Exhibit 10.5
AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF OCTOBER 30, 2007
AMONG
SPORT SUPPLY GROUP, 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) [c71400c7140001.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
    23  
 
       
Section 1.3 Other Definitional Provisions and References
    24  
 
       
ARTICLE 2
       
 
       
LOANS AND LETTERS OF CREDIT
    24  
 
       
Section 2.1 Intentionally omitted
    24  
 
       
Section 2.2 Revolving Loans, WCMA Loans and Swingline Loans
    24  
 
       
Section 2.3 Interest, Interest Calculations and Certain Fees
    32  
 
       
Section 2.4 Notes
    35  
 
       
Section 2.5 Letters of Credit and Letter of Credit Fees
    36  
 
       
Section 2.6 General Provisions Regarding Payment; Loan Account
    39  
 
       
Section 2.7 Maximum Interest
    41  
 
       
Section 2.8 Taxes
    42  
 
       
Section 2.9 Capital Adequacy
    43  
 
       
Section 2.10 Mitigation Obligations
    43  
 
       
ARTICLE 3
       
 
       
REPRESENTATIONS AND WARRANTIES
    44  
 
       
Section 3.1 Existence and Power
    44  
 
       
Section 3.2 Organization and Governmental Authorization; No Contravention
    44  
 
       
Section 3.3 Binding Effect
    44  
 
       
Section 3.4 Capitalization
    45  
 
       
Section 3.5 Financial Information
    45  
 
       
Section 3.6 Litigation
    45  
 
       
Section 3.7 Ownership of Property
    45  
 
       
Section 3.8 No Default
    46  
 
       
Section 3.9 Labor Matters
    46  
 
       
Section 3.10 Regulated Entities
    46  
 
       
Section 3.11 Margin Regulations
    46  
 
       
Section 3.12 Compliance With Laws; Anti-Terrorism Laws
    46  
 
       
Section 3.13 Taxes
    47  
 
       
Section 3.14 Compliance with ERISA
    47  
 
       
Section 3.15 Brokers
    48  
 
       
Section 3.16 Material Contracts
    48  
 
       
Section 3.17 Compliance with Environmental Requirements; No Hazardous Materials
    48  
 
       
Section 3.18 Intellectual Property
    50  
 
       
Section 3.19 Real Property Interests
    50  
 
       
Section 3.20 Solvency
    50  
 
       

 

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              Page
Section 3.21 Senior Debt
    50  
 
       
Section 3.22 Certain Representations regarding the Acquisition Documents
    50  
 
       
Section 3.23 Full Disclosure
    51  
 
       
Section 3.24 Representations and Warranties Incorporated from Other Operative
Documents
    51  
 
       
ARTICLE 4
       
 
       
AFFIRMATIVE COVENANTS
    51  
 
       
Section 4.1 Financial Statements and Other Reports
    51  
 
       
Section 4.2 Payment and Performance of Obligations
    54  
 
       
Section 4.3 Maintenance of Existence
    55  
 
       
Section 4.4 Maintenance of Property; Insurance
    55  
 
       
Section 4.5 Compliance with Laws
    56  
 
       
Section 4.6 Inspection of Property, Books and Records
    56  
 
       
Section 4.7 Use of Proceeds
    57  
 
       
Section 4.8 Lenders’ Meetings
    58  
 
       
Section 4.9 Intentionally omitted
    58  
 
       
Section 4.10 Hazardous Materials; Remediation
    58  
 
       
Section 4.11 Syndication
    58  
 
       
Section 4.12 Further Assurances
    59  
 
       
ARTICLE 5
       
 
       
