Exhibit 10.2
AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF NOVEMBER 13, 2006
AMONG
COLLEGIATE PACIFIC INC.,
MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.,
as Administrative Agent, as a Lender (including as the
Lender of WCMA Loans) and
as Sole Bookrunner and Sole Lead Arranger;
AND
THE ADDITIONAL LENDERS
FROM TIME TO TIME PARTY HERETO
(MERRILL LYNCH LOGO) [d41271d4127102.gif]

 

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TABLE OF CONTENTS

                              Page ARTICLE 1         DEFINITIONS     2      
Section 1.1  
Certain Defined Terms
    2       Section 1.2  
Accounting Terms and Determinations
    29       Section 1.3  
Other Definitional Provisions and References
    30          
 
        ARTICLE 2         LOANS AND LETTERS OF CREDIT     30       Section 2.1  
Term Loan
    30       Section 2.2  
Revolving Loans, WCMA Loans and Swingline Loans
    33       Section 2.3  
Interest, Interest Calculations and Certain Fees
    39       Section 2.4  
Notes
    42       Section 2.5  
Letters of Credit and Letter of Credit Fees
    43       Section 2.6  
General Provisions Regarding Payment; Loan Account
    46       Section 2.7  
Maximum Interest
    48       Section 2.8  
Taxes
    49       Section 2.9  
Capital Adequacy
    50       Section 2.10  
Mitigation Obligations
    50          
 
        ARTICLE 3         REPRESENTATIONS AND WARRANTIES     50       Section
3.1  
Existence and Power
    51       Section 3.2  
Organization and Governmental Authorization; No Contravention
    51       Section 3.3  
Binding Effect
    51       Section 3.4  
Capitalization
    51       Section 3.5  
Financial Information
    52       Section 3.6  
Litigation
    52       Section 3.7  
Ownership of Property
    52       Section 3.8  
No Default
    53       Section 3.9  
Labor Matters
    53       Section 3.10  
Regulated Entities
    53       Section 3.11  
Margin Regulations
    53       Section 3.12  
Compliance With Laws; Anti-Terrorism Laws
    53       Section 3.13  
Taxes
    54       Section 3.14  
Compliance with ERISA
    54       Section 3.15  
Brokers
    55       Section 3.16  
Material Contracts
    55       Section 3.17  
Compliance with Environmental Requirements; No Hazardous Materials
    55       Section 3.18  
Intellectual Property
    56       Section 3.19  
Real Property Interests
    57       Section 3.20  
Solvency
    57       Section 3.21  
Senior Debt
    57  

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                              Page     Section 3.22  
Certain Representations regarding the Acquisition Documents
    57       Section 3.23  
Full Disclosure
    58       Section 3.24  
Representations and Warranties Incorporated from Other Operative Documents
    58          
 
        ARTICLE 4         AFFIRMATIVE COVENANTS     58       Section 4.1  
Financial Statements and Other Reports
    58       Section 4.2  
Payment and Performance of Obligations
    62       Section 4.3  
Maintenance of Existence
    63       Section 4.4  
Maintenance of Property; Insurance
    63       Section 4.5  
Compliance with Laws
    64       Section 4.6  
Inspection of Property, Books and Records
    64       Section 4.7  
Use of Proceeds
    65       Section 4.8  
Lenders’ Meetings
    65       Section 4.9  
Intentionally omitted
    65       Section 4.10  
Hazardous Materials; Remediation
    65       Section 4.11  
Syndication
    66       Section 4.12  
Further Assurances
    66          
 
        ARTICLE 5         NEGATIVE COVENANTS     68       Section 5.1  
Debt
    68       Section 5.2  
Liens
    68       Section 5.3  
Contingent Obligations
    69       Section 5.4  
Restricted Distributions
    70       Section 5.5  
Restricted Agreements
    70       Section 5.6  
Payments and Modifications of Subordinated Debt
    70       Section 5.7  
Consolidations, Mergers and Sales of Assets
    71       Section 5.8  
Purchase of Assets, Investments
    71       Section 5.9  
Transactions with Affiliates
    75       Section 5.10  
Modification of Organizational Documents
    75       Section 5.11  
Intentionally Omitted
    76       Section 5.12  
Fiscal Year
    76       Section 5.13  
Conduct of Business
    76       Section 5.14  
Intentionally Omitted
    76       Section 5.15  
Lease Payments
    76       Section 5.16  
Limitation on Sale and Leaseback Transactions
    76       Section 5.17  
Bank Accounts
    76       Section 5.18  
Compliance with Anti-Terrorism Laws
    76          
 
        ARTICLE 6 ACCOUNTS AND INVENTORY REPRESENTATIONS, WARRANTIES, COVENANTS
AND AGREEMENTS     77       Section 6.1  
Accounts and Account Collections
    77       Section 6.2  
Inventory
    79  

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                              Page ARTICLE 7         FINANCIAL COVENANTS     79
      Section 7.1  
Fixed Charge Coverage Ratio
    80       Section 7.2  
Senior Leverage Ratio
    80          
 
        ARTICLE 8 CONDITIONS     80       Section 8.1  
Conditions to Initial Closing
    80       Section 8.2  
Intentionally omitted
    82       Section 8.3  
Conditions to Each Loan, Support Agreement and Lender Letter of Credit
    82          
 
        ARTICLE 9         EVENTS OF DEFAULT     83       Section 9.1  
Events of Default
    83       Section 9.2  
Acceleration and Suspension or Termination of Revolving Loan Commitment
    85       Section 9.3  
Cash Collateral
    86       Section 9.4  
Default Rate of Interest and Suspension of LIBOR Rate Options
    86       Section 9.5  
Setoff Rights
    86       Section 9.6  
Application of Proceeds
    87          
 
        ARTICLE 10         EXPENSES AND INDEMNITY     88       Section 10.1  
Expenses
    88       Section 10.2  
Indemnity
    89          
 
        ARTICLE 11         ADMINISTRATIVE AGENT     89       Section 11.1  
Appointment and Authorization
    89       Section 11.2  
Administrative Agent and Affiliates
    90       Section 11.3  
Action by Administrative Agent
    90       Section 11.4  
Consultation with Experts
    90       Section 11.5  
Liability of Administrative Agent
    90       Section 11.6  
Indemnification
    91       Section 11.7  
Right to Request and Act on Instructions
    91       Section 11.8  
Credit Decision
    92       Section 11.9  
Collateral Matters
    92       Section 11.10  
Agency for Perfection
    92       Section 11.11  
Notice of Default
    93       Section 11.12  
Successor Administrative Agent
    93       Section 11.13  
Disbursements of Revolving Loans; Payment and Sharing of Payment
    94       Section 11.14  
Right to Perform, Preserve and Protect
    97       Section 11.15  
Additional Titled Agents
    97          
 
        ARTICLE 12         MISCELLANEOUS     97  

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                              Page     Section 12.1  
Survival
    97       Section 12.2  
No Waivers
    97       Section 12.3  
Notices
    98       Section 12.4  
Severability
    99       Section 12.5  
Amendments and Waivers
    99       Section 12.6  
Assignments; Participations; Replacement of Lenders
    100       Section 12.7  
Headings
    103       Section 12.8  
Confidentiality
    103       Section 12.9  
Waiver of Consequential and Other Damages
    104       Section 12.10  
Marshaling; Payments Set Aside
    104       Section 12.11  
GOVERNING LAW; SUBMISSION TO JURISDICTION
    104       Section 12.12  
WAIVER OF JURY TRIAL
    105       Section 12.13  
Publication; Advertisement
    105       Section 12.14  
Senior Debt
    106       Section 12.15  
Counterparts; Integration
    106       Section 12.16  
No Strict Construction
    106  

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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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AMENDED AND RESTATED CREDIT AGREEMENT
     AMENDED AND RESTATED CREDIT AGREEMENT dated as of November 13, 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, MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC., individually as a Lender
(including as the Lender of WCMA Loans), as Administrative Agent, Sole
Bookrunner and Sole Lead Arranger.
RECITALS:
     WHEREAS, Borrower, Administrative Agent and Merrill Lynch Business
Financial Services Inc., acting through its Merrill Lynch Capital division, are
parties to a Credit Agreement dated June 29, 2006 pursuant to which the Lenders
have extended certain term loan and working capital loan facilities in favor of
Borrower (the “Original Credit Agreement”); and
     WHEREAS, pursuant to that certain WORKING CAPITAL MANAGEMENT® ACCOUNT
AGREEMENT NO. 586-07067 and the accompanying Program Description (as the same
may be, or have been, amended, modified or supplemented, the “WCMA Agreement")
between Borrower and Administrative Agent’s Affiliate, Merrill Lynch, Pierce,
Fenner & Smith, Incorporated (together with its successors and assigns,
“MLPF&S”), Borrower opened, or shall prior to the Activation Date open, a
Working Capital Management Account pursuant to the “WCMA Service” (and the “WCMA
Program” described in the WCMA Agreement and any documents incorporated therein,
and the WCMA Agreement is by this reference incorporated by reference herein and
made a part hereof); and
     WHEREAS, in connection with the WCMA Agreement and as part of the WCMA
Program, Borrower has requested that WCMA Lender provide, and subject to the
terms and conditions herein set forth, WCMA Lender has agreed to provide, a
commercial line of credit for Borrower; and
     WHEREAS, Borrower has requested that Lenders and Administrative Agent
provide certain financing to Borrower to finance the proposed acquisition by
Borrower of all of the issued and outstanding shares of capital stock of Sport
Supply Group, Inc., a Delaware corporation (“SSG”), not presently owned by
Borrower, and to provide ongoing working capital requirements on and after the
acquisition, and that the credit facilities under the Original Credit Agreement
be amended to provide for (a) a $35,000,000 revolving credit line, with a
sublimit for the issuance of letters of credit, and (b) a $20,000,000 term loan
facility; and
     WHEREAS, Borrower, Lenders and Administrative Agent desire that the
Original Credit Agreement be amended to add the WCMA Line of Credit, to increase
the amount of the revolving credit line and the term loan facility and to effect
certain other changes, and to restate the Original Credit Agreement in its
entirety, all as provided herein.
     NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrower, Lenders, and Administrative
Agent agree as follows:

 

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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 and/or WCMA Lender 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).
     “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 (including, without
limitation, the Merger Agreement), purchase agreement or other acquisition
agreement in respect of a Section 5.8(b) Permitted Acquisition or a
Section 5.8(c) Permitted Acquisition, and all agreements, documents and
instruments executed and/or delivered pursuant thereto or in connection
therewith.
     “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).
     “Activation Date” shall mean the date upon which WCMA Lender shall cause
the WCMA Line of Credit to be fully activated under MLPF&S’ computer system as
part of the WCMA Program.
     “Additional Titled Agent” has the meaning set forth in Section 11.15.
     “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 Revolving Loan 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

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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 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 Amended and Restated 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.

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     “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.
     “Backup Books and Records” has the meaning set forth in Section 4.6(b).
     “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 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, 0.50% per annum, with
respect to Revolving Loans, Swingline Loans, and all other Obligations (other
than the Term Loan) and 1.75% per annum with respect to the Term Loan, and
(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.

