Performance of Obligations.
     Borrower (i) will pay and discharge, and cause each Subsidiary to pay and
discharge, at or before maturity, all of their respective obligations and
liabilities, including tax liabilities, except for such obligations and/or
liabilities (x) that may be the subject of a Permitted Contest and (y) the
nonpayment or nondischarge of which could not reasonably be expected to have a
Material Adverse Effect, (ii) will maintain, and cause each Subsidiary to
maintain, in accordance with GAAP, appropriate reserves for the accrual of all
of their respective obligations and liabilities and (iii) will not breach or
permit any Subsidiary to breach, or permit to exist any default under, the terms
of any lease, commitment, contract, instrument or obligation to which it

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is a party, or by which its properties or assets are bound, except for such
breaches or defaults which could not reasonably be expected to have a Material
Adverse Effect.
     Section 4.3 Maintenance of Existence.
     Borrower will preserve, renew and keep in full force and effect, and will
cause each Subsidiary to preserve, renew and keep in full force and effect,
their respective existence and their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business.
     Section 4.4 Maintenance of Property; Insurance.
     (a) Borrower will keep, and will cause each Subsidiary to keep, all
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted.
     (b) Borrower will maintain, and will cause each Subsidiary to maintain,
(i) casualty insurance on all real and personal property on an all risks basis
(including the perils of flood and quake), covering the repair and replacement
cost of all such property and coverage for business interruption and public
liability insurance (including products/completed operations liability coverage)
in each case of the kinds customarily carried or maintained by Persons of
established reputation engaged in similar businesses and in amounts acceptable
to Administrative Agent and (ii) such other insurance coverage in such amounts
and with respect to such risks as Administrative Agent may reasonably request.
All such insurance shall be provided by insurers having an A.M. Best
policyholders rating reasonably acceptable to Administrative Agent. Borrower
will not, and will not permit any Subsidiary to, bring or keep any article on
any business location of any Credit Party, or cause or allow any condition to
exist, if the presence of such article or the occurrence of such condition could
reasonably cause the invalidation of any insurance required by this Section
4.4(b), or would otherwise be prohibited by the terms thereof.
     (c) On or prior to the Closing Date, and at all times thereafter, Borrower
will cause Administrative Agent to be named as an additional insured, assignee
and loss payee (which shall include, as applicable, identification as
mortgagee), as applicable, on each insurance policy required to be maintained
pursuant to this Section 4.4 pursuant to endorsements in form and content
acceptable to Administrative Agent. Borrower will deliver to Administrative
Agent and the Lenders (i) on the Closing Date, a certificate from Borrower’s
insurance broker dated such date showing the amount of coverage as of such date,
and that such policies will include effective waivers (whether under the terms
of any such policy or otherwise) by the insurer of all claims for insurance
premiums against all loss payees and additional insureds and all rights of
subrogation against all loss payees and additional insureds, and that if all or
any part of such policy is canceled, terminated or expires, the insurer will
forthwith give notice thereof to each additional insured, assignee and loss
payee and that no cancellation, reduction in amount or material change in
coverage thereof shall be effective until at least thirty (30) days after
receipt by each additional insured, assignee and loss payee of written notice
thereof, (ii) on an annual basis, and upon the request of any Lender through
Administrative Agent from time to time full information as to the insurance
carried, (iii) within five (5) days of receipt of notice from any insurer, a
copy of any notice of cancellation, nonrenewal or material change in coverage
from

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that existing on the date of this Agreement and (iv) forthwith, notice of any
cancellation or nonrenewal of coverage by Borrower.
     (d) In the event Borrower fails to provide Administrative Agent with
evidence of the insurance coverage required by this Agreement, Administrative
Agent may purchase insurance at Borrower’s expense to protect Administrative
Agent’s interests in the Collateral. This insurance may, but need not, protect
Borrower’s interests. The coverage purchased by Administrative Agent may not pay
any claim made by Borrower or any claim that is made against Borrower in
connection with the Collateral. Borrower may later cancel any insurance
purchased by Administrative Agent, but only after providing Administrative Agent
with evidence that Borrower has obtained insurance as required by this
Agreement. If Administrative Agent purchases insurance for the Collateral, to
the fullest extent provided by law Borrower will be responsible for the costs of
that insurance, including interest and other charges imposed by Administrative
Agent in connection with the placement of the insurance, until the effective
date of the cancellation or expiration of the insurance. The costs of the
insurance may be added to the Obligations. The costs of the insurance may be
more than the cost of insurance Borrower is able to obtain on its own.
     Section 4.5 Compliance with Laws.
     Borrower will comply, and cause each Subsidiary to comply, with the
requirements of all applicable Laws, except to the extent that failure to so
comply could not reasonably be expected to have a Material Adverse Effect or
result in any Lien upon a material portion of the assets of any such Person in
favor of any Governmental Authority.
     Section 4.6 Inspection of Property, Books and Records.
     Borrower will keep, and will cause each Subsidiary to keep, proper books of
record and account in accordance with GAAP in which full, true and correct
entries shall be made of all dealings and transactions in relation to its
business and activities; and will permit, and will cause each Subsidiary to
permit, at the sole cost of Borrower or any applicable Subsidiary,
representatives of Administrative Agent and of any Lender (but at such Lender’s
expense unless such visit or inspection is made concurrently with Administrative
Agent) to visit and inspect any of their respective properties, to examine and
make abstracts or copies from any of their respective books and records, to
conduct a collateral audit and analysis of their respective Inventory and
Accounts and to discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public accountants as often
as may reasonably be desired. In the absence of an Event of Default,
Administrative Agent or any Lender exercising any rights pursuant to this
Section 4.6 shall give Borrower or any applicable Subsidiary commercially
reasonable prior written notice of such exercise. No notice shall be required
during the existence and continuance of any Event of Default.
     Section 4.7 Use of Proceeds.
     Borrower will use the proceeds of the Term Loan solely for payment of
transaction fees incurred in connection with the Operative Documents and the
refinancing on the Closing Date of Debt. The proceeds of Revolving Loans shall
be used by Borrower solely for the purposes set

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forth in the preceding sentence, for working capital needs of Borrower and its
Subsidiaries, to provide financing to consummate Section 5.8(b) Permitted
Acquisitions and Section 5.8(c) Permitted Acquisitions, and, to the extent
permitted by Administrative Agent and solely after the satisfaction of the
Acquisition Revolving Loan Commitment Increase, to repurchase or redeem certain
employee options to purchase shares of the common stock of the acquired Person
in connection with a Section 5.8(c) Permitted Acquisition.
     Section 4.8 Lenders’ Meetings.
     From time to time at the request of Administrative Agent, Borrower will, in
each case to the extent requested by either Administrative Agent or Required
Lenders, conduct a meeting of Administrative Agent and the Lenders to discuss
the most recently reported financial results and the financial condition of
Borrower and its Subsidiaries, at which shall be present a Responsible Officer
and such other officers of the Credit Parties as may be reasonably requested to
attend by Administrative Agent or any Lender, such request or requests to be
made within a reasonable time prior to the scheduled date of such meeting. Such
meetings shall be held at a time and place convenient to the Lenders and to
Borrower.
     Section 4.9 Intentionally omitted.
     Section 4.10 Hazardous Materials; Remediation.
     (a) If any release or disposal of Hazardous Materials shall occur or shall
have occurred on any real property or any other assets of Borrower or any other
Credit Party, Borrower will cause, or direct the applicable Credit Party to
cause, the prompt containment and removal of such Hazardous Materials and the
remediation of such real property or other assets as is necessary to comply with
all Environmental Laws and to preserve the value of such real property or other
assets. Without limiting the generality of the foregoing, Borrower shall, and
shall cause each other Credit Party to, comply with each Environmental Law
requiring the performance at any real property by Borrower or any other Credit
Party of activities in response to the release or threatened release of a
Hazardous Material.
     (b) Borrower will provide Administrative Agent within thirty (30) days
after demand therefor with a bond, letter of credit or similar financial
assurance evidencing to the satisfaction of Administrative Agent that sufficient
funds are available to pay the cost of removing, treating and disposing of any
Hazardous Materials or Hazardous Materials Contamination and discharging any
assessment which may be established on any property as a result thereof, such
demand to be made, if at all, upon Administrative Agent’s reasonable business
determination that the failure to remove, treat or dispose of any Hazardous
Materials or Hazardous Materials Contamination, or the failure to discharge any
such assessment could reasonably be expected to have a Material Adverse Effect.
     Section 4.11 Revolving Loan Commitment Increases and Syndications.
     (a) In the event of a requested increase of the Revolving Loan Commitment,
whether as a result of requests by Borrower for the Optional Revolving Loan
Commitment Increase, the Acquisition Revolving Loan Commitment Increase, or
otherwise, and if after giving effect

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thereto, the aggregate principal amount of the Term Loan held by Merrill Lynch
plus the dollar amount of Merrill Lynch’s Pro Rata Share of the Revolving Loan
Commitment (after giving effect to all prior syndications of the Loans and the
Loan commitments) would be greater than, $45,000,000, Borrower agrees, as a
condition precedent to the increase in the Revolving Loan Commitment,
Administrative Agent shall successfully syndicate the Loans and the Loan
commitments as determined by Agent in the exercise of its reasonable discretion
(it being understood and agreed that syndication shall be deemed successful when
the aggregate principal amount of the Term Loan held by Merrill Lynch plus the
dollar amount of Merrill Lynch’s Pro Rata Share of the Revolving Loan Commitment
is equal to, or less than, $45,000,000).
     (b) If at any time and from time to time, the aggregate principal amount of
the Term Loan held by Merrill Lynch plus the dollar amount of Merrill Lynch’s
Pro Rata Share of the Revolving Loan Commitment (after giving effect to all
prior syndications of the Loans and the Loan commitments) shall be greater than
$30,000,000, Borrower agrees that from time to time thereafter, Administrative
Agent may in the exercise of its reasonable discretion determine to successfully
syndicate all or a portion of the Loans and Loan commitments (it being
understood and agreed that syndication shall be deemed successful when the
aggregate principal amount of the Term Loan held by Merrill Lynch plus the
dollar amount of Merrill Lynch’s Pro Rata Share of the Revolving Loan Commitment
is equal to, or less than, $30,000,000).
     (c) In connection with any syndication referred to in Sections 4.11(a) and
(b), Borrower will enter into such modifications to the Loans and/or the
Financing Documents as Administrative Agent may reasonably request as necessary
for such successful syndication of the Loans and the Loan commitments. Such
modifications shall include, without limitation, a decrease in the aggregate
amount of, or a reallocation of, the Term Loan and the Revolving Loan
Commitment, adjustments to the Base Rate Margin, the LIBOR Margin and/or the
Pricing Table, and additional fees payable by Borrower; provided, that any such
modification increasing the Base Rate Margin or the LIBOR Margin shall be
limited to a maximum of 0.25%, and increasing any upfront commitment fee and
structuring fees shall each be limited to a maximum of 0.25%, in each case in
the aggregate for all such syndications. Borrower will cooperate with and assist
Merrill Lynch in accomplishing the successful syndication of the Loans and the
Loan commitments, which shall include, without limitation, participation in
meetings and conferences with Merrill Lynch and prospective Lenders, preparation
of financial and marketing materials and projections reasonably requested by
Agent, Merrill Lynch and prospective Lenders, and furnishing such other
information as Agent, Merrill Lynch and prospective Lenders shall reasonably
request.
     Section 4.12 Further Assurances.
     (a) Borrower will, and will cause each Subsidiary and each Holding Company
to, at its own cost and expense, cause to be promptly and duly taken, executed,
acknowledged and delivered all such further acts, documents and assurances as
may from time to time be necessary or as Administrative Agent or the Required
Lenders may from time to time request in order to carry out the intent and
purposes of the Financing Documents and the transactions contemplated thereby,
including all such actions to establish, create, preserve, protect and perfect a
first priority Lien (subject only to Permitted Liens) in favor of Administrative
Agent for the benefit of

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the Lenders on the Collateral (including Collateral acquired after the date
hereof), including on any and all assets of each Credit Party, whether now owned
or hereafter acquired.
     (b) Without limiting the generality of the foregoing, in the event that
Borrower or any of its Subsidiaries shall acquire or form any new Subsidiary
after the date hereof (including, without limitation, SSG), or shall form a
Holding Company, Borrower or the respective Subsidiary will cause such new
Subsidiary or Holding Company, upon such acquisition and concurrently with such
formation, (i) to execute a Guarantee (in form and content acceptable to
Administrative Agent) guaranteeing payment and performance of all of the
Obligations and to take such other action (including, without limitation,
authorizing the filing of such UCC financing statements and delivering
certificates in respect of the equity securities of such Subsidiary) as shall be
necessary or appropriate to establish, create, preserve, protect and perfect a
first priority Lien (subject only to Permitted Liens) in favor of Administrative
Agent for the benefit of Administrative Agent and the Lenders on all assets,
both real and personal, in which such new Subsidiary or Holding Company has or
may thereafter acquire any interest, (ii) to execute such other Security
Documents, in form and content acceptable to Administrative Agent, as may be
required or requested by Administrative Agent in connection with the actions
contemplated by the preceding clause (i) and (iii) to deliver such proof of
corporate (or comparable) action, incumbency of officers, opinions of counsel
and other documents as Administrative Agent shall have required or requested.
Until such time that any Subsidiary or Holding Company shall have fully complied
with the provisions of this paragraph, and without limitation of any rights and
remedies available to Administrative Agent and Lenders as a result thereof, the
operating results of such Subsidiary or Holding Company shall be disregarded in
the calculation of EBITDA for any measurement period, and none of the assets of
such Subsidiary or Holding Company shall constitute “Eligible Accounts” or
“Eligible Inventory”.
     (c) Borrower shall take such action from time to time as shall be necessary
to ensure that each of its Subsidiaries is a Wholly-Owned Subsidiary and that
Administrative Agent shall have, for the benefit of Administrative Agent and
Lenders, a first priority Lien on all capital stock or other equity securities
of each Subsidiary. In the event that any additional capital stock or other
equity securities shall be issued by any Subsidiary, Borrower shall or shall
cause each of its Subsidiaries to, concurrently with such issuance, deliver to
Administrative Agent to the extent required by the applicable Financing
Documents the certificates evidencing such securities, accompanied by undated
powers executed in blank and to take such other action as Administrative Agent
shall request to perfect the security interest created therein pursuant to such
Financing Documents.
     (d) Concurrently with the acquisition by Borrower or any of its
Subsidiaries following the Closing Date of any real estate or real property
leasehold interests, Borrower will, within thirty (30) days following written
request by Administrative Agent, deliver or cause to be delivered to
Administrative Agent, with respect to such real estate, (i) a mortgage or deed
of trust, as applicable, in form and substance satisfactory to Administrative
Agent, executed by the title holder thereof, (ii) an ALTA lender’s title
insurance policy issued by a title insurer reasonably satisfactory to
Administrative Agent in form and substance and in amounts reasonably
satisfactory to Administrative Agent insuring Administrative Agent’s first
priority Lien on such real estate, free and clear of all defects and
encumbrances except Permitted Liens,

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(iii) a current ALTA survey, certified to Administrative Agent by a licensed
surveyor, in form and substance satisfactory to Administrative Agent, (iv) a
certificate, in form and substance acceptable to Administrative Agent, to
Administrative Agent from a national certification agency acceptable to
Administrative Agent, certifying that such real estate is not located in a
special flood hazard area and (v) in the case of real estate that consists of a
leasehold estate, such estoppel letters, consents and waivers from the landlords
and non-disturbance agreements from any holders of mortgages or deeds of trust
on such real estate as may be requested by Administrative Agent, all of which
shall be in form and substance satisfactory to Administrative Agent.
ARTICLE 5
NEGATIVE COVENANTS
     Borrower agrees that, so long as any Credit Exposure exists:
     Section 5.1 Debt.
     Borrower will not, and will not permit any Subsidiary to, directly or
indirectly, create, incur, assume, guarantee or otherwise become or remain
directly or indirectly liable with respect to, any Debt, except for:
     (a) Debt under the Financing Documents and Letter of Credit Liabilities;
     (b) Debt outstanding on the date of this Agreement and set forth on
Schedule 5.1;
     (c) Subordinated Debt;
     (d) Debt incurred or assumed for the purpose of financing all or any part
of the cost of acquiring any fixed asset (including through Capital Leases), in
an aggregate principal amount at any time outstanding not greater than $500,000;
     (e) Debt, if any, arising under Swap Contracts with an Eligible Swap
Counterparty; and
     (f) Intercompany Debt arising from loans made by (i) Borrower to its
Wholly-Owned Subsidiaries to fund working capital requirements of such
Subsidiaries in the Ordinary Course of Business, or (ii) any Wholly-Owned
Subsidiary of Borrower to Borrower; provided, however, that upon the request of
Administrative Agent at any time, any such Debt shall be evidenced by promissory
notes having terms reasonably satisfactory to Administrative Agent, the sole
originally executed counterparts of which shall be pledged and delivered to
Administrative Agent, for the benefit of Administrative Agent and Lenders, as
security for the Obligations.
     Section 5.2 Liens.
     Borrower will not, and will not permit any Subsidiary to, directly or
indirectly, create, assume or suffer to exist any Lien on any asset now owned or
hereafter acquired by it (including, without limitation, any equity interests in
and to SSG), except:

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     (a) Liens created by the Security Documents;
     (b) Liens existing on the date of this Agreement and set forth on
Schedule 5.2;
     (c) any Lien on any asset securing Debt permitted under Section 5.1(d),
provided that such Lien attaches only to the assets financed by such Debt, and
such Lien attaches concurrently with or within ninety (90) days after the
acquisition thereof;
     (d) Liens for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or the subject of a Permitted
Contest;
     (e) Liens arising in the Ordinary Course of Business (i) in favor of
carriers, warehousemen, mechanics and materialmen, and other similar Liens
imposed by law and (ii) in connection with worker’s compensation, unemployment
compensation and other types of social security (excluding Liens arising under
ERISA) or in connection with surety bonds, bids, performance bonds and similar
obligations for sums not overdue or the subject of a Permitted Contest and not
involving any deposits or advances or borrowed money or the deferred purchase
price of property or services and, in each case, for which it maintains adequate
reserves;
     (f) attachments, appeal bonds, judgments and other similar Liens, for sums
not exceeding $150,000 in the aggregate arising in connection with court
proceedings; provided that the execution or other enforcement of such Liens is
effectively stayed and the claims secured thereby are the subject of a Permitted
Contest; and
     (g) easements, rights of way, restrictions, minor defects or irregularities
in title and other similar Liens not interfering in any material respect with
the ordinary conduct of the business of Borrower or any Subsidiary.
     Section 5.3 Contingent Obligations.
     Borrower will not, and will not permit any Subsidiary to, directly or
indirectly, create, assume, incur or suffer to exist any Contingent Obligations,
except for:
     (a) Contingent Obligations arising in respect of the Debt under the
Financing Documents and Letter of Credit Liabilities;
     (b) Contingent Obligations resulting from endorsements for collection or
deposit in the Ordinary Course of Business;
     (c) So long as there exists no Event of Default both immediately before and
immediately after giving effect to any such transaction, Contingent Obligations
existing or arising under any Swap Contract with an Eligible Swap Counterparty,
provided that such obligations are (or were) entered into by Borrower or a
Subsidiary in the Ordinary Course of Business for the purpose of directly
mitigating risks associated with liabilities, commitments, investments, assets,
or property held or reasonably anticipated by such Person and not for purposes
of speculation;

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     (d) Contingent Obligations outstanding on the date of this Agreement and
set forth on Schedule 5.3; and
     (e) Contingent Obligations arising with respect to customary
indemnification obligations in favor of purchasers in connection with
dispositions permitted under Section 5.7.
     Section 5.4 Restricted Distributions.
     Borrower will not, and will not permit any Subsidiary to, directly or
indirectly, declare, order, pay, make or set apart any sum for any Restricted
Distribution; provided that the foregoing shall not restrict or prohibit
(a) Borrower from making cash dividends to its stockholders in amounts and
otherwise substantially consistent with its past practices, or (b) any
Subsidiary from making dividends or distributions, directly or indirectly, to
Borrower, if, in each case, at the time of the declaration, order, payment,
making or setting apart any sum for any such Restricted Distribution and
immediately after giving effect thereto, no Default or Event of Default shall
have occurred and shall be continuing or would result therefrom.
     Section 5.5 Restricted Agreements.
     Borrower will not, and will not permit any Subsidiary to, directly or
indirectly (i) enter into or assume any agreement (other than the Financing
Documents and the Subordinated Debt Documents) prohibiting the creation or
assumption of any Lien upon its properties or assets, whether now owned or
hereafter acquired or (ii) create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind (except
as provided by the Subordinated Debt Documents) on the ability of any Subsidiary
to: (1) pay or make Restricted Distributions to Borrower or any Subsidiary;
(2) make loans or advances to Borrower or any Subsidiary; or (3) transfer any of
its property or assets to Borrower or any Subsidiary.
     Section 5.6 Payments and Modifications of Subordinated Debt.
     Notwithstanding the provisions of Section 5.4 or any other provision of
this Agreement, Borrower will not, and will not permit any Subsidiary to,
directly or indirectly (a) redeem or otherwise acquire, or declare, pay, make or
set aside any amount in respect of the redemption or other acquisition of, all
or any portion of Borrower’s 5.75% Convertible Senior Subordinated Notes (the
“Convertible Senior Notes”); (b) declare, pay, make or set aside any amount for
payment in respect of Subordinated Debt, except for regularly scheduled payments
of principal and interest (but no voluntary prepayments) in respect of such
Subordinated Debt made in full compliance with the Subordination Agreement and,
if any, any other subordination provisions applicable to such Subordinated Debt;
or (c) amend or otherwise modify the terms of any Subordinated Debt if the
effect of such amendment or modification is to (i) increase the interest rate or
fees on, or change the manner or timing of payment of, such Debt; (ii) change
the dates upon which payments of principal or interest are due on, or the
principal amount of, such Debt; (iii) change any event of default or add or make
more restrictive any covenant with respect to such Debt; (iv) change the
prepayment provisions of such Debt or any of the defined terms related thereto;
(v) change the subordination provisions thereof (or the subordination terms of
any guaranty thereof); or (vi) change or amend any other term if such change or
amendment would materially increase the obligations of the obligor or confer
additional material rights on

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the holder of such Debt in a manner adverse to Borrower, any Subsidiaries,
Administrative Agent or Lenders. Borrower shall, prior to entering into any such
amendment or modification, deliver to Administrative Agent reasonably in advance
of the execution thereof, any final or execution form copy thereof and, if
approval of Required Lenders is required by the terms of this Agreement prior to
the taking of any such action, Borrower agrees not to take, nor permit any of
its Subsidiaries to take, any such action with respect to any such items without
obtaining such approval from Required Lenders.
     Section 5.7 Consolidations, Mergers and Sales of Assets.
     Borrower will not, and will not permit any Subsidiary to, directly or
indirectly (a) consolidate or merge with or into any other Person other than
(i) mergers consummated to effect the consummation of a Permitted Acquisition
and (ii) in each case with not less than twenty (20) Business Days’ prior
written notice to Administrative Agent (or such lesser amount of notice as
Administrative Agent, in its sole discretion, may from time to time permit)
mergers of any Wholly-Owned Subsidiary with and into Borrower (with Borrower as
the surviving entity of such merger) or with and into any other Wholly-Owned
Subsidiary of Borrower or (b) consummate any Asset Dispositions other than
dispositions of Equipment for cash and fair value that Borrower determines in
good faith is no longer used or useful in the business of Borrower and its
Subsidiaries if all of the following conditions are met: (i) the market value of
assets sold or otherwise disposed of in any single transaction or series of
related transactions does not exceed $100,000 and the aggregate market value of
assets sold or otherwise disposed of in any Fiscal Year of Borrower does not
exceed $200,000; (ii) the Net Cash Proceeds of any such disposition are applied
as required by Section 2.1(c); (iii) after giving effect to any such disposition
and the repayment of Debt with the proceeds thereof, Borrower is in compliance
on a pro forma basis with the covenants set forth in Article 7 recomputed for
the most recently ended month for which information is available and is in
compliance with all other terms and conditions of this Agreement; and (iv) no
Default or Event of Default then exists or would result from any such
disposition.
     Section 5.8 Purchase of Assets, Investments.
     (a) Borrower will not, and will not permit any Subsidiary to, directly or
indirectly (w) acquire or enter into any agreement to acquire any assets other
than in the Ordinary Course of Business, constituting capital expenditures to
the extent permitted hereunder or constituting replacement assets purchased with
proceeds of Property Insurance Policies, awards or other compensation with
respect to any eminent domain, condemnation or similar proceeding; (x) create,
acquire or enter into any agreement to create or acquire any Subsidiary other
than Wholly-Owned Subsidiaries acquired or created in connection with the
consummation of Permitted Acquisitions and for which the requirements set forth
in Section 4.12 have been satisfied, (y) engage or enter into any agreement to
engage in any joint venture or partnership with any other Person or (z) acquire
or own or enter into any agreement to acquire or own any Investment in any
Person other than:
          (i) Investments existing on the date of this Agreement and set forth
on Schedule 5.8;