NEGATIVE COVENANTS
    60  
 
       
Section 5.1 Debt
    60  
 
       
Section 5.2 Liens
    61  
 
       
Section 5.3 Contingent Obligations
    62  
 
       
Section 5.4 Restricted Distributions
    63  
 
       
Section 5.5 Restricted Agreements
    63  
 
       
Section 5.6 Payments and Modifications of Subordinated Debt
    63  
 
       
Section 5.7 Consolidations, Mergers and Sales of Assets
    64  
 
       
Section 5.8 Purchase of Assets, Investments
    64  
 
       
Section 5.9 Transactions with Affiliates
    68  
 
       
Section 5.10 Modification of Organizational Documents
    68  
 
       
Section 5.11 Intentionally Omitted
    68  
 
       
Section 5.12 Fiscal Year
    68  
 
       
Section 5.13 Conduct of Business
    69  
 
       
Section 5.14 Intentionally Omitted
    69  
 
       
Section 5.15 Lease Payments
    69  
 
       
Section 5.16 Limitation on Sale and Leaseback Transactions
    69  
 
       
Section 5.17 Bank Accounts
    69  
 
       
Section 5.18 Compliance with Anti-Terrorism Laws
    69  
 
       
ARTICLE 6
   
 
       
ACCOUNTS AND INVENTORY REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS
70  
 
       
Section 6.1 Accounts and Account Collections
    70  
 
       
Section 6.2 Inventory
    72  
 
       

 

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              Page
 
       
ARTICLE 7
       
 
       
FINANCIAL COVENANTS
    73  
 
       
Section 7.1 Fixed Charge Coverage Ratio
    73  
 
       
Section 7.2 Senior Leverage Ratio
    73  
 
       
Section 7.3 Capital Expenditures
    73  
 
       
ARTICLE 8
       
 
       
CONDITIONS
    73  
 
       
Section 8.1 Conditions to Closing
    73  
 
       
Section 8.2 Intentionally omitted
    74  
 
       
Section 8.3 Conditions to Each Loan, Support Agreement and Lender Letter of
Credit
    74  
 
       
ARTICLE 9
       
 
       
EVENTS OF DEFAULT
    75  
 
       
Section 9.1 Events of Default
    75  
 
       
Section 9.2 Acceleration and Suspension or Termination of Revolving Loan
Commitment
    77  
 
       
Section 9.3 Cash Collateral
    78  
 
       
Section 9.4 Default Rate of Interest and Suspension of LIBOR Rate Options
    78  
 
       
Section 9.5 Setoff Rights
    78  
 
       
Section 9.6 Application of Proceeds
    79  
 
       
ARTICLE 10
       
 
       
EXPENSES AND INDEMNITY
    80  
 
       
Section 10.1 Expenses
    80  
 
       
Section 10.2 Indemnity
    81  
 
       
ARTICLE 11
       
 
       
ADMINISTRATIVE AGENT
    82  
 
       
Section 11.1 Appointment and Authorization
    82  
 
       
Section 11.2 Administrative Agent and Affiliates
    82  
 
       
Section 11.3 Action by Administrative Agent
    82  
 
       
Section 11.4 Consultation with Experts
    82  
 
       
Section 11.5 Liability of Administrative Agent
    82  
 
       
Section 11.6 Indemnification
    83  
 
       
Section 11.7 Right to Request and Act on Instructions
    83  
 
       
Section 11.8 Credit Decision
    84  
 
       
Section 11.9 Collateral Matters
    84  
 
       
Section 11.10 Agency for Perfection
    84  
 
       
Section 11.11 Notice of Default
    85  
 
       
Section 11.12 Successor Administrative Agent
    85  
 
       
Section 11.13 Disbursements of Revolving Loans; Payment and Sharing of Payment
    86  
 
       
Section 11.14 Right to Perform, Preserve and Protect
    89  
 
       
Section 11.15 Additional Titled Agents
    89  

 

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              Page
 
       
ARTICLE 12
       
 
       
MISCELLANEOUS
    89  
 
       
Section 12.1 Survival
    89  
 
       
Section 12.2 No Waivers
    89  
 
       
Section 12.3 Notices
    90  
 
       
Section 12.4 Severability
    90  
 
       
Section 12.5 Amendments and Waivers
    91  
 
       
Section 12.6 Assignments; Participations; Replacement of Lenders
    92  
 
       
Section 12.7 Headings
    95  
 
       
Section 12.8 Confidentiality
    95  
 
       
Section 12.9 Waiver of Consequential and Other Damages
    96  
 
       
Section 12.10 Marshaling; Payments Set Aside
    96  
 
       
Section 12.11 GOVERNING LAW; SUBMISSION TO JURISDICTION
    96  
 
       
Section 12.12 WAIVER OF JURY TRIAL
    97  
 
       
Section 12.13 Publication; Advertisement
    97  
 
       
Section 12.14 Senior Debt
    97  
 
       
Section 12.15 Counterparts; Integration
    98  
 
       
Section 12.16 No Strict Construction
    98  
 
       