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     “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 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 Expenditures” has the meaning provided in the Compliance
Certificate.
     “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

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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 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.
     “Closing Date Term Loan” has the meaning set forth in Section 2.1(a).
     “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

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context may require hereunder) in its consolidated financial statements if such
statements were prepared as of such date.
     “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.
     “Convertible Senior Note Documents” means the 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, the Convertible Senior Notes, and all
agreements, documents and instruments executed and/or delivered pursuant thereto
or in connection therewith.
     “Credit Exposure” means any period of time during which the Revolving Loan
Commitment or the WCMA Loan Commitment is outstanding or any Loan, WCMA
Obligations, 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

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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 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;

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     (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;
     (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 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; provided, that, notwithstanding the foregoing, if Borrower shall be in
compliance with Article 6 hereof, and each of Borrower and its Subsidiaries
shall be in compliance with the provisions of Section 4.12 of their respective
security agreements in favor of Administrative Agent, then Accounts in an
aggregate amount not to exceed $1,200,000 at any one time outstanding that are
the obligations of Account Debtors who are the United States government or a
political subdivision thereof and that are otherwise Eligible Accounts pursuant
to the terms and conditions of this Agreement, may be considered to be Eligible
Accounts under this clause (E);
     (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;

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     (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;
     (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;

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     (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;
     (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;
     (Y) that is the obligation of an Account Debtor that is a state,
municipality or department, agency or instrumentality thereof if Administrative
Agent, in its sole discretion, has determined that the Borrower or any of its
Subsidiaries, or any other Person, is required to comply in a manner acceptable
to Administrative Agent, with any applicable state statute or municipal
ordinance of similar purpose and effect to the Federal Assignment of Claims Act
of 1940; and
     (Z) 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, and the inclusion of such Eligible
Accounts in the Revolving Loan Borrowing Base or the WCMA Loan 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.

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     “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 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 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;

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     (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;
     (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) intentionally omitted;
     (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 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, and the
inclusion of such Eligible Inventory in the Revolving Loan Borrowing Base or the
WCMA Loan 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

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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 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.

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     “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 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, the WCMA Agreement, 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.
     “Governmental Authority Account” mean an Account of Borrower and its
Domestic Subsidiaries that is an obligation of an Account Debtor that is a
Governmental Authority, including, without limitation, an Account that is an
obligation of an Account Debtor referred to in clauses (E) and (Y) of the
definition above in this Section 1.1 of the term Eligible Accounts.

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     “Governmental Authority Account Debtors” means Account Debtors with regard
to Governmental Authority Accounts.
     “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
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

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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.
     “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, (v) WCMA Lender, to
the extent of any WCMA Loans, and (vi) 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.

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     “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.
     “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, 2.00% per annum, with
respect to Revolving Loans, and all other Obligations (other than the Term Loan)
and 3.25% per annum with respect to the Term Loan, 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.

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     “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).
     “Loans” means the Term Loan, the Revolving Loans, the WCMA 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).
     “Merger” shall mean the merger of SSG with CP Merger Sub, Inc. pursuant to
the Merger Agreement and the other related Acquisition Documents.

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     “Merger Agreement” shall mean the Agreement and Plan of Merger dated as of
September 20, 2006, as amended by a First Amendment to Agreement and Plan of
Merger dated as of November 13, 2006, in each case by and among Borrower, SSG
and CP Merger Sub, Inc.
     “Merrill Lynch” means Merrill Lynch Business Financial Services Inc. and
its successors.
     “MLPF&S” has the meaning set forth in the recitals to this Agreement.
     “Money Accounts” has the meaning set forth in the WCMA Agreement.
     “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 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, the WCMA Loan Note,
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

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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.
     “One-Month LIBOR” shall mean, as of the date of any determination, the
interest rate then most recently published in the “Money Rates” section of The
Wall Street Journal as the one-month London Interbank Offered Rate, or, in the
event that The Wall Street Journal shall, for any reason, fail or cease to
publish the One-Month LIBOR, WCMA Lender will choose a reasonably comparable
index or source to use as the basis for the Interest Rate.
     “One-Month LIBOR Margin” means (i) initially, 2.00% per annum, and
(ii) thereafter, as of each Adjustment Date, the One-Month 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 One-Month
LIBOR Margin shall occur on such Adjustment Date.
     “Operative Documents” means the Financing Documents, the Subordinated Debt
Documents and the Acquisition Documents.
     “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).

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     “Original Credit Agreement” has the meaning set forth in the recitals to
this Agreement.
     “Overadvance Revolving Loans” has the meaning set forth in
Section 2.2(a)(iii).
     “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.
     “Pricing Table” means the following table:

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                                              Revolving Loans, WCMA Loans and  
          all other Obligations (other than the             Term Loan)          
          LIBOR/One-   Term Loan Tier   Senior Leverage Ratio   Base Rate1  
Month LIBOR   Base Rate   LIBOR
IV
  Greater than or equal to 2.50 to 1.00     0.50 %     2.00 %     1.75 %    
3.25 %
 
                                   
III
  Greater than or equal to 2.00 to 1.00, but less than 2.50 to 1.00     0.25 %  
  1.75 %     1.25 %     2.75 %
 
                                   
II
  Greater than or equal to 1.00 to 1.00, but less than 2.00 to 1.00     0.00 %  
  1.50 %     0.75 %     2.25 %
 
                                   
I
  Less than 1.00     –0.25 %     1.25 %     0.25 %     1.75 %

 

1   Not applicable to WCMA Loans.

     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.
     “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, (iii) with respect to WCMA Lender’s obligation to make WCMA Loans, WCMA
Lender’s’ right to receive payments of principal and interest with respect
thereto, the WCMA Commitment Percentage of WCMA 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 and/or the WCMA Loan Commitment shall
have been terminated, such Lender’s then existing Revolving Loan Outstandings
plus, as to Merrill Lynch, WCMA Lender’s then existing WCMA 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 and/or the WCMA Loan Commitment shall have been terminated, the then
existing Revolving Loan Outstandings, plus the then existing WCMA Loan
Outstandings), 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

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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 and/or the
WCMA 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 the then outstanding principal balance of
the Loans plus 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 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 and WCMA 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 and, as to WCMA
Lender, the WCMA Loans plus (y) the then aggregate amount of Letter of Credit
Liabilities.
     “Reserves” means such amounts as Administrative Agent (and/or WCMA Lender
as to WCMA Loans) may from time to time establish and revise, in each case in
the exercise of their respective reasonable discretion, reducing the amount of
Revolving Loans, WCMA 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 (and/or WCMA Lender as to WCMA
Loans) in the exercise of their respective reasonable credit judgment:
(i) adversely affect, or could reasonably be expected to 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 (and/or WCMA Lender as to WCMA Loans)
respective 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 and/or WCMA Lender, as applicable. To
the extent Administrative Agent and/or WCMA Lender, as applicable, may, in
accordance with any other terms hereof, revise the lending formula(s) used to
determine the Revolving Loan Borrowing Base or the WCMA Loan Borrowing Base or
establish new criteria or revise existing criteria for Eligible Accounts or
Eligible Inventory, Administrative Agent and WCMA Lender, as applicable, 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 and/or WCMA Lender, as applicable, 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

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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 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
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) $33,000,000, minus (x) any Reserves
then and from time to time established by the Administrative Agent and/or WCMA
Lender, and minus (y) WCMA Loan Outstandings.
     “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.
     “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 the WCMA
Loan Outstandings and (ii) the Revolving Loan 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

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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 and the Convertible Senior Notes 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 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” has the meaning set forth in the recitals to this Agreement.
     “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, (ii) the Promissory Note, dated July 26, 2004,
executed by Borrower payable to C. Michael Caravati in the stated principal
amount of $250,000, (iii) the Promissory Note, dated May 11, 2005, executed by
Borrower payable to Albert A. Messier in the stated principal amount

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of $100,000, (iv) Promissory Note, dated May 11, 2005, executed by Borrower
payable to Daniel F. Salkeld in the stated principal amount of $130,000 and
(v) the Subordination Agreements.
     “Subordination Agreements” means (i) the Subordination Agreement dated
May 31, 2006 among Kenneth L. Caravati, Borrower and Administrative Agent,
(ii) the Subordination Agreement dated May 31, 2006 among Michael Caravati,
Borrower and Administrative Agent, (iii) the Subordination Agreement dated
June 1, 2006 among Albert A. Messier, Borrower and Administrative Agent, and
(iv) the Subordination Agreement dated June 1, 2006 among Daniel F. Salkeld,
Borrower and Administrative Agent.
     “Subsidiary” means, with respect to any Person, (i) any corporation, 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.
     “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 WCMA Loan Outstandings and (iii) the Revolving
Loan Borrowing Base minus the amount of Revolving Loan Outstandings.
     “Swingline Loan Note” has the meaning set forth in Section 2.4.

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     “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.
     “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.
     “WCMA Account” means the Working Capital Management Account of Borrower
with MLPF&S identified as Account No. 587-07067 and any successor Working
Capital Management Account of Borrower with MLPF&S.
     “WCMA Agreement” has the meaning set forth in the recitals to this
Agreement.
     “WCMA Commitment Percentage” means, as to any WCMA Lender, (i) on the
Closing Date, 100%, and (ii) on any date following the Closing Date, the
percentage equal to the amount of the WCMA Loan Commitment of such Lender on
such date divided by the WCMA Loan Commitment on such date.
     “WCMA Lender” means Merrill Lynch and its successors and assigns, solely in
its capacity as the Lender of WCMA Loans under this Agreement.
     “WCMA Line of Credit” means the line of credit set forth in Section 2.2(b)
and funded by WCMA Lender through the WCMA Account and made available to
Borrower subject to the terms of this Agreement.
     “WCMA Loan Borrowing Base” means, as of any date of calculation, a dollar
amount calculated pursuant to the Borrowing Base Certificate most recently
delivered to Administrative

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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) $33,000,000, minus (x) any Reserves then and from time to time established
by the Administrative Agent and/or WCMA Lender, and minus (y) the Revolving Loan
Outstandings.
     “WCMA Loan Commitment” means $5,000,000.
     “WCMA Loan Limit” means the lesser of (i) the WCMA Loan Commitment or
(ii) the WCMA Loan Borrowing Base.
     “WCMA Loan Maturity Date” means June 1, 2009
     “WCMA Loan Note” means the WCMA Loan Note set forth in Section 2.4.
     “WCMA Loan Outstandings” means, at any time of calculation, the then
existing aggregate outstanding principal amount of WCMA Loans.
     “WCMA Loans” means loans made and to be made by WCMA Lender at any time and
from time to time under Section 2.2(a)(ii) of this Agreement and the WCMA
Agreement.
     “WCMA Program” has the meaning set forth in the recitals of this Agreement.
     “WCMA Obligations” means all obligations, liabilities and indebtedness
(monetary (including post-petition interest, whether or not allowed) or
otherwise of each Credit Party under the WCMA Agreement and all related
Financing Documents, 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.
     “WCMA Termination Date” has the meaning set forth in Section 2.2(c).
     “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

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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. 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 June 29, 2006, the Lenders made a term loan to
the Borrower in the amount of $10,000,000, of which there is an outstanding
balance on the date hereof of $9,500,000. On the terms and subject to the
conditions set forth herein, the Lenders hereby agree to make an additional term
loan on the date hereof in an original principal amount equal to $10,500,000
(the “Closing Date Term Loan”), so that after the making of such Term Loan, the
aggregate principal amount of Term Loans made by Lenders to Borrower shall be
$20,000,000. The Term Loan made to Borrower on June 29, 2006 and the Closing
Date Term Loan to be made to Borrower on the Closing Date are collectively
referred to in this Agreement and the other Loan Documents as the “Term Loan”.
Each Lender’s obligation to fund the Closing Date Term Loan shall be limited to
such Lender’s Term Loan Commitment Percentage of the Closing Date Term Loan, and
no Lender shall have any obligation to fund any portion of the Closing Date Term
Loan required to be funded by any other Lender, but not so funded.