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          (ii) Cash Equivalents;
          (iii) intentionally omitted;
          (iv) bank deposits established in accordance with Section 5.17;
          (v) Investments in securities of Account Debtors received pursuant to
any plan of reorganization or similar arrangement upon the bankruptcy or
insolvency of such Account Debtors; and
          (vi) Investments in the form of Swap Contracts permitted under
Section 5.3(c).
     (b) Notwithstanding the provisions of Section 5.8(a), Borrower or one of
its Subsidiaries may acquire all or substantially all of the assets, stock, or
other equity interests of another Person (each, a “Section 5.8(b) Permitted
Acquisition”) upon the following terms and conditions (all in form and substance
satisfactory to the Agent): (i) no Default of Event of Default then exists or
would result from such Section 5.8(b) Permitted Acquisition; (ii) the Person
that Borrower or its Subsidiary is requesting to purchase or the business from
which Borrower or its Subsidiary is requesting to purchase assets is in the same
line of business as the Borrower or such Subsidiary, and the entity whose equity
interests or assets are being purchased had positive EBITDA for the immediately
preceding fiscal year; (iii) Agent shall have been granted a first priority,
perfect lien on and security interest in all properties and assets to be
acquired, or on the properties and assets of the Person whose stock or equity
interests are to be acquired, as applicable; (iv) Borrower or such Subsidiary
shall have delivered to Agent (A) written notice not less than thirty (30) days
prior to the consummation of such proposed acquisition, (B) a “Deal Term Sheet”
outlining all material terms of the proposed acquisition, and pro-forma
financial statements and covenant compliance sheets, projected as of the
consummation of such proposed acquisition and certified by the chief financial
officer of Borrower, reflecting pro-forma compliance with the Operative
Documents after the consummation of any such proposed acquisition; (v) during
the 12-month period ending on any date of determination by the Administrative
Agent, the aggregate acquisition costs for all Section 5.8(b) Permitted
Acquisitions, shall not exceed $2,000,000; (vi) Borrower and the applicable
Subsidiary shall have furnished to Agent such other information, documents and
items as Agent shall have requested, including but not limited to true, complete
and correct copies of the financial statements of the acquisition target, and
all Acquisition Documents and other documents and instruments relating to the
proposed acquisition, (vii) all indebtedness incurred by Borrower or such
Subsidiary shall be fully and completely subordinated to the Obligations; and
(viii) the Credit Parties shall have enter into such modifications to the
Financing Documents, and shall have entered into such other documents and
instruments, in each case as Agent may reasonably request.
     (c) Notwithstanding the provisions of Section 5.8(a), upon and after the
effectiveness of the Acquisition Revolving Loan Commitment Increase, in addition
to Section 5.8(b) Permitted Acquisitions, Borrower may acquire, or may cause a
Wholly-Owned Subsidiary to acquire, all or substantially all of the assets, or
all (but not less than all) of the capital stock or other equity securities, of
any Person (the “Target”) (in each case, a “Section 5.8(c) Permitted
Acquisition”) with the prior written approval of Administrative Agent and the
Required Lenders

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in their discretion and upon the satisfaction of each of the Acquisition
Revolving Loan Commitment Increase Conditions, including each of the following
conditions:
          (i) Administrative Agent shall have received not less than 30 Business
Days’ prior notice of such proposed Section 5.8(c) Permitted Acquisition, which
notice shall include a due diligence package including the following materials
if requested by Administrative Agent, each in form and substance reasonably
satisfactory to Administrative Agent:
     (A) copies of the Target’s two most recent annual income statements and
balance sheets, together with the audit opinions thereon, if any, of the
Target’s independent accountants, together with available interim financial
statements, (B) if available, any asset or business appraisals, (C) a general
description of the business to be acquired, (D) a general description of the
competitive position of the business to be acquired within its industry, (E) a
summary of pending and known threatened litigation adversely affecting the
business or assets to be acquired, (F) a description of the method of financing
such acquisition, including sources and uses, (G) a listing of locations of all
personal and real property to be acquired, (H) a description of any change in
management of Borrower and its Subsidiaries, after giving effect to such
acquisition, (I) all material agreements to be assumed or acquired, (J) if the
Target owns or leases, or if the assets to be acquired includes, any real
property or if otherwise requested by Administrative Agent, environmental
reports and related information regarding any such property owned, leased or
otherwise used (other than leased property used solely as office space),
(K) draft copies of all proposed Acquisition Documents, including all schedules
thereto and (L) any other material or reports reasonably requested by
Administrative Agent.
          (ii) Concurrently with delivery of the notice and due diligence
materials referred to in clause (i) above, if requested by Administrative Agent,
Borrower shall have delivered to Administrative Agent, in form and substance
reasonably satisfactory to Administrative Agent:
     (A) a pro forma consolidated and consolidating balance sheet, income
statement and cash flow statement of Borrower and its Subsidiaries (the
“Acquisition Pro Forma”), based on most recently available financial statements,
which shall be complete and shall fairly present in all material respects the
assets, liabilities, financial condition and results of operations of Borrower
and its Subsidiaries in accordance with GAAP consistently applied, but taking
into account such Section 5.8(c) Permitted Acquisition, the funding of all Loans
and the incurrence or assumption of all other Debt and repayment of Debt in
connection therewith, and such Acquisition Pro Forma shall reflect that (x) on a
pro forma basis, Borrower and its Subsidiaries would have had a Senior Leverage
Ratio not in excess of 2.50 to 1.0 for the four quarter period reflected in the
Compliance Certificate most recently delivered to Administrative Agent pursuant
to Section 4.1(c) prior to the consummation of such Section 5.8(c) Permitted
Acquisition (after giving effect to such Section 5.8(c) Permitted Acquisition
and all Loans funded in connection therewith as if made on the first day of such
period) and (y) on a pro forma basis, no Default or Event of Default has
occurred and is continuing or would result after giving effect to such
Section 5.8(c) Permitted Acquisition, the funding of all Loans and

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the incurrence or assumption of all other Debt and repayment of Debt in
connection therewith;
     (B) updated versions of the operating plans, budgets and forecasts most
recently delivered to Administrative Agent pursuant to Section 4.1(m) covering
the three (3) year period commencing on the date of such Section 5.8(c)
Permitted Acquisition and otherwise prepared in accordance with the requirements
of Section 4.1(m) (the “Acquisition Projections”) and based upon historical
financial data of a recent date reasonably satisfactory to Administrative Agent,
taking into account such Section 5.8(c) Permitted Acquisition, the funding of
all Loans and the incurrence or assumption of all other Debt and repayment of
Debt in connection therewith; and
     (C) a certificate of a Responsible Officer of Borrower to the effect that:
(w) Borrower and each Subsidiary will be Solvent upon the consummation of the
Section 5.8(c) Permitted Acquisition; (x) the Acquisition Pro Forma fairly
presents the financial condition of Borrower and its Subsidiaries (on a
consolidated basis) as of the date thereof and the periods covered thereby, in
each case after giving effect to the Section 5.8(c) Permitted Acquisition and
related transactions; (y) the Acquisition Projections represent Borrower’s best
estimate of Borrower’s consolidated future financial performance as of the date
thereof and after giving effect to the Section 5.8(c) Permitted Acquisition, the
assumptions contained therein are believed by Borrower to be fair and reasonable
in light of current business conditions and the Acquisition Projections
demonstrate Borrower’s projected compliance with the covenants set forth in
Article 7 for the one-year period immediately following the consummation of such
Section 5.8(c) Permitted Acquisition; provided, that Borrower can give no
assurance that the results reflected in the Acquisition Projections will be
attained; and (z) Borrower and its Subsidiaries have completed their due
diligence investigation with respect to the Target and such Section 5.8(c)
Permitted Acquisition, which investigation was conducted in a manner similar to
that which would have been conducted by a prudent purchaser of a comparable
business and the results of which investigation, to the extent requested, were
delivered to Administrative Agent;
          (iii) such Section 5.8(c) Permitted Acquisition shall only involve
assets located in the United States (and, in connection with the acquisition of
the capital stock or other equity securities of a Target, such Target shall be
formed, incorporated or otherwise organized under the laws of a State within the
United States) and comprising a business, or those assets of a business, of the
type engaged in by Borrower as of the Closing Date and businesses reasonably
related thereto, and which business would not subject Administrative Agent or
any Lender to regulatory or third party approvals in connection with the
exercise of its rights and remedies under this Agreement or any other Financing
Documents other than approvals applicable to the exercise of such rights and
remedies with respect to Borrower prior to such Section 5.8(c) Permitted
Acquisition;
          (iv) such Section 5.8(c) Permitted Acquisition shall be consensual,
shall have been approved by the Target’s board of directors (or comparable
governing board) and shall be consummated in accordance with the terms of the
Acquisition Documents, and in compliance with all applicable Laws;

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          (v) no assets or liabilities (including, without limitation,
Investments, Debt and Contingent Obligations) shall be acquired, incurred,
assumed or otherwise be reflected on a consolidated balance sheet of Borrower
and its Subsidiaries after giving effect to such Section 5.8(c) Permitted
Acquisition, except (A) Loans made hereunder and (B) those assets and
liabilities which may be acquired, incurred or assumed in accordance with the
provisions of this Agreement;
          (vi) the business and assets acquired in such Section 5.8(c) Permitted
Acquisition shall be free and clear of all Liens (other than Permitted Liens);
          (vii) at or prior to the closing of any Section 5.8(c) Permitted
Acquisition, Administrative Agent will be granted a first priority perfected
Lien (subject to Permitted Liens) in all assets acquired pursuant thereto or, as
contemplated by Section 4.12, in the assets and capital stock or other equity
interests of the Target, and Borrower, its Subsidiaries and the Target shall
have executed such documents and taken such actions as may be required by
Administrative Agent in connection therewith (including the delivery of
(A) certified copies of the resolutions of the board of directors (or comparable
governing board) of Borrower, its Subsidiaries and the Target authorizing such
Section 5.8(c) Permitted Acquisition and the granting of Liens described herein,
(B) legal opinions, in form and content reasonably acceptable to Administrative
Agent, with respect to the transactions described herein and (C) evidence of
insurance of the business to be acquired consistent with the requirements of
Section 4.4);
          (viii) the Target shall not have incurred an operating loss for the
trailing twelve-month period preceding the date of the Section 5.8(c) Permitted
Acquisition, as determined based upon the Target’s financial statements for its
most recently completed fiscal year;
          (ix) on or prior to the date of such Section 5.8(c) Permitted
Acquisition, Administrative Agent shall have received, in form and substance
reasonably satisfactory to Administrative Agent, (a) copies of the Acquisition
Documents and all other documents reasonably requested by Administrative Agent
and (c) amendments to the Schedules, to the extent necessary to make the
representations and warranties in this Agreement true and correct after giving
effect to the consummation of such Section 5.8(c) Permitted Acquisition; and
          (x) notwithstanding anything in this Section 5.8(c), no Inventory
acquired by Borrower or a Subsidiary of Borrower shall be deemed to be Eligible
Inventory, and no Account acquired by Borrower or a Subsidiary of Borrower shall
be deemed to be an Eligible Account, except to the extent Administrative Agent
has given its prior written approval with respect thereto.
     Section 5.9 Transactions with Affiliates.
     Except (i) as disclosed on Schedule 5.9, and (ii) for transactions that are
disclosed to Administrative Agent in advance of being entered into and which
contain terms that are no less favorable to Borrower or any Subsidiary, as the
case may be, than those which might be obtained from a third party not an
Affiliate of any Credit Party, Borrower will not, and will not permit any
Subsidiary to, directly or indirectly, enter into or permit to exist any
transaction (including the

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purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate of Borrower.
     Section 5.10 Modification of Organizational Documents.
     Borrower will not, and will not permit any Subsidiary to, directly or
indirectly, amend or otherwise modify any Organizational Documents of such
Person, except for such amendments or other modifications required by Law and
fully disclosed to Administrative Agent.
     Section 5.11 Intentionally Omitted.
     Section 5.12 Fiscal Year.
     Borrower will not, and will not permit any Subsidiary to, change its Fiscal
Year.
     Section 5.13 Conduct of Business.
     Borrower will not, and will not permit any Subsidiary to, directly or
indirectly, engage in any line of business other than those businesses engaged
in on the Closing Date and described on Schedule 5.13 and businesses reasonably
related thereto.
     Section 5.14 Intentionally Omitted.
     Section 5.15 Lease Payments.
     Borrower will not, and will not permit any Subsidiary to, directly or
indirectly, incur or assume (whether pursuant to a Guarantee or otherwise) any
liability for rental payments under a lease with a lease term of one year or
more if, after giving effect thereto, the aggregate amount of minimum lease
payments that Borrower and its Consolidated Subsidiaries have so incurred or
assumed will exceed, on a consolidated basis, $2,000,000 for any calendar year
under all such leases (excluding Capital Leases).
     Section 5.16 Limitation on Sale and Leaseback Transactions.
     Borrower will not, and will not permit any Subsidiary to, directly or
indirectly, enter into any arrangement with any Person whereby in a
substantially contemporaneous transaction Borrower or any of its Subsidiaries
sells or transfers all or substantially all of its right, title and interest in
an asset and, in connection therewith, acquires or leases back the right to use
such asset.
     Section 5.17 Bank Accounts.
     Without limiting the provisions of Section 6.1(d), Borrower will not, and
will not permit any Subsidiary to, directly or indirectly, establish any new
bank account without prior written notice to Administrative Agent and unless
Administrative Agent, Borrower or such Subsidiary and the bank at which the
account is to be opened enter into a control agreement regarding such bank
account pursuant to which such bank acknowledges the security interest of
Administrative Agent in such bank account, agrees to comply with instructions
originated by Administrative

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Agent directing disposition of the funds in such bank account without further
consent from Borrower, and agrees to subordinate and limit any security interest
such bank may have in such bank account on terms satisfactory to Administrative
Agent.
     Section 5.18 Compliance with Anti-Terrorism Laws.
     (a) Borrower will not, and will not permit any Subsidiary to, directly or
indirectly, knowingly enter into any Operative Documents or Material Contracts
with any Person listed on the OFAC Lists. Borrower shall immediately notify
Administrative Agent if Borrower has knowledge that Borrower, any additional
Credit Party or any of their respective Affiliates or agents acting or
benefiting in any capacity in connection with the transactions contemplated by
this Agreement is or becomes a Blocked Person or (i) is convicted on,
(ii) pleads nolo contendere to, (iii) is indicted on or (iv) is arraigned and
held over on charges involving money laundering or predicate crimes to money
laundering. Borrower will not, and will not permit any Subsidiary to, directly
or indirectly, (i) conduct any business or engage in any transaction or dealing
with any Blocked Person, including, without limitation, the making or receiving
of any contribution of funds, goods or services to or for the benefit of any
Blocked Person, (ii) deal in, or otherwise engage in any transaction relating
to, any property or interests in property blocked pursuant to Executive Order
No. 13224, any similar executive order or other Anti-Terrorism Law, or
(iii) engage in or conspire to engage in any transaction that evades or avoids,
or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in Executive Order No. 13224 or other Anti-Terrorism Law.
     (b) Administrative Agent hereby notifies Borrower that pursuant to the
requirements of the USA PATRIOT Act, and the Administrative Agent’s policies and
procedures, the Administrative Agent is required to obtain, verify and record
certain information and documentation that identifies Borrower, which
information includes the name and address of Borrower and such other information
that will allow the Administrative Agent to identify Borrower in accordance with
the USA PATRIOT Act.
ARTICLE 6
ACCOUNTS AND INVENTORY REPRESENTATIONS,
WARRANTIES, COVENANTS AND AGREEMENTS
     To induce Administrative Agent and Lenders to enter into this Agreement and
to make the Loans and other credit accommodations contemplated hereby, Borrower
hereby represents and warrants to Administrative Agent and each Lender, and
further agrees with Administrative Agent and each Lender, that:
     Section 6.1 Accounts and Account Collections.
     (a) Borrower shall notify Administrative Agent promptly of: (i) any
material delay in the performance by Borrower or any of its Subsidiaries of any
of their material obligations to any Account Debtor or the assertion of any
material claims, offsets, defenses or counterclaims by any Account Debtor, or
any material disputes with Account Debtors, or any settlement, adjustment or
compromise thereof, (ii) all material adverse information known to any Credit
Party relating to the financial condition of any Account Debtor and (iii) any
event or circumstance which, to any

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Credit Party’s knowledge, would result in any Account no longer constituting an
Eligible Account. Borrower hereby agrees not to grant to any Account Debtor, and
to cause each of its Subsidiaries not to grant to any Account Debtor, any
credit, discount, allowance or extension, or to enter into any agreement for any
of the foregoing, without Administrative Agent’s consent, except in the Ordinary
Course of Business. So long as no Event of Default exists or has occurred and is
continuing, Borrower may settle, adjust or compromise, and may permit each of
its Subsidiaries to settle, adjust or compromise, any claim, offset,
counterclaim or dispute with any Account Debtor. At any time that an Event of
Default exists or has occurred and is continuing, Administrative Agent shall, at
its option, have the exclusive right to settle, adjust or compromise any claim,
offset, counterclaim or dispute with Account Debtors of any Credit Party or
grant any credits, discounts or allowances.
     (b) With respect to each Account: (i) the amounts shown on any invoice
delivered to Administrative Agent or schedule thereof delivered to
Administrative Agent shall be true and complete in all material respects,
(ii) no payments shall be made thereon except payments immediately delivered to
Administrative Agent pursuant to the terms of this Agreement or any applicable
Security Document (to the extent so required), (iii) there shall be no setoffs,
deductions, contras, defenses, counterclaims or disputes existing or asserted
with respect thereto except as reported to Administrative Agent in accordance
with the terms of this Agreement, and (iv) none of the transactions giving rise
thereto will violate any applicable laws or regulations, all documentation
relating thereto will be legally sufficient under such laws and regulations and
all such documentation will be legally enforceable in accordance with its terms.
     (c) Administrative Agent shall have the right at any time or times in
Administrative Agent’s name or in the name of a nominee of Administrative Agent,
to verify the validity, amount or any other matter relating to any Account or
other Collateral, by mail, telephone, e-mail, facsimile transmission or
otherwise. To facilitate the exercise of the right described in the immediately
preceding sentence, Borrower hereby agrees to provide Administrative Agent upon
request the name and address of each Account Debtor of Borrower or any of its
Subsidiaries.
     (d) Upon request by Administrative Agent, as contemplated by Section 4.12
of the Borrower Security Agreement, (i) (A) Borrower shall establish and
maintain, at its sole expense, and shall cause each Subsidiary to establish and
maintain, at its sole expense blocked accounts or lockboxes and related blocked
accounts (in either case, “Blocked Accounts”), as Administrative Agent may
specify, with such banks as are acceptable to Administrative Agent into which
Borrower and its Subsidiaries shall promptly deposit and direct their respective
Account Debtors to directly remit all payments on Accounts and all payments
constituting proceeds of Inventory or other Collateral in the identical form in
which such payments are made, whether by cash, check or other manner, (B)
Borrower shall deliver, or cause to be delivered, to Administrative Agent a
Deposit Account Control Agreement duly authorized, executed and delivered by
each bank where a Blocked Account for the benefit of Borrower or any of its
Subsidiaries is maintained, and by each bank where any other Deposit Account is
from time to time maintained. Borrower shall further execute and deliver, and
shall cause each of its Subsidiaries to execute and deliver, such agreements and
documents as Administrative Agent may require in connection with such Blocked
Accounts, Deposit Accounts and such Deposit Account Control Agreements, and
(C) without limiting the provisions of Section 5.17, Borrower shall not
establish, and shall

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cause each of its Subsidiaries not to establish, any Deposit Accounts not
existing as of the Closing Date, unless Borrower or its Subsidiaries (as
applicable) have complied in full with the provisions of this Section 6.1 with
respect to such Deposit Accounts. Borrower agrees that all payments made to such
Blocked Accounts or other funds received and collected by Administrative Agent
or any Lender, whether in respect of the Accounts, as proceeds of Inventory or
other Collateral or otherwise shall be treated as payments to Administrative
Agent and Lenders in respect of the Obligations and therefore shall constitute
the property of Administrative Agent and Lenders to the extent of the then
outstanding Obligations.
     (e) For purposes of calculating the amount of the Loans available to
Borrower, payments made to a Blocked Account will be applied (conditional upon
final collection) to the Obligations on the Business Day of receipt by
Administrative Agent of immediately available funds in the Payment Account
provided such payments and notice thereof are received in accordance with
Administrative Agent’s usual and customary practices as in effect from time to
time and with sufficient time to credit the Loan Account on such day, and if
not, then on the next Business Day. For the purposes of calculating interest on
the Obligations, such payments or other funds received shall be deemed applied
(conditional upon final collection) to the Obligations one (1) Business Day
following the date of receipt of immediately available funds by Administrative
Agent in the Payment Account provided such payments or other funds and notice
thereof are received in accordance with Administrative Agent’s usual and
customary practices as in effect from time to time and with sufficient time to
credit the Loan Account on such day, and if not, then on the next Business Day.
     (f) Borrower and its directors, employees, agents, Subsidiaries and other
Affiliates shall, acting as trustee for Administrative Agent, receive, as the
property of Administrative Agent, any monies, checks, notes, drafts or any other
payment relating to and/or proceeds of Accounts, Inventory or other Collateral
which come into their possession or under their control and immediately upon
receipt thereof, shall deposit or cause the same to be deposited in the Blocked
Accounts, or remit the same or cause the same to be remitted, in kind, to
Administrative Agent. In no event shall the same be commingled with Borrower’s
own funds. Borrower agrees to pay or to reimburse Administrative Agent on demand
for any amounts owed or paid to or demanded by any bank at which a Blocked
Account is established or any other bank or Person involved in the transfer of
funds to or from the Blocked Accounts arising out of Administrative Agent’s
payments to or indemnification of such bank or Person.
     Section 6.2 Inventory.
     With respect to the Inventory: (i) Borrower shall at all times maintain,
and cause each of its Subsidiaries to maintain, records of Inventory reasonably
satisfactory to Administrative Agent, keeping correct and accurate records
itemizing and describing the kind, type, quality and quantity of Inventory, the
cost therefor and daily withdrawals therefrom and additions thereto; (ii)
Borrower shall conduct, and cause each of its Subsidiaries to conduct, a
physical count of the Inventory at least once each year but at any time or times
as Administrative Agent may request on or after an Event of Default, and
promptly following such physical inventory shall supply Administrative Agent
with a report in the form and with such specificity as may be satisfactory to
Administrative Agent concerning such physical count; (iii) Borrower shall not
sell, and shall not permit any of its Subsidiaries to sell, Inventory to any
customer on approval, or any other