 

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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
  -   Intentionally Omitted
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 October 30, 2007 among SPORT
SUPPLY GROUP, 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, entered into a
Credit Agreement dated June 29, 2006 pursuant to which the Lenders 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. 586-07665 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 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,
WCMA Lender provides Borrower with a commercial line of credit for Borrower; and
WHEREAS, pursuant to an Amended and Restated Credit Agreement dated November 13,
2006 (as amended to date, the “First Amended Agreement”) Lenders and
Administrative Agent provided certain financing to Borrower to finance the
proposed acquisition by Borrower of the issued and outstanding shares of capital
stock of Sport Supply Group, Inc., a Delaware corporation (“Old SSG”), not then
owned by Borrower, and to provide ongoing working capital requirements on and
after the acquisition, and the credit facilities under the Original Credit
Agreement were 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, Old SSG has since been merged with and into Collegiate Pacific Inc., a
Delaware corporation, and Collegiate Pacific Inc. changed its name to Sport
Supply Group, Inc., and is the Borrower under this Agreement; and
WHEREAS, Borrower has requested a reduction in the maximum amount of Loans and
other extensions of credit that may be made under First Amended Agreement (the
“Credit Facility Reduction”) and that certain other amendments be made to the
First Amended Agreement (with the Credit Facility Reduction, collectively, the
“October 2007 Amendments”); and

 

 

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WHEREAS, in connection with the October 2007 Amendments, Wells Fargo Bank, N.A.
shall no longer be a Lender; and
WHEREAS, Borrower, the remaining Lenders and Administrative Agent desire that
the First Amended Agreement, as amended and restated by the October 2007
Amendments as set forth herein, be restated 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:
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.

 

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“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.
“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.
“Back-to Back Letter of Credit” has the meaning set forth in Section 2.5(e).

 

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“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 date of this Agreement, -0.75% per annum,
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 Sport Supply Group, Inc., a Delaware corporation.
“Borrower Security Agreement” means the Security Agreement dated the date hereof
by the Borrower in favor of the Administrative Agent, as the same may be
amended, supplemented, restated or otherwise modified from time to time.
“Borrower’s Account” means the account specified on the signature pages hereof
below Borrower’s name into which Loans shall, absent other instructions, be
made, or such other account as Borrower may specify by notice to Administrative
Agent.

 

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“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 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;

 

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(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.
“Closing Checklist” means Annex B to this Agreement.
“Closing Date” means the date of the First Amended Agreement.
“Code” means the Internal Revenue Code of 1986.
“Collateral” means all property, now existing or hereafter acquired, mortgaged
or pledged to, or purported to be subjected to a Lien in favor of,
Administrative Agent, for the benefit of Administrative Agent and Lenders,
pursuant to the Security Documents.
“Commitment Annex” means Annex A to this Agreement.
“Commitment Expiry Date” means June 1, 2010.
“Compliance Certificate” means a certificate, duly executed by a Responsible
Officer, appropriately completed and substantially in the form of Exhibit B
hereto.
“Consolidated Subsidiary” means at any date any Subsidiary or other Person the
accounts of which would be consolidated with those of Borrower (or any other
Person, as the context may require hereunder) in its consolidated financial
statements if such statements were prepared as of such date.
“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.