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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, ten (10) scheduled payments, as follows:
(i) the first four (4) scheduled payments, each in the principal amount of
$750,000, shall be due and payable on March 31, 2007, June 30, 2007,
September 30, 2007 and December 31, 2007, (ii) the next five (5) scheduled
payments, each in the principal amount of $1,000,000, shall be due and payable
on March 31, 2008, June 30, 2008, September 30, 2008, December 31, 2008, and
March 31, 2009, and (iii) a tenth (10th) 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, Swingline Loans and WCMA
Loans) 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
$350,000 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 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 from
the issuance of equity securities to Borrower or any Wholly-Owned Subsidiary,
and (3) proceeds from 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

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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 (i) or
(iii) shall be immediately applied by Borrower as a prepayment against then
outstanding Revolving Loans and then, any remainder to WCMA Loans, and
Administrative Agent shall establish a Reserve (the “Reinvestment Reserve”)
against the Revolving Loan Limit and the WCMA 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
(i) 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 (i) and (iii).”
     (c) 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 the 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.
     (d) 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, Swingline Loans and WCMA Loans, in the foregoing
order, 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 and/or WCMA Loans would be required pursuant to
either of Section 2.2(c) 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,
second, at any time the Revolving Loans have been repaid in full,

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as a repayment of the outstanding Swingline Loans, and third, at any time the
Revolving Loans and Swingline Loans have been repaid in full, as a repayment of
WCMA 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, WCMA 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) On the terms and subject to the conditions set forth herein, WCMA
Lender agrees to make WCMA Loans from time to time as set forth herein in such
amounts as Borrower may from time to time request in accordance with the terms
hereof, up to an aggregate outstanding amount not to exceed the WCMA Loan Limit.
Within the foregoing limits, Borrower may borrow under this Section 2.2(a)(ii),
may prepay or repay WCMA Loans from time to time and may reborrow WCMA Loans
pursuant to this Section 2.2(a)(ii), the WCMA Agreement and WCMA Program.
Borrower may request WCMA Loans by use of WCMA Checks, FTS, Visa® charges, wire
transfers, or such other means of access to the WCMA Line of Credit as may be
permitted by WCMA Lender from time to time; it being understood that so long as
the WCMA Line of Credit shall be in effect, any charge or debit to the WCMA
Account which but for the WCMA Line of Credit would under the terms of the WCMA
Agreement result in an overdraft, shall be deemed a request by Borrower for a
WCMA Loan.
     (iii) 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 Loan 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 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, (ii) the WCMA 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

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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 and WCMA 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 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

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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.
          (iv) Upon request of Borrower as contemplated by Section 2.2(a)(ii)
and subject to the terms and conditions of this Agreement and the WCMA
Agreement, WCMA Lender shall make WCMA Loans to Borrower.
     (c) Mandatory Revolving Loan and WCMA 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) The WCMA Loan Commitment shall terminate upon the earliest to
occur of (i) WCMA Loan Maturity Date, (ii) the Termination Date, and (iii) any
date on which WCMA Lender elects to terminate the WCMA Loan Commitment pursuant
to Section 9.2 (such earlier date being the “WCMA Termination Date”). On the
Termination Date or the WCMA Termination Date, there shall become due, and
Borrower shall pay the entire outstanding principal amount of each WCMA Loan,
together with accrued and unpaid WCMA Obligations and other Obligations
pertaining thereto.
          (iii) If at any time the Revolving Loan Outstandings exceed the
Revolving Loan Limit or the Swingline Loan Outstandings exceed the Swingline
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.
          (iv) If at any time the WCMA Loan Outstandings exceed the WCMA Loan
Limit, then, on the next succeeding Business Day, Borrower shall repay the WCMA
Loans in an amount equal to such excess.
          (v) In the event that, at any time any WCMA Loans are outstanding,
either (1) an Event of Default pursuant to either Section 9.1(f) or 9.1(g) has
occurred, or at the request of WCMA Lender in the event that any other Event of
Default has occurred, or (2) the WCMA 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 any Revolving Lender (other than
Merrill Lynch) that was a Non-Funding Revolving Lender at the time the
applicable

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WCMA Loans were advanced) shall be deemed to have irrevocably and immediately
purchased and received from WCMA Lender, without recourse or warranty, an
undivided interest and participation in the WCMA Loan in an amount equal to such
Lender’s Revolving Loan Commitment Percentage multiplied by the total amount of
the WCMA 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 WCMA Lender desires to effect settlement of any such purchase, WCMA 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 WCMA 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 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 WCMA Loan. Upon such settlement, the Revolving
Loan Commitment Amount of each purchasing Revolving Lender shall increase
accordingly and Borrower shall, if requested by any Revolving Lender, execute a
replacement Revolving Loan Note in such increased amount.
          (vi) In the event any Revolving Lender (other than Non-Funding
Revolving Lenders, as specified above) fails to make available to WCMA Lender
when due the amount of such Lender’s participation in the WCMA Loans, WCMA
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 WCMA Loans. Any Lender’s failure to make any payment
requested under this Section 2.2(c) 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 WCMA Lender such other Lender’s required
payment hereunder. The obligations of the Lenders under this Section 2.2(c)
shall be deemed to be binding upon Administrative Agent, WCMA 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.
          (vii) In the event that both Sections (iii) and (iv) shall require the
repayment of Revolving Loan Outstandings, Swingline Loan Outstandings and WCMA
Loan Outstandings, then amounts repaid shall be applied on a pro-rata basis to
Revolving Loans, Swingline Loans and WCMA Loans of each Lender in accordance
with 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, as to WCMA Lender, the WCMA Loan Commitment (or, in the
event the WCMA Loan Commitment shall have been terminated, WCMA Lender’ then
existing WCMA Loan Outstandings), by (y) the sum of the Revolving Loan
Commitment plus the WCMA Loan Commitment (or, in the event the Revolving Loan
Commitment and/or the WCMA Loan Commitment shall have been terminated, the then
existing Revolving Loan Outstandings and/or WCMA Loan Outstandings, as
applicable) of all Lenders.

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     (d) Optional Prepayments; Permanent Reduction of Revolving Loan Commitment;
Reduction of All Commitments; Early Termination.
          (i) Subject to the provisions of Section 2.3(e)(iv), Borrower may from
time to time prepay the Revolving Loans, Swingline Loans and/or the WCMA 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) 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 may
elect may not exceed $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

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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.
          (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

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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
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.
     Section 2.3 Interest, Interest Calculations and Certain Fees.
     (a) Interest.
          (i) From and following the Closing Date, depending upon Borrower’s
election from time to time, subject to the terms hereof, to have portions of
Revolving Loans and the Term 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:
     (A) 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.
     (B) If a LIBOR Loan, then at the sum of the LIBOR plus the applicable LIBOR
Margin.
          (ii) WCMA Loans shall bear interest at the One-Month LIBOR plus the
One-Month 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 (i) (A) the Revolving Loan Commitment less (B) the average
daily balance of the Revolving Loan Outstandings during the preceding month,
multiplied by (ii) (A) at all times when Tier I or II of

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the Pricing Table shall be applicable, 0.375% per annum, or (B) at all times
when Tier III or IV of the Pricing Table shall be applicable, 0.50% 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; WCMA Late Charges.
          (i) Base Rate Loans and LIBOR Loans. 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.
          (ii) WCMA Loans. The One-Month LIBOR will change as of the date of
publication in The Wall Street Journal of a One-Month LIBOR that is different
from that published on the preceding Business Day. If more than one One-Month
LIBOR is published, then the highest of such rates shall apply. Any payment or
deposit required to be made by Borrower pursuant to the WCMA Agreement not paid
or made within ten (10) days of the applicable due date shall be subject to a
late charge in an amount equal to the lesser of: (A) 5% of the overdue amount,
or (B) the maximum amount permitted by applicable law. Such late charge shall be
payable on demand, or, without demand, may in the sole discretion of WCMA Lender
be paid by a subsequent WCMA Loan and added to the WCMA Loan Outstandings.
Unless otherwise directed in writing by WCMA Lender, all interest on the WCMA
Loans will be automatically charged to the WCMA Account on first Business Day of
each calendar month and on the maturity of WCMA Loans, whether by acceleration
or otherwise, and, to the extent not paid with free credit balances or the
proceeds of sales of any Money Accounts then in the WCMA Account, as provided
herein, will be paid by a WCMA Loan and added to the WCMA Loan Outstandings.
     (e) LIBOR Provisions.
          (i) LIBOR Election. All Loans (other than WCMA 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 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

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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 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

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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.
     (a) Term Notes, Revolving Loan Notes and Swingline Loan Notes. The portion
of the Term Loan made by each Lender on June 29, 2006 and the portion of the
Closing Date Term Loan made by such Lender on the date hereof shall be
evidenced, if so requested by such Lender, by a consolidated, amended and
restated 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.
     (b) WCMA Loan Note. FOR VALUE RECEIVED, Borrower hereby promises to pay to
the order of WCMA Lender, at the times and in the manner set forth in this
Agreement, or in such other manner and at such place as WCMA Lender may
hereafter designate in writing, the following: (a) on the WCMA Termination Date,
the WCMA Loan Outstandings, (b) interest at the Interest Rate (or, if
applicable, at the Default Rate) on the outstanding WCMA Loan

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Outstandings, from and including the date on which the initial WCMA Loan is made
until the date of payment of all WCMA Loans in full, and (c) on demand, all
other sums payable pursuant to this Agreement in respect of WCMA Loans.
     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

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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 (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

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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 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

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to Administrative Agent, or the applicable LC Issuer, as applicable, forthwith
on demand 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 (other than WCMA Loans) and other extensions of
credit made by the Lenders hereunder or under any other Financing Document, and
all payments thereon made by

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Borrower. All entries in the 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. As to the WCMA Loans, MLPF&S will include in each
monthly statement it issues under the WCMA Program information with respect to
WCMA Loans and the WCMA Loan Outstandings. Any questions that Borrower may have
with respect to such information, and any questions with respect to any other
matter in such statements or about or affecting the WCMA Program, shall be
directed to MLPF&S.
     (c) WCMA Lender shall not be responsible, and shall have no liability to
Borrower or any other party, for any delay or failure of WCMA Lender to honor
any request of Borrower for a WCMA Loan or any other act or omission of WCMA
Lender, MLPF&S or any of their Affiliates due to or resulting from any system
failure, error or delay in posting or other clerical error, loss of power, fire,
Act of God or other cause beyond the reasonable control of WCMA Lender, MLPF&S
or any of their Affiliates unless directly arising out of the willful wrongful
act or active gross negligence of WCMA Lender. In no event shall WCMA Lender be
liable to Borrower or any other party for any incidental or consequential
damages arising from any act or omission by WCMA Lender, MLPF&S or any of their
Affiliates in connection with the WCMA Line of Credit or this Agreement.
     (d) All payments required or permitted to be made pursuant to the WCMA
Agreement and this Agreement shall be made in lawful money of the United States.
Unless otherwise directed by WCMA Lender, payments on account of the WCMA Loan
Outstandings may be made by the delivery of checks (other than WCMA Checks), or
by means of FTS or wire transfer of funds (other than funds from the WCMA Line
of Credit) to MLPF&S for credit to Borrower’s WCMA Account. Notwithstanding
anything in the WCMA Agreement to the contrary, Borrower hereby irrevocably
authorizes and directs MLPF&S to apply available free credit balances in the
WCMA Account to the repayment of the WCMA Loan Outstandings prior to application
for any other purpose. Payments to WCMA Lender from funds in the WCMA Account
shall be deemed to be made by Borrower upon the same basis and schedule as funds
are made available for investment in the Money Accounts in accordance with the
terms of the WCMA Agreement. All funds received by WCMA Lender from MLPF&S
pursuant to the aforesaid authorization shall be applied by WCMA Lender to
repayment of the WCMA Loan Outstandings. The acceptance by or on behalf of WCMA
Lender of a check or other payment for a lesser amount than shall be due from
Borrower, regardless of any endorsement or statement thereon or transmitted
therewith, shall not be deemed an accord and satisfaction or anything other than
a payment on account, and WCMA Lender or anyone acting on behalf of WCMA Lender
may accept such check or other payment without prejudice to the rights of WCMA
Lender to recover the balance actually due or to pursue any other remedy under
this Agreement

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or applicable law for such balance. All checks accepted by or on behalf of WCMA
Lender in connection with the WCMA Line of Credit are subject to final
collection.
     (e) In order to minimize the WCMA Loan Outstandings, Borrower hereby
irrevocably authorizes and directs MLPF&S, effective on the Activation Date and
continuing thereafter so long as this Agreement and the WCMA Agreement shall be
in effect: (i) to immediately and prior to application for any other purpose pay
to WCMA Lender to the extent of any WCMA Loan Outstandings or other amounts
payable by Borrower hereunder all available free credit balances from time to
time in the WCMA Account; and (ii) if such available free credit balances are
insufficient to pay the WCMA Loan Outstandings and such other amounts, and there
are in the WCMA Account at any time any investments in Money Accounts (other
than any investments constituting any Minimum Money Accounts Balance under the
WCMA Directed Reserve Program), to immediately liquidate such investments and
pay to WCMA Lender to the extent of any WCMA Loan Outstandings and such other
amounts the available proceeds from the liquidation of any such Money Accounts.
     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.