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basis which entitles the customer to return (except for the right of customers
for Inventory which is defective or non-conforming) or may obligate any Credit
Party to repurchase such Inventory; (iv) Borrower shall keep, and shall cause
each of its Subsidiaries to keep, the Inventory in good and marketable
condition; and (v) Borrower shall not acquire or accept for sale, and shall not
permit any of its Subsidiaries to acquire or accept for sale, without prior
written notice to Administrative Agent, any Inventory on consignment or
approval.
ARTICLE 7
FINANCIAL COVENANTS
     Borrower agrees that, so long as any Credit Exposure exists:
     Section 7.1 Fixed Charge Coverage Ratio.
     Borrower will not permit the Fixed Charge Coverage Ratio for the 12-month
period ending on the last day of each calendar quarter to be less than (a) prior
to the effectiveness of the Acquisition Revolving Loan Commitment Increase, 1.10
to 1.00, and (b) after the effectiveness of the Acquisition Revolving Loan
Commitment Increase, 1.20 to 1.00.
     Section 7.2 Senior Leverage Ratio.
     Borrower will not permit the Senior Leverage Ratio for the twelve
(12) month period ending the last day of any calendar quarter (or, if any
portion of such period precedes the Closing Date, for the period commencing on
the Closing Date and ending on such date, expressed on an annualized basis) to
exceed 2.50 to 1.00.
ARTICLE 8
CONDITIONS
     Section 8.1 Conditions to Initial Closing.
     The obligation of each Lender to make the initial Loans, of Administrative
Agent to issue any Support Agreements on the Closing Date and of any LC Issuer
to issue any Lender Letter of Credit on the Closing Date shall be subject to the
receipt by Administrative Agent of each agreement, document and instrument set
forth on the Closing Checklist, each in form and substance reasonably
satisfactory to Administrative Agent, and to the satisfaction of the following
conditions precedent, each to the satisfaction of Administrative Agent and
Lenders in their reasonable discretion:
     (a) the payment of all fees, expenses and other amounts due and payable
under each Financing Document, including, without limitation, the Administrative
Agent Fee Letter;
     (b) the satisfaction of Agent as to the absence, since March 31, 2006, of
any Material Adverse Effect or any event or condition which could reasonably be
expected to result in a Material Adverse Effect;
     (c) the receipt of the initial Borrowing Base Certificate, prepared as of
the Closing Date, which certificate shall evidence immediately available excess
borrowing capacity of

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Revolving Loans of not less than $5,000,000 after giving effect to the initial
funding of Loans on the Closing Date and the consummation of the transactions
contemplated by the Operative Documents;
     (d) Merrill Lynch shall be satisfied with the results of its legal and
business due diligence, which, in the case of business due diligence, shall
include audits, appraisals, reports (including, without limitation,
environmental reports) and other documentation (including, without limitation,
title and survey documentation) with respect to any owned or leased property,
communications with management regarding financial performance and financial
condition and a field exam (in scope acceptable to Merrill Lynch) of Borrower
and Subsidiaries, and Borrower’s and Subsidiaries’ respective operations;
     (e) Administrative Agent and the Lenders shall have received and approved
all requested financial statements and projections;
     (f) intentionally omitted;
     (g) all other transactions contemplated to occur in connection with the
closing of this loan and letter of credit facility shall have been consummated
in accordance with applicable Law and the documentation relating thereto, which
shall be satisfactory to Agent and the Lenders in form and substance;
     (h) Intentionally omitted;
     (i) Merrill Lynch shall be satisfied that there has been no material
adverse change in the capital markets which could impair Merrill Lynch’s ability
to successfully syndicate this loan and letter of credit facility;
     (j) all governmental and third party approvals necessary in connection with
the closing of this loan and letter of credit facility and the transactions
contemplated to occur in connection therewith shall have been obtained and shall
be in full force and effect, and final and non-appealable;
     (k) Agent shall be satisfied with Borrower’s and its Subsidiaries’ and
SSG’s respective capital, legal and organizational structure;
     (l) Intentionally omitted;
     (m) Agent shall have received copies of (or binders for) insurance policies
(including without limitation casualty, property, liability and business
interruption insurance) that satisfy the insurance requirements included in the
Financing Documents, with certificates and endorsements satisfactory to Agent
naming Agent as lender loss payee and additional insured, and Agent shall have
received the satisfactory results of the review by a third party consultant
engaged by Agent to review the adequacy of Borrowers’ and its Subsidiaries’
respective insurance coverage; and
     (n) receipt by Agent of such other documents, instruments and/or agreements
as Agent may reasonably request.

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     Section 8.2 Conditions to Acquisition Revolving Loan Commitment Increase.
     The effectiveness of the Acquisition Revolving Loan Commitment Increase
shall be subject to the satisfaction of the following conditions precedent (the
“Acquisition Revolving Loan Commitment Increase Conditions”), each to the
satisfaction of Administrative Agent and Lenders in their sole discretion:
     (a) Borrower shall have complied with the conditions set forth in
Section 5.8(c);
     (b) the payment of all fees, expenses and other amounts due and payable
under each Financing Document, including, without limitation, the Administrative
Agent Fee Letter;
     (c) all other transactions contemplated to occur in connection with the
closing of this loan and letter of credit facility shall have been consummated
in accordance with applicable Law and the documentation relating thereto, which
shall be satisfactory to Agent and the Lenders in form and substance;
     (d) consummation of a Section 5.8(c) Permitted Acquisition pursuant to
Acquisition Documents, each of which shall be in form and substance satisfactory
to the Administrative Agent and Lenders in their sole discretion, and otherwise
on terms and conditions satisfactory to the Administrative Agent and Lenders in
their sole discretion;
     (e) no Default or Event of Default shall have occurred and shall be
continuing;
     (f) Merrill Lynch shall be satisfied with the results of its legal and
business due diligence with regard to the Target and the Credit Parties, which,
in the case of business due diligence, may include audits, appraisals, reports
(including, without limitation, environmental reports) and other documentation
(including, without limitation, title and survey documentation) with respect to
any owned or leased property, communications with management regarding financial
performance and financial condition and a field exam (in scope acceptable to
Merrill Lynch) of Borrower, its Subsidiaries, and Target and their respective
businesses and operations;
     (g) Administrative Agent shall have received copies of (or binders for)
insurance policies (including without limitation casualty, property, liability
and business interruption insurance) that satisfy the insurance requirements
included in the Financing Documents, with certificates and endorsements
satisfactory to Administrative Agent naming Administrative Agent as lender loss
payee and additional insured, and Administrative Agent shall have received the
satisfactory results of the review by a third party consultant engaged by
Administrative Agent to review the adequacy of the Target’s insurance coverage;
     (h) Borrower, the Target, the other Credit Parties and such other Persons
reasonably requested by Administrative Agent shall have entered into such new
Financing Documents and/or modifications to the Financing Documents, and shall
have delivered such other documents, instruments, and agreements in respect of
the Loans and the Financing Documents, as Administrative Agent may reasonably
request;

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     (i) (i) There is no pending or threatened Litigation with respect to the
Acquisition, the Target or otherwise, and (ii) there shall not have occurred any
act, condition or occurrence of any other nature whatsoever, which, in any such
case, whether singly or in the aggregate, and whether or not related, has had or
could reasonably expected to have a material adverse change in, or a material
adverse effect upon, any of (A) the condition (financial or otherwise),
operations, business, properties or prospects of any of the Credit Parties or
the Target, (B) the rights and remedies of Administrative Agent or Lenders under
any Financing Document, or the ability of any Credit Party to perform any of its
obligations under any Financing Document to which it is a party, whether prior
or subsequent to the Acquisition, (C) the legality, validity or enforceability
of any Financing Document, whether prior or subsequent to the Acquisition, or
(D) the existence, perfection or priority of any security interest granted in
any Financing Document or the value of any material Collateral, whether prior or
subsequent to the Acquisition; and
     (j) Receipt by Administrative Agent of such other information (financial or
otherwise), documents, instruments and/or agreements as Administrative Agent may
reasonably request.
     Section 8.3 Conditions to Each Loan, Support Agreement and Lender Letter of
Credit.
     The obligation of the Lenders to make a Loan (other than Revolving Loans
made pursuant to either of Section 2.2(e)(ii) and/or Section 2.5(c)), of
Administrative Agent to issue any Support Agreement or of any LC Issuer to issue
any Lender Letter of Credit (including, in each case, on the Closing Date) is
subject to the satisfaction of the following additional conditions:
          (i) in the case of a Revolving Loan Borrowing, receipt by
Administrative Agent of a Notice of Borrowing (or telephonic or electronic
notice, as permitted by Section 2.2(b)(ii)) in accordance with Section 2.2(b)
and, in the case of any Support Agreement or Lender Letter of Credit, receipt by
Administrative Agent of a Notice of LC Credit Event in accordance with
Section 2.5(a);
          (ii) the fact that, immediately after such borrowing and after
application of the proceeds thereof or after such issuance, the Revolving Loan
Outstandings will not exceed the Revolving Loan Limit;
          (iii) the fact that, immediately before and after such borrowing or
issuance, no Default or Event of Default shall have occurred and be continuing;
and
          (iv) the fact that the representations and warranties of each Credit
Party contained in the Financing Documents shall be true, correct and complete
on and as of the date of such borrowing or issuance, except to the extent that
any such representation or warranty relates to a specific date in which case
such representation or warranty shall be true and correct as of such earlier
date.
     Each giving of a Notice of LC Credit Event hereunder, each giving of a
Notice of Borrowing hereunder and each acceptance by Borrower of the proceeds of
any Loan made

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hereunder shall be deemed to be a representation and warranty by Borrower on the
date of such notice or acceptance as to the facts specified in Sections 8.3(ii),
8.3(iii) and 8.3(iv).
ARTICLE 9
EVENTS OF DEFAULT
     Section 9.1 Events of Default.
     For purposes of the Financing Documents, the occurrence of any of the
following conditions and/or events, whether voluntary or involuntary, by
operation of law or otherwise, shall constitute an “Event of Default”:
     (a) Borrower shall fail to pay when due (i) any principal under any
Financing Document, or (ii) any interest, premium or fee under any Financing
Document or any other amount payable under any Financing Document and such
interest, premium, fee or other amount shall remain unpaid for three
(3) Business Days after the respective due dates thereof;
     (b) Borrower shall fail to observe or perform any covenant contained in
Article 4, Article 5, Article 6 or Article 7;
     (c) any Credit Party defaults in the performance of or compliance with any
term contained in this Agreement or in any other Financing Document (other than
occurrences described in other provisions of this Section 9.1 for which a
different grace or cure period is specified or for which no grace or cure period
is specified and thereby constitute immediate Events of Default) and such
default is not remedied or waived within thirty (30) days after the earlier of
(1) receipt by Borrower of notice from Administrative Agent or Required Lenders
of such default or (2) actual knowledge of Borrower or any other Credit Party of
such default;
     (d) any representation, warranty, certification or statement made by any
Credit Party or any other Person in any Financing Document or in any
certificate, financial statement or other document delivered pursuant to any
Financing Document is incorrect in any respect (or in any material respect if
such representation, warranty, certification or statement is not by its terms
already qualified as to materiality) when made (or deemed made);
     (e) (1) failure of any Credit Party to pay when due or within any
applicable grace period any principal, interest or other amount on Debt (other
than the Loans) or in respect of any Swap Contract, or the occurrence of any
other breach, default, condition or event with respect to any Debt (other than
the Loans) or in respect of any Swap Contract, if (i) such failure or occurrence
occurs upon the scheduled maturity of such Debt or liabilities in respect of
such Swap Contract, or upon automatic acceleration of such Debt or liabilities
in respect of such Swap Contract, or (ii) the effect of such failure or
occurrence is to cause or to permit the holder or holders of any such Debt, or
the counterparty under any such Swap Contract, to cause, such Debt or other
liabilities to become or be declared due prior to its stated maturity, and, in
each case, such Debt or liabilities have an individual principal amount (or, in
the case of a Swap Contract, a notional amount) in excess of $250,000; or
(2) the occurrence of any breach or default under any terms or provisions of any
Subordinated Debt Document or under any agreement subordinating

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the Subordinated Debt to all or any portion of the Obligations or the occurrence
of any event requiring the prepayment of any Subordinated Debt;
     (f) any Credit Party shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, or shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due, or shall
take any corporate action to authorize any of the foregoing;
     (g) an involuntary case or other proceeding shall be commenced against any
Credit Party seeking liquidation, reorganization or other relief with respect to
it or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of sixty (60) days; or an order for relief
shall be entered against any Credit Party under the federal bankruptcy laws as
now or hereafter in effect;
     (h) (1) institution of any steps by any Person to terminate a Pension Plan
if as a result of such termination any Credit Party or any member of the
Controlled Group could be required to make a contribution to such Pension Plan,
or could incur a liability or obligation to such Pension Plan, in excess of
$250,000, (2) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA, or (3) there
shall occur any withdrawal or partial withdrawal from a Multiemployer Plan and
the withdrawal liability (without unaccrued interest) to Multiemployer Plans as
a result of such withdrawal (including any outstanding withdrawal liability that
any Credit Party or any member of the Controlled Group have incurred on the date
of such withdrawal) exceeds $250,000;
     (i) one or more judgments or orders for the payment of money (not paid or
fully covered by insurance maintained in accordance with the requirements of
this Agreement and as to which the relevant insurance company has acknowledged
coverage) aggregating in excess of $250,000 shall be rendered against any or all
Credit Parties and either (a) enforcement proceedings shall have been commenced
by any creditor upon any such judgments or orders or (b) there shall be any
period of twenty (20) consecutive days during which a stay of enforcement of any
such judgments or orders, by reason of a pending appeal, bond or otherwise,
shall not be in effect;
     (j) a Change of Control of Borrower shall occur;
     (k) any Lien created by any of the Security Documents shall at any time
fail to constitute a valid and perfected Lien on all of the Collateral purported
to be secured thereby, subject to no prior or equal Lien except Permitted Liens,
or any Credit Party shall so assert;
     (l) any Credit Party shall be prohibited or otherwise materially restrained
from conducting the business theretofore conducted by it by virtue of any
casualty, any labor strike,

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any determination, ruling, decision, decree or order of any court or regulatory
authority of competent jurisdiction or any other event and such casualty, labor
strike, determination, ruling, decision, decree, order or other event remains
unstayed and in effect for any period of thirty (30) days; or
     (m) any of the Operative Documents shall for any reason fail to constitute
the valid and binding agreement of any party thereto, or any such party shall so
assert.
     Section 9.2 Acceleration and Suspension or Termination of Revolving Loan
Commitment.
     Upon the occurrence and during the continuance of an Event of Default,
Administrative Agent may, and shall, if so requested by Required Lenders, (i) by
notice to Borrower suspend or terminate the Revolving Loan Commitment and the
obligations of Administrative Agent and the Lenders with respect thereto, in
whole or in part (and, if in part, such reduction shall be pro rata among the
Lenders having a Revolving Loan Commitment Percentage) and/or (ii) by notice to
Borrower declare all or any portion of the Obligations to be, and such
Obligations shall thereupon become, immediately due and payable, with accrued
interest thereon, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by Borrower and Borrower will pay the same;
provided that in the case of any of the Events of Default specified in
Section 9.1(f) or 9.1(g) above, without any notice to Borrower or any other act
by Administrative Agent or the Lenders, the Revolving Loan Commitment and the
obligations of Administrative Agent and the Lenders with respect thereto shall
thereupon terminate and all of the Obligations shall become immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by Borrower and Borrower will pay the same.
     Section 9.3 Cash Collateral.
     If an Acceleration Event shall have occurred, and so long as it continues,
then without any request or the taking of any other action by Administrative
Agent or the Lenders, Borrower shall immediately comply with the provisions of
Section 2.5(e) with respect to the deposit of cash collateral to secure the
existing Letter of Credit Liabilities and future payment of related fees.
     Section 9.4 Default Rate of Interest and Suspension of LIBOR Rate Options.
     At the election of Administrative Agent or Required Lenders, after the
occurrence of an Event of Default and for so long as it continues, (i) the Loans
and other Obligations shall bear interest at rates that are two percent (2.0%)
in excess of the rates otherwise payable under this Agreement and (ii) the fee
described in Section 2.5(b) shall increase by a rate that is two percent (2.0%)
in excess of the rate otherwise payable under such Section. Furthermore, at the
election of Administrative Agent or Required Lenders during any period in which
any Event of Default is continuing (x) as the Interest Periods for LIBOR Loans
then in effect expire, such Loans shall be converted into Base Rate Loans and
(y) the LIBOR election will not be available to Borrower.

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     Section 9.5 Setoff Rights.
     During the continuance of any Event of Default, each Lender is hereby
authorized by Borrower at any time or from time to time, with reasonably prompt
subsequent notice to Borrower (any prior or contemporaneous notice being hereby
expressly waived) to set off and to appropriate and to apply any and all
(A) balances held by such Lender or any of such Lender’s Affiliates at any of
its offices for the account of Borrower or any of its Subsidiaries (regardless
of whether such balances are then due to Borrower or its Subsidiaries), and
(B) other property at any time held or owing by such Lender to or for the credit
or for the account of Borrower or any of its Subsidiaries, against and on
account of any of the Obligations; except that no Lender shall exercise any such
right without the prior written consent of Administrative Agent. Any Lender
exercising a right to set off shall purchase for cash (and the other Lenders
shall sell) interests in each of such other Lender’s Pro Rata Share of the
Obligations as would be necessary to cause all Lenders to share the amount so
set off with each other Lender in accordance with their respective Pro Rata
Share of the Obligations. Borrower agrees, to the fullest extent permitted by
law, that any Lender or any of such Lender’s Affiliates may exercise its right
to set off with respect to the Obligations as provided in this Section 9.5.
     Section 9.6 Application of Proceeds.
     (a) Notwithstanding anything to the contrary contained in this Agreement,
upon the occurrence and during the continuance of an Event of Default, Borrower
irrevocably waives the right to direct the application of any and all payments
at any time or times thereafter received by Administrative Agent from or on
behalf of Borrower or any guarantor of all or any part of the Obligations, and,
as between Borrower on the one hand and Administrative Agent and Lenders on the
other, Administrative Agent shall have the continuing and exclusive right to
apply and to reapply any and all payments received against the Obligations in
such manner as Administrative Agent may deem advisable notwithstanding any
previous application by Administrative Agent.
     (b) Notwithstanding anything to the contrary contained in this Agreement,
if an Acceleration Event shall have occurred, and so long as it continues,
Administrative Agent shall apply any and all payments received by Administrative
Agent in respect of the Obligations, and any and all proceeds of Collateral
received by Administrative Agent, in the following order: first, to all fees,
costs, indemnities, liabilities, obligations and expenses incurred by or owing
to Administrative Agent with respect to this Agreement, the other Financing
Documents or the Collateral; second, to all fees, costs, indemnities,
liabilities, obligations and expenses incurred by or owing to any Lender with
respect to this Agreement, the other Financing Documents or the Collateral;
third, to accrued and unpaid interest on the Obligations (including any interest
which, but for the provisions of the Bankruptcy Code, would have accrued on such
amounts); fourth, to the principal amount of the Obligations outstanding and to
provide cash collateral to secure any and all Letter of Credit Liability and
future payment of related fees, as provided for in Section 2.5(e); fifth to
Obligations owing to any Eligible Swap Counterparty in respect of any Swap
Contracts permitted by the terms of this Agreement; and sixth to any other
indebtedness or obligations of Borrower owing to Administrative Agent or any
Lender under the Financing Documents.

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     (c) Absent the occurrence and continuance of an Acceleration Event,
Administrative Agent shall apply any and all payments received by Administrative
Agent in respect of the Obligations, and any and all proceeds of Collateral
received by Administrative Agent, in such order as Administrative Agent may from
time to time elect. In the absence of any specific election made by
Administrative Agent pursuant to this clause (c), payments and proceeds received
by Administrative Agent pursuant to this clause (c) shall be applied in the
following order: first, to all fees, costs, indemnities, liabilities,
obligations and expenses incurred by or owing to Administrative Agent with
respect to this Agreement, the other Financing Documents or the Collateral;
second, to all fees, costs, indemnities, liabilities, obligations and expenses
incurred by or owing to any Lender with respect to this Agreement, the other
Financing Documents or the Collateral; third, to accrued and unpaid interest on
the Obligations; fourth, to the principal amount of the Obligations outstanding;
fifth to Obligations owing to any Eligible Swap Counterparty in respect of any
Swap Contracts permitted by the terms of this Agreement; sixth to provide cash
collateral to secure any then outstanding Loans, Letter of Credit Liability and
payment of related fees; seventh to provide cash collateral to secure any other
then outstanding Obligations, other than in respect of Swap Contracts permitted,
but not required, by the terms of this Agreement, eighth to provide cash
collateral to secure Obligations in respect of Swap Contracts permitted, but not
required, by the terms of this Agreement; and ninth to any other indebtedness or
obligations of Borrower owing to Administrative Agent or any Lender under the
Financing Documents.
     (d) Any balance remaining after giving effect to the applications set forth
in this Section 9.6 shall be delivered to Borrower or to whoever may be lawfully
entitled to receive such balance or as a court of competent jurisdiction may
direct. In carrying out any of the applications set forth in this Section 9.6,
(x) amounts received shall be applied in the numerical order provided until
exhausted prior to the application to the next succeeding category and (y) each
of the Persons entitled to receive a payment in any particular category shall
receive an amount equal to its pro rata share of amounts available to be applied
pursuant thereto for such category.
ARTICLE 10
EXPENSES AND INDEMNITY
     Section 10.1 Expenses.
     Borrower hereby agrees to promptly pay (i) all costs and expenses of
Administrative Agent (including without limitation the reasonable fees, costs
and expenses of counsel to, and independent appraisers and consultants retained
by Administrative Agent) in connection with the examination, review, due
diligence investigation, documentation, negotiation, closing and syndication of
the transactions contemplated by the Financing Documents, in connection with the
performance by Administrative Agent of its rights and remedies under the
Financing Documents and in connection with the continued administration of the
Financing Documents including (x) any amendments, modifications, consents and
waivers to and/or under any and all Financing Documents and (y) any periodic
public record searches conducted by or at the request of Administrative Agent
(including, without limitation, title investigations, UCC searches, fixture
filing searches, judgment, pending litigation and tax lien searches and searches
of applicable corporate, limited liability, partnership and related records
concerning the continued

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existence, organization and good standing of certain Persons), (ii) without
limitation of the preceding clause (i), all costs and expenses of Administrative
Agent in connection with the creation, perfection and maintenance of Liens
pursuant to the Financing Documents, (iii) without limitation of the preceding
clause (i), all costs and expenses of Administrative Agent in connection with
(x) protecting, storing, insuring, handling, maintaining or selling any
Collateral; (y) any litigation, dispute, suit or proceeding relating to any
Financing Document; and (z) any workout, collection, bankruptcy, insolvency and
other enforcement proceedings under any and all of the Financing Documents, and
(iv) all costs and expenses incurred by Lenders in connection with any
litigation, dispute, suit or proceeding relating to any Financing Document and
in connection with any workout, collection, bankruptcy, insolvency and other
enforcement proceedings under any and all Financing Documents, provided, that to
the extent that the costs and expenses referred to in this clause (iv) consist
of fees, costs and expenses of counsel, Borrower shall be obligated to pay such
reasonable fees, costs and expenses for counsel to Administrative Agent and for
only one counsel acting for all Lenders (other than Administrative Agent).
     Section 10.2 Indemnity.
     Borrower hereby agrees to indemnify, pay and hold harmless Administrative
Agent and Lenders and the officers, directors, employees, trustees, agents,
investment advisors, collateral managers, servicers, and counsel of
Administrative Agent and Lenders (collectively called the “Indemnitees”) from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever (including the fees and disbursements of counsel for such
Indemnitee) in connection with any investigative, response, remedial,
administrative or judicial matter or proceeding, whether or not such Indemnitee
shall be designated a party thereto and including any such proceeding initiated
by or on behalf of a Credit Party, and the reasonable expenses of investigation
by engineers, environmental consultants and similar technical personnel and any
commission, fee or compensation claimed by any broker (other than any broker
retained by Administrative Agent or Lenders) asserting any right to payment for
the transactions contemplated hereby, which may be imposed on, incurred by or
asserted against such Indemnitee as a result of or in connection with the
transactions contemplated hereby or by the other Operative Documents (including
(i)(A) as a direct or indirect result of the presence on or under, or escape,
seepage, leakage, spillage, discharge, emission or release from, any property
now or previously owned, leased or operated by Borrower, any Subsidiary or any
other Person of any Hazardous Materials or any Hazardous Materials
Contamination, (B) arising out of or relating to the offsite disposal of any
materials generated or present on any such property or (C) arising out of or
resulting from the environmental condition of any such property or the
applicability of any governmental requirements relating to Hazardous Materials,
whether or not occasioned wholly or in part by any condition, accident or event
caused by any act or omission of Borrower or any Subsidiary, and (ii) proposed
and actual extensions of credit under this Agreement) and the use or intended
use of the proceeds of the Loans and Letters of Credit, except that Borrower
shall have no obligation hereunder to an Indemnitee with respect to any
liability resulting from the gross negligence or willful misconduct of such
Indemnitee, as determined by a final non-appealable judgment of a court of
competent jurisdiction. To the extent that the undertaking set forth in the
immediately preceding sentence may be unenforceable, Borrower shall contribute
the

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maximum portion which it is permitted to pay and satisfy under applicable law to
the payment and satisfaction of all such indemnified liabilities incurred by the
Indemnitees or any of them.
ARTICLE 11
ADMINISTRATIVE AGENT
     Section 11.1 Appointment and Authorization.
     Each Lender hereby irrevocably appoints and authorizes Administrative Agent
to enter into each of the Financing Documents to which it is a party (other than
this Agreement) on its behalf and to take such actions as Administrative Agent
on its behalf and to exercise such powers under the Financing Documents as are
delegated to Administrative Agent by the terms thereof, together with all such
powers as are reasonably incidental thereto. Subject to the terms of
Section 12.5 and to the terms of the other Financing Documents, Administrative
Agent is authorized and empowered to amend, modify, or waive any provisions of
this Agreement or the other Financing Documents on behalf of Lenders. The
provisions of this Article 11 are solely for the benefit of Administrative Agent
and Lenders and neither Borrower nor any other Credit Party shall have any
rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, Administrative Agent
shall act solely as agent of Lenders and does not assume and shall not be deemed
to have assumed any obligation toward or relationship of agency or trust with or
for Borrower or any other Credit Party. Administrative Agent may perform any of
its duties hereunder, or under the Financing Documents, by or through its own
agents or employees.
     Section 11.2 Administrative Agent and Affiliates.
     Administrative Agent shall have the same rights and powers under the
Financing Documents as any other Lender and may exercise or refrain from
exercising the same as though it were not Administrative Agent, and
Administrative Agent and its Affiliates may lend money to, invest in and
generally engage in any kind of business with each Credit Party or Affiliate of
any Credit Party as if it were not Administrative Agent hereunder.
     Section 11.3 Action by Administrative Agent.
     The duties of Administrative Agent shall be mechanical and administrative
in nature. Administrative Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Lender. Nothing in this Agreement or
any of the Financing Documents is intended to or shall be construed to impose
upon Administrative Agent any obligations in respect of this Agreement or any of
the Financing Documents except as expressly set forth herein or therein.
     Section 11.4 Consultation with Experts.
     Administrative Agent may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.