 

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“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 4.7.
“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 Facility Reduction” has the meaning set forth in the recitals to this
Agreement.
“Credit Party” means any of Borrower and any Subsidiary of Borrower, whether now
existing or hereafter acquired or formed; and “Credit Parties” means all such
Persons, collectively.
“Debt” of a Person means at any date, without duplication, (i) all obligations
of such Person for borrowed money, (ii) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments, (iii) all obligations
of such Person to pay the deferred purchase price of property or services,
except trade accounts payable arising and paid on a timely basis and in the
Ordinary Course of Business, (iv) all Capital Leases of such Person, (v) all
non-contingent obligations of such Person to reimburse any bank or other Person
in respect of amounts paid under a letter of credit, banker’s acceptance or
similar instrument, (vi) all equity securities of such Person subject to
repurchase or redemption otherwise than at the sole option of such Person,
(vii) all obligations secured by a Lien on any asset of such Person, whether or
not such obligation is otherwise an obligation of such Person, (viii) ”earnouts”
and similar payment obligations of such Person, and (ix) all Debt of others
Guaranteed by such Person. Without 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.

 

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“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 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 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.

 

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“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 (viii)(A), (B), and/or (C) of
Section 2.2(c)), including without limitation amounts received in respect of
foreign, United States, State or local tax refunds to the extent not included in
the calculation of EBITDA, pension plan reversions, purchase price and other
monetary adjustments made pursuant to any Acquisition Document and/or
indemnification payments made pursuant to any Acquisition Document (other than
such indemnification payments to the extent that the amounts so received are
applied by a Credit Party for the purpose of replacing, repairing or restoring
any assets or properties of a Credit Party, thereby satisfying the condition
giving rise to the claim for indemnification, or otherwise covering any
out-of-pocket expenses incurred by any Credit Party in obtaining such payments);
provided that Extraordinary Receipts shall exclude any single or related series
of amounts received in an aggregate amount less than $100,000.
“Federal Funds Rate” means, for any day, the rate of interest per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (i) if 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.

 

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“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.
“First Amended Agreement” has the meaning set forth in the recitals to this
Agreement.
“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.
“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.

 

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“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), six (6) or twelve (12) months
thereafter, as selected by Borrower pursuant to Section 2.3(e); provided, that:
(a) if any Interest Period would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the following Business Day unless
the result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the preceding
Business Day; (b) any Interest Period that begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period shall end on the last Business Day of the calendar month at the end of
such Interest Period; and (c) Borrower may not select any Interest Period for a
Revolving Loan which would extend beyond the Commitment Expiry Date.
“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.

 

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“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.
“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.

 

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“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 date of this Agreement, 0.75% per annum, and
(ii) thereafter, as of each Adjustment Date, the LIBOR Margin shall be adjusted,
if necessary, to the applicable percent per annum set forth in the Pricing Table
corresponding to the Senior Leverage Ratio for the twelve (12) month period
ending on such date; provided, that if an Event of Default has occurred and is
continuing on an Adjustment Date, no reduction in the LIBOR Margin shall occur
on such Adjustment Date.
“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind, or any other type of preferential
arrangement that has the practical effect of creating a security interest, in
respect of such asset. For the purposes of this Agreement and the other
Financing Documents, Borrower or any Subsidiary shall be deemed to own subject
to a Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, Capital Lease or other
title retention agreement relating to such asset.
“Litigation” means any action, suit or proceeding before any court, mediator,
arbitrator or Governmental Authority.
“Loan Account” has the meaning set forth in Section 2.6(b).
“Loans” means 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.

 

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“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 Old SSG with CP Merger Sub, Inc. pursuant to
the Merger Agreement and the other related Acquisition Documents.
“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 Collegiate
Pacific Inc., Old 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.

 

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“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 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 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.
“October 2007 Amendments” has the meaning set forth in the recitals to this
Agreement.
“OFAC” means the U.S. Department of Treasury Office of Foreign Assets Control.

 

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“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.
“Old SSG” has the meaning set forth in the recitals to this Agreement.
“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, 0.75% 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.
“Optional Revolving Loan Commitment Increase” has the meaning set forth in
Section 2.2(g).
“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).
“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.