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     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, 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

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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.
     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. SSG has no Subsidiaries.
     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
Schedule 3.4. No shares of the capital stock or other equity securities of any
Credit Party (other

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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, 2006 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 Administrative 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) Intentionally omitted.
     (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 June 30, 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.
     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.

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     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.
     (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

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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 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

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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).
     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

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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 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

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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 Certain Representations regarding the Acquisition Documents.
     The Acquisition Documents have been duly authorized (including, without
limitation, by the stockholders of SSG), executed and delivered by each of the
parties thereto and each is the legal, valid, binding obligation of each of the
parties thereto, enforceable in accordance with its 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. After giving effect to the Merger and the other
transactions contemplated by the Acquisition Documents, the representations and
warranties contemplated by the Financing Documents are correct in all respects.
The Merger has been consummated in accordance with the terms and provisions of
the Merger Agreement. Without limiting the foregoing, except as disclosed to
Administrative Agent in writing, the parties to the Acquisition Documents have
made and/or obtained all filings, consents, authorizations, and approvals from
each Governmental Authority and other Person required to be obtained and/or
made, as the case may be, in connection with the Merger and the other
transactions contemplated by the Acquisition Documents, and none of the
conditions precedent to the Merger or to the other transactions contemplated by
the Acquisition Documents have been waived by any of the parties thereto.

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     Section 3.23 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 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 3.24 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, 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 year-to-date
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

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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;
     (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 in making the examination necessary for the
certification of such financial statements, nothing has come to their attention
to lead them to believe that a Default or Event of Default exists or, if a
Default or Event of Default exists, specifying such Default or Event of Default
and its nature;
     (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

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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 Litigation with regard to the Merger, 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 Merger, 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

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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;
     (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

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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;
     (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 Revolving Loan Borrowing Base and/or the WCMA Loan
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 Revolving Loan
Borrowing Base and/or the WCMA Loan 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

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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 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

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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 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.
     (a) 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
(including, without limitation, the Backup 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.
     (b) Without limiting of the generality of the foregoing, Borrower will, and
will cause each Subsidiary to, maintain a duplicate copy of all of its books and
records in electronic or other

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computerized form or in such other medium as may be acceptable to Administrative
Agent (the “Backup Books and Records”), at such locations as shall be acceptable
to Administrative Agent, and to back-up or update, no less frequently than
weekly, the Backup Books and Records. Borrower will, and will cause each
Subsidiary to, take all such action to provide access by Administrative Agent
and its representatives to the Backup Books and Records on such terms and
conditions, and pursuant to such access agreements and other agreements, as
Administrative Agent shall request.
     Section 4.7 Use of Proceeds.
     Borrower will use the proceeds of the Term Loan solely to finance the
transactions contemplated by the Merger Agreement and the other Operative
Documents. The proceeds of Revolving Loans shall be used by Borrower solely for
the purposes set forth in the preceding sentence, to finance Capital
Expenditures in an aggregate amount not to exceed $2,500,000 during each Fiscal
Year of Borrower, and for working capital needs of Borrower and its
Subsidiaries. Borrower will use the proceeds of the WCMA Loans solely to finance
the transactions contemplated by the Merger Agreement and the other Operative
Documents, and for working capital requirements in the ordinary course of its
business, or, with the prior written consent of WCMA Lender, for other lawful
business purposes not prohibited hereby Borrower agrees that under no
circumstances will the proceeds of any WCMA Loan be used: (i) for personal,
family or household purposes of any person whatsoever, or (ii) to purchase,
carry or trade in securities, or repay debt incurred to purchase, carry or trade
in securities, whether in or in connection with the WCMA Account, another
account of Borrower with MLPF&S or an account of Borrower at any other broker or
dealer in securities, or (iii) unless otherwise consented to in writing by WCMA
Lender, to pay any amount to Merrill Lynch and Co., Inc. or any of its
Subsidiaries, other than Merrill Lynch Bank USA, Merrill Lynch Bank & Trust Co.
or any Subsidiary of either of them (including WCMA Lender and Merrill Lynch
Credit Corporation).
     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

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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 Syndication.
     (a) At any time and from time to time after the date hereof, Borrower will
enter into such modifications to the Loans and/or the Financing Documents as
Administrative Agent may reasonably request as necessary for the successful
syndication of the Loans and the Loan commitments, as determined by
Administrative Agent in the exercise of its reasonable discretion. Such
modifications shall include, without limitation, 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 any
modification 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 Administrative
Agent, Merrill Lynch and prospective Lenders, and furnishing such other
information as Administrative 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 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, and obtaining letters and
agreements with landlords and licensors of any of the Credit Parties as
Administrative Agent or the Required Lenders may from time to time request.

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     (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, 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, (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

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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;
     (f) Debt under the Convertible Senior Notes and the other Convertible
Senior Note Documents in an aggregate principal amount not to exceed
$50,000,000; and
     (g) 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:
     (a) Liens created by the Security Documents;
     (b) Liens existing on the date of this Agreement and set forth on
Schedule 5.2;

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     (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;
     (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.

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     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 or the Convertible Senior Notes, except
for regularly scheduled payments of principal and interest (but no voluntary
prepayments) in respect of such Debt made in full compliance with the
Subordination Agreement or the Convertible Senior Debt Documents, as applicable,
and, if any, any other subordination provisions applicable to such Debt; or
(c) amend or otherwise modify the terms of any Subordinated Debt or the
Convertible Senior Note Documents 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 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

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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) the Merger, the consummation of a Section 5.8(b) Permitted Acquisition or a
Section 5.8(c) Permitted Acquisition in accordance with the terms and conditions
of Sections 5.8(b) and 5.8(c), respectively, and the other terms and conditions
of this Agreement, 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 either a Section 5.8(b) Permitted Acquisition or a
Section 5.8(c) Permitted Acquisition in accordance with the terms and conditions
of Sections 5.8(b) and 5.8(c), respectively, and the other terms and conditions
of this Agreement, 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;
          (ii) Cash Equivalents;

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          (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 Administrative 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) Administrative 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 Administrative 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
Administrative Agent such other information, documents and items as
Administrative 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 entered into such
modifications to the Financing Documents, and shall have entered into such other
documents and instruments, in each case as Administrative Agent may reasonably
request.
     (c) Notwithstanding the provisions of Section 5.8(a), 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 in their discretion, 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

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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 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

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“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;
          (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;

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          (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 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.

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     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 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

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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 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.

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     (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 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

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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 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:

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     Section 7.1 Fixed Charge Coverage Ratio.
     Borrower will not permit the Fixed Charge Coverage Ratio at any time during
any of the following periods (as of any date of calculation for the twelve
(12) month period ending on such date) to be less than the ratio set forth for
such period: (a) during the period from and including the date hereof to and
including March 31, 2007, 1.15 to 1.00, (b) during the period from and including
April 1, 2007 to and including September 30, 2007, 1.20 to 1.00, (c) during the
period from and including October 1, 2007 to and including March 31, 2008, 1.25
to 1.00, and (d) during the period from and including April 1, 2008 and at all
times thereafter, 1.35 to 1.00.
     Section 7.2 Senior Leverage Ratio.
     Borrower will not permit the ratio of (a) the difference between (i) Total
Debt less (ii) Subordinated Debt and the Convertible Senior Notes on the last
day of each calendar quarter set forth below to (b) EBITDA for the twelve
(12) month period ending on each such date to exceed the ratio set forth below
opposite such period:

          Date   Ratio  
December 31, 2006
    3.00 to 1.00  
March 31, 2007
    2.75 to 1.00  
June 30, 2007
    2.50 to 1.00  
September 30, 2007
    2.25 to 1.00  
December 31, 2007
    2.25 to 1.00  
March 31, 2008
    2.25 to 1.00  
June 30, 2008 and on the last day of each calendar quarter thereafter
    2.00 to 1.00  

     Section 7.3 Capital Expenditures
     Borrower will not permit the aggregate amount of Capital Expenditures
during any Fiscal Year of Borrower (commencing with the fiscal year of Borrower
ending June 30, 2007) to exceed $3,000,000.
ARTICLE 8
CONDITIONS
     Section 8.1 Conditions to Closing.
     The obligation of each Lender to make the Loans on the Closing Date, 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:

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     (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 Administrative Agent as to the absence, since
June 30, 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 Revolving Loans of not less than $6,000,000 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 with regard to Merger, the Merger Agreement, SSG 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 (including SSG) and their respective businesses and operations;
     (e) Administrative Agent and the Lenders shall have received and approved
all requested financial statements and projections;
     (f) the receipt of evidence satisfactory to Lenders and Administrative
Agent that the transactions contemplated by the Merger Agreement and the related
Acquisition Documents shall have occurred on terms and conditions satisfactory
to Lenders and Administrative Agent, and certified copies of the Merger
Agreement and such related Acquisition Documents, with the opinions of counsel
included therein expressly stating that that Lenders and Administrative Agent
are entitled to rely thereon as fully as if such opinions were addressed to
Lenders and Administrative Agent.
     (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 Administrative Agent and the Lenders in form and
substance;
     (h) no Default or Event of Default shall have occurred and shall be
continuing;
     (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;

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     (k) Administrative Agent shall be satisfied with the Credit Parties’
respective capital, legal and organizational structures;
     (l) Borrower, SSG, 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;
     (m) There shall not have occurred any act, condition or occurrence of any
other nature whatsoever (including, without limitation, any pending or
threatened Litigation with respect to the Merger or otherwise) which, in any
such case, whether singly or in the aggregate, and whether or not related, in
the reasonable judgment of Administrative Agent has had or could reasonably
expected to have 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 SSG or any of the other 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, whether prior or subsequent
to the Acquisition, (iii) the legality, validity or enforceability of any
Financing Document, whether prior or subsequent to the Merger, or (iv) 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 Merger;
     (n) Borrower shall have validly subscribed to and continued to maintain the
WCMA Account with MLPF&S, and the WCMA Account shall then be reflected as an
active “commercial” WCMA Account (i.e., one with line of credit capabilities) on
MLPF&S’ WCMA computer system and Borrower’s subscription to the WCMA Program
shall be in effect (it being understood that no activation by WCMA Lender of the
WCMA Line of Credit for a nominal amount shall be deemed evidence of the
satisfaction of any of the conditions set forth above, or a waiver of any of
those conditions); and
     (o) Receipt by Administrative Agent of such other information (financial or
otherwise), documents, instruments and/or agreements as Administrative Agent may
reasonably request.
     Section 8.2 Intentionally omitted.
     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

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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;
          (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; and
          (v) the requirements of Section 8.1(n) shall have been satisfied and
the WCMA Line of Credit shall not have otherwise been terminated and Borrower’s
subscription to the WCMA Program shall not have been terminated.
     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 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;

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     (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 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;

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     (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, 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.
     (a) 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.
     (b) Upon the occurrence and during the continuance of an Event of Default,
WCMA Lender may (i) by notice to Borrower suspend or terminate the WCMA Loan
Commitment and the obligations WCMA Lender with respect thereto, in whole or in
part and/or (ii) by notice to Borrower declare all or any portion of the WCMA
Obligations to be, and such WCMA

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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 WCMA Lender, Administrative Agent or the Lenders, the WCMA Lender Loan
Commitment and the obligations of WCMA Lender with respect thereto shall
thereupon terminate and all of the WCMA 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 (or WCMA Lender
as to WCMA Loans), 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.
     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 (including, without limitation, any cash,
credit, deposits, accounts, financial assets, investment property, and/or
securities of Borrower which is in transit to or in the possession, custody or
control of any agent, bailee or Affiliate of any Lender); 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; provided, that any set off
by WCMA Lender prior to the purchase by any other

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Lender of a participation in the WCMA Loans pursuant to Section 2.2(c)(v) shall
not be shared as provided above, but instead may be retained by WCMA Lender and
applied as it shall determine in its sole discretion. 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. In the absence of any specific
election by Administrative Agent, or 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) on a pro-rata basis among
the Lenders in accordance with their respective Pro Rata Share; 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), all on a pro-rata basis among the
Lenders in accordance with their respective Pro Rata Share; 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, all on a pro-rata basis among the Lenders in accordance
with their respective Pro Rata Share.
     (b) Intentionally omitted.
     (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

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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 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,

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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 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

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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.
     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

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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
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.