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     Section 11.5 Liability of Administrative Agent.
     Neither Administrative Agent nor any of its directors, officers, agents or
employees shall be liable to any Lender for any action taken or not taken by it
in connection with the Financing Documents, except that Administrative Agent
shall be liable with respect to its specific duties set forth hereunder, but
only to the extent of its own gross negligence or willful misconduct in the
discharge thereof as determined by a final non-appealable judgment of a court of
competent jurisdiction. Neither Administrative Agent nor any of its directors,
officers, agents or employees shall be responsible for or have any duty to
ascertain, inquire into or verify (i) any statement, warranty or representation
made in connection with any Financing Document or any borrowing hereunder;
(ii) the performance or observance of any of the covenants or agreements
specified in any Financing Document; (iii) the satisfaction of any condition
specified in any Financing Document; (iv) the validity, effectiveness,
sufficiency or genuineness of any Financing Document, any Lien purported to be
created or perfected thereby or any other instrument or writing furnished in
connection therewith; (v) the existence or non-existence of any Default or Event
of Default; or (vi) the financial condition of any Credit Party. Administrative
Agent shall not incur any liability by acting in reliance upon any notice,
consent, certificate, statement, or other writing (which may be a bank wire,
telex, facsimile or electronic transmission or similar writing) believed by it
to be genuine or to be signed by the proper party or parties. Administrative
Agent shall not be liable for any apportionment or distribution of payments made
by it in good faith and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse of any
Lender to whom payment was due but not made, shall be to recover from other
Lenders any payment in excess of the amount to which they are determined to be
entitled (and such other Lenders hereby agree to return to such Lender any such
erroneous payments received by them).
     Section 11.6 Indemnification.
     Each Lender shall, in accordance with its Pro Rata Share, indemnify
Administrative Agent (to the extent not reimbursed by Borrower) upon demand
against any cost, expense (including counsel fees and disbursements), claim,
demand, action, loss or liability (except such as result from Administrative
Agent’s gross negligence or willful misconduct as determined by a final
non-appealable judgment of a court of competent jurisdiction) that
Administrative Agent may suffer or incur in connection with the Financing
Documents or any action taken or omitted by Administrative Agent hereunder or
thereunder. If any indemnity furnished to Administrative Agent for any purpose
shall, in the opinion of Administrative Agent, be insufficient or become
impaired, Administrative Agent may call for additional indemnity and cease, or
not commence, to do the acts indemnified against even if so directed by Required
Lenders until such additional indemnity is furnished.
     Section 11.7 Right to Request and Act on Instructions.
     Administrative Agent may at any time request instructions from Lenders with
respect to any actions or approvals which by the terms of this Agreement or of
any of the Financing Documents Administrative Agent is permitted or desires to
take or to grant, and if such instructions are promptly requested,
Administrative Agent shall be absolutely entitled to refrain from taking any
action or to withhold any approval and shall not be under any liability

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whatsoever to any Person for refraining from any action or withholding any
approval under any of the Financing Documents until it shall have received such
instructions from Required Lenders or all or such other portion of the Lenders
as shall be prescribed by this Agreement. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against Administrative Agent as
a result of Administrative Agent acting or refraining from acting under this
Agreement or any of the other Financing Documents in accordance with the
instructions of Required Lenders or Required Revolving Lenders (or all or such
other portion of the Lenders as shall be prescribed by this Agreement) and,
notwithstanding the instructions of Required Lenders or Required Revolving
Lenders (or such other applicable portion of the Lenders), Administrative Agent
shall have no obligation to take any action if it believes, in good faith, that
such action would violate applicable Law or exposes Administrative Agent to any
liability for which it has not received satisfactory indemnification in
accordance with the provisions of Section 11.6.
     Section 11.8 Credit Decision.
     Each Lender acknowledges that it has, independently and without reliance
upon Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon Administrative Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
any action under the Financing Documents.
     Section 11.9 Collateral Matters.
     Lenders irrevocably authorize Administrative Agent, at its option and in
its discretion, to (x) release any Lien granted to or held by Administrative
Agent under any Security Document (i) upon termination of the Revolving Loan
Commitment and payment in full of all Obligations, the expiration, termination
or cash collateralization (to the satisfaction of Administrative Agent) of all
Letters of Credit and, to the extent required by Administrative Agent in its
sole discretion, the expiration, termination or cash collateralization (to the
satisfaction of Administrative Agent) of all Swap Contracts secured, in whole or
in part, by any Collateral; or (ii) constituting property sold or disposed of as
part of or in connection with any disposition permitted under any Financing
Document (it being understood and agreed that Administrative Agent may
conclusively rely without further inquiry on a certificate of a Responsible
Officer as to the sale or other disposition of property being made in full
compliance with the provisions of the Financing Documents) and (y) release or
subordinate any Lien granted to or held by Administrative Agent under any
Security Document constituting property described in Section 5.2(c) (it being
understood and agreed that Administrative Agent may conclusively rely without
further inquiry on a certificate of a Responsible Officer as to the
identification of any property described in Section 5.2(c)). Upon request by
Administrative Agent at any time, Lenders will confirm Administrative Agent’s
authority to release and/or subordinate particular types or items of Collateral
pursuant to this Section 11.9.

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     Section 11.10 Agency for Perfection.
     Administrative Agent and each Lender hereby appoint Administrative Agent as
agent for the purpose of perfecting Administrative Agent’s security interest
(for the benefit of Administrative Agent and Lenders) in the Collateral.
Administrative Agent and each Lender hereby appoint each other Lender as agent
for the purpose of perfecting Administrative Agent’s security interest (for the
benefit of Administrative Agent and Lenders) in assets which, in accordance with
the Uniform Commercial Code in any applicable jurisdiction, can be perfected by
possession or control. Should any Lender (other than Administrative Agent)
obtain possession or control of any such assets, such Lender shall notify
Administrative Agent thereof, and, promptly upon Administrative Agent’s request
therefor, shall deliver such assets to Administrative Agent or in accordance
with Administrative Agent’s instructions or transfer control to Administrative
Agent in accordance with Administrative Agent’s instructions. Each Lender agrees
that it will not have any right individually to enforce or seek to enforce any
Security Document or to realize upon any Collateral for the Loans unless
instructed to do so by Administrative Agent (or consented to by Administrative
Agent, as provided in Section 9.5), it being understood and agreed that such
rights and remedies may be exercised only by Administrative Agent.
     Section 11.11 Notice of Default.
     Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default except with respect to defaults in
the payment of principal, interest and fees required to be paid to
Administrative Agent for the account of Lenders, unless Administrative Agent
shall have received written notice from a Lender or Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a “notice of default”. Administrative Agent will notify each Lender of
its receipt of any such notice. Administrative Agent shall take such action with
respect to such Default or Event of Default as may be requested by Required
Lenders, Required Revolving Lenders (or all or such other portion of the Lenders
as shall be prescribed by this Agreement) in accordance with the terms hereof.
Unless and until Administrative Agent has received any such request,
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interests of Lenders.
     Section 11.12 Successor Administrative Agent.
     Administrative Agent may at any time give notice of its resignation to the
Lenders, Swingline Lender and Borrower. Upon receipt of any such notice of
resignation, Required Lenders shall have the right, in consultation with
Borrower, to appoint a successor Administrative Agent. Upon the acceptance of a
successor’s appointment as Administrative Agent hereunder and notice of such
acceptance to the retiring Administrative Agent, such successor shall succeed to
and become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Administrative Agent, the retiring Administrative Agent’s
resignation shall become immediately effective and the retiring Administrative
Agent shall be discharged from all of its duties and obligations hereunder and
under the other Financing Documents (if such resignation was not already
effective and such duties and obligations not already

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discharged, as provided below in this paragraph). The fees payable by Borrower
to a successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between Borrower and such successor. If no
such successor shall have been so appointed by Required Lenders and shall have
accepted such appointment within thirty (30) days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders and Swingline Lender (but
without any obligation) appoint a successor Administrative Agent. From and
following the expiration of such thirty (30) day period, Administrative Agent
shall have the exclusive right, upon one (1) Business Days’ notice to Borrower
and the Lenders, to make its resignation effective immediately. From and
following the effectiveness of such notice, (i) the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder and under
the other Financing Documents and (ii) all payments, communications and
determinations provided to be made by, to or through Administrative Agent shall
instead be made by or to each Lender and Swingline Lender directly, until such
time as Required Lenders appoint a successor Administrative Agent as provided
for above in this paragraph. The provisions of this Agreement shall continue in
effect for the benefit of any retiring Administrative Agent and its sub-agents
after the effectiveness of its resignation hereunder and under the other
Financing Documents in respect of any actions taken or omitted to be taken by
any of them while the retiring Administrative Agent was acting or was continuing
to act as Administrative Agent.
     Section 11.13 Disbursements of Revolving Loans; Payment and Sharing of
Payment.
     (a) Revolving Loan Advances, Payments and Settlements; Interest and Fee
Payments.
          (i) Administrative Agent shall have the right, on behalf of Revolving
Lenders (other than Non-Funding Revolving Lenders) to disburse funds to Borrower
for all Revolving Loans requested or deemed requested by Borrower pursuant to
the terms of this Agreement regardless of whether the conditions precedent set
forth in Section 8.3 are then satisfied, including the existence of any Default
or Event of Default either before or after giving effect to the making of such
Revolving Loans; provided, that Administrative Agent shall not advance any
Revolving Loan pursuant to this clause (i) if the Revolving Loan Outstandings
exceed the Revolving Loan Limit, either before or after giving effect to the
making of any proposed Revolving Loan. Administrative Agent shall be
conclusively entitled to assume, for purposes of the preceding sentence, that
each Revolving Lender, other than any Non-Funding Revolving Lenders, will fund
its Pro Rata Share of all Revolving Loans requested by Borrower. Each Revolving
Lender (other than any Non-Funding Revolving Lender) shall reimburse
Administrative Agent on demand, in accordance with the provisions of the
immediately following paragraph, for all funds disbursed on its behalf by
Administrative Agent pursuant to the first sentence of this clause (i), or if
Administrative Agent so requests, each Revolving Lender will remit to
Administrative Agent its Pro Rata Share of any Revolving Loan before
Administrative Agent disburses the same to Borrower. If Administrative Agent
elects to require that each Revolving Lender make funds available to
Administrative Agent, prior to a disbursement by Administrative Agent to
Borrower, Administrative Agent shall advise each Revolving Lender by telephone,
facsimile or e-mail of the amount of such Revolving Lender’s Pro Rata Share of
the Revolving Loan requested by Borrower no later than noon (Chicago time) on
the date of funding of such Revolving Loan, and each such Revolving Lender
shall, subject to

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the provisions of Article 8, pay Administrative Agent on such date such
Revolving Lender’s Pro Rata Share of such requested Revolving Loan, in same day
funds, by wire transfer to the Payment Account, or such other account as may be
identified by Administrative Agent to Revolving Lenders from time to time. If
any Lender fails to pay the amount of its Pro Rata Share within one (1) Business
Day after Administrative Agent’s demand, Administrative Agent shall promptly
notify Borrower, and Borrower shall immediately repay such amount to
Administrative Agent. Any repayment required by Borrower pursuant to this
Section 11.13 shall be accompanied by accrued interest thereon from and
including the date such amount is made available to Borrower to but excluding
the date of payment at the rate of interest then applicable to Revolving Loans
which are Base Rate Loans. Nothing in this Section 11.13 or elsewhere in this
Agreement or the other Financing Documents shall be deemed to require
Administrative Agent to advance funds on behalf of any Lender or to relieve any
Lender from its obligation to fulfill its commitments hereunder or to prejudice
any rights that Administrative Agent or Borrower may have against any Lender as
a result of any default by such Lender hereunder.
          (ii) On a Business Day of each week as selected from time to time by
Administrative Agent, or more frequently (including daily), if Administrative
Agent so elects (each such day being a “Settlement Date”), Administrative Agent
will advise each Revolving Lender by telephone, facsimile or e-mail of the
amount of each such Revolving Lender’s Pro Rata Share of the Revolving Loan
balance as of the close of business of the Business Day immediately preceding
the Settlement Date. In the event that payments are necessary to adjust the
amount of such Revolving Lender’s actual Pro Rata Share of the Revolving Loan
balance to such Lender’s required Pro Rata Share of the Revolving Loan balance
as of any Settlement Date, the party from which such payment is due shall pay
Administrative Agent, without setoff or discount, to the Payment Account not
later than noon (Chicago time) on the Business Day following the Settlement Date
the full amount necessary to make such adjustment. Any obligation arising
pursuant to the immediately preceding sentence shall be absolute and
unconditional and shall not be affected by any circumstance whatsoever. In the
event settlement shall not have occurred by the date and time specified in the
second preceding sentence, interest shall accrue on the unsettled amount at the
Federal Funds Rate, for the first three (3) days following the scheduled date of
settlement, and thereafter at the Base Rate plus the Base Rate Margin applicable
to Revolving Loans.
          (iii) On each Settlement Date, Administrative Agent shall advise each
Revolving Lender by telephone, facsimile or e-mail of the amount of such
Revolving Lender’s Pro Rata Share of principal, interest and fees paid for the
benefit of Revolving Lenders with respect to each applicable Revolving Loan, to
the extent of such Revolving Lender’s credit exposure with respect thereto, and
shall make payment to such Revolving Lender not later than noon (Chicago time)
on the Business Day following the Settlement Date of such amounts in accordance
with wire instructions delivered by such Revolving Lender to Administrative
Agent, as the same may be modified from time to time by written notice to
Administrative Agent; provided, that, in the case such Revolving Lender is a
Defaulted Lender, Administrative Agent shall be entitled to set off the funding
short-fall against that Defaulted Lender’s respective share of all payments
received from Borrower.

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          (iv) The provisions of this Section 11.13(a) shall be deemed to be
binding upon Administrative Agent and Lenders notwithstanding the occurrence of
any Default or Event of Default, or any insolvency or bankruptcy proceeding
pertaining to Borrower or any other Credit Party.
     (b) Term Loan Payments. Payments of principal, interest and fees in respect
of the Term Loan will be settled on the date of receipt if received by
Administrative Agent on the last Business Day of a month or on the Business Day
immediately following the date of receipt if received on any day other than the
last Business Day of a month.
     (c) Return of Payments.
          (i) If Administrative Agent pays an amount to a Lender under this
Agreement in the belief or expectation that a related payment has been or will
be received by Administrative Agent from Borrower and such related payment is
not received by Administrative Agent, then Administrative Agent will be entitled
to recover such amount from such Lender on demand without setoff, counterclaim
or deduction of any kind, together with interest accruing on a daily basis at
the Federal Funds Rate.
          (ii) If Administrative Agent determines at any time that any amount
received by Administrative Agent under this Agreement must be returned to
Borrower or paid to any other Person pursuant to any insolvency law or
otherwise, then, notwithstanding any other term or condition of this Agreement
or any other Financing Document, Administrative Agent will not be required to
distribute any portion thereof to any Lender. In addition, each Lender will
repay to Administrative Agent on demand any portion of such amount that
Administrative Agent has distributed to such Lender, together with interest at
such rate, if any, as Administrative Agent is required to pay to Borrower or
such other Person, without setoff, counterclaim or deduction of any kind.
     (d) Defaulted Lenders. The failure of any Defaulted Lender to make any
Revolving Loan or any payment required by it hereunder shall not relieve any
other Lender of its obligations to make such Revolving Loan or payment, but
neither any other Lender nor Administrative Agent shall be responsible for the
failure of any Defaulted Lender to make a Revolving Loan or make any other
payment required hereunder. Notwithstanding anything set forth herein to the
contrary, a Defaulted Lender shall not have any voting or consent rights under
or with respect to any Financing Document or constitute a “Lender” (or be
included in the calculation of “Required Lenders” or “Required Revolving
Lenders” hereunder) for any voting or consent rights under or with respect to
any Financing Document.
     (e) Sharing of Payments. If any Lender shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of setoff or otherwise)
on account of any Loan (other than pursuant to the terms of Sections 2.3(e)(v)
or Section 2.9) in excess of its Pro Rata Share of payments entitled pursuant to
the other provisions of this Section 11.13, such Lender shall purchase from the
other Lenders such participations in extensions of credit made by such other
Lenders (without recourse, representation or warranty) as shall be necessary to
cause such purchasing Lender to share the excess payment or other recovery
ratably with each of them; provided, however, that if all or any portion of the
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required to be returned or otherwise recovered from such purchasing Lender, such
portion of such purchase shall be rescinded and each Lender which has sold a
participation to the purchasing Lender shall repay to the purchasing Lender the
purchase price to the ratable extent of such return or recovery, without
interest. Borrower agrees that any Lender so purchasing a participation from
another Lender pursuant to this clause (e) may, to the fullest extent permitted
by law, exercise all its rights of payment (including pursuant to Section 9.5)
with respect to such participation as fully as if such Lender were the direct
creditor of Borrower in the amount of such participation. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this clause (e) applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such secured
claim in a manner consistent with the rights of the Lenders entitled under this
clause (e) to share in the benefits of any recovery on such secured claim.
Notwithstanding the foregoing, Administrative Agent may retain for its own
account any and all payments made and to be made under the Administrative Agent
Fee Letter.
     Section 11.14 Right to Perform, Preserve and Protect.
     If any Credit Party fails to perform any obligation hereunder or under any
other Financing Document, Administrative Agent itself may, but shall not be
obligated to, cause such obligation to be performed at Borrower’s expense.
Administrative Agent is further authorized by Borrower and the Lenders to make
expenditures from time to time which Administrative Agent, in its reasonable
business judgment, deems necessary or desirable to (i) preserve or protect the
business conducted by Borrower, the Collateral, or any portion thereof and/or
(ii) enhance the likelihood of, or maximize the amount of, repayment of the
Loans and other Obligations. Borrower hereby agrees to reimburse Administrative
Agent on demand for any and all costs, liabilities and obligations incurred by
Administrative Agent pursuant to this Section 11.14. Each Lender hereby agrees
to indemnify Administrative Agent upon demand for any and all costs, liabilities
and obligations incurred by Administrative Agent pursuant to this Section 11.14,
in accordance with the provisions of Section 11.6.
     Section 11.15 Additional Titled Agents.
     Except for rights and powers, if any, expressly reserved under this
Agreement to any bookrunner, arranger or to any titled agent named on the cover
page of this Agreement, other than Administrative Agent (collectively, the
“Additional Titled Agents”), and except for obligations, liabilities, duties and
responsibilities, if any, expressly assumed under this Agreement by any
Additional Titled Agent, no Additional Titled Agent, in such capacity, has any
rights, powers, liabilities, duties or responsibilities hereunder or under any
of the other Financing Documents. Without limiting the foregoing, no Additional
Titled Agent shall have nor be deemed to have a fiduciary relationship with any
Lender. At any time that any Lender serving as an Additional Titled Agent shall
have transferred to any other Person (other than any Affiliates) all of its
interests in the Loans and in the Revolving Loan Commitment, such Lender shall
be deemed to have concurrently resigned as such Additional Titled Agent.