 

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“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:

                              Revolving Loans, WCMA Loans         and all other
Obligations                 LIBOR/One- Tier   Senior Leverage Ratio   Base Rate1
  Month LIBOR
V
  Greater than or equal to 2.00 to 1.00     0.25 %     1.75 %
IV
  Greater than or equal to 1.50 to 1.00, but less than 2.00 to 1.00     0.00 %  
  1.50 %
III
  Greater than or equal to 1.00 to 1.00, but less than 1.50 to 1.00     -0.25 %
    1.25 %
II
  Greater than or equal to 0.50 to 1.00, but less than 1.00 to 1.00     -0.50 %
    1.00 %
I
  Less than .0.50 to 1.00     -0.75 %     0.75 %

For purposes of the Pricing Table, and without limiting the applicability of
Section 9.4, if Borrower shall at any time fail to timely deliver a Compliance
Certificate, then effective as of the tenth (10th) Business Day following the
date on which such Compliance Certificate was due, each applicable Base Rate
Margin and each applicable LIBOR Margin shall be conclusively presumed to equal
the highest applicable Base Rate Margin and the highest applicable LIBOR Margin
specified in the Pricing Table until the date of delivery of such Compliance
Certificate.
 

1  
Not applicable to WCMA Loans.

 

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“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 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,
(ii) 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 (iii) 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), 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.
“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 2.2(c).
“Replacement Lender” has the meaning set forth in Section 12.6(c).
“Required Lenders” means, subject to the provisions of Section 11.13(d), at any
time Lenders holding (i) sixty-six and two thirds percent (66 2/3%) (one hundred
percent (100%) if the number of total Lenders shall be less than three (3)) or
more of the sum of, without duplication, the Revolving Loan Commitment and the
WCMA Loan Commitment 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.

 

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“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. 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 account of (a) the
purchase, redemption, retirement, defeasance, surrender, cancellation,
termination or acquisition of any equity interests in such Person or any claim
respecting the purchase or sale of any equity interest in such Person or (b) any
option, warrant or other right to acquire any equity interests in such Person.
“Revolving Lender” means each Lender having a Revolving Loan Commitment Amount
in excess of zero (or, in the event the Revolving Loan Commitment shall have
been terminated at any time, each Lender at such time having Revolving Loan
Outstandings in excess of zero).
“Revolving Loan Borrowing” means a borrowing of a Revolving Loan.
“Revolving Loan Commitment” means the sum of each Lender’s Revolving Loan
Commitment Amount.

 

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“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 Revolving Loan Commitment minus
the amount of Swingline Loan Outstandings and the WCMA Loan Outstandings.
“Revolving Loan Note” has the meaning set forth in Section 2.4.
“Revolving Loan Outstandings” means at any time of calculation (i) the sum of
the then existing aggregate outstanding principal amount of Revolving Loans and
the then existing Letter of Credit Liabilities and (ii) when used with reference
to any single Lender, the sum of the then existing outstanding principal amount
of Revolving Loans advanced by, or for the account of, such Lender and the then
existing Letter of Credit Liabilities for the account of such Lender.
“Revolving Loans” has the meaning set forth in Section 2.2(a).
“Section 5.8(b) Permitted Acquisition” has the meaning set forth in
Section 5.8(b).
“Section 5.8(c) Permitted Acquisition” has the meaning set forth in
Section 5.8(c).
“Security Documents” means any agreement, document or instrument executed
concurrently herewith or at any time hereafter pursuant to which one or more
Credit Parties or any other Person either (i) Guarantees payment or performance
of all or any portion of the Obligations and/or (ii) provides, as security for
all or any portion of the Obligations, a Lien on any of its assets in favor of
Administrative Agent for its own benefit and the benefit of the Lenders, as any
or all of the same may be amended, supplemented, restated or otherwise modified
from time to time.
“Senior Leverage Ratio” means the ratio of (i) the difference between (a) Total
Debt less (b) Subordinated Debt 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).

 

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“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.
“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 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).

 

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“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, and (ii) the Revolving Loan Commitment minus the amount of
Revolving Loan Outstandings and WCMA Loan Outstandings.
“Swingline Loan Note” has the meaning set forth in Section 2.4.
“Swingline Loan Outstandings” means, at any time of calculation, the then
existing aggregate outstanding principal amount of Swingline Loans.
“Target” has the meaning set forth in Section 5.8(c).
“Taxes” has the meaning set forth in Section 2.8.
“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. 586-07665 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.