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     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.
     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

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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 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

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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 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

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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.
          (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

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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.
          (i) General Provisions. Except as provided in Section 11.3(e)(ii), 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 excess
payment or other recovery is thereafter 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.
          (ii) WCMA Account. Notwithstanding anything contained in this
Agreement or any other Financing Document to the contrary, each Lender hereby
agrees that until the full and final payment to WCMA Lender of all WCMA
Obligations, any payment or other recovery (whether voluntary, involuntary, by
application of setoff or otherwise) it shall receive or to which it shall become
entitled (whether pursuant to any applicable bankruptcy, insolvency or other
similar law, or otherwise) and that shall represent any amounts, assets or other
properties at any

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time and from time to time in the WCMA Account shall be immediately delivered to
WCMA Lender to be applied by WCMA Lender to the outstanding WCMA Obligations.
     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.
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

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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
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.

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     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, 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 Revolving Loan Borrowing Base and/or the WCMA Loan 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)

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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).
     (c) Notwithstanding anything in the Operative Documents to the contrary, no
amendment, waiver or other modification to this Agreement in respect of the WCMA
Agreement, WCMA Account, WCMA Program or WCMA Loans, or the transactions
contemplated hereby or thereby, shall be effected without the prior written
consent of WCMA Lender. WCMA Lender shall have the sole power and authority to
effect any amendment, waiver or other modification to the WCMA Agreement, WCMA
Account, WCMA Program and the procedures and operations in respect of or
otherwise relating to the WCMA Loans and WCMA Line of Credit.
     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 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.

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          (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.
          (vi) Notwithstanding the foregoing provisions of this Section 12.6(a)
or any other provision of this Agreement, WCMA Lender may at any time assign to
one or more Persons all or a portion of its WCMA Loans and interest in the WCMA
Loan Commitment, together with all related obligations, at any time in its sole
discretion.
     (b) Participations.
     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

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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 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

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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 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

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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 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

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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 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.

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     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:    
 
           
 
      Bank of America    
 
      Reference: Collegiate Pacific, Inc. (WCMA, Revolver, Term)    
 
      ABA No.: 026009593    
 
      Account No.: 8188101946    
 
      Account Name: MLBFS – Middle Market    

                  With a copy to:    
 
                LIDJI & DOREY    
 
           
 
  Address:   500 N. Akard St., Suite 3500    
 
      Dallas, TX 75201    
 
      Attention: Michael R. Dorey Esq.         Facsimile number: (214) 774–1212
        E-Mail Address: mdorey@lidjidorey.com    

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                  MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC., as
Administrative Agent and a Lender (including as WCMA Lender)    
 
           
 
  By:   /s/ Brian Talty    
 
           
 
      Name: Brian Talty    
 
      Title: 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 Business Financial Services Inc.         15
Exchange Place         Jersey City, New Jersey 07032         Attn: Kimberly Y.
Gross, Esq.         Facsimile number: (201) 593-7868           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    

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CONSENT AND AGREEMENT OF GUARANTORS
     The undersigned Guarantors hereby consent and agree to the foregoing
Amended and Restated Credit Agreement, the other Operative Documents, as amended
to date, and the transactions contemplated hereby and thereby.

                          SPORT SUPPLY GROUP, INC.            
 
                   
 
  By:   /s/ William R. Estill            
 
                   
 
      Its: Secretary            
 
                        TOMARK SPORTS, INC.            
 
                   
 
  By:   /s/ William R. Estill            
 
                   
 
  Its:   Chief Financial Officer            
 
                        KESSLERS TEAM SPORTS, INC.            
 
                   
 
  By:   /s/ William R. Estill            
 
                   
 
  Its:   Chief Financial Officer            
 
                        DIXIE SPORTING GOODS CO., INC.            
 
                   
 
  By:   /s/ William R. Estill            
 
                   
 
  Its:   Chief Financial Officer            
 
                        CMS OF CENTRAL FLORIDA, INC.            
 
                   
 
  By:   /s/ William R. Estill            
 
                   
 
  Its:   Chief Financial Officer            
 
                        SALKELD & SONS, INC         .  
 
                   
 
  By:   /s/ William R. Estill            
 
                   
 
  Its:   Chief Financial Officer            

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Annex A
Commitment Annex

                                      Revolving Loan     Revolving Loan        
    Term Loan       Commitment     Commitment     Term Loan     Commitment  
Lender   Amount     Percentage     Commitment Amount     Percentage  
Merrill Lynch
  $ 35,000,000       100 %   $ 20,000,000       100 %
TOTALS
  $ 35,000,000       100 %   $ 20,000,000       100 %

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Annex B
Closing Checklist
     Intentionally omitted.

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(MERRILL LYNCH LOGO) [d41271d4127101.gif]
  Exhibit A to Amended and Restated 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 Amended and Restated Credit Agreement
dated as of November 13, 2006 (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 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 accordance with their terms all obligations which by the
terms of the Credit Agreement are

Exhibit A - Page 1

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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 Agreement) against whom enforcement of such
change, waiver, discharge or termination is sought.

Exhibit A - Page 2

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

 

     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

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

 

     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 Business Financial Services Inc., as
Administrative Agent and Swingline Lender    
 
           
 
  By:        
 
           
 
  Title:        
 
           
 
                Collegiate Pacific Inc.    
 
           
 
  By:        
 
           
 
  Title:        
 
           

Exhibit A - Page 4

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

 

Schedule to Assignment Agreement

         
Assignor:
       
 
       
Assignee:
       
 
       
Effective Date:
       
 
       

     Amended and Restated Credit Agreement dated as of November 13, 2006 among
Collegiate Pacific Inc., as Borrower, the financial institutions party thereto
from time to time, as Lenders, and 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) [d41271d4127101.gif]
  Exhibit B to Amended and Restated 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
Amended and Restated Credit Agreement dated as of November 13, 2006 among
Borrower, the Lenders from time to time party thereto and 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;

Exhibit B - Page 1

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

 

     (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; and
     (g) Capital Expenditures for the applicable period ending on the last day
covered by this certificate (Fiscal Year to date) were $                     .

                                              Revolving Loans, WCMA Loans and  
          all other Obligations (other than the             Term Loan)   Term
Loan           LIBOR/One-         Tier   Senior Leverage Ratio   Base Rate2  
Month LIBOR   Base Rate   LIBOR IV  
Greater than or equal to 2.50 to 1.00
    0.50 %     2.00 %     1.75 %     3.25 % III  
Greater than or equal to 2.00 to 1.00, but less than 2.50 to 1.00
    0.25 %     1.75 %     1.25 %     2.75 % II  
Greater than or equal to 1.00 to 1.00, but less than 2.00 to 1.00
    0.00 %     1.50 %     0.75 %     2.25 % I  
Less than 1.00
    -0.25 %     1.25 %     0.25 %     1.75 %

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

             
 
  By                  
 
  Name                  
 
  Title       of Borrower
 
           

 

2   Not applicable to WCMA Loans

Exhibit B – Page 2

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

 

FIXED CHARGE COVERAGE RATIO
(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 payments3 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   For purposes of calculating the amount of scheduled payments of Debt, the
amount of scheduled payments of the Term Loan to be included shall be the
installments of the Term Loan that shall become due at any time during the
12-month period commencing on and including the first day subsequent to the
Defined Period (provided, that only $1,000,000 of the scheduled installment of
the Term Loan due and payable on the Commitment Expiry Date shall be included
for purposes of calculating the amount of scheduled payments of Debt).

Exhibit B - Page 3

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

 

                  Operating Cash Flow:            
 
                EBITDA for the Defined Period (calculated in the manner required
by Annex 1 to the Compliance Certificate)            
 
        $      
 
             
 
               
Less:
  To the extent not already reflected in the calculation of EBITDA, other
capitalized costs, defined as the gross amount paid in cash and capitalized
during the Defined Period, as long term assets, other than amounts capitalized
during the Defined Period as capital expenditures for property, plant and
equipment or similar fixed asset accounts            
 
             
 
                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          
___ to 1.0
 
                In Compliance           Yes/No

Exhibit B - Page 4

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

 

SENIOR LEVERAGE RATIO
(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            
 
               
 
  Convertible Senior Notes            
 
                Total Debt less Subordinated Debt and Convertible Senior Notes  
         
 
        $      
 
              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 and Convertible Senior Notes 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

Exhibit B - Page 5

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

 

“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

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

 

CAPITAL EXPENDITURES
(Section 7.3)

             
Capital Expenditures for the applicable measurement period (the “Defined
Period”) are defined as follows:
           
 
    $                         
 
           
Amount capitalized during the Defined Period by Borrower and its Consolidated
Subsidiaries as capital expenditures for property, plant, and equipment or
similar fixed asset accounts, including any such expenditures by way of
acquisition of a Person or by way of assumption of Debt or other obligations, to
the extent reflected as plant, property and equipment, but in each case
excluding the effect of any Section 5.8(b) Permitted Acquisition or
Section 5.8(c) Permitted Acquisition
         

                    

         
Plus:
  deposits made in the Defined Period in connection with property, plant, and
equipment; less deposits of a prior period included above                       
 
       
Less:
  Net Cash Proceeds of Asset Dispositions received during the Defined Period
which (i) Borrower or a Subsidiary is permitted to reinvest pursuant to the
terms of the Credit Agreement and (ii) are included in capital expenditures
above                       
 
       
 
  Proceeds of Property Insurance Policies received during the Defined Period
which (i) Borrower or a Subsidiary is permitted to reinvest pursuant to the
terms of the Credit Agreement and (ii) are included in capital expenditures
above                       

         
Capital Expenditures
  $
 
       
Permitted Capital Expenditures
  $ 3,000,000  
In Compliance
  Yes/No

Exhibit B - Page 7

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ANNEX 1 TO COMPLIANCE CERTIFICATE
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
                          
 
       
Compensation expense recognized pursuant to Statement of Financial Accounting
Standards No. 123R (“SFAS 123R”) and deducted in the determination of net
income4
                            
Minority Interest relating to SSG5
                          
 
       
Amortization and depreciation deducted in the determination of net income for
the Defined Period
                          
 
    EBITDA for the Defined Period   $                    

 

4   Amounts added back are limited to compensation expense solely in respect of
the grant or vesting of stock-based compensation required to be recognized
pursuant to SFAS 123R and solely to the extent such expense is a non-cash item.
  5   To the extent not included above in the calculation of net income (or
loss) for the Defined Period of Borrower and its Consolidated Subsidiaries,
without duplication, 100% of the net income (or loss) of SSG for the Defined
Period notwithstanding that prior to November 13, 2006, SSG was not a
wholly-owned Subsidiary of Borrower.