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ARTICLE 12
MISCELLANEOUS
     Section 12.1 Survival.
     All agreements, representations and warranties made herein and in every
other Financing Document shall survive the execution and delivery of this
Agreement and the other Financing Documents and the other Operative Documents.
The provisions of Sections 2.8 and 2.9 and Articles 10, 11 and 12 shall survive
the payment of the Obligations (both with respect to any Lender and all Lenders
collectively) and any termination of this Agreement.
     Section 12.2 No Waivers.
     No failure or delay by Administrative Agent or any Lender in exercising any
right, power or privilege under any Financing Document shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein and therein provided shall be cumulative and not
exclusive of any rights or remedies provided by law. Any reference in any
Financing Document to the “continuing” nature of any Event of Default shall not
be construed as establishing or otherwise indicating that Borrower or any other
Credit Party has the independent right to cure any such Event of Default, but is
rather presented merely for convenience should such Event of Default be waived
in accordance with the terms of the applicable Financing Documents.
     Section 12.3 Notices.
     (a) All notices, requests and other communications to any party hereunder
shall be in writing (including prepaid overnight courier, facsimile
transmission, e-mail, electronic submissions or similar writing) and shall be
given to such party at its address, facsimile number or e-mail address set forth
on the signature pages hereof (or, in the case of any such Lender who becomes a
Lender after the date hereof, in an Assignment Agreement or in a notice
delivered to Borrower and Administrative Agent by the assignee Lender forthwith
upon such assignment) or at such other address, facsimile number or e-mail
address as such party may hereafter specify for the purpose by notice to
Administrative Agent and Borrower; provided, that notices, requests or other
communications shall be permitted by e-mail or other electronic submissions only
in accordance with the provisions of Section 12.3(b). Each such notice, request
or other communication shall be effective (i) if given by facsimile, when such
notice is transmitted to the facsimile number specified by this Section and the
sender receives a confirmation of transmission from the sending facsimile
machine, (ii) if given by e-mail or other electronic submissions, as set forth
in Section 12.3(c) or (iii) if given by mail, prepaid overnight courier or any
other means, when received at the applicable address specified by this Section.
     (b) Notices and other communications to the parties hereto may be delivered
or furnished by electronic communication (including e-mail and Internet or
intranet websites) provided, that (i) the foregoing shall not apply to notices
sent directly to any party hereto if such party has notified the Administrative
Agent that it has elected not to receive notices by electronic communication
(which election may be limited to particular notices) and (ii) no Notices of

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Borrowing, Notices of LC Credit Event or any notices regarding request for
advances hereunder shall be permitted to be delivered or furnished by electronic
communication unless made in accordance with specific procedures approved from
time to time by Administrative Agent.
     (c) Unless the Administrative Agent otherwise prescribes, (i) notices and
other communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgment from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgment), and (ii) notices or communications posted to an
Internet or intranet website shall be deemed received upon the deemed receipt by
the intended recipient at its e-mail address as described in the foregoing
clause (i) of notification that such notice or communication is available and
identifying the website address therefor, provided, that if any such notice or
other communication is not sent or posted during normal business hours, such
notice or communication shall be deemed to have been sent at the opening of
business on the next Business Day.
     Section 12.4 Severability.
     In case any provision of or obligation under this Agreement or any other
Financing Document shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
     Section 12.5 Amendments and Waivers.
     (a) No provision of this Agreement or any other Financing Document may be
amended, waived or otherwise modified unless such amendment, waiver or other
modification is in writing and is signed or otherwise approved by Borrower and
the Required Lenders (and, if (x) any amendment, waiver or other modification
would either increase a Lender’s Revolving Loan Commitment Amount or increase a
Lender’s funding obligations in respect of any Term Loan, by such Lender and
(y) the rights or duties of Administrative Agent, LC Issuer and/or Swingline
Lender are affected thereby, by Administrative Agent, LC Issuer and/or Swingline
Lender, as the case may be); provided that no such amendment, waiver or other
modification shall, unless signed by all the Lenders directly affected thereby,
(i) reduce the principal of, rate of interest on or any fees with respect to any
Loan or Reimbursement Obligation or forgive any principal, interest or fees with
respect to any Loan or Reimbursement Obligation; (ii) postpone the date fixed
for, or waive, any payment (other than a payment pursuant to Section 2.1(c)) of
principal of any Loan, or of any Reimbursement Obligation or of interest on any
Loan or any Reimbursement Obligation or any fees hereunder or for any
termination of any commitment; (iii) change the definition of the term Required
Lenders or the percentage of Lenders which shall be required for Lenders to take
any action hereunder; (iv) release all or substantially all of the Collateral,
authorize Borrower to sell or otherwise dispose of all or substantially all of
the Collateral or release any guarantor of all or any portion of the Obligations
of its Guarantee obligations with respect thereto, except, in each case with
respect to this clause (iv), as otherwise may be provided in this Agreement or
the other Financing Documents (including in connection with any disposition
permitted hereunder); (v) amend, waive or otherwise modify this Section 12.5(a)
or the definitions of the terms used in this Section 12.5(a) insofar as the
definitions affect the substance of this Section 12.5(a); or (vi) consent to the
assignment,

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delegation or other transfer by any Credit Party of any of its rights and
obligations under any Financing Document or release Borrower of its payment
obligations under any Financing Document, except, in each case with respect to
this clause (vi), pursuant to a merger or consolidation permitted pursuant to
this Agreement. It is hereby understood and agreed that all Lenders shall be
deemed directly affected by an amendment, waiver or other modification of the
type described in the preceding clauses (iii), (iv), (v) and (vi) of the
preceding sentence.
     (b) Without limitation of the provisions of the preceding clause (a), no
amendment, waiver or other modification to this Agreement shall, unless signed
by Required Revolving Lenders, (i) increase any of the advance rates set forth
in the Borrowing Base Certificate, (ii) make less restrictive the calculation of
the Borrowing Base; (iii) amend, waive or otherwise modify Section 2.2(a) or the
definitions of the terms used in Section 2.2(a) insofar as the definitions
affect the substance of such Section; (iv) change the definition of the term
Required Revolving Lenders or the percentage of Lenders which shall be required
for Required Revolving Lenders to take any action hereunder or (v) amend, waive
or otherwise modify this Section 12.5(b) or the definitions of the terms used in
this Section 12.5(b) insofar as the definitions affect the substance of this
Section 12.5(b).
     Section 12.6 Assignments; Participations; Replacement of Lenders.
     (a) Assignments.
          (i) Any Lender may at any time assign to one or more Eligible
Assignees all or any portion of such Lender’s Loans and interest in the
Revolving Loan Commitment, together with all related obligations of such Lender
hereunder. Except as Administrative Agent may otherwise agree, the amount of any
such assignment (determined as of the date of the applicable Assignment
Agreement or, if a “Trade Date” is specified in such Assignment Agreement, as of
such Trade Date) shall be in a minimum aggregate amount equal to $1,000,000 or,
if less, the assignor’s entire interests in the Revolving Loan Commitment and
outstanding Loans; provided, that, in connection with simultaneous assignments
to two or more related Approved Funds, such Approved Funds shall be treated as
one assignee for purposes of determining compliance with the minimum assignment
size referred to above. Borrower and Administrative Agent shall be entitled to
continue to deal solely and directly with such Lender in connection with the
interests so assigned to an Eligible Assignee until Administrative Agent shall
have received and accepted an effective Assignment Agreement executed, delivered
and fully completed by the applicable parties thereto and a processing fee of
$3,500; provided, only one processing fee shall be payable in connection with
simultaneous assignments to two or more related Approved Funds.
          (ii) From and after the date on which the conditions described above
have been met, (i) such Eligible Assignee shall be deemed automatically to have
become a party hereto and, to the extent of the interests assigned to such
Eligible Assignee pursuant to such Assignment Agreement, shall have the rights
and obligations of a Lender hereunder and (ii) the assigning Lender, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment Agreement, shall be released from its rights and obligations
hereunder (other than those that survive termination pursuant to Section 12.1).
Upon the request of the Eligible Assignee (and, as applicable, the assigning
Lender) pursuant to an effective Assignment Agreement, Borrower shall execute
and deliver to Administrative Agent for delivery

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to the Eligible Assignee (and, as applicable, the assigning Lender) Notes in the
aggregate principal amount of the Eligible Assignee’s percentage interest in the
Revolving Loan Commitment plus the principal amount of the Eligible Assignee’s
Term Loan (and, as applicable, Notes in the principal amount of that portion of
the Revolving Loan Commitment retained by the assigning Lender plus the
principal amount of the Term Loan retained by the assigning Lender). Upon
receipt by the assigning Lender of such Note, the assigning Lender shall return
to Borrower any prior Note held by it.
          (iii) Administrative Agent, acting solely for this purpose as an agent
of Borrower, shall maintain at its offices located in Chicago, Illinois a copy
of each Assignment Agreement delivered to it and a register for the recordation
of the names and addresses of each Lender, and the commitments of, and principal
amount of the Loans owing to, such Lender pursuant to the terms hereof. The
entries in such register shall be conclusive, and Borrower, Administrative Agent
and Lenders may treat each Person whose name is recorded therein pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. Such register shall be available for
inspection by Borrower and any Lender, at any reasonable time upon reasonable
prior notice to Administrative Agent.
          (iv) Notwithstanding the foregoing provisions of this Section 12.6(a)
or any other provision of this Agreement, any Lender may at any time pledge or
assign a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.
          (v) Notwithstanding the foregoing provisions of this Section 12.6(a)
or any other provision of this Agreement, Administrative Agent has the right,
but not the obligation, to effectuate assignments of Loans and Revolving Loan
Commitments via an electronic settlement system acceptable to Administrative
Agent as designated in writing from time to time to the Lenders by
Administrative Agent (the “Settlement Service”). At any time when the
Administrative Agent elects, in its sole discretion, to implement such
Settlement Service, each such assignment shall be effected by the assigning
Lender and proposed assignee pursuant to the procedures then in effect under the
Settlement Service, which procedures shall be consistent with the other
provisions of this Section 12.6(a). Each assigning Lender and proposed Eligible
Assignee shall comply with the requirements of the Settlement Service in
connection with effecting any assignment of Loans and Revolving Loan Commitments
pursuant to the Settlement Service. If so elected by each of Administrative
Agent and the Borrower, Administrative Agent’s and the Borrower’s approval of
such Eligible Assignee shall be deemed to have been automatically granted with
respect to any transfer effected through the Settlement Service. Assignments and
assumptions of the Loans and Revolving Loan Commitments shall be effected by the
provisions otherwise set forth herein until Administrative Agent notifies
Lenders of the Settlement Service as set forth herein.
     (b) Participations.

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     Any Lender may at any time, without the consent of, or notice to, Borrower
or Administrative Agent, sell to one or more Persons participating interests in
its Loans, commitments or other interests hereunder (any such Person, a
“Participant”). In the event of a sale by a Lender of a participating interest
to a Participant, (a) such Lender’s obligations hereunder shall remain unchanged
for all purposes, (b) Borrower and Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations hereunder and (c) all amounts payable by Borrower shall be
determined as if such Lender had not sold such participation and shall be paid
directly to such Lender. No Participant shall have any direct or indirect voting
rights hereunder except with respect to any event described in Section 12.5
expressly requiring the unanimous vote of all Lenders or, as applicable, all
affected Lenders. Except as otherwise consented to by Administrative Agent, each
Lender agrees to incorporate the requirements of the preceding sentence into
each participation agreement which such Lender enters into with any Participant.
Borrower agrees that if amounts outstanding under this Agreement are due and
payable (as a result of acceleration or otherwise), each Participant shall be
deemed to have the right of set-off in respect of its participating interest in
amounts owing under this Agreement and with respect to any Letter of Credit to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement; provided that such right of
set-off shall be subject to the obligation of each Participant to share with
Lenders, and Lenders agree to share with each Participant, as provided in
Section 9.5.
     (c) Replacement of Lenders.
     Within thirty (30) days after: (i) receipt by Administrative Agent of
notice and demand from any Lender for payment of additional costs as provided in
Sections 2.3(e)(v) or Section 2.9, which demand shall not have been revoked,
(ii) Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.8,
(iii) any Lender is a Defaulted Lender, and the circumstances causing such
status shall not have been cured or waived; or (iv) any failure by any Lender to
consent to a requested amendment, waiver or modification to any Financing
Document in which Required Lenders have already consented to such amendment,
waiver or modification but the consent of each Lender, or each Lender affected
thereby, is required with respect thereto, (each relevant Lender in the
foregoing clauses (i) through (iv) being an “Affected Lender”) each of Borrower
and Administrative Agent may, at its option, notify such Affected Lender and, in
the case of Borrower election, the Administrative Agent, of such Person’s
intention to obtain, at Borrower’s expense, a replacement Lender (“Replacement
Lender”) for such Lender, which Replacement Lender shall be an Eligible Assignee
and, in the event the Replacement Lender is to replace an Affected Lender
described in the preceding clause (iv), such Replacement Lender consents to the
requested amendment, waiver or modification making the replaced Lender an
Affected Lender. In the event Borrower or Administrative Agent, as applicable,
obtains a Replacement Lender within ninety (90) days following notice of its
intention to do so, the Affected Lender shall sell, at par, and assign all of
its Loans and funding commitments hereunder to such Replacement Lender in
accordance with the procedures set forth in Section 12.6(a); provided, that
(i) Borrower shall have reimbursed such Lender for its increased costs and
additional payments for which it is entitled to reimbursement under any of
Sections 2.3(e)(v), 2.8 or Section 2.9, as applicable, of this Agreement through
the date of such sale and assignment and (ii) Borrower

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shall pay to Administrative Agent the $3,500 processing fee in respect of such
assignment. In the event that a replaced Lender does not execute an Assignment
Agreement pursuant to Section 12.6(a) within five (5) Business Days after
receipt by such replaced Lender of notice of replacement pursuant to this
Section 12.6(c) and presentation to such replaced Lender of an Assignment
Agreement evidencing an assignment pursuant to this Section 12.6(c), such
replaced Lender shall be deemed to have consented to the terms of such
Assignment Agreement, and any such Assignment Agreement executed by
Administrative Agent, the Replacement Lender and, to the extent required
pursuant to Section 12.6(a), Borrower, shall be effective for purposes of this
Section 12.6(c) and Section 12.6(a). Upon any such assignment and payment, such
replaced Lender shall no longer constitute a “Lender” for purposes hereof, other
than with respect to such rights and obligations that survive termination as set
forth in Section 12.1.
     (d) Credit Party Assignments.
     No Credit Party may assign, delegate or otherwise transfer any of its
rights or other obligations hereunder or under any other Financing Document
without the prior written consent of Administrative Agent and each Lender.
     Section 12.7 Headings.
     Headings and captions used in the Financing Documents (including the
Exhibits, Schedules and Annexes hereto and thereto) are included for convenience
of reference only and shall not be given any substantive effect.
     Section 12.8 Confidentiality.
     Administrative Agent and each Lender shall hold all non-public information
regarding the Credit Parties and their respective businesses identified as such
by Borrower and obtained by Administrative Agent or any Lender pursuant to the
requirements hereof in accordance with such Person’s customary procedures for
handling information of such nature, except that disclosure of such information
may be made (i) to their respective agents, employees, Subsidiaries, Affiliates,
attorneys, auditors, professional consultants, rating agencies, insurance
industry associations and portfolio management services, (ii) to prospective
transferees or purchasers of any interest in the Loans, and to prospective
contractual counterparties (or the professional advisors thereto) in Swap
Contracts permitted hereby, provided that any such Persons shall have agreed to
be bound by the provisions of this Section 12.8, (iii) as required by Law,
subpoena, judicial order or similar order and in connection with any litigation;
provided, that to the extent practicable, the Administrative Agent or any
Lender, as the case may be, shall provide the affected Credit Party written
notice prior to disclosure so that such Credit Party may seek appropriate
protective orders prior to disclosure, (iv) as may be required in connection
with the examination, audit or similar investigation of such Person and (v) to a
Person that is a trustee, investment advisor, collateral manager, servicer,
noteholder or secured party in a Securitization (as hereinafter defined) in
connection with the administration, servicing and reporting on the assets
serving as collateral for such Securitization. For the purposes of this Section,
“Securitization” shall mean a public or private offering by a Lender or any of
its Affiliates or their respective successors and assigns, of securities which
represent an interest in, or which are collateralized, in whole or in party, by
the Loans. Confidential information shall include only such information
identified as such at the

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time provided to Administrative Agent and shall not include information that
either: (i) is in the public domain, or becomes part of the public domain after
disclosure to such Person through no fault of such Person, or (ii) is disclosed
to such Person by a Person other than a Credit Party, provided Administrative
Agent or the disclosing Lender, if applicable, does not have actual knowledge
that such Person is prohibited from disclosing such information. The obligations
of Administrative Agent and Lenders under this Section 12.8 shall supersede and
replace the obligations of Administrative Agent and Lenders under any
confidentiality agreement in respect of this financing executed and delivered by
Administrative Agent or any Lender prior to the date hereof.
     Section 12.9 Waiver of Consequential and Other Damages.
     To the fullest extent permitted by applicable law, Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of this Agreement, any other Financing Document or any agreement or instrument
contemplated hereby or thereby, the transactions contemplated hereby or thereby,
any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee
shall be liable for any damages arising from the use by unintended recipients of
any information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Financing Documents or the transactions contemplated
hereby or thereby.
     Section 12.10 Marshaling; Payments Set Aside.
     Neither Administrative Agent nor any Lender shall be under any obligation
to marshal any assets in payment of any or all of the Obligations. To the extent
that Borrower makes any payment or Administrative Agent enforces its Liens or
Administrative Agent or any Lender exercises its right of set-off, and such
payment or the proceeds of such enforcement or set-off is subsequently
invalidated, declared to be fraudulent or preferential, set aside, or required
to be repaid by anyone, then to the extent of such recovery, the Obligations or
part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefore, shall be revived and continued in full force and effect as
if such payment had not been made or such enforcement or set-off had not
occurred.
     Section 12.11 GOVERNING LAW; SUBMISSION TO JURISDICTION.
     THIS AGREEMENT, EACH NOTE AND EACH OTHER FINANCING DOCUMENT, AND ALL
MATTERS RELATING HERETO OR THERETO OR ARISING THEREFROM (WHETHER SOUNDING IN
CONTRACT LAW, TORT LAW OR OTHERWISE), SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. BORROWER HEREBY CONSENTS TO THE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF COOK,
STATE OF ILLINOIS AND IRREVOCABLY AGREES THAT, SUBJECT TO ADMINISTRATIVE AGENT’S
ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING

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TO THIS AGREEMENT OR THE OTHER FINANCING DOCUMENTS SHALL BE LITIGATED IN SUCH
COURTS. BORROWER EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. BORROWER HEREBY
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE
OF PROCESS MAY BE MADE UPON BORROWER BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH IN THIS
AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS
BEEN POSTED.
     Section 12.12 WAIVER OF JURY TRIAL.
     EACH OF BORROWER, ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THE FINANCING DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH OF BORROWER, ADMINISTRATIVE
AGENT AND EACH LENDER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN
ENTERING INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND THAT EACH
WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH OF
BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER WARRANTS AND REPRESENTS THAT EACH
HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND
THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
     Section 12.13 Publication; Advertisement.
     (a) Publication. No Credit Party will directly or indirectly publish,
disclose or otherwise use in any public disclosure, advertising material,
promotional material, press release or interview, any reference to the name,
logo or any trademark of Merrill Lynch or any of its Affiliates or any reference
to this Agreement or the financing evidenced hereby, in any case except (i) as
required by Law, subpoena or judicial or similar order, in which case the
applicable Credit Party shall give Administrative Agent prior written notice of
such publication or other disclosure or (ii) with Merrill Lynch’s prior written
consent.
     (b) Advertisement. Each Lender and each Credit Party hereby authorizes
Merrill Lynch to publish the name of such Lender and Credit Party, the existence
of the financing arrangements referenced under this Agreement, the primary
purpose and/or structure of those arrangements, the amount of credit extended
under each facility, the title and role of each party to this Agreement, and the
total amount of the financing evidenced hereby in any “tombstone”, comparable
advertisement or press release which Merrill Lynch elects to submit for
publication. In addition, each Lender and each Credit Party agrees that Merrill
Lynch may provide lending

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industry trade organizations with information necessary and customary for
inclusion in league table measurements after the Closing Date. With respect to
any of the foregoing, Merrill Lynch shall provide Borrower with an opportunity
to review and confer with Merrill Lynch regarding the contents of any such
tombstone, advertisement or information, as applicable, prior to its submission
for publication and, following such review period, Merrill Lynch may, from time
to time, publish such information in any media form desired by Merrill Lynch,
until such time that Borrower shall have requested Merrill Lynch cease any such
further publication.
     Section 12.14 Senior Debt.
     The Obligations shall constitute “Senior Debt” under that certain Indenture
dated as of November 26, 2004, as amended to date, between Borrower and The Bank
of New York Trust Company, N.A., as Trustee, and within the meaning of the
Convertible Senior Notes.
     Section 12.15 Counterparts; Integration.
     This Agreement and the other Financing Documents may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
Signatures by facsimile shall bind the parties hereto. This Agreement and the
other Financing Documents constitute the entire agreement and understanding
among the parties hereto and supersede any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.
     Section 12.16 No Strict Construction.
     The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provisions of this
Agreement.

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

                  COLLEGIATE PACIFIC INC.
 
                By:   /s/ William R. Estill                   Name: William R.
Estill         Title: Chief Financial Officer
 
           
 
      Address:   13950 Senlac Drive, Suite 100
 
          Dallas, TX 75234
 
                    Facsimile number: (214) 484-1377         E-Mail Address:
bill@colpac.com         Taxpayer Identification Number: 2980248

                     Payment Account Designation:
 
                     
 
                     
 
                     
 
      ABA No.:    
 
           
 
      Account No.:    
 
           
 
      Account Name:    
 
           

              With a copy to:
 
            LIDJI & DOREY
 
       
 
  Address:   500 N. Akard St., Suite 3500
 
      Dallas, TX 75201
 
      Attention: Michael R. Dorey Esq.     Facsimile number: (214) 774–1230    
E-Mail Address: mdorey@lidjidorey.com

 

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                      MERRILL LYNCH CAPITAL, a division of Merrill Lynch
Business Financial Services Inc., as Administrative Agent and a Lender
 
                    By:   /s/ Brian Talty                           Name: Brian
Talty             Title: Senior Vice President    
 
               
 
      Address:   15 Exchange Place, 4th Floor
Jersey City, New Jersey 07302-3914
Attn: Account Manager for
          Collegiate Pacific Inc. Transaction               Facsimile number:
(201) 593 - 7870
E-Mail Address: brian_talty@ml.com    
 
                    With a copy to:    
 
                    Merrill Lynch Capital
222 N. LaSalle Street, 16th Floor
Chicago, Illinois 60601         Attn:   Group Senior Transaction Attorney,
Corporate Finance, for Collegiate Pacific Inc. transaction         Facsimile
number: (312) 499-3126    
 
                    And with an additional copy to:    

              TROUTMAN SANDERS LLP
 
       
 
  Address:   The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Attention: William D. Freedman, Esq.     Facsimile number: (212) 704–5935
E-Mail Address: william.freedman@troutmansanders.com

 
 
 
 
 

          List of Annexes attached to this agreement and not filed herewith:
 
       
Annex B
  -   Closing Checklist

 

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Annex A
Commitment Annex
(as of the Closing Date)

                                      Revolving                 Loan   Revolving
Loan   Term Loan   Term Loan     Commitment   Commitment   Commitment  
Commitment Lender   Amount   Percentage   Amount   Percentage
Merrill Lynch Capital
  $ 20,000,000       100 %   $ 10,000,000       100 %
TOTALS
  $ 20,000,000       100 %   $ 10,000,000       100 %

(After Effectiveness of Acquisition Revolving Loan Commitment Increase)

                                      Revolving                 Loan   Revolving
Loan   Term Loan   Term Loan     Commitment   Commitment   Commitment  
Commitment Lender   Amount1   Percentage   Amount   Percentage
Merrill Lynch Capital
  $ 35,000,000       100 %   $ 10,000,000       100 %
TOTALS
  $ 35,000,000       100 %   $ 10,000,000       100 %

(After Effectiveness of Optional Revolving Loan Commitment Increase)

                                      Revolving                 Loan   Revolving
Loan   Term Loan   Term Loan     Commitment   Commitment   Commitment  
Commitment Lender   Amount2   Percentage   Amount   Percentage
Merrill Lynch Capital
  $ 30,000,000       100 %   $ 10,000,000       100 %
TOTALS
  $ 30,000,000       100 %   $ 10,000,000       100 %

 

1   If the Optional Revolving Loan Commitment Increase is effective at the time
of the effectiveness of the Acquisition Revolving Loan Commitment Increase, then
the amounts in this column shall be increased by $10,000,000 to $45,000,000.   2
  If the Acquisition Revolving Loan Commitment Increase is effective at the time
of the effectiveness of the Optional Revolving Loan Commitment Increase, then
the amounts in this column shall be increased by $15,000,000 to $45,000,000.