 

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“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 Commitment” means $5,000,000.
“WCMA Loan Maturity Date” means June 1, 2010.
“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 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.

 

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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 Intentionally omitted.
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 Commitment.
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.

 

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(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 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.

 

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(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
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.

 

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(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 and the Swingline Loan
Outstandings exceed the Revolving Loan Limit or the Swingline Loan Limit, as
applicable, 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) Intentionally omitted.
(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 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.

 

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(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.
(viii) There shall become due and payable and Borrower shall prepay the
Revolving Loans, Swingline Loans and WCMA Loans in the following amounts and at
the following times:
(A) 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 one hundred eighty (180) 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 $3,000,000 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);
(B) 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;

 

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(C) 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 2.2(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 2.2(c)(iii)), and provided, that, so long
as no Default or Event of Default has occurred and is continuing, the recipient
of such Net Cash Proceeds may reinvest the amount of such Net Cash Proceeds
within ninety (90) days, in replacement fixed assets of a kind then used or
usable in the business of such Credit Party. If the applicable Credit Party does
not intend to so reinvest such Net Cash Proceeds, or if the time period set
forth in the immediately preceding sentence expires without such Credit Party
having reinvested such Net Cash Proceeds, Borrower shall prepay the Loans in an
amount equal to such Net Cash Proceeds; and
(D) upon receipt by any Credit Party of any Extraordinary Receipts, an amount
equal to one hundred percent (100%) of such Extraordinary Receipts.
(E) 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 Commitment 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).”
(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) Intentionally omitted.
(iii) Borrower may, upon not less than ten (10) Business 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.

 

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(e) Swingline Loans.
(i) Swingline Lender may, from time to time, at its sole election and without
prior notice to or consent by any Lender or Borrower, convert any request or
deemed request by Borrower for a Revolving Loan that is a Base Rate Loan into a
request for an advance made by, and for the account of, Swingline Lender in
accordance with the terms of this Agreement (each such advance, a “Swingline
Loan”). Each Swingline Loan shall be a Base Rate Loan, and shall be advanced by
Swingline Lender in the same manner as Revolving Loans are advanced hereunder,
in accordance with the provisions of Section 2.2(b). Swingline Lender shall have
the right (but not the obligation) to advance Swingline Loans regardless of
whether the conditions precedent set forth in Section 8.3 are then satisfied,
including the existence of any Default or Event of Default either before or
after giving effect to the making of such Swingline Loan; provided, that
Swingline Lender shall not advance any Swingline Loan if the Swingline Loan
Outstandings exceed the Swingline Loan Limit, either before or after giving
effect to the making of any proposed Swingline Loan. If at any time the
Swingline Loan Outstandings exceed the Swingline Loan Limit, then, on the next
succeeding Business Day, Borrower shall repay Revolving Loans and/or Swingline
Loans or cash collateralize Letter of Credit Liabilities in the manner specified
in Section 2.5(e) or cancel outstanding Letters of Credit, or any combination of
the foregoing, in an aggregate amount equal to such excess.
(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).

 

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(iii) In the event that, at any time any Swingline Loans are outstanding, either
(1) an Event of Default pursuant to either Section 9.1(f) or 9.1(g) has occurred
or (2) the Revolving Loan Commitment has been suspended or terminated in
accordance with the provisions of this Agreement, then in either case, each of
the Revolving Lenders (other than Swingline Lender and any Revolving Lender that
was a Non-Funding Revolving Lender at the time the applicable Swingline Loans
were advanced) shall be deemed to have irrevocably and immediately purchased and
received from Swingline Lender, without recourse or warranty, an undivided
interest and participation in the Swingline Loan in an amount equal to such
Lender’s Revolving Loan Commitment Percentage (but recalculated to disregard any
interest of any Non-Funding Revolving Lender in the Revolving Loans) multiplied
by the total amount of the Swingline Loans outstanding. Any purchase obligation
arising pursuant to the immediately preceding sentence shall be absolute and
unconditional and shall not be affected by any circumstances whatsoever. In the
event that on any Business Day Swingline Lender desires to effect settlement of
any such purchase, Swingline Lender shall promptly notify Administrative Agent
to that effect and indicate the payment amounts required by each Lender to
effect such settlement. Administrative Agent agrees to transmit to Revolving
Lenders the information contained in each notice received by Administrative
Agent from Swingline Lender and shall concurrently notify such Lenders of each
such Lender’s Pro Rata Share of the required payment settlement amount. Each
such Lender (other than Non-Funding Revolving Lenders, as specified above) shall
effect such settlement upon receipt of any such notice by transferring to the
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.