Exhibit B – Page 8

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

 

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 9

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(MERRILL LYNCH LOGO) [d41271d4127101.gif]
  Exhibit C to Credit Agreement (Borrowing Base Certificate)

Merrill Lynch Business Financial Services Inc.
Borrowing Base Report Summary

                          Date:  
 
      Report #:                 
 
            Name:  
 
  Period Covered:       to            
 
                   
Borrower #
                       
 
                       
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 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 Business Financial Services Inc.
Accounts Receivable Borrowing Base Report

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

                     
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

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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)
  $      
 
       
Borrower 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

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Merrill Lynch Business Financial Services Inc.
Inventory Borrowing Base Report

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

                     
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

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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
  4      
 
       
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
  r$      
 
       
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

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Merrill Lynch Business Financial Services Inc.
Borrowing Base Report — Collection Detail

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

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

Exhibit C - Page 6

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

 

     
(MERRILL LYNCH LOGO) [d41271d4127101.gif]
  Exhibit D to Amended and Restated 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 Amended and Restated Credit Agreement dated as
of November 13, 2006 among Borrower, the Lenders from time to time party thereto
and 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 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) [d41271d4127101.gif]
  Exhibit E to Amended and Restated Credit Agreement
(Payment Notification)

COLLEGIATE PACIFIC INC.
Date:                     , ______
Reference is hereby made to the Amended and Restated Credit Agreement dated
November 13, 2006 among the undersigned, 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:
  Bank of America
 
       
ABA#
  026009593    
Account Name:
  Merrill Lynch Business Financial Services Inc.
Account #:
  8188101946    
Reference:
  Collegiate Pacific Inc. (WCMA, Revolver, Term)
 
       
Address:
  Merrill Lynch Business Financial Services Inc.
222 N. LaSalle Street, 15th 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

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

 

SCHEDULES
TO THE
AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
COLLEGIATE PACIFIC INC.,
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 November 13, 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.

 

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

 

SCHEDULE 3.1
to
AMENDED AND RESTATED 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.
  P 94000013004     Florida   N/A   Orlando Team Sports
 
                   
Salkeld & Sons, Inc.
    0627319     Delaware   Illinois   N/A
 
                   
Sport Supply Group, Inc.
    0936022     Delaware   Alabama, California, New Jersey, Pennsylvania and
Texas   AN Warehouse
NAR/GT

 

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

 

SCHEDULE 3.4
to
AMENDED AND RESTATED 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
Sport Supply Group, Inc.***
  20,000,000 common shares

* Collegiate Pacific Inc. owns 100% of the outstanding capital stock of each
Subsidiary other than Sport Supply Group, Inc. Collegiate Pacific Inc. currently
owns 73.2% of the outstanding capital stock of Sport Supply Group, Inc. and will
own 100% of the outstanding capital stock of Sport Supply Group, Inc. at the
effective time of the merger of a wholly-owned subsidiary of Collegiate Pacific
Inc. with and into Sport Supply Group, Inc.
** Preemptive rights.
*** There are currently 500,867 issued and outstanding options to acquire shares
of the common stock of Sport Supply Group, Inc. In connection with the merger of
a wholly-owned subsidiary of Collegiate Pacific Inc. with and into Sport Supply
Group, Inc., each such option shall at the effective time of the merger be
converted into the right to receive the difference between the per share merger
consideration and the exercise price of the option.

 

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

 

SCHEDULE 3.6
to
AMENDED AND RESTATED 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
     Jeffrey S. Abraham, as Trustee of the Law Offices of Jeffrey S. Abraham
Money Purchase Plan dated 12/31/99 F/B/O Jeffrey S. Abraham, on behalf of
himself and a class of all others similarly situated, and derivatively on behalf
of nominal defendant, Sport Supply Group, Inc. vs. Emerson Radio Corp., Geoffrey
P. Jurick, Arthur J. Coerver, Harvey Rothenberg, Collegiate Pacific, Inc., and
Michael J. Blumenfeld and Sport Supply Group, Inc., Nominal Defendant. On
December 15, 2005, a stockholder of Sport Supply Group, Inc., 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, Collegiate Pacific Inc. and its
directors, Arthur J. Coerver and Harvey Rothenberg, as well as Sport Supply
Group, Inc. as a nominal defendant, with a number of causes of action. The
plaintiff filed the lawsuit as a class action on behalf of the public
stockholders of SSG in connection with the September 8, 2005, Agreement and Plan
of Merger pursuant to which the Company was to have acquired the remaining
shares of the outstanding capital stock of Sport Supply Group, Inc. that it did
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 seeks damages against Emerson Radio Corp.
and Mr. Jurick for breach of fiduciary duty to the Sport Supply Group, Inc.
stockholders and a derivative claim against Collegiate Pacific Inc. and the
defendant directors for breach of fiduciary duty and unjust enrichment in
connection with the use of Sport Supply Group, Inc. assets without due
compensation.
     The defendant directors and Collegiate Pacific filed their answer to the
complaint on March 15, 2006. Defendants Emerson and Jurick filed a Motion to
Dismiss Count I of the complaint alleging breach of fiduciary duty as to Emerson
and Jurick. The Court issued its Opinion on July 5, 2006 and ordered that Count
I as to Emerson and Jurick be dismissed for failure to state a claim upon which
relief can be granted. Proceedings in this case have been stayed indefinitely

 

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

 

by agreement of the parties.
     Costa Brava Partnership III, L.P., Greenwood Capital, L.P., and Greenwood
Investors, L.P. v. Geoffrey P. Jurick, Thomas P. Triechler, Peter Bunger,
Terrence Babilla and Collegiate Pacific, Inc., a Delaware Corporation, In the
Court of Chancery of the State of Delaware, In and For New Castle County, Civil
Action No. 2277-N. On July 14, 2006, Costa Brava Partnership III L.P., Greenwood
Capital L.P., and Greenwood Investors, L.P., filed a complaint in the Court of
Chancery of the State of Delaware in and for New Castle County, against
Mr. Geoffrey P. Jurick, Thomas P. Triechler, Peter Bunger, Terrence Babilla and
Collegiate Pacific Inc. This lawsuit seeks damages against Messrs. Jurick,
Triechler, Bunger and Babilla for alleged breaches of their fiduciary duties to
Sport Supply Group, Inc.’s minority stockholders in connection with Emerson
Radio Corp.’s sale of its interest in Sport Supply Group, Inc. to Collegiate
Pacific Inc. The plaintiffs also seek damages from Collegiate Pacific Inc. for
allegedly aiding and abetting the individual defendants’ alleged breaches of
fiduciary duty. The complaint incorporates Sport Supply Group, Inc. company
information obtained by plaintiffs through an action seeking books and records
of Sport Supply Group, Inc., captioned Costa Brava Partnership III L.P. v. Sport
Supply Group, Inc., C.A. No. 1885-N. The books and records case was ultimately
dismissed after Sport Supply Group, Inc. agreed to produce certain documents.
     All defendants filed motions to dismiss on August 9, 2006. The defendants
filed their opening briefs in support of their motions to dismiss on
September 27, 2006. The plaintiffs’ response was due October 27, 2006 and the
defendants’ replies were due November 10, 2006. Oral argument on the motions to
dismiss is scheduled for November 28, 2006.
     Daniel F. Fitzgibbon, Jr. v. EICO, Inc., Sport Supply Group, Inc., d/b/a
Athletic Connection, Inc. [sic], Case No. 2:02-1288, U. S. District Court,
Southern District of West Virginia, Charleston Division (Formerly Civil Action
No. 3:01-CV-7, Eastern District of Kentucky). Plaintiff Daniel Fitzgibbon filed
a Complaint for Inducing Patent Infringement and Other Relief with Jury Demand
on February 12, 2001 in the U.S. District Court in the Eastern District of
Kentucky. The suit was ultimately transferred to the Southern District of West
Virginia due to a lack of jurisdiction by the Kentucky courts. The suit claims
Mr. Fitzgibbon’s patent no. 4,913,233 (“the ‘233 Patent”) “. . . provides
methods and apparatus useful primarily in the pre-splitting and blast removal of
earth formations utilized by mining and earth removal operations.” It further
claims “16 methods of producing desired controlled blasting results” primarily
using his patented inflatable devices. Mr. Fitzgibbon’s company alleged that The
Athletic Connection (“TAC”) believes its playground balls can be used in place
of Mr. Fitzgibbon’s devices. It further alleges TAC induced parties to buy its
playground balls and use Mr. Fitzgibbon’s patented “air-decking method” in an
infringing manner. Additional counts allege intentional interference with
prospective business relations and unjust enrichment.
     The Federal Court issued its Memorandum of Opinion and Order with regard to
the Markman definitions. The most important of these definitions with regard to
SSG deals with the definition of a “bag-like device”. The Court has determined
that this term shall mean an item similar to, or characteristic of, an
inflatable container composed of flexible material having the capability to
stretch that is made, or adapted, to perform a function. This leaves open the
argument that the playground ball sold by SSG may meet the definition of
bag-like device. The

 

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

 

issue before the Court continues to be whether or not SSG actively participated
in the violation of that patent. The Court also issued a Scheduling Order
setting various discovery deadlines. A Pretrial Conference is scheduled for
July 20, 2007 and individuals with authority to settle are required to attend.
Barring settlement, trial is set for August 20, 2007. Plaintiff has served
discovery requests to SSG.
     U.S. Games Systems, Inc. v. Sport Supply Group, Inc., Paper No. 2, Reg.
No. 1,246,494, Cancellation No. 32, 131, United States Patent and Trademark
Office. Petitioner, U.S. Games Systems has filed a Petition to Cancel regarding
SSG’s trademark registration of the U.S. Games, Inc. name, claiming that
Petitioner’s use pre-dates the use of the name by SSG and its successors.
Petitioner manufactures and sells board games, card games and tarot cards and
seeks to have SSG’s registration of the U.S. Games trademark cancelled, alleging
that it was using the name since 1968, and claiming SSG has only used the name
since 1972. The Trademark Board still has not ruled on SSG’s Motion for
Sanctions. However, SSG is not prejudiced by the delay since their registration
continues to subsist and is renewed to July 26, 2013.
     Raymond Gadd and Katherine Gadd, as parents and natural guardians of
Matthew Gadd, v. Athletic Training Equipment Company, Inc. and Quakertown Sports
Zone, Inc., Court of Commons Pleas, Bucks County, PA, No. 03-07779-24-2. Suit
was filed on approximately December 2, 2003, exact date unknown, and served on
ATEC by First Class Mail on December 5, 2003. SSG did not receive notice of this
suit until January 13, 2004. This suit arises out of an alleged injury to
Matthew Gadd that occurred on May 30, 2003 at Quakertown Sports Zone in
Doylestown, Pennsylvania. Matthew Gadd is a 12-year-old minor, residing with his
parents in Charlotte, North Carolina. According to the Complaint, Matthew was
struck in the right eye by a ball that was pitched from a pitching machine
believed to have been manufactured by ATEC. Although SSG sold ATEC to Amer
Sports, d/b/a Wilson, on November 14, 2003, the date of loss falls within the
policy period of SSG’s general liability coverage. According to the terms of the
Asset Purchase Agreement, SSG is responsible for coverage of the claim under its
general liability policy. However, AMER/Wilson is responsible for paying any
deductible on the claim. For this reason, defense will be coordinated between
SSG, ATEC, Amer and Wilson.
     Brad Ahlfinger, Individually and as next friend of Brad William Ahlfinger,
a minor vs. BSN Sports a/k/a Collegiate Pacific, a/k/a Collegiate Pacific, Inc.,
a/k/a Nitro Sports, a/k/a Cherokee Design and Construction, Inc., a/k/a Sport
Supply Group, Inc., a/k/a NK Mills, Inc., In the District Court of Dallas
County, Texas, A-14th Judicial District, Cause No. DC5-12702. Plaintiffs allege
that Ahlfinger was moving a portable backstop at Berkner High School in
Richardson, Texas on August 27, 2005, when the lever arm struck him in the
mouth. The extent of Plaintiff’s injuries is unknown at this time. The claim has
been submitted to SSG’s TPA and insurance carrier. At this time, SSG is
continuing to obtain and review medical records, retain an expert witness and
evaluate the possibility of mediation. SSG filed a Third-Party Complaint against
Evan Bennett on September 1, 2006. Mr. Bennett’s attorney has accepted service
on behalf of his client and his answer is pending. An Agreed Scheduling Order
was entered with the Court setting discovery and pleadings deadlines and setting
the case for trial on March 5, 2007.
     Lidia Kauffman vs. The City of New Rochelle School District, Outdoor
Aluminum, Inc., and Sport Supply Group, Inc., d/b/a Passon’s Sports, Supreme
Court of the State of