 

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(MERRILL LYNCH LOGO) [d39562d3956202.gif]
  Exhibit A to Credit Agreement (Assignment Agreement)

     This Assignment Agreement (this “Assignment Agreement”) is entered into as
of                      by and between the Assignor named on the signature page
hereto (“Assignor”) and the Assignee named on the signature page hereto
(“Assignee”). Reference is made to the Credit Agreement dated as of
                     (as amended or otherwise modified from time to time, the
“Credit Agreement”) among Collegiate Pacific Inc. (“Borrower”), the financial
institutions party thereto from time to time, as Lenders, and Merrill Lynch
Capital, a division of Merrill Lynch Business Financial Services Inc., as
Administrative Agent. Capitalized terms used herein and not otherwise defined
shall have the meanings assigned to them in the Credit Agreement.
     Assignor and Assignee hereby agree as follows:
     Assignor hereby sells and assigns to Assignee, and Assignee hereby
purchases and assumes from Assignor the interests set forth on the schedule
attached hereto (the “Schedule”), in and to Assignor’s rights and obligations
under the Credit Agreement as of the effective date set forth on the Schedule
(the “Effective Date”). Such purchase and sale is made without recourse,
representation or warranty except as expressly set forth herein. On the
Effective Date, Assignee shall pay to Assignor an amount equal to the aggregate
amounts assigned pursuant to the Schedule (exclusive of unfunded portions of the
Revolving Loan Commitment) and Assignor shall pay to Assignee a closing fee in
respect of the transactions contemplated hereby in the amount specified on the
Schedule.
     Assignor (i) represents that as of the Effective Date, that it is the legal
and beneficial owner of the interests assigned hereunder free and clear of any
adverse claim, (ii) makes no other representation or warranty and assumes no
responsibility with respect to any statement, warranties or representations made
in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, any other Financing Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any other
Credit Party or any other Person or the performance or observance by any Credit
Party of its Obligations under the Credit Agreement or any other Financing
Documents or any other instrument or document furnished pursuant thereto.
     Assignee (i) confirms that it has received a copy of the Credit Agreement
and the other Financing Documents, together with copies of the most recent
financial statements delivered pursuant thereto and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement; (ii) agrees that it will,
independently and without reliance upon Administrative Agent, Assignor or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (iii) appoints and authorizes
Administrative Agent to take such action as Administrative Agent on its behalf
and to exercise such powers under the Credit Agreement and the other Financing
Documents as are delegated to Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; (iv) agrees that
it will perform in

Exhibit A – Page 1

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accordance with their terms all obligations which by the terms of the Credit
Agreement are required to be performed by it as a Lender; (v) represents that on
the date of this Assignment Agreement it is not presently aware of any facts
that would cause it to make a claim under the Credit Agreement; (vi) represents
and warrants that Assignee is not a Foreign Lender or, if it is a Foreign
Lender, (A) that it has delivered to Administrative Agent the documentation
required to be delivered to Administrative Agent by Section 13 below and
(B) that if it is claiming exemption from U.S. federal withholding tax under
Section 871(h) or 881(c) of the Code with respect to payments of “portfolio
interest”, (w) it is not a “bank” within the meaning of Section 881(c)(3)(A) of
the Code, (x) it is not a 10-percent shareholder of any Credit Party within the
meaning of Section 881(c)(3)(B) or Section 871(h)(3)(B) of the Code, (y) it is
not a controlled foreign corporation related to any Credit Party within the
meaning of Section 881(c)(3)(C) of the Code and (z) it is not a conduit entity
participating in a conduit financing arrangement (as defined in Section 1.881-3
of the Code Treasury Regulations); (vii) represents and warrants that Assignee
is (or, upon receipt of the required consents hereto by Administrative Agent,
Swingline Lender and Borrower will become) an Eligible Assignee and
(viii) represents and warrants that it has experience and expertise in the
making or the purchasing of loans such as the Loans, and that it has acquired
the interests described herein for its own account and without any present
intention of selling all or any portion of such interests.
     Each of Assignor and Assignee represents and warrants to the other party
hereto that it has full power and authority to enter into this Assignment
Agreement and to perform its obligations hereunder in accordance with the
provisions hereof, that this Assignment Agreement has been duly authorized,
executed and delivered by such party and that this Assignment Agreement
constitutes a legal, valid and binding obligation of such party, enforceable
against such party in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors’ rights generally and by general
principles of equity.
     Upon the effectiveness of this Assignment Agreement as provided below,
(i) Administrative Agent shall register Assignee as a Lender, pursuant to the
terms of the Credit Agreement, (ii) Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment Agreement, have the
rights and obligations of a Lender thereunder, (iii) Assignor shall, to the
extent provided in this Assignment Agreement, relinquish its rights and be
released from its obligations under the Credit Agreement and (iv) Administrative
Agent shall thereafter make all payments in respect of the interest assigned
hereby (including payments of principal, interest, fees and other amounts) to
Assignee. Assignor and Assignee shall make all appropriate adjustments in
payments for periods prior to the Effective Date by Administrative Agent or with
respect to the making of this assignment directly between themselves.
     Each of Assignor and Assignee hereby agrees from time to time, upon request
of the other such party hereto, to take such additional actions and to execute
and deliver such additional documents and instruments as such other party may
reasonably request to effect the transactions contemplated by, and to carry out
the intent of, this Assignment Agreement.
     Neither this Assignment Agreement nor any term hereof may be changed,
waived, discharged or terminated, except by an instrument in writing signed by
the party (including, if applicable, any party required to evidence its consent
to or acceptance of this Assignment

Exhibit A – Page 2

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Agreement) against whom enforcement of such change, waiver, discharge or
termination is sought.
     For the purposes hereof and for purposes of the Credit Agreement, the
notice address of Assignee shall be as set forth on the Schedule. Any notice or
other communication herein required or permitted to be given shall be in writing
and delivered in accordance with the notice provisions of the Credit Agreement.
     In case any provision in or obligation under this Assignment Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
     THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
     This Assignment Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and assigns.
     This Assignment Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the signatures hereto
were upon the same agreement.
     This Assignment Agreement shall become effective as of the Effective Date
upon the satisfaction of each of the following conditions: (i) the execution of
a counterpart hereof by each of Assignor and Assignee, (ii) the execution of a
counterpart hereof by each of Administrative Agent and Borrower as evidence of
its consent hereto to the extent required pursuant to Section 12.6(a) of the
Credit Agreement, (iii) the receipt by Administrative Agent of the
administrative fee referred to in Section 12.6(a) of the Credit Agreement,
(iv) in the event Assignee is a Foreign Lender, the receipt by Administrative
Agent of United States Internal Revenue Service Forms W-8ECI, W-8BEN or W-8IMY
(as applicable), and such other forms, certificates or documents, including
those prescribed by the United States Internal Revenue Service, properly
completed and executed by Assignee, certifying as to Assignee’s entitlement to
exemption from withholding or deduction of Taxes, and (v) the receipt by
Administrative Agent of originals or telecopies of the counterparts described
above.

Exhibit A – Page 3

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     The parties hereto have caused this Assignment Agreement to be executed and
delivered as of the date first written above.

              ASSIGNOR:
 
       
 
  By:     
 
     
 
  Title:  
 
       
 
            ASSIGNEE:
 
             
 
       
 
  By:     
 
     
 
  Title:  
 
       
 
            Consented to:
 
            Merrill Lynch Capital, a division of Merrill Lynch Business
Financial Services Inc., as Administrative Agent and Swingline Lender
 
       
 
  By:     
 
     
 
  Title:  
 
       
 
            Collegiate Pacific Inc.
 
       
 
  By:     
 
     
 
  Title:  
 
       

Exhibit A – Page 4

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Schedule to Assignment Agreement

         
Assignor:
       
 
 
 
   
Assignee:
       
 
 
 
   
Effective Date: 
     
 
 
 
   

     Credit Agreement dated as of                                          among
Collegiate Pacific Inc., as Borrower, the financial institutions party thereto
from time to time, as Lenders, and Merrill Lynch Capital, a division of Merrill
Lynch Business Financial Services Inc., as Administrative Agent.
Interests Assigned:

                      Revolving Loan     Commitment/Loan   Commitment   Term
Loan
Assignor Amounts
  $       $    
 
               
Amounts Assigned
  $       $    
 
               
Assignor Amounts (post-assignment)
  $       $    
 
               

Closing Fee: $                 
Assignee Information:

                          Address for Notices:       Address for Payments:
 
                                     
 
              Bank:                      
 
  Attention:           ABA #:    
 
                   
 
  Telephone:           Account #    
 
                   
 
  Facsimile:           Reference:    
 
                   

Exhibit A – Page 5

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(MERRILL LYNCH LOGO) [d39562d3956202.gif]
  Exhibit B to Credit Agreement (Compliance Certificate)

COMPLIANCE CERTIFICATE
[BORROWER]
Date:                     ,      
     This certificate is given by                                         , a
Responsible Officer of                      (“Borrower”), pursuant to
Section 4.1(c) of that certain Credit Agreement dated as of
                    ,                      among Borrower, the Lenders from time
to time party thereto and Merrill Lynch Capital, a division of Merrill Lynch
Business Financial Services Inc., as Administrative Agent for Lenders (as such
agreement may have been amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”). Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement.
     The undersigned Responsible Officer hereby certifies to Administrative
Agent and Lenders that:
     (a) the financial statements delivered with this certificate in accordance
with Section 4.1(a) and/or 4.1(b) of the Credit Agreement fairly present in all
material respects the results of operations and financial condition of Borrower
and the Subsidiaries as of the dates and the accounting period covered by such
financial statements;
     (b) I have reviewed the terms of the Credit Agreement and have made, or
caused to be made under my supervision, a review in reasonable detail of the
transactions and conditions of Borrower and the Subsidiaries during the
accounting period covered by such financial statements;
     (c) such review has not disclosed the existence during or at the end of
such accounting period, and I have no knowledge of the existence as of the date
hereof, of any condition or event that constitutes a Default or an Event of
Default, except as set forth in Schedule 1 hereto, which includes a description
of the nature and period of existence of such Default or an Event of Default and
what action Borrower has taken, is undertaking and proposes to take with respect
thereto;
     (d) Borrower is in compliance with the covenants contained in Article 7 of
the Credit Agreement, as demonstrated by the calculation of such covenants
below, except as set forth below;
     (e) the Fixed Charge Coverage Ratio for the period covered by this
certificate, as demonstrated by the calculations required by Section 7.1
attached hereto, is ___ to 1.00; and

Exhibit B – Page 1

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     (f) the Senior Leverage Ratio for the period covered by this certificate,
as demonstrated by the calculations required by Section 7.2 attached hereto, is
           to 1.00.
     Prior to the effectiveness of the Acquisition Revolving Loan Commitment
Increase, the following table will be applicable:

                      Revolving Loans, Term Loan and     all other Obligations
Senior Leverage Ratio   Base Rate   LIBOR
Greater than or equal to 2.00 to 1.00
    0.50 %     2.00 %
Greater than or equal to 1.00 to 1.00, but less than or equal to 2.00 to 1.00
    0.25 %     1.75 %
Less than 1.00
    0.00 %     1.50 %

     After the effectiveness of the Acquisition Revolving Loan Commitment
Increase, the following table will be applicable:

                                      Revolving Loans and all other        
Obligations (other than Term Loan)   Term Loan Senior Leverage Ratio   Base Rate
  LIBOR   Base Rate   LIBOR
Greater than or equal to 2.00 to 1.00
    0.50 %     2.00 %     0.75 %     2.25 %
Greater than or equal to 1.00 to 1.00, but less than or equal to 2.00 to 1.00
    0.25 %     1.75 %     0.50 %     2.00 %
Less than 1.00
    0.00 %     1.50 %     0.25 %     1.75 %

     IN WITNESS WHEREOF, the undersigned officer has executed and delivered this
certificate this ___day of _________, _________.

             
 
  By                
 
  Name                 
 
  Title      of Borrower
 
           

Exhibit B – Page 2

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FIXED CHARGE COVERAGE RATIO3
(Section 7.1)

         
Fixed Charge Coverage Ratio for the applicable measurement period (the “Defined
Period”) is defined as follows:
       
 
       
Fixed Charges:
       
 
       
Interest expense ($______), net of interest income ($______), interest paid in
kind ($______) and amortization of capitalized fees and expenses, if any,
incurred to consummate the transactions contemplated by the Operative Documents
and included in interest expense ($______), included in the determination of net
income of Borrower and its Consolidated Subsidiaries for the Defined Period
(“Total Interest Expense”)
  $    
 
       
 
       
Plus: Any provision for (benefit from) income or franchise taxes included in the
determination of net income for the Defined Period
       
 
       
 
       
Scheduled payments of principal for the Defined Period with respect to all Debt
(including the portion of scheduled payments under Capital Leases allocable to
principal but excluding mandatory prepayments required by Section 2.1(c) and
excluding scheduled repayments of Revolving Loans and other Debt subject to
reborrowing to the extent not accompanied by a concurrent and permanent
reduction of the Revolving Loan Commitment (or equivalent loan commitment))
       
 
       
 
       
Increases (decreases) during the Defined Period in deferred tax assets
       
 
       
 
       
Decreases (increases) during the Defined Period in deferred tax liabilities
       
 
       
 
       
Restricted Distributions made in cash during the Defined Period
       
 
       
 
       
Fixed Charges
  $    
 
       

 

3   This ratio is to be calculated for Borrower and its Consolidated
Subsidiaries other than SSG until it is a wholly-owned Subsidiary of Borrower.

Exhibit B – Page 3

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Operating Cash Flow:
       
 
       
EBITDA for the Defined Period (calculated in the manner required by Annex 1 to
the Compliance Certificate)
  $    
 
     
 
       
Operating Cash Flow
  $    
 
     
 
       
Fixed Charge Coverage Ratio (Ratio of Operating Cash Flow to Fixed Charges) for
the Defined Period
                      to 1.0
 
       
Minimum Fixed Charge Coverage for the Defined Period
  [1.10][1.20]4 to 1.0  
 
       
In Compliance
  Yes/No

 

4   As applicable. After the effectiveness of the Acquisition Revolving Loan
Commitment Increase, the minimum Fixed Charge Coverage Ratio shall be 1.20 to
1.00

Exhibit B – Page 4

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SENIOR LEVERAGE RATIO5
(Section 7.2)

         
Total Debt:
       
 
       
Average daily principal balance of the Revolving Loans for the one month period
ending on the last day of the applicable measurement period (the “Defined
Period”)
  $    
 
       
 
       
Plus: Outstanding principal balance of the Term Loan as of the last day of the
Defined Period
       
 
       
 
       
Letter of Credit Liabilities as of the last day of the Defined Period
       
 
       
 
       
Outstanding principal balance of all other Debt of Borrower and its Consolidated
Subsidiaries as of the last day of the Defined Period
       
 
       
 
       
Less: Subordinated Debt
       
 
       
Total Debt less Subordinated Debt
  $    
 
       
 
       
EBITDA for the Defined Period (calculated in the manner required by Annex 1 to
the Compliance Certificate)
  $    
 
       
 
       
Plus: Pro Forma Acquisition EBITDA (as defined below) for each Section 5.8(b)
Permitted Acquisition and Section 5.8(c) Permitted Acquisition (and each such
proposed acquisition for determining compliance with Section 5.8)
       
 
       
Permitted Acquisition No. 1: _______________
       
Permitted Acquisition No. 2: _______________
       
[add additional line items, as applicable]
       
 
       
Adjusted EBITDA
  $    
 
       
 
       
Senior Leverage Ratio (ratio of Total Debt less Subordinated Debt to Adjusted
EBITDA) for the Defined Period
        to 1.00
 
       
Maximum Senior Leverage Ratio for the Defined Period
    2.50 to 1.00  
 
       
In Compliance
  Yes/No    

 

5   This ratio is to be calculated for Borrower and its Consolidate Subsidiaries
other than SSG until it is a wholly-owned Subsidiary of Borrower.

Exhibit B – Page 5

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“Pro Forma Acquisition EBITDA” means EBITDA (calculated in the same manner as
EBITDA is calculated on this Exhibit B) attributable to each Section 5.8(b)
Permitted Acquisition and Section 5.8(c) Permitted Acquisition (with such pro
forma adjustments as are reasonably acceptable to Administrative Agent based
upon data presented to Administrative Agent to its reasonable satisfaction)
consummated during the one (1) year period preceding the date of determination
calculated solely for a number of months immediately preceding the consummation
of the applicable Section 5.8(b) Permitted Acquisition or Section 5.8(c)
Permitted Acquisition, which number equals twelve (12) minus the number of
months following the consummation of the applicable Section 5.8(b) Permitted
Acquisition or Section 5.8(c) Permitted Acquisition for which financial
statements of Borrower and its Subsidiaries have been delivered to
Administrative Agent pursuant to Section 4.1, and (ii) for purposes of
determining compliance with Section 5.8, EBITDA (calculated in the same manner
as EBITDA is calculated on this Exhibit B) of the target of any proposed
Section 5.8(b) Permitted Acquisition or Section 5.8(c) Permitted Acquisition
(adjusted with such pro forma adjustments as are reasonably acceptable to
Administrative Agent based upon data presented to Administrative Agent to its
reasonable satisfaction) calculated for the twelve (12) months immediately
preceding the consummation of the proposed Section 5.8(b) Permitted Acquisition
or Section 5.8(c) Permitted Acquisition.

Exhibit B – Page 6

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ANNEX 1 TO COMPLIANCE CERTIFICATE6
EBITDA

         
EBITDA for the applicable measurement period (the “Defined Period”) is defined
as follows:
       
 
       
Net income (or loss) for the Defined Period of Borrower and its Consolidated
Subsidiaries, but excluding: (a) the income (or loss) of any Person (other than
Subsidiaries of Borrower) in which Borrower or any of its Subsidiaries has an
ownership interest unless received by Borrower or its Subsidiary in a cash
distribution; and (b) the income (or loss) of any Person accrued prior to the
date it became a Subsidiary of Borrower or is merged into or consolidated with
Borrower
  $    
 
       
 
       
Plus: Any provision for (or less any benefit from) income and franchise taxes
(or, as the successor to franchise taxes in the State of Texas, “margin tax”)
included in the determination of net income for the Defined Period
       
 
       
 
       
Interest expense, net of interest income, deducted in the determination of net
income for the Defined Period
       
 
       
 
       
Amortization and depreciation deducted in the determination of net income for
the Defined Period
       
 
       
 
       
For any Defined Period that includes the three-month period ended December 31,
2005, the one-time cash charge related to the termination of the merger
agreement dated September 7, 2005 among Borrower, SSG and CP Merger Sub, Inc.
  $ 430,000  
 
       
For any Defined Period that includes the three-month period ended December 31,
2005, a one-time cash charge related to certain professional fees
  $ 176,000  
 
       
EBITDA for the Defined Period
  $    
 
       

 

6   EBITDA shall be calculated for Borrower and its Consolidated Subsidiaries
other than SSG until it is a wholly-owned Subsidiary of Borrower.

Exhibit B – Page 7

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Schedule 1 to
Compliance Certificate
[Borrower to list any existing Defaults or Events of Default, specifying the
nature and period of existence of each, and the actions Borrower has taken, is
undertaking and proposes to take in respect thereof. If no Defaults and no
Events of Default are then in existence, such schedule should read “None”.]

Exhibit B – Page 8

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(MERRILL LYNCH LOGO) [d39562d3956202.gif]
  Exhibit C to Credit Agreement (Borrowing Base Certificate)

Merrill Lynch Capital
Borrowing Base Report Summary

     
Date:                                                 
  Report #:                     
 
   
Name:                                               
  Period Covered:                      to                       
Customer #

                                 
Accounts Receivable
                       
 
                       
Total A/R Availability
  $                    
 
                       
 
                       
Inventory
                       
 
                       
Total Inventory Availability
  $       $            
 
                       
 
                       
Facility Limit
                       
 
                       
Revolving Loan Commitment
                       
 
                       
Borrowing Base Availability
          $            
 
                       
 
                       
Loan Outstanding
                       
 
                       
Current Loan Balance
  $                    
 
                       
 
                       
Less: Available Collections
  $                    
 
                       
 
                       
Add: Borrowings
  $                    
 
                       
 
                       
Ending Loan Balance this Report
          $            
 
                       
 
                       
Overall Reserves
                       
 
                       
Letter of Credit Liabilities
  $                    
 
                       
 
                       
Other
  $       $            
 
                       
 
                       
Excess/(Short) Borrowing Base
          $            
 
               

Pursuant to, and in accordance with, the terms and provisions of the loan
documents (“Documents”), between Merrill Lynch Capital, a division of Merrill
Lynch Business Financial Services Inc., as Administrative Agent (“Secured
Party”), certain financial institutions, as lenders, and Collegiate Pacific Inc.
(“Borrower”), Borrower is executing and delivering to Secured Party this
Borrowing Base Report accompanied by supporting data (collectively referred to
as (“Report”). Borrower warrants and represents to Secured Party that this
Report is true, correct, and based on information contained in Borrower’s own
financial records. Borrower, by the execution of this Report, hereby ratifies,
confirms and affirms all of the terms, conditions and provisions of the
Documents, and further certifies that the Borrower is in compliance with the
documents as of                                                             .
This document does not supersede any provisions of the Credit Agreement.

         
 
      (Borrower)
 
       
 
      (Title)
 
       

Exhibit C – Page 1

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Merrill Lynch Capital
Accounts Receivable Borrowing Base Report

                                 
Date:
          Report #:       Period Covered:       To    
 
                             
Name:
              Customer #               
 
                         

                                  Accounts Receivable
               
 
    A/R                  
1.   Balance Brought Forward
  $       $            
 
                         
2.   Additions
  $                    
 
                       
3.   Deductions
  $                    
 
                       
4.   Gross Balance this Report
  $       $            
 
                       
 
                        Ineligibles
       
 
                       
5.   Total Ineligibles
  $       $            
 
                       
 
                       
 
                       
6.   Subtotal Eligible Receivables
  $       $            
 
                       
Advance Rates
    %                  
 
                       
7.   Eligible Receivable Collateral
  $                    
 
                       
 
  $                    
 
                       
 
                       
8.   A/R Caps (If Applicable)
  $                    
 
                       
9.   Gross Eligible Receivables
  $       $            
 
                       
10. Reserves (-)
  $                    
 
                       
11. Net Availability
  $       $            
 
                       
12. Overall A/R Limit
          $            
 
                       
13. Total A/R Availability
          $            
 
               

Exhibit C – Page 2

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

 

Accounts Receivable Ineligibles

         
Over __ days past the due date
  $    
 
         
Over __ days past invoice date
  $    
 
         
Cross Age, __% rule
  $    
 
         
Affiliate Accounts
  $    
 
         
Foreign Accounts
  $    
 
         
Government Accounts (noncompliant with assignment of claims acts)
  $    
 
         
Customer in bankruptcy / insolvent
  $    
 
         
Progress billings, Bill and Hold
  $    
 
         
A/R in excess of approved concentration %
  $    
 
         
Accounts Subject to Dispute, Counterclaim or Setoff
  $    
 
         
Judgment, Instrument or Chattel Paper
  $    
 
         
Administrative Agent does not have valid lien
  $    
 
         
Account not owned by Borrower, or subject to any lien other than Administrative
Agent’s lien
  $    
 
         
Conditional Sales
  $    
 
         
Uncompleted sale or delivery
  $    
 
         
Payable in Foreign Currency
  $    
 
         
Interest or service charges
  $    
 
         
Accounts reissued for partial payment, debit memos and charge backs
  $    
 
         
Cash on delivery or other cash sales
  $    
 
         
Accounts that exceed credit limit set by Administrative Agent
  $    
 
         
Accounts Debtors with unsatisfactory credit standing
  $    
 
         
Accounts subject to credits due to Account Debtor or other offset by Account
Debtor
  $    
 
         
Collectability or enforceability impaired
  $    
 
         
Representation or warranties untrue
  $    
 
         
No invoice sent to Agent
  $    
 
         
Otherwise unacceptable to Administrative Agent
  $    
 
         
Total
  $    
 
       

Exhibit C – Page 3

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

 

Merrill Lynch Capital
Inventory Borrowing Base Report

                                 
Date:
          Report #:       Period Covered:       to     
 
                                 
Name:
              Customer #               
 
                           

                                          Inventory Category
                       
 
  INV                        
1.   Balance Brought Forward
  $       $                    
 
                               
 
                               
2.   Additions
  $                            
 
                               
3.   Deductions
  $                            
 
                               
4.   Gross Balance this Report
  $       $                    
 
                               
 
                                Ineligibles
               
5.   Total Ineligibles
  $       $                    
 
                               
 
                               
 
                               
6.   Subtotal Eligible Inventory
  $       $                    
 
                               
Advance Rates
    %                          
 
                               
7.   Eligible Inventory Collateral
  $                            
 
                               
 
  $                            
 
                               
8.   Inventory Caps
  $                            
 
                               
 
                               
 
                               
9.   Gross Inventory Availability
  $       $                    
 
                               
10. Reserves (-)
  $                            
 
                               
11. Net Availability
  $       $                    
 
                               
12. Overall Inventory Limit
          $                    
 
                               
13. Total Inventory Availability
          $                    
 
                       

Exhibit C – Page 4

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

 

Inventory Ineligibles

         
Work in Process [or raw materials]
  $    
 
         
Inactive inventory (excess slow moving, obsolete, etc).
  $    
 
         
Not held for sale in the ordinary course
  $    
 
         
Administrative Agent does not have valid lien
  $    
 
         
Lien in favor of person other than Administrative Agent
  $    
 
         
Outside locations / processors
  $    
 
         
Consigned inventory
  $    
 
         
Inventory in Transit or Outside Borrower Control
  $    
 
         
Violation of Fair Labor Standards Act/Subject to “hot goods” provision
  $    
 
         
Not Covered by casualty insurance
  $    
 
         
Display, packing, shipping, replacement or sample items
  $    
 
         
Returned goods
  $    
 
         
“Freight-in” charges
  $    
 
         
Representations or warranties not true
  $    
 
         
Hazardous Materials or goods that require license
  $    
 
         
Negotiable Document of Title not delivered to Administrative Agent
  $    
 
         
Bill and hold inventory
  $    
 
         
Located outside the United States
  $    
 
         
Otherwise unacceptable to Administrative Agent
  $    
 
         
Total
  $    
 
       

Exhibit C – Page 5

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

 

Merrill Lynch Capital
Borrowing Base Report — Collection Detail

                         
Date:
      Report #:       Period Covered:       to
 
                       
Name:
          Customer #       Facility #    

                               
Date Funds
  A/R   Non - A/R         Total Amount
Deposited 
  Collections   Collections         Deposited
 
  $       $             $    
 
                             
 
  $       $             $    
 
                             
 
  $       $             $    
 
                             
 
  $       $             $    
 
                             
 
  $       $             $    
 
                             
 
  $       $             $    
 
                             
 
  $       $             $    
 
                             
 
  $       $             $    
 
                             
 
  $       $             $    
 
                             
 
  $       $             $    
 
                             
 
  $       $             $    
 
                             
 
  $       $             $    
 
                             
 
  $       $             $    
 
                             
 
  $       $             $    
 
                             
 
  $       $             $    
 
                             
 
  $       $             $    
 
                             
 
  $       $             $    
 
                             
 
  $       $             $    
 
                             
 
  $       $             $    
 
                             
 
                             
Total Funds Deposited
                Total Deposits   $    
 
                             
 
                             
From:
                Less: Non A/R
Collections   $    
 
                             
 
                             
To:
                Total A/R Collections   $    
 
                             

Exhibit C - Page 6

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

 

     
(MERRILL LYNCH LOGO) [d39562d3956202.gif]
  Exhibit D to Credit Agreement (Notice of Borrowing)

COLLEGIATE PACIFIC INC.
Date:                                         ,                     
          This certificate is given by                                         ,
a Responsible Officer of Collegiate Pacific Inc. (“Borrower”), pursuant to
Section [2.2(b)/2.3(e)] of that certain Credit Agreement dated as of
                                        ,            among Borrower, the Lenders
from time to time party thereto and Merrill Lynch Capital, a division of Merrill
Lynch Business Financial Services Inc., as Administrative Agent for Lenders (as
such agreement may have been amended, restated, supplemented or otherwise
modified from time to time the “Credit Agreement”). Capitalized terms used
herein without definition shall have the meanings set forth in the Credit
Agreement.
          The undersigned Responsible Officer hereby gives notice to
Administrative Agent of Borrower’s request to: [complete as appropriate]
     (a) on [  date  ] borrow $[                    ] of Revolving Loans, which
Revolving Loans shall be [Base Rate Loans/LIBOR Loans having an Interest Period
of                      month(s)];
     (b) on [  date  ] convert $[                    ]of the aggregate
outstanding principal amount of the [                    ] Loan, bearing
interest at the [                    ] Rate, into a(n) [                    ]
Loan [and, in the case of a LIBOR Loan, having an Interest Period of
[                    ] month(s)];
     (c) on [  date  ] continue $[                    ]of the aggregate
outstanding principal amount of the [                    ] Loan, bearing
interest at the LIBOR, as a LIBOR Loan having an Interest Period of
[                    ] month(s).
          The undersigned officer hereby certifies that, both before and after
giving effect to the request above (i) each of the conditions precedent set
forth in Section 8.3(b), 8.3(c) and 8.3(d) have been satisfied, (ii) all of the
representations and warranties contained in the Credit Agreement and the other
Financing Documents are true, correct and complete as of the date hereof, except
to the extent such representation or warranty relates to a specific date, in
which case such representation or warranty is true, correct and complete as of
such earlier date, and (iii) no Default or Event of Default has occurred and is
continuing on the date hereof.