 

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(f) Optional Revolving Loan Commitment Increase Request. Provided no Default or
Event of Default shall have occurred and shall be continuing, Borrower may
request that the Lenders increase the Revolving Loan Commitment by an amount not
greater than $30,000,000 in the aggregate (the “Optional Revolving Loan
Commitment Increase”). The Optional Revolving Loan Commitment Increase shall be
subject to the approval of Administrative Agent and the Lenders in their
respective sole discretion, and shall also be subject to the terms and
provisions of Section 4.11, including, without limitation, such modifications to
the Financing Documents as Administrative Agent shall reasonably request as
necessary to effect the Optional Revolving Loan Commitment Increase (including
an amendment to the Commitment Annex to reflect the Lenders, and the commitment
amounts and commitment percentages of such Lenders, as of the effectiveness of
the Optional Revolving Loan Commitment Increase), and other matters considered
appropriate by Agent in its reasonable discretion. Only one such increase in the
Revolving Loan Commitment may be requested by Borrower pursuant to this
Section 2.2(f).
(g) 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, 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). All
prepayments required by Section 2.2(c) shall 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, 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 2.2(c).
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
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.

 

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(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, II or III of the Pricing Table
shall be applicable, 0.125% per annum, or (B) at all times when Tier IV or V of
the Pricing Table shall be applicable, 0.25% 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.

 

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(e) LIBOR Provisions.
(i) LIBOR Election. 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 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 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.

 

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(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 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) Revolving Loan Notes and Swingline Loan Notes. 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 Revolving Loan
Commitment. The Swingline Loans made by Swingline Lender shall be evidenced, if
so requested by Swingline Lender, by a promissory note executed by Borrower (a
“Swingline Loan Note”) in an original principal amount equal to the amount
identified in clause (i) of the definition of Swingline Loan Limit.

 

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(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 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).

 

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Administrative Agent shall promptly notify Revolving Lenders of any such deemed
request and each Revolving Lender (other than any such Revolving Lender that was
a Non-Funding Revolving Lender at the time the applicable Supported Letter of
Credit or Lender Letter of Credit was issued) hereby agrees to make available to
Administrative Agent not later than noon (Chicago time) on the Business Day
following such notification from Administrative Agent such Revolving Lender’s
Pro Rata Share of such Revolving Loan (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.

 

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(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) (A) 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 Liability to be available to
Administrative Agent, for its benefit and the benefit of issuers of Lender
Letters of Credit, to reimburse payments of drafts drawn under such Letters of
Credit and pay any fees and expenses related thereto or (B) deliver to
Administrative Agent for the benefit of all Revolving Lenders a letter of credit
(the “Back-to-Back Letter of Credit”) issued by a financial institution, and in
form and substance, reasonably acceptable to Administrative Agent, with a face
amount equal to one hundred and five percent (105%) of the aggregate outstanding
Letter of Credit Liabilities to be available to be drawn upon by Administrative
Agent, for its benefit and the benefit of issuers of Lender Letters of Credit,
to reimburse payments of drafts drawn under such Letters of Credit and pay any
fees and expenses related thereto and (ii) in each case, to 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 or Back-to-Back Letter of Credit, as
applicable, described in the preceding clause attributable to such Letter of
Credit, but only to the extent not previously applied or drawn upon 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.