 

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New York, County of Westchester, Index No. 05-9716. Plaintiff was seated on
metal bleachers at a soccer game at New Rochelle High School in New Rochelle,
New York. She alleges she suffered injuries when she fell while descending the
bleachers. Her Complaint alleges the bleachers were defective and caused her to
fall. The bleachers were manufactured by Outdoor Aluminum and sold to the school
through Passon’s Sports. Plaintiff claims injuries resulting in surgery four
months after the incident with post-surgical infection. Medical records indicate
multiple previous injuries and pre-existing conditions. Depositions are being
scheduled. Discovery must be completed by October 23, 2006. SSG’s Answer
included a cross-claim as to the school and Outdoor Aluminum, manufacturer of
the bleachers.
     Jeffrey S. Abraham, as Trustee of the Law Offices of Jeffrey S. Abraham
Money Purchase Plan dated 12/31/99 F/B/O Jeffrey S. Abraham vs. Collegiate
Pacific, Inc., Michael J. Blumenfeld, Arthur J. Coerver, Harvey Rothenberg,
Robert W. Philip, Thomas P. Treichler and Sport Supply Group, Inc.; Court of
Chancery of the State of Delaware in and for New Castle County. On September 21,
2006, Jeffrey S. Abraham, as Trustee of the Law Offices of Jeffrey S. Abraham
Money Purchase Plan dated 12/31/99 F/B/O Jeffrey S. Abraham (the “Plaintiff”),
filed a complaint in the Court of Chancery of the State of Delaware in and for
New Castle County, C.A. No. 2435-N against Collegiate Pacific, Inc., the
Chairman and Chief Executive Officer of Collegiate Pacific Inc., Michael J.
Blumenfeld, the four directors of Sport Supply Group, Inc., Arthur J. Coerver,
Harvey Rothenberg, Robert W. Philip and Thomas P. Treichler, and Sport Supply
Group, Inc., as a nominal defendant The Plaintiff is a stockholder of Sport
Supply Group, Inc. and brought the action as a class action on behalf of all
Sport Supply Group, Inc. minority stockholders.
     The Plaintiff alleges, among other things, that the $8.80 cash price per
share of Sport Supply Group, Inc. common stock to be paid to the minority
stockholders in the merger is unfair in that it fails to take into account the
value of Sport Supply Group, Inc., its improving financial results and its value
in comparison to similar companies. The Plaintiff also alleges that the process
by which the merger agreement was arrived at could not have been the product of
good faith and fair dealing in that Collegiate Pacific Inc. and Mr. Blumenfeld
acted in bad faith by taking various actions to depress the price of Sport
Supply Group, Inc. common stock and dry up the market liquidity in such shares,
all in an effort to effect the proposed merger. In addition, the Plaintiff
alleges that the directors of Sport Supply Group, Inc. breached their fiduciary
duties of good faith and loyalty to the Plaintiff and the other minority
stockholders in the merger agreement negotiations.
     The Plaintiff requests that the merger be enjoined or in the alternative,
damages be awarded to the Sport Supply Group, Inc. minority stockholders. The
Plaintiff also seeks the costs of bringing the action, including reasonable
attorneys fees and experts’ fees.
     The following potential claims arising since January 1, 2000, have been
reported to SSG, with no court action taken to date:
     Notice of a claim of piracy for illegal duplication of proprietary software
products was delivered to Sport Supply Group, Inc. by letter dated August 29,
2006 from attorneys for Software & Information Industry Association (“SIIA”),
Donahue Gallagher & Woods, LLP of Oakland, California. Specific software was not
identified, but a complete audit of all

 

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software in use by Sport Supply Group, Inc., with proof of purchase, was
demanded by September 12, 2006. Attorneys for the Company filed a response in a
letter dated September 12, 2006, to SIIA disputing their allegations and
requesting evidence of alleged unlawful installation and use of software as
referenced in SIIA’s letter of August 29, 2006.
     Jessica Ruiz, a minor. Ms. Ruiz was allegedly injured on October 10, 2001,
at William T. Dwyer High School in Palm Beach Gardens, Florida, while using
volleyball equipment allegedly purchased from Passon’s/BSN. This potential claim
was reported to Crawford & Company on June 18, 2003. There has been no activity
on this claim since the last report, but SSG will continue to monitor the claim.
     Tamra Young Ms. Young was allegedly injured on June 8, 2004, when she fell
between two mats in a pit area while participating in an obstacle course
exercise at the United States Army Base at Ft. Campbell, Kentucky.
     John Staso, Karen Brown, Catherine and Stephanie Slocum. Four students at
Middletown South High School in Middletown, New Jersey were allegedly injured
when a portable 4-row bleacher tipped over during a football game on
September 11, 2004.
     Unknown Student Re: Brute Force Multi Station Machine. SSG was notified via
email by a supervisor at a youth recreation facility that a bolt on the support
bracket of a Brute Force Multi-Station weight machine broke causing the bracket
to strike a resident student. The bolt was replaced and the broken bolt has been
retained with the file. Specific information regarding names, dates and places
and any alleged injuries has not been provided at this time. There has been no
activity on this claim.
     Ronald Vargas. An attorney for a student at Driftwood Middle School in
Broward County, Florida represents a student claiming to have cut his leg on a
metal bench on March 30, 2005. The product has not been identified and there has
been no action on this claim.
     New Rochelle High School, New York. A letter dated November 29, 2005, from
the Claims Manager of New York Schools Insurance alleged that some fans were
injured at a football game when metal bleachers collapsed or tipped over. SSG’s
internal investigation indicates the bleachers were manufactured by Outdoor
Aluminum. No suits have been filed, and SSG will continue to monitor the claim.
     Sweet Home, Oregon School District. The SSG Call Center received a call
from Kevin Strong of the Sweet Home, Oregon School District on September 12,
2006, regarding an incident involving alleged injuries to a student from a
FOLD-UP JUDGES STAND. Mr. Strong’s call was returned and he shared the results
of their investigation for the purpose of preventing any future injuries. No
claims have been made at this time. SSG will follow up with an internal
investigation to determine if any action needs to be taken.
     SSG is a plaintiff in the following matter:
     Sport Supply Group, Inc. v. Angie Rodriguez a/k/a Angelica Ocura, Angelica
Reynosa a/k/a Angelica Ruynuso, and KKS Financial Services d/b/a KK’S Check
Cashing, In the

 

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District Court of Dallas County, Texas, B-44th Judicial District, Cause No.
06-09444. SSG filed its Original Petition on September 11, 2006, against former
employee, Angie Rodriguez and KK’s Check Cashing Service. An internal audit has
revealed missing funds obtained from refund checks in excess of $40,000. The
refund checks appear to have been cashed by former employee Angie Rodriguez,
with the assistance of employees of KK’s Check Cashing Service. A criminal
investigation, as well as an internal audit, is underway. Insurance coverage has
been requested under the Crime policy, which carries a $50,000 deductible.
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.

 

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

 

SCHEDULE 3.15
to
AMENDED AND RESTATED 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.

 

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

 

SCHEDULE 3.16
to
AMENDED AND RESTATED 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.
Credit Agreement, dated June 29, 2006, by and among Collegiate Pacific Inc. and
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 thereto.
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.

 

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

 

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.
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 21, 2006, 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.
Exclusive Marketing and Distribution Agreement, dated July 15, 2006, by and
between Collegiate Pacific Inc. and New Era Cap Company, Inc.

 

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

 

Reseller and Distributor Agreement, dated September 2006, by and between
Collegiate Pacific Inc. and The Varsity Group, Inc.
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.
Amended and Restated License Agreement, dated as of December 21, 2000, as
amended on May 1, 2005 and September 11, 2006, by and among MacMark Corporation,
Equilink Licensing Corporation and Sport Supply Group, Inc.
Agreement, dated as of December 9, 1986, by and between Voit Corporation and
Sport Supply Group, Inc., the successor-in-interest to BSN Corp., as amended on
August 1, 2003.
Retail Agreement, dated as of October 1, 2003, by and between Voit Corporation
and Sport Supply Group, Inc.
R/3 Software End-User License Agreement , dated as of June 11, 1998, by and
between SAP America, Inc. and Sport Supply Group, Inc., as amended on January 1,
2004 and September 30, 2005.
Professional Services Agreement, dated as of April 3, 2001, by and between SAP
America, Inc. and Sport Supply Group, Inc.
Vendor Agreement, dated June 25, 2001, as amended on August 14, 2002, May 20,
2005 and January 3, 2006, by and between the American Heart Association and
Sport Supply Group, Inc.
Supply Agreement by and between Sport Supply Group, Inc. and the General
Services Administration.
Risk Management Consulting Services Agreement, dated August 16, 2005, by and
between Sport Supply Group, Inc. and ICA Risk Management Consultants.
Sport Supply Group, Inc. 401(k) Plan, dated June 1, 1997.
Non-Competition, Confidentiality and Severance Agreement, dated February 8,
2002, by and between John Bals and Sport Supply Group, Inc.
Management Services Agreement, dated August 14, 2006, by and between Collegiate
Pacific Inc. and Sport Supply Group, Inc.
Services Agreement, dated March 1, 2001, as amended on May 17, 2004, January 28,
2005 and August 1, 2006, by and between Sport Supply Group, Inc. and EJB
Development, Inc.
Participation Agreement, dated September 8, 2006, by and between Sport Supply
Group, Inc. and Amazon Services LLC.