Exhibit D – Page 1

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

 

     IN WITNESS WHEREOF, the undersigned officer has executed and delivered this
certificate this     day of                     ,               .

             
 
  By                  
 
  Name                  
 
  Title       of Borrower
 
           

Exhibit D – Page 2

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

 

     
(MERRILL LYNCH LOGO) [d39562d3956202.gif]
  Exhibit E to Credit Agreement (Payment Notification)

COLLEGIATE PACIFIC INC.
Date:                     , ______
Reference is hereby made to the Credit Agreement dated                     ,
20___ among the undersigned, Merrill Lynch Capital, a division of Merrill Lynch
Business Financial Services Inc., as Administrative Agent and the financial
institutions party thereto. Capitalized terms used here have the meanings
ascribed thereto in the Credit Agreement.
Please be advised that funds in the amount of $                     will be wire
transferred to Administrative Agent on                     , 200_.
Such funds shall constitute [an optional] [a mandatory] prepayment of the Term
Loan, with such prepayments to be applied in the manner specified in
Section 2.1(e)(i).
Such mandatory prepayment is being made pursuant to Section 2.1(c) (i), (ii),
(iii) or (iv) of the Credit Agreement.
Fax to MLC Operations 312-499-3336 no later than noon Chicago time
Note: Funds must be received no later than noon Chicago time for same day
application

     
Wire Instructions:
   
Bank Name:
  LaSalle Bank National Association
 
  135 S. LaSalle Street
 
  Chicago, IL 60603
 
   
ABA#
  0710-0050-5
Account Name:
  MLBFS Corporate Finance
Account #:
  5800393182
Reference:
  (Client Name)
 
   
Address:
  Merrill Lynch Capital
 
  222 N. LaSalle Street, 16th Floor
 
  Chicago, IL 60601

Exhibit E – Page 1

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

 

     IN WITNESS WHEREOF, the undersigned officer has executed and delivered this
certificate this ___day of                     , ___.

                 
 
  By                         
 
  Name                         
 
  Title      of Borrower    
 
               

Exhibit E – Page 2

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

 

FINAL DISCLOSURE SCHEDULES
SCHEDULES
TO THE
CREDIT AGREEMENT
AMONG
COLLEGIATE PACIFIC INC.,
MERRILL LYNCH CAPITAL,
A Division of Merrill Lynch Business Financial Services Inc.,
as Administrative Agent, as a Lender and
as Sole Bookrunner and Sole Lead Arranger
AND
THE ADDITIONAL LENDERS
FROM TIME TO TIME PARTY HERETO
Dated as of June 29, 2006
Capitalized terms not defined in the attached schedules have the meaning given
to them in the Agreement. The attached schedules may contain more information
than specifically required by the Agreement, in which case, such information has
been included solely for informational purposes. For the avoidance of doubt, if
any section of the attached schedules discloses an item or information in such a
way as to make its relevance to the disclosure required by another section of
the attached schedules clearly apparent based solely on the substance and
particularity of such disclosure in the attached schedules, the matter shall be
deemed to have been disclosed in such other section of the attached schedules,
notwithstanding the omission of an appropriate cross-reference to such other
section. Headings have been inserted for convenience of reference and do not
augment, amend or alter the express descriptions of matters contained in the
attached schedules.

 

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

 

FINAL DISCLOSURE SCHEDULES
SCHEDULE 3.1
to
CREDIT AGREEMENT
AMONG
COLLEGIATE PACIFIC INC.,
MERRILL LYNCH CAPITAL,
A Division of Merrill Lynch Business Financial Services Inc.,
as Administrative Agent, as a Lender and
as Sole Bookrunner and Sole Lead Arranger
AND
THE ADDITIONAL LENDERS
FROM TIME TO TIME PARTY HERETO
Existence, Organizational Identification Numbers, Foreign Qualification, Prior
Names

                      ORIGINAL                 IDENTIFIC-   JURISDICTIONS  
JURISDICTIONS     CREDIT   ATION   OF   OF   ADDITIONAL PARTY   NUMBERS  
ORGANIZATION   QUALIFICATION   NAMES
Collegiate Pacific, Inc.
  2980248   Delaware   Texas   The Discounter, Vantage Products, Kesmil
Manufacturing, Inc.
Tomark Sports, Inc.
  3738477   Delaware   California   BOO Acquisition Corp.
Kesslers Team Sports, Inc.
  3761437   Delaware   Arkansas, Georgia,
Illinois, Indiana,
Louisiana,
Mississippi, Ohio,
Oklahoma, Tennessee   N/A
Dixie Sporting Goods Co., Inc.
  0104782-8   Virginia   North Carolina,
Ohio, West Virginia   N/A
CMS of Central Florida, Inc.
  P94000013004   Florida   N/A   Orlando Team Sports
Salkeld & Sons, Inc.
  0627319   Delaware   Illinois   N/A

 

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

 

FINAL DISCLOSURE SCHEDULES
SCHEDULE 3.4
to
CREDIT AGREEMENT
AMONG
COLLEGIATE PACIFIC INC.,
MERRILL LYNCH CAPITAL,
A Division of Merrill Lynch Business Financial Services Inc.,
as Administrative Agent, as a Lender and
as Sole Bookrunner and Sole Lead Arranger
AND
THE ADDITIONAL LENDERS
FROM TIME TO TIME PARTY HERETO
Capitalization

      Credit Party   Authorized Shares
Collegiate Pacific Inc.
  51,000,000 shares (50,000,000 common and 1,000,000 preferred)
Tomark Sports, Inc.*
  100 common shares
Kesslers Team Sports, Inc.*
  100 common shares
Dixie Sporting Goods Co., Inc.*
  Class A Voting – 50 common shares Class B Non-Voting – 450 common shares**
CMS of Central Florida, Inc.*
  7,500 common shares
Salkeld & Sons, Inc.*
  5,000 common shares

 

*   Collegiate Pacific Inc. owns 100% of the outstanding capital stock of each
Subsidiary.   **   Preemptive rights.

 

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

 

FINAL DISCLOSURE SCHEDULES
SCHEDULE 3.6
to
CREDIT AGREEMENT
AMONG
COLLEGIATE PACIFIC INC.,
MERRILL LYNCH CAPITAL,
A Division of Merrill Lynch Business Financial Services Inc.,
as Administrative Agent, as a Lender and
as Sole Bookrunner and Sole Lead Arranger
AND
THE ADDITIONAL LENDERS
FROM TIME TO TIME PARTY HERETO
Litigation
     On October 5, 2005, two stockholders of Sport Supply Group, Inc. (“SSG”),
Martin Kleinbart and William Stahl, each filed a separate lawsuit in the Court
of Chancery of the State of Delaware in and for New Castle County against
Collegiate Pacific Inc., including Collegiate Pacific Inc.’s (the “Company”)
Chairman and Chief Executive Officer, Michael J. Blumenfeld, SSG and certain
former members of SSG’s board of directors. The plaintiffs filed the lawsuits as
a class action on behalf of the public stockholders of SSG in connection with
the now terminated Agreement and Plan of Merger pursuant to which the Company
was to have acquired the remaining outstanding capital stock of SSG that it did
not already own at that time. On November 22, 2005, for reasons unrelated to the
pending lawsuit, the Company and SSG entered into a Termination Agreement, dated
November 22, 2005, which terminated the Agreement and Plan of Merger. The
lawsuit alleged the consideration to be paid to the public shareholders of SSG
was inadequate and that the defendants breached certain fiduciary duties owed to
the SSG public stockholders. The Company believes the claims asserted by the
plaintiff are without merit.
     On December 15, 2005, a stockholder of SSG, Jeffrey S. Abraham, as Trustee
of the Law Offices of Jeffrey S. Abraham Money Purchase Plan, dated December 31,
1999, f/b/o Jeffrey S. Abraham, filed a lawsuit in the Court of Chancery of the
State of Delaware in and for New Castle County against Emerson Radio Corp.,
Geoffrey P. Jurick, Arthur J. Coerver, Harvey Rothenberg, the Company and
Michael J. Blumenfeld. The plaintiff filed the lawsuits on behalf of plaintiff
and as a class action on behalf of the public stockholders of SSG in connection
with the now terminated Agreement and Plan of Merger pursuant to which the
Company was to have acquired the remaining shares of the outstanding capital
stock of SSG that it does not already own and the Company’s subsequent
acquisition of an additional 1.66 million shares of SSG for approximately
$9.2 million cash from an institutional stockholder. The lawsuit alleges the
defendants breached certain fiduciary duties owed to SSG’s stockholders and the
Company was unjustly enriched from its use of certain SSG assets. The Company
believes the claims asserted by the plaintiff are without merit

 

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

 

FINAL DISCLOSURE SCHEDULES
and the purported derivative lawsuit is defective.
     Each Credit Party is party to various other litigation matters, involving
ordinary and routine claims incidental to each Credit Party’s business. These
litigation matters will not, individually or in the aggregate, have a Material
Adverse Effect.

 

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

 

FINAL DISCLOSURE SCHEDULES
SCHEDULE 3.15
to
CREDIT AGREEMENT
AMONG
COLLEGIATE PACIFIC INC.,
MERRILL LYNCH CAPITAL,
A Division of Merrill Lynch Business Financial Services Inc.,
as Administrative Agent, as a Lender and
as Sole Bookrunner and Sole Lead Arranger
AND
THE ADDITIONAL LENDERS
FROM TIME TO TIME PARTY HERETO
Brokers
None.

 

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

 

FINAL DISCLOSURE SCHEDULES
SCHEDULE 3.16
to
CREDIT AGREEMENT
AMONG
COLLEGIATE PACIFIC INC.,
MERRILL LYNCH CAPITAL,
A Division of Merrill Lynch Business Financial Services Inc.,
as Administrative Agent, as a Lender and
as Sole Bookrunner and Sole Lead Arranger
AND
THE ADDITIONAL LENDERS
FROM TIME TO TIME PARTY HERETO
Material Contracts
Indenture, dated as of November 26, 2004, by and between Collegiate Pacific Inc.
and The Bank of New York Trust Company N.A., as Trustee.
Registration Rights Agreement, dated as of November 26, 2004, by and between
Collegiate Pacific Inc. and Thomas Weisel Partners LLC.
Loan and Security Agreement, dated November 5, 2003, as amended on April 28,
2004, August 26, 2004, November 18, 2004, November 23, 2004, May 9, 2005 and
September 19, 2005, by and between Collegiate Pacific Inc. and Merrill Lynch
Business Financial Services Inc.
Amended and Restated 1998 Collegiate Pacific Inc. Stock Option Plan and form of
Stock Option Agreements.
ABF Warehousing Agreement, dated January 24, 2006, by and between Collegiate
Pacific Inc. and ABF
Warehousing Agreement, dated February 8, 2006, by and between Collegiate Pacific
Inc. and Network Logistics, Inc.
Collegiate Pacific Inc.’s 401(k) Plan, dated as of April 15, 2005.
Employment Agreement, dated January 9, 2004, by and between Collegiate Pacific
Inc. and Thomas C. White.
Employment Agreement, dated January 9, 2004, by and between Collegiate Pacific
Inc. and Mark S. Harpin.
Employment Agreement, dated April 1, 2004, by and between Kesslers Team Sports,
Inc. and Robert Dickman.
Employment Agreement, dated April 1, 2004, by and between Kesslers Team Sports,
Inc. and Daniel Dickman.
Employment Agreement, dated April 1, 2004, by and between Kesslers Team Sports,
Inc. and Phil Dickman.

 

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

 

FINAL DISCLOSURE SCHEDULES
Employment Agreement, dated April 1, 2004, by and between Kesslers Team Sports,
Inc. and Steve Carloni.
Employment Agreement, dated July 23, 2004, by and between Dixie Sporting Goods
Co., Inc. and Keneth L. Caravati.
Employment Agreement, dated July 23, 2004, by and between Dixie Sporting Goods
Co., Inc. and C. Michael Caravati.
Employment Agreement, dated July 23, 2004, by and between Dixie Sporting Goods
Co., Inc. and Kenneth L. Caravati.
Promissory Note, dated July 26, 2004, executed by Collegiate Pacific Inc.
payable to Kenneth L. Caravati in the stated principal amount of $250,000.
Promissory Note, dated July 26, 2004, executed by Collegiate Pacific Inc.
payable to C. Michael Caravati in the stated principal amount of $250,000.
Employment Agreement, dated December 10, 2004, by and between CMS of Central
Florida Inc. and Michael McWeeney.
Promissory Note, dated May 11, 2005, executed by Collegiate Pacific Inc. payable
to Albert A. Messier in the stated principal amount of $100,000.
Promissory Note, dated May 11, 2005, executed by Collegiate Pacific Inc. payable
to Daniel F. Salkeld in the stated principal amount of $130,000.
Employment Agreement, dated May 11, 2005, by and between Salkeld & Sons Inc. and
Albert A. Messier.
Employment Agreement, dated May 11, 2005, by and between Salkeld & Sons Inc. and
Daniel F. Salkeld.
Agreement and Plan of Merger, dated as of December 30, 2003, by and among
Tomark, Inc., Collegiate Pacific Inc., BOO Merger Corp., Thomas C. White and
Mark S. Harpin.
Asset Purchase Agreement, dated as of February 9, 2004, by and among Kesslers
Team Sports, Inc., Collegiate Pacific Inc., BOO Acquisition Corp., Bob Dickman,
Dan Dickman, Phil Dickman and Floyd Dickman.
Stock Purchase Agreement, dated as of July 23, 2004, by and among Collegiate
Pacific Inc., Kenneth L. Caravati and C. Michael Caravati.
Stock Purchase Agreement, dated as of December 10, 2004, by and among Collegiate
Pacific Inc., Barbara L. Smith, Carmine McWeeney and Michael McWeeney.
Stock Purchase Agreement, dated as of May 11, 2005, by and among Collegiate
Pacific Inc., Albert A. Messier and Daniel F. Salkeld.
Stock Purchase Agreement, dated as of July 1, 2005, by and among Collegiate
Pacific Inc., Emerson Radio Corp. and Emerson Radio (Hong Kong) Limited.
Asset Purchase Agreement, dated as of August 3, 2005, by and among Collegiate
Pacific Inc., Salkeld & Sons, Inc. and Albert A. Messier.
Agreement and Plan of Merger, dated as of September 7, 2005, by and among
Collegiate Pacific Inc., CP Merger Sub, Inc. and Sport Supply Group, Inc.
Exclusive Licensing Agreement, dated February 7, 2000, as amended on March 16,
2001, by and between Edwards Sports Products Limited and Collegiate Pacific Inc.

 

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FINAL DISCLOSURE SCHEDULES
Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Michael J. Blumenfeld.
Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Adam Blumenfeld.
Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and William R. Estill.
Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Arthur J. Coerver.
Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Harvey Rothenberg.
Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Tevis Martin.
Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Kurt Hagan.
Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Bob Dickman.
Real Property Leases

                                                  Name and Address of          
              Owner (if leased) or             Owned/Leased          
Third-Party Operator (if Credit           /Operated by   Annualized   operated
by a third Party   Address   Size   Third Party   Rent   party)
Collegiate Pacific Inc.
  13950 Senlac
Drive, Suite 100-
200 Dallas, TX
75234   88,000 sq. ft.   Lease; expires in 2007   $ 347,364     The Realty
Associates
Fund VI, L.P.; c/o TA
Associates Realty, 28 State
St., 10th Floor, Boston, MA
02109
Collegiate Pacific Inc.
  4640 North
Oketo, Harwood
Heights, IL
60706   5,000 sq. ft.   Month/month   $ 24,000     Diamond Tool Company,
Inc.; 4238-40 N. Sayre,
Norridge, IL 60706
Collegiate Pacific Inc.
  1200 North 28th
Avenue, P.O.
Box 612506,
DFW Airport,
TX 75261   sq. ft. based on need   Month/month   $ 5 /pallet   Network
Logistics, Inc.;
1200 North 28th Avenue,
P.O. Box 612506, DFW
Airport, TX 75261
Collegiate Pacific Inc.
  Offsite
Warehouse #2,
850 West
Freeway, #003,
Grand Prairie,
TX 75051   sq. ft. based on need   Month/month   $ 6,600  minimum   ABF Supply
Chain
Services, 850 West
Freeway, Grand Prairie,
TX 75051
Collegiate Pacific Inc.
  8410 Wolf Lake
Drive, Bartlett,
TN 38133   2,340 sq. ft.   Month/month   $ 24,275     64 Investment Partnership;
7700 Wolf River
Boulevard, Germantown,
TN 38138

 

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FINAL DISCLOSURE SCHEDULES

                                                          Name and Address of  
                          Owner (if leased) or                 Owned/Leased    
      Third-Party Operator (if Credit               /Operated by   Annualized  
operated by a third Party   Address   Size   Third Party   Rent   party)
Tomark Sports, Inc.
  1180 A California
Avenue, Corona,
CA 92881   27,700 sq. ft.   Lease; expires in 2009   Months 1-12—$136,260
13-24—$140,352 25-36—$144,552 37-48—$148,896 49-60—$153,360   Edward A. Money
and
Marilyn J. Money,
Trustees of the Money
Family Trust; 1180
California St, Suite B,
Corona, CA 92878
Kesslers Team Sports, Inc.
  930 East Main St,
Richmond, IN
47374   76,000 sq. ft.   Lease; expires in 2009   $136,800 (base) Base Rent +
real estate taxes + insurance + utilities   RPD Services, Inc.; 920
and 930 E. Main St.,
Richmond, IN 47374
22 N. 11th Street,
Richmond, IN 47374
Kesslers Team Sports, Inc.
  192 West Joliet
Street, Ste. C
Crown Point, IN
46307   2,000 sq. ft.   Month/month   Beginning Base Rent $800/mo. $825 first
renewal; $850 ($10,200) second renewal $800 deposit   Struebig Development, Inc.
1110 Merrillville Road
Crown Point, IN 46307
Kesslers Team Sports, Inc.
  2802
Congressional
Pkwy, #B, Fort
Wayne, IN
46808   1,500 sq. ft.   Lease expires in 2008   $9,150 (base) $1,000 deposit 5%
late fee after 15 days   The Fleming Group, LLC
Attn: A. V. Fleming
2014 Lakewood Drive
Fort Wayne, IN 46819
Kesslers Team Sports, Inc.
  7215 East 21st
Street, Suite G,
Indianapolis, IN
46219   3,200 sq.ft.   Month/month   $24,804 till May 2007 $25,608 till May 2009
Renewal at FMV, not to exceed 10%   Justus Home Builders, Inc.
1398 North Shadeland
Ave.
Post Office Box 19409
Indianapolis, IN 46219

 

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FINAL DISCLOSURE SCHEDULES

                                                          Name and Address of  
                          Owner (if leased) or                 Owned/Leased    
      Third-Party Operator (if Credit               /Operated by   Annualized  
operated by a third Party   Address   Size   Third Party   Rent   party)
Kesslers Team Sports, Inc.
  117 East
Markland
Avenue,
Kokomo, IN
46901   4,700 sq. ft.   Month/month   $27,000 Renewals @ base + CPI with $28,800
max for 1st and $30,000 for 2nd & 3rd 5% late fee after 5 days   Eva Hutto
Estate
Phillip Hutto-Personal Rep.
1001 East Walnut Street
Kokomo, IN 46901
Kesslers Team Sports, Inc.
  1112 Ohio Street,
Terre Haute, IN
47807   950 sq. ft.   Month/month   $8,076 + $673 deposit $10/day late fee after
10 days   Dix Real Estate
1540 South 3rd Street, Suite 
B
Terre Haute, IN 47802
Kesslers Team Sports, Inc.
  6442 Metro Court,
Unit E, Bedford
Heights, OH 44146   2,200 sq, ft.   Month/month   $8,796 for initial term;
$9,360 1st renewal $9,900 2nd renewal   Metro Industrial Park, Inc.
24733 Aurora Road
Bedford Heights, OH
44146
Kesslers Team Sports, Inc.
  801 Busch Court,
Columbus, OH
43229   3,580 sq. ft.   Month/month   $21,486 Base + $4,476.24 exp. estimated @
$1.25/sq.ft./yr. $1,939.70 dep.   Shale Partners, Ltd.
Post Office Box 365
Dublin, OH 43017
Kesslers Team Sports, Inc.
  10138
Transportation Way
Cincinnati, OH
45246   1,000 sq. ft.   Month/month   Unknown   TBG Baseball Investors
10135 Transportation Way
Cincinnati, OH 45246

 

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

 