 

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(ii) If either (x) Administrative Agent makes any payment or disbursement under
any Support Agreement and/or (y) an LC Issuer makes any payment or disbursement
under any Lender Letter of Credit, and (A) Borrower has not reimbursed
Administrative Agent or, as applicable, the applicable LC Issuer, with respect
to any Lender Letter of Credit in full for such payment or disbursement in
accordance with Section 2.5(c), or (B) any reimbursement received by
Administrative Agent or any LC Issuer from Borrower is or must be returned or
rescinded upon or during any bankruptcy or reorganization of any Credit Party or
otherwise, each Revolving Lender (other than any Revolving Lender that was a
Non-Funding Revolving Lender at the time of the issuance of such Supported
Letter of Credit or Lender Letter of Credit) shall be irrevocably and
unconditionally obligated to pay to Administrative Agent, or the applicable LC
Issuer, as applicable, its Pro Rata Share of such payment or disbursement (but
no such payment shall diminish the Obligations of Borrower under
Section 2.5(c)), calculated to disregard any interest of any Non-Funding
Revolving Lender in the Revolving Loans. To the extent any such Revolving Lender
shall not have made such amount available to Administrative Agent, or the
applicable LC Issuer, as applicable, by noon (Chicago time) on the Business Day
on which such Lender receives notice from Administrative Agent, or the
applicable LC Issuer, as applicable, of such payment or disbursement, such
Lender agrees to pay interest on such amount to Administrative Agent, or the
applicable LC Issuer, as applicable, forthwith on demand 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. 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, against then outstanding WCMA Loans;
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 Sections 2.2(c) and (g), and shall be fully
authorized by Borrower and each Lender to make any corresponding Loan Account
reversals in respect thereof.

 

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(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 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.

 

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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 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.

 

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(c) In no event shall the total interest received by any Lender exceed the
amount which it could lawfully have received had the interest been calculated
for the full term hereof at the Maximum Lawful Rate. If, notwithstanding the
prior sentence, any Lender has received interest hereunder in excess of the
Maximum Lawful Rate, such excess amount shall be applied to the reduction of the
principal balance of the Loans or to other amounts (other than interest) payable
hereunder, and if no such principal or other amounts are then outstanding, such
excess or part thereof remaining shall be paid to Borrower.
(d) In computing interest payable with reference to the Maximum Lawful Rate
applicable to any Lender, such interest shall be calculated at a daily rate
equal to the Maximum Lawful Rate divided by the number of days in the year in
which such calculation is made.
Section 2.8 Taxes.
(a) All payments of principal and interest on the Loans and all other amounts
payable hereunder shall be made free and clear of and without deduction for any
present or future income, excise, stamp, documentary, property or franchise
taxes and other taxes, fees, duties, 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.

 

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(c) Each Lender that (i) is organized under the laws of a jurisdiction other
than the United States and (ii)(A) is a party hereto on the Closing Date or
(B) purports to become an assignee of an interest pursuant to Section 12.6(a)
after the Closing Date (unless such Lender was already a Lender hereunder
immediately prior to such assignment) (each such Lender a “Foreign Lender”)
shall execute and deliver to each of Borrower and Administrative Agent one or
more (as Borrower or Administrative Agent may reasonably request) United States
Internal Revenue Service Forms W-8ECI, W-8BEN, W-8IMY (as applicable) and other
applicable forms, certificates or documents prescribed by the United States
Internal Revenue Service or reasonably requested by Administrative Agent
certifying as to such Lender’s entitlement to a complete exemption from
withholding or deduction of Taxes. Borrower shall not be required to pay
additional amounts to any Lender pursuant to this Section 2.8 with respect to
United States withholding and income Taxes to the extent that the obligation to
pay such additional amounts would not have arisen but for the failure of such
Lender to comply with this paragraph other than as a result of a change in law.
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.

 

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

 

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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 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, 2007 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) Intentionally omitted.
(d) Since June 30, 2007 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 terrorism of
a Blocked Person.

 

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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.

 

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All contributions (if any) have been made on a timely basis to any Multiemployer
Plan that are required to be made by any Credit Party or any other member of the
Controlled Group under the terms of the plan or of any collective bargaining
agreement or by applicable Law; no Credit Party nor any member of the Controlled
Group has withdrawn or partially withdrawn from any Multiemployer Plan, incurred
any withdrawal