 

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

 

Agreement and Plan of Merger, dated as of September 21, 2006, and by and among
Collegiate Pacific Inc., CP Merger Sub, Inc. and Sport Supply Group, Inc.
First Amendment to Agreement and Plan of Merger, dated as of November 13, 2006,
and by and among Collegiate Pacific Inc., CP Merger Sub, Inc. and Sport Supply
Group, Inc.
Real Property Leases

                                          Name and Address of            
Owned/Leas       Owner (if leased) or             ed/Operated       Third-Party
Operator (if Credit           by Third   Annualized   operated by a third Party
  Address   Size   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.
  850 West Freeway,
#003, Offsite
Warehouse #2,
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.   Lease expires in
2011   $24,275    64 Investment Partnership; 7700 Wolf River Boulevard,
Germantown, TN 38138
 
                   
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 A, Corona, CA 92878

 

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

 

                                          Name and Address of            
Owned/Leas       Owner (if leased) or             ed/Operated       Third-Party
Operator (if Credit           by Third   Annualized   operated by a third Party
  Address   Size   Party   Rent   party)
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.   Lease
expires
05/31/2009   $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 46219-19409
 
                   
Kesslers Team Sports, Inc.
  117 East Markland
Avenue, Kokomo,
IN 46901   4,700 sq. ft.   Lease expires
04/30/2009   $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

 

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

 

                                          Name and Address of            
Owned/Leas       Owner (if leased) or             ed/Operated       Third-Party
Operator (if Credit           by Third   Annualized   operated by a third Party
  Address   Size   Party   Rent   party)
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.   Lease expires
04/30/2009   $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
 
                   
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

 

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

 

                                          Name and Address of            
Owned/Leas       Owner (if leased) or             ed/Operated       Third-Party
Operator (if Credit           by Third   Annualized   operated by a third Party
  Address   Size   Party   Rent   party)
Kesslers Team Sports, Inc.
  3501 Winchester Road
Springfield, IL
62707   1,200 sq. ft.   Lease expires
11/2007   $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 7/2007   $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 5/2008   $24,756 beginning
5/30/03 with 2% yearly
increase   Ackerman & Co. 1040 Crown Pointe Parkway, Suite 200 Atlanta, GA 30338
 
                   
Kesslers Team Sports, Inc.
  201C Central Park Dr., Suite 1190, Knoxville, TN 37922   4,000 sq. ft.   Lease
expires
07/31/2008   $27,000 + $5,640 =
$32,640 for 05-06 term   All Eleven f/k/a Center Park Trade Center, 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 3/2008   $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 8/2007
  $21,300–1st year
$22,956–2nd & 3rd $23,844 4th year
$23,844 for
5th &
6th year   SK Properties, LP 150 N. Market Wichita, KS 67202

Rent paid to:
 
              renewals
+ $675 estimate for
OE + $2,400 deposit   CB Richardson Ellis, Okla. Dept. 1518 Tulsa, OK 74143

 

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

 

                                          Name and Address of            
Owned/Leas       Owner (if leased) or             ed/Operated       Third-Party
Operator (if Credit           by Third   Annualized   operated by a third Party
  Address   Size   Party   Rent   party)
Kesslers Team Sports, Inc.
  5202 A Brookhollow
Parkway, Norcross,
GA 30071   10,000 sq. ft.   Lease expires 2/2008   $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
11/2006   $4,800    Sandy Bubp
121 North Meridian
Portland, IN 47371
 
                   
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.   Month/month   $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 Center
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
11/30/2007   $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

 

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                                          Name and Address of            
Owned/Leas       Owner (if leased) or             ed/Operated       Third-Party
Operator (if Credit           by Third   Annualized   operated by a third Party
  Address   Size   Party   Rent   party)
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
 
                   
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 Center Limited Partnership P.O. Box 2734 Chapel Hill,
NC 27515-2734

cc: John A. Northen Post Office Box 2208 Chapel Hill, NC 27515-2208

 

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

 

                                          Name and Address of            
Owned/Leas       Owner (if leased) or             ed/Operated       Third-Party
Operator (if Credit           by Third   Annualized   operated by a third Party
  Address   Size   Party   Rent   party)
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
 
                   
Dixie Sporting Goods Co., Inc.
  42 Euclid Avenue
Bristol, VA 24201   1,200 sq. ft.    Lease expires
12/31/2006   $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.
  9313-H Monroe Rd,
Charlotte, NC
28211   4,960 sq. ft.    Lease expires
04/30/2011   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

 

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

 

                                          Name and Address of            
Owned/Leas       Owner (if leased) or             ed/Operated       Third-Party
Operator (if Credit           by Third   Annualized   operated by a third Party
  Address   Size   Party   Rent   party)
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
 
                   
CMS of Central Florida, Inc.
  900 Central Park
Drive, Sanford, FL
32771   6,250 sq. ft.    Lease expires
04/30/2007   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
 
                   
 
              Months:    
CMS of Central Florida, Inc.
  7029-5 Commonwealth Ave., Jacksonville, FL 32220   1,800 sq. ft.    Lease
expires
07/31/2007   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

 

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

 

                                          Name and Address of            
Owned/Leas       Owner (if leased) or             ed/Operated       Third-Party
Operator (if Credit           by Third   Annualized   operated by a third Party
  Address   Size   Party   Rent   party)
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
 
                   
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
 
                   
Sport Supply Group, Inc.
  13700 Benchmark
Drive, Farmers
Branch, TX 75234   181,841 sq. ft.    Lease expires
12/31/2010   $542,523 plus taxes and utilities   Prologis Trust 2310 LBJ
Freeway, Suite 200 Farmers Branch, TX 75234
 
                   
Sport Supply Group, Inc.
  1901 Diplomat
Drive, Farmers
Branch, TX 75234   137,670 sq. ft.    Lease expires
12/31/2010   $447,432 plus insurance, taxes and utilities   Acquiport DFWIP,
Inc. 75 Remittance Drive, Suite 1110 Chicago, IL 60675-1110
 
                   
Sport Supply Group, Inc.
  263 W. Cerritos Avenue, Anaheim, CA 92805   996 sq. ft.    Lease expires
04/30/2007   $15,600 plus operating
expenses   Anaheim Business Campus, LLC c/o HAMRA Properties 337 W. Cerritos
Avenue Anaheim, CA 92805

 

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

 

                                          Name and Address of            
Owned/Leas       Owner (if leased) or             ed/Operated       Third-Party
Operator (if Credit           by Third   Annualized   operated by a third Party
  Address   Size   Party   Rent   party)
Sport Supply Group, Inc. d/b/a Passon’s Sports
  715 Twining Road, Suite 100, Dresher, PA 19025   1,528 sq. ft.    Lease
expires 09/30/2006 (month to month thereafter)   $24,000    Joseph Lupowitz
Sons, Inc. P.O. Box 793 Abington, PA 19001

 

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

 

SCHEDULE 3.17
to
AMENDED AND RESTATED 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.

 

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

 

SCHEDULE 3.18
to
AMENDED AND RESTATED 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 /             Registration       Copyrights /     or  
    Registration 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    
Sport Supply Group, Inc.
      Alumagoal/1262511    
Sport Supply Group, Inc.
      The Athletic
Connection/1870846    
Sport Supply Group, Inc.
      BSN/1198106    
Sport Supply Group, Inc.
      BSN/2473322    
Sport Supply Group, Inc.
      Brute Force/1949588    
Sport Supply Group, Inc.
      Bulldog/1880726    
Sport Supply Group, Inc.
      Cata-Pole/1127054    
Sport Supply Group, Inc.
      Champion Barbell/76/494960    
Sport Supply Group, Inc.
      Champion Barbell and Design/76/494961    
Sport Supply Group, Inc.
      Champion Barbell and Design - China/3002301    

 

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

 

                  Patents /             Registration       Copyrights /     or  
    Registration or     Application   Trademarks / Registration or   Application
Credit Party   Numbers   Application Numbers   Numbers
Sport Supply Group, Inc.
      Color My Class/1845758    
Sport Supply Group, Inc.
      Curvemaster & Design/972790    
Sport Supply Group, Inc.
      Esportsonline.com/75/732811    
Sport Supply Group, Inc.
      Flag-A-Tag/738205    
Sport Supply Group, Inc.
      GSC/2505937    
Sport Supply Group, Inc.
      Gamecraft/1965771    
Sport Supply Group, Inc.
      The Heart Adventure/2002107    
Sport Supply Group, Inc.
      Multi-Fit/2052751    
Sport Supply Group, Inc.
      New England Camp and Recreation/1998854    
Sport Supply Group, Inc.
      Passon’s Sports/2499731    
Sport Supply Group, Inc.
      Pillo Polo/1223595    
Sport Supply Group, Inc.
      Port-A-Pit/800268    
Sport Supply Group, Inc.
      Port-A-Pit/3105665    
Sport Supply Group, Inc.
      Pro Base/1410733    
Sport Supply Group, Inc.
      Pro Down/1909693    
Sport Supply Group, Inc.
      Pro Down/76/629171    
Sport Supply Group, Inc.
      Quick Fence/1847722    
Sport Supply Group, Inc.
      Rol-Dri/2299816    
Sport Supply Group, Inc.
      Roll-N-Fold/2299816    
Sport Supply Group, Inc.
      SSG/2430822    
Sport Supply Group, Inc.
      Sport Supply Group, Inc./2778839    
Sport Supply Group, Inc.
      Tidi Court/1055596    
Sport Supply Group, Inc.
      Toppleball/1223594    
Sport Supply Group, Inc.
      Toppleball Canada/196718    
Sport Supply Group, Inc.
      U.S. Games/1246494    
Sport Supply Group, Inc.
      Ultimat/1934630    
Sport Supply Group, Inc.
      Volley Trainer/1739140    
Sport Supply Group, Inc.
      Waffle/1906667    
Sport Supply Group, Inc.
      Learning Through
Movement/2718194    
Sport Supply Group, Inc.
      Jungle Bug/2464321    
Sport Supply Group, Inc.
      Earthball/1084113    
Sport Supply Group, Inc.
      Pro Practice/1562359    
Sport Supply Group, Inc.
      Synchronous Geodesic
Prism/1551091    
Sport Supply Group, Inc.
      Mid Plus    
Sport Supply Group, Inc.
  Adjustable Belt
Buckles/6141835        
Sport Supply Group, Inc.
  Adjustable Belt
Buckles/6308381        

 

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

 

                  Patents /             Registration       Copyrights /     or  
    Registration or     Application   Trademarks / Registration or   Application
Credit Party   Numbers   Application Numbers   Numbers
Sport Supply Group, Inc.
  Athletic Numerical
Indicator
Display/4841674        
Sport Supply Group, Inc.
  Contoured Landing Surface (method of making)/5643139        
Sport Supply Group, Inc.
  Flag Football
Device/5456462        
Sport Supply Group, Inc.
  Flag Football Device and Coupling/6241631        

 

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

 

SCHEDULE 3.19
to
AMENDED AND RESTATED 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

         
Sport Supply Group, Inc. d/b/a AN Warehouse
  361 Westover Road,
Anniston, AL 36201   35,000 sq. ft.
Sport Supply Group, Inc. d/b/a NAR/GT
  780 Hutto Hill, Anniston,
AL 36201   45,000 sq. ft.

 

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

 

SCHEDULE 5.1
to
AMENDED AND RESTATED 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.
  $ 50,000,000  
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  

 

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

 

SCHEDULE 5.2
to
AMENDED AND RESTATED 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 Capital or Merrill Lynch Capital, a
division 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.

 

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

 

SCHEDULE 5.3
to
AMENDED AND RESTATED 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.

 

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

 

SCHEDULE 5.8
to
AMENDED AND RESTATED 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 73.2% of Sport Supply
Group, Inc. and will at the effective time of the merger of a wholly-owned
subsidiary of Collegiate Pacific Inc. with and into Sport Supply Group, Inc. own
100% of Sport Supply Group, Inc.

 

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

 

SCHEDULE 5.9
to
AMENDED AND RESTATED 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.

 

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

 

Description
Indemnification Agreement, dated as of November 13, 2006, by and between
Collegiate Pacific Inc. and Terrence M. Babilla
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.

 

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

 

Description
Promissory Note, dated May 11, 2005, executed by Collegiate Pacific Inc. payable
to Albert A. Messier in the stated principal amount of:
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.
Management Services Agreement, dated August 14, 2006, by and between Collegiate
Pacific Inc. and Sport Supply Group, Inc.

 

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

 

SCHEDULE 5.13
to
AMENDED AND RESTATED 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.