FINAL DISCLOSURE SCHEDULES

                                                          Name and Address of  
                          Owner (if leased) or                 Owned/Leased    
      Third-Party Operator (if Credit               /Operated by   Annualized  
operated by a third Party   Address   Size   Third Party   Rent   party)
Kesslers Team Sports, Inc.
  7103 Chancellor
Drive, Suite 200
Cedar Falls, IA
50613   2,775 sq. ft.   Lease expires in 2008   $22,176 1st yr $24,948 2nd yr
$27,720 3rd yr 1st renewal @ $30,492 2nd renewal @same increase as 1st + CPI
adjustment All rent + CAM est. of $758/mo   Crestwood, Ltd.
26301 Siena Drive
Bonita Springs, FL 34134
Kesslers Team Sports, Inc.
  605 North Logan,
Danville, IL 61832   600 sq. ft.   Month/month   $2,880 $240 deposit   George
Weller &
Associates
605 North Logan Avenue
Post Office Box 1102
Danville, IL 61834-1102
Kesslers Team Sports, Inc.
  110 East Sangamon
Rantoul, IL 61866   1,800 sq. ft.   Month/month   Unknown   Team Screenprinting
Post Office Box 940
Rantoul, IL 61866
Kesslers Team Sports, Inc.
  3501 Winchester
Road
Springfield, IL
62707   1,200 sq. ft.   Lease expires 11/07   $8,400 to 11/30/03 $8,700 next 24
mo to 11/30/05 $9,000 next 24 mo to 11/30/07   Steve Wells
2601 Colt Road
Springfield, IL 62707
Kesslers Team Sports, Inc.
  1611 24th Avenue
Gulfport, MS
39501   3,200 sq. ft.   Lease expires 7/07   $19,800 $1,650 deposit   Hancock
Bank Trust Dept.
Denise Parker, Trust
Officer
Post Office Box 4019
Gulfport, MS 39502
Kesslers Team Sports, Inc.
  10010 Highway
92, Suite 160
Woodstock, GA
30188   2,000 sq. ft.   Lease expires 5/08   $24,756 beginning 5/30/03 with 2%
yearly increase   Ackerman & Co.
1040 Crown Pointe
Parkway,
Suite 200
Atlanta, GA 30338

 

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

 

FINAL DISCLOSURE SCHEDULES

                                                          Name and Address of  
                          Owner (if leased) or                 Owned/Leased    
      Third-Party Operator (if Credit               /Operated by   Annualized  
operated by a third Party   Address   Size   Third Party   Rent   party)
Kesslers Team Sports, Inc.
  201C Central
Park Dr., Suite 
1190,
Knoxville, TN
37922   4,000 sq. ft.   Lease expires 8/06   $27,000 + $5,640 = $32,640 for
05-06 term   All Eleven
f/k/a Centre Park Trade
Centre, Ltd.
c/o Wood Properties, Inc.
1600 Riverview Tower
900 South Gay Street
Knoxville, TN 37902
Kesslers Team Sports, Inc.
  #7 Clearwater
Drive, Suite A,
Little Rock, AR
72204   5,000 sq. ft.   Lease expires 3/08   $20,760 Base rent + 7.75% of
Operating Expenses 21/2 % increase/yr   Little Rock Investments
LLC
c/o Dickson Flake Partners
Inc. 400 W. Capitol Ave Ste
1200
Little Rock, AR 72201
Kesslers Team Sports, Inc.
  9433 East 51st
Street, Tulsa, OK
74145   4,500 sq. ft.   Lease expires 8/07   $21,300–1st year $22,956–2nd & 3rd
$23,844 4th year $23,844 for 5th & 6th year renewals + $675 estimate for OE +
$2,400 deposit   SK Properties, LP
150 N. Market
Wichita, KS 67202

Rent paid to:
CB Richardson Ellis, Okla.
Dept. 1518
Tulsa, OK 74143
Kesslers Team Sports, Inc.
  5202 A
Brookhollow
Parkway,
Norcross, GA
30071   10,000 sq. ft.   Lease expires 2/08   $51,000 1st & 2nd $53,040 3rd yr.
$55,162 4th yr $57,360 5th yr.   Brookhollow Associates
c/o Perdue Management
Co.
340 E. Paces Ferry Road
Atlanta, GA 30305
Kesslers Team Sports, Inc.
  216 North
Meridian St.
Portland, IN
47371   2,000 sq. ft.   Lease expires 11/06   $ 4800       Sandy Bubp
121 North Meridian
Portland, IN 47371

 

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

 

FINAL DISCLOSURE SCHEDULES

                                                          Name and Address of  
                          Owner (if leased) or                 Owned/Leased    
      Third-Party Operator (if Credit               /Operated by   Annualized  
operated by a third Party   Address   Size   Third Party   Rent   party)
Dixie Sporting Goods Co., Inc.
  2400 Westwood
Avenue,
Richmond, VA
23230   37,300 sq ft.   Lease Expires in 2008   $74,376 Base for first year in
1995 $101,364 for 10th $127,200 base effective 3/1/05 with 3% increase each year
for `06 and `07   The Wilton Companies;
10625 Patterson Avenue,
Richmond, VA 23233

c/o Hunter Cockrell
4901 Dickens Road, Suite
100
P.O. Box 6895
Richmond, VA 23230-
6895
Dixie Sporting Goods Co., Inc.
  1244B Executive
Boulevard, Suite
103, Chesapeake,
VA 23320-2807   2,360 sq. ft.   Lease expires
12/31/05   $13,216–1998 $14,042-1999

Per 3rd Amendment: $16,284-2004 $16,780-2005   1985 Associates
c/o Advantis Real Estate
Services Company
900 World Trade Centre
101 West Main Street
Norfolk, VA 23510-1687
Dixie Sporting Goods Co., Inc.
  4515 Daly Drive,
Suite J, Chantilly,
VA 20151   1,925 sq. ft.   Lease expires
12/31/05   $22,619 – 1st $23,523 – 2nd $24,464 – 3rd $25,443 – 4th $26,461 – 5th
  Wilbur L. McBay, Trustee
c/o Transwestern Carey
Winston, LLC
P.O. Box 64925
Baltimore, MD 21264-
4925
Dixie Sporting Goods Co., Inc.
  7841-D Rolling
Road,
Springfield, VA
22153   1,765 sq. ft.   Lease expires in
2008   $28,240 Base 1st year 3% increase each year Renewals: $39,514 – 1st
$41,489 – 2nd $43,564 – 3rd   SV Enterprises, LLC, c/o
Pointe Real Estate, P.O.
Box 222912, Chantilly, VA
22153
Dixie Sporting Goods Co., Inc.
  619 Florida St.,
Salem, VA
24153   1,650 sq. ft.   Month/month   $9,750 for 1st yr 3% annual increase  
Vickey Shavely
P.O. Box 20809
Roanoke, VA 24018

 

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

 

FINAL DISCLOSURE SCHEDULES

                                                          Name and Address of  
                          Owner (if leased) or                 Owned/Leased    
      Third-Party Operator (if Credit               /Operated by   Annualized  
operated by a third Party   Address   Size   Third Party   Rent   party)
Dixie Sporting Goods Co., Inc.
  15 Glen Bridge
Road, Suite C,
Arden, NC
28704-8481   1,670 sq. ft.   Month/month   $13,200 for 1st yr $13,560 2nd year
$14,046 beginning 1/1/05   RC Warehousing
5 Taylor Street
Asheville, NC 28804
Dixie Sporting Goods Co., Inc.
  501 Deacon
Blvd.
Winstom-Salem,
NC 27105   3,000 sq. ft.   Month/month   $33,000 for 1st yr 2 1/2 % increase per
year   Wake Forest University
P.O. Box 7477
Winston-Salem, NC 27109
Dixie Sporting Goods Co., Inc.
  2040-J South
Park Drive,
Winterville, NC
28590   2,500 sq. ft.   Lease expires in 2010   $18,372 first 5 years $20,362
for renewal   Soddy & Soddy Properties
5351 Reedy Branch Road
Winterville, NC 28590
Dixie Sporting Goods Co., Inc.
  4221 Garrett
Road, Suite 8
Durham, NC
27707   2,500 sq. ft   Lease expires in 2010   Free rent & fees 4/24/05 to
6/30/05 $23,258 Base beginning 7/1/05 5/1/08 rent increases 3%   Gold Centre
Limited
Partnership
P.O. Box 2734
Chapel Hill, NC 27515-
2734

cc: John A. Northen
Post Office Box 2208
Chapel Hill, NC 27515-
2208
Dixie Sporting Goods Co., Inc.
  150 Front Street,
Suite B
Marietta, OH
45750   1,400 Sq. Ft.   Lease expires in 2008   $12,000 1st year $13,200 2nd
year $14,400 3rd year $18,000 for 3-year renewal   H & H Rentals
154 Front Street
P.O. Box 447
Marietta, OH 45750
Dixie Sporting Goods Co., Inc.
  309 Hwy. 64/264
Manteo, NC
27954   350 sq. ft   Month/month   $6,300 1st year Renewal at comparable rent as
determined by Landlord   Ray E. Hollowell, Jr.
c/o Bruce Miller, CPA
137 Owens Beach Road
Extended
Harbinger, NC 27941

 

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

 

FINAL DISCLOSURE SCHEDULES

                                                          Name and Address of  
                          Owner (if leased) or                 Owned/Leased    
      Third-Party Operator (if Credit               /Operated by   Annualized  
operated by a third Party   Address   Size   Third Party   Rent   party)
Dixie Sporting Goods Co., Inc.
  42 Euclid
Avenue
Bristol, VA
24201   1,200 sq. ft.   Lease Expires
12/31/06   $7,260 + $5/month for trash 3% increase for each renewal   John Ed
Fuller, President
Stone & Stone, Inc.
50 Euclid Avenue
Bristol, VA 24201
Dixie Sporting Goods Co., Inc.
  2400 Westwood
Avenue, Suites
H&I, Richmond,
VA 23230   4,960 sq. ft.   Lease Expires 2011   Base Rent + pro rated tax & ins.
Year 1 $35,712 Year 2 $35,160 Year 3 $38,256 Year 4 $39,594 Year 5 $40,980
$3,286 deposit   9301 Monroe, LLC
c/o Levine Properties, Inc.
Post Office Box 2439
Matthews, NC 28106
Dixie Sporting Goods Co., Inc.
  One Holland
Place, Suite 210
2235 Staples Mill
Road
Richmond, VA     3,482     Lease expires December 2008   Base Rent + pro-rata
share of operating expenses Year1 — $53,134; Year 2 — $55,573; Year 3 — $57,244
  Lar Don Realty LC
301 Yamato Road, Suite 
3101
Boca Raton, FL 33431
CMS of Central Florida, Inc.
  751 Central Park
Drive, Sanford,
FL 32771   12,000 sq. ft.   Lease; expires in 2010   05-06 = $76,500 06-07 =
$80,340 07-08 = $84,348 08-09 = $88,560 09-10 = $93,000

All rent + CAM and taxes   McWeeney Smith
Partnership; 8600 Venezia
Drive, #2235, Orlando, FL
32810

 

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

 

FINAL DISCLOSURE SCHEDULES

                                                          Name and Address of  
                          Owner (if leased) or                 Owned/Leased    
      Third-Party Operator (if Credit               /Operated by   Annualized  
operated by a third Party   Address   Size   Third Party   Rent   party)
CMS of Central Florida, Inc.
  900 Central Park
Drive, Sanford, FL
32771   6,250 sq. ft.   Lease; expires in 2006   Base rent of $31,250 +sales tax
of $2,187= $33,438 $2,604.17 deposit; 5% late fee after 7 days   Avatar
Institute, LLC, 900
Central Park Drive,
Sanford, FL 32771
CMS of Central Florida, Inc.
  7029-5
Commonwealth
Ave.,
Jacksonville, FL
32220   1,800 sq. ft.   Lease; expires in 2006   Months: 1-12 = $18,900
13-24=$19,269 25-36=$19,649 +CAM (inc. capital improvements) & taxes   Easton,
Sanderson & Co.,
300 East State Street,
Jacksonville, FL 32202
CMS of Central Florida, Inc.
  21113 Johnson
Street, Suite 130,
Pembroke Pines,
FL 33029   2,700 sq. ft.   Lease; expires in 2007   $30,000 Base Rent + sales
tax $5,000 deposit ($2,300 prior dep + $2,700)   Chapel Trail Associates,
Ltd.; 21011 Johnson, St.,
Suite 101, Pembroke Pines,
FL 33029
Salkeld & Sons, Inc.
  575 William
Latham Drive,
Bourbonnais, IL
60914   10,000 sq. ft.   Lease; expires in 2009   $96,000 Rent increases 2%/mo
for each 2yr renewal $8,000 deposit & $400 late fee after 10th   First American
Bank,
Trustee

 

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

 

FINAL DISCLOSURE SCHEDULES

                                                          Name and Address of  
                          Owner (if leased) or                 Owned/Leased    
      Third-Party Operator (if Credit               /Operated by   Annualized  
operated by a third Party   Address   Size   Third Party   Rent   party)
Salkeld & Sons, Inc.
  1605 Commerce
Drive,
Bourbonnais, IL
60914   16,000 sq. ft.   Lease; expires in 2010   $72,000 until new space is
completed then $126,000 with 12% late fee after 5 days 2% rent increase for each
renewal term   Albert A. Messier; 1605
Commerce Drive,
Bourbonnais,
IL 60914

 

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

 

FINAL DISCLOSURE SCHEDULES
SCHEDULE 3.17
to
CREDIT AGREEMENT
AMONG
COLLEGIATE PACIFIC INC.,
MERRILL LYNCH CAPITAL,
A Division of Merrill Lynch Business Financial Services Inc.,
as Administrative Agent, as a Lender and
as Sole Bookrunner and Sole Lead Arranger
AND
THE ADDITIONAL LENDERS
FROM TIME TO TIME PARTY HERETO
Environmental Compliance
None.

 

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

 

FINAL DISCLOSURE SCHEDULES
SCHEDULE 3.18
to
CREDIT AGREEMENT
AMONG
COLLEGIATE PACIFIC INC.,
MERRILL LYNCH CAPITAL,
A Division of Merrill Lynch Business Financial Services Inc.,
as Administrative Agent, as a Lender and
as Sole Bookrunner and Sole Lead Arranger
AND
THE ADDITIONAL LENDERS
FROM TIME TO TIME PARTY HERETO
Intellectual Property

                  Patents /       Copyrights /     Registration      
Registration or     or Application   Trademarks / Registration or   Application
Credit Party   Numbers   Application Numbers   Numbers
Collegiate Pacific Inc.
      Mark 1/2261716   SEC Footbal/VA-26-010
 
           
Collegiate Pacific Inc.
      Mark 1 (with logo)/2447836   The Fleece beast/VA-210-638
 
           
Collegiate Pacific Inc.
      Collegiate Pacific/2278787    
 
           
Collegiate Pacific Inc.
      CP Collegiate Pacific/2262148    
 
           
Collegiate Pacific Inc.
      Funnets/2425244    

 

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

 

FINAL DISCLOSURE SCHEDULES
SCHEDULE 3.19
to
CREDIT AGREEMENT
AMONG
COLLEGIATE PACIFIC INC.,
MERRILL LYNCH CAPITAL,
A Division of Merrill Lynch Business Financial Services Inc.,
as Administrative Agent, as a Lender and
as Sole Bookrunner and Sole Lead Arranger
AND
THE ADDITIONAL LENDERS
FROM TIME TO TIME PARTY HERETO
Owned Real Estate
None.

 

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

 

FINAL DISCLOSURE SCHEDULES
SCHEDULE 5.1
to
CREDIT AGREEMENT
AMONG
COLLEGIATE PACIFIC INC.,
MERRILL LYNCH CAPITAL,
A Division of Merrill Lynch Business Financial Services Inc.,
as Administrative Agent, as a Lender and
as Sole Bookrunner and Sole Lead Arranger
AND
THE ADDITIONAL LENDERS
FROM TIME TO TIME PARTY HERETO
Debt

          Descriptions   Amounts
Indenture, dated as of November 26, 2004, by and between Collegiate Pacific Inc.
and The Bank of New York Trust Company N.A., as Trustee.
  $ 40,000,000  
 
       
Promissory Note, dated July 26, 2004, executed by Collegiate Pacific Inc.
payable to Kenneth L. Caravati in the stated principal amount of:
  $ 250,000  
 
       
Promissory Note, dated July 26, 2004, executed by Collegiate Pacific Inc.
payable to C. Michael Caravati in the stated principal amount of:
  $ 250,000  
 
       
Promissory Note, dated May 11, 2005, executed by Collegiate Pacific Inc. payable
to Albert A. Messier in the stated principal amount of:
  $ 100,000  
 
       
Promissory Note, dated May 11, 2005, executed by Collegiate Pacific Inc. payable
to Daniel F. Salkeld in the stated principal amount of:
  $ 130,000  

 

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

 

FINAL DISCLOSURE SCHEDULES
SCHEDULE 5.2
to
CREDIT AGREEMENT
AMONG
COLLEGIATE PACIFIC INC.,
MERRILL LYNCH CAPITAL,
A Division of Merrill Lynch Business Financial Services Inc.,
as Administrative Agent, as a Lender and
as Sole Bookrunner and Sole Lead Arranger
AND
THE ADDITIONAL LENDERS
FROM TIME TO TIME PARTY HERETO
Liens
Other than liens in favor of Merrill Lynch Business Financial Services Inc., no
other liens have been granted by any Credit Party, except for protective filings
by equipment lessors under the terms of outstanding equipment leases, each of
which will survive the closing, and those filings in existence for which
termination statements under the Uniform Commercial Code have been furnished to
the Administrative Agent for filing

 

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

 

FINAL DISCLOSURE SCHEDULES
SCHEDULE 5.3
to
CREDIT AGREEMENT
AMONG
COLLEGIATE PACIFIC INC.,
MERRILL LYNCH CAPITAL,
A Division of Merrill Lynch Business Financial Services Inc.,
as Administrative Agent, as a Lender and
as Sole Bookrunner and Sole Lead Arranger
AND
THE ADDITIONAL LENDERS
FROM TIME TO TIME PARTY HERETO
Contingent Obligations
None.

 

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

 

FINAL DISCLOSURE SCHEDULES
SCHEDULE 5.8
to
CREDIT AGREEMENT
AMONG
COLLEGIATE PACIFIC INC.,
MERRILL LYNCH CAPITAL,
A Division of Merrill Lynch Business Financial Services Inc.,
as Administrative Agent, as a Lender and
as Sole Bookrunner and Sole Lead Arranger
AND
THE ADDITIONAL LENDERS
FROM TIME TO TIME PARTY HERETO
Investments
Collegiate Pacific Inc. currently owns approximately 73% of Sport Supply Group,
Inc.

 

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FINAL DISCLOSURE SCHEDULES
SCHEDULE 5.9
to
CREDIT AGREEMENT
AMONG
COLLEGIATE PACIFIC INC.,
MERRILL LYNCH CAPITAL,
A Division of Merrill Lynch Business Financial Services Inc.,
as Administrative Agent, as a Lender and
as Sole Bookrunner and Sole Lead Arranger
AND
THE ADDITIONAL LENDERS
FROM TIME TO TIME PARTY HERETO
Affiliate Transactions

  Description
Indemnification Agreement, dated as of January 31, 2006, by and between
Collegiate Pacific Inc. and Adam Blumenfeld.
 
Indemnification Agreement, dated as of January 31, 2006, by and between
Collegiate Pacific Inc. and Michael J. Blumenfeld.
 
Indemnification Agreement, dated as of January 31, 2006, by and between
Collegiate Pacific Inc. and Arthur J. Coerver.
 
Indemnification Agreement, dated as of January 31, 2006, by and between
Collegiate Pacific Inc. and Jeff Davidowitz.
 
Indemnification Agreement, dated as of January 31, 2006, by and between
Collegiate Pacific Inc. and William R. Estill.
 
Indemnification Agreement, dated as of January 31, 2006, by and between
Collegiate Pacific Inc. and Kurt Hagan.
 
Indemnification Agreement, dated as of January 31, 2006, by and between
Collegiate Pacific Inc. and Robert W. Hampton.
 
Indemnification Agreement, dated as of January 31, 2006, by and between
Collegiate Pacific Inc. and Harvey Rothenberg.
 
Indemnification Agreement, dated as of January 31, 2006, by and between
Collegiate Pacific Inc. and Tevis Martin.
 
Indemnification Agreement, dated as of January 31, 2006, by and between
Collegiate Pacific Inc. and William H. Watkins, Jr.

 

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FINAL DISCLOSURE SCHEDULES

  Description
Employment Agreement, dated January 9, 2004, by and between Collegiate Pacific
Inc. and Thomas C. White.
 
Employment Agreement, dated January 9, 2004, by and between Collegiate Pacific
Inc. and Mark S. Harpin.
 
Employment Agreement, dated April 1, 2004, by and between Kesslers Team Sports,
Inc. and Robert Dickman.
 
Employment Agreement, dated April 1, 2004, by and between Kesslers Team Sports,
Inc. and Daniel Dickman.
 
Employment Agreement, dated April 1, 2004, by and between Kesslers Team Sports,
Inc. and Phil Dickman.
 
Employment Agreement, dated April 1, 2004, by and between Kesslers Team Sports,
Inc. and Steve Carloni.
 
Employment Agreement, dated July 23, 2004, by and between Dixie Sporting Goods
Co., Inc. and Keneth L. Caravati.
 
Employment Agreement, dated July 23, 2004, by and between Dixie Sporting Goods
Co., Inc. and C. Michael Caravati.
 
Employment Agreement, dated July 23, 2004, by and between Dixie Sporting Goods
Co., Inc. and Kenneth L. Caravati.
 
Employment Agreement, dated December 10, 2004, by and between CMS of Central
Florida Inc. and Michael McWeeney.
 
Employment Agreement, dated May 11, 2005, by and between Salkeld & Sons Inc. and
Albert A. Messier.
 
Employment Agreement, dated May 11, 2005, by and between Salkeld & Sons Inc. and
Daniel F. Salkeld.
 
Lease Agreement, dated April 1, 2004, by and between Collegiate Pacific Inc. and
RPD Services, Inc.
 
Lease Agreement, dated December 10, 2005, by and between McWeeney Smith
Partnership and CMS of Central Florida, Inc d/b/a Orlando Team Sports.
 
Lease Agreement, dated as of August 1, 2005, by and among Salkeld & Sons, Inc.
and Albert A. Messier.
 
Lease Agreement, dated as of October 1, 2004 by and between Salkeld & Sons, Inc.
and First American Bank.
 
Promissory Note, dated July 26, 2004, executed by Collegiate Pacific Inc.
payable to Kenneth L. Caravati in the stated principal amount of $250,000.
 
Promissory Note, dated July 26, 2004, executed by Collegiate Pacific Inc.
payable to C. Michael Caravati in the stated principal amount of $250,000.
 
Promissory Note, dated May 11, 2005, executed by Collegiate Pacific Inc. payable
to Albert A. Messier in the stated principal amount of:

 

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FINAL DISCLOSURE SCHEDULES

  Description
Promissory Note, dated May 11, 2005, executed by Collegiate Pacific Inc. payable
to Daniel F. Salkeld in the stated principal amount of:
 
Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Michael J. Blumenfeld.
 
Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Adam Blumenfeld.
 
Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and William R. Estill.
 
Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Arthur J. Coerver.
 
Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Harvey Rothenberg.
 
Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Tevis Martin.
 
Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Kurt Hagan.
 
Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Bob Dickman.
 
As requested by Collegiate Pacific Inc. from time to time, Sport Supply Group,
Inc. will (a) render various payroll processing and human resource services to
Collegiate Pacific Inc. and its subsidiaries and (b) make office space available
to Collegiate Pacific Inc. at its corporate office and warehouse facility
located at 1901 Diplomat Drive, Dallas, Texas. Collegiate Pacific Inc. and Sport
Supply Group, Inc. engaged in arms-length negotiations of the fees to be charged
and paid for the services and office space, and believe in each instance that
the fees are consistent with comparable market rates. The aggregate monthly fees
to be paid by Collegiate Pacific Inc. under this arrangement are approximately
$20,000.

 

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FINAL DISCLOSURE SCHEDULES
SCHEDULE 5.13
to
CREDIT AGREEMENT
AMONG
COLLEGIATE PACIFIC INC.,
MERRILL LYNCH CAPITAL,
A Division of Merrill Lynch Business Financial Services Inc.,
as Administrative Agent, as a Lender and
as Sole Bookrunner and Sole Lead Arranger
AND
THE ADDITIONAL LENDERS
FROM TIME TO TIME PARTY HERETO
Business Description
Each Credit Party is engaged in the business of marketing, manufacturing and
distributing sporting goods and equipment, soft good athletic apparel and
footwear products, physical education, recreational and leisure products
primarily to the non-retail institutional market in the United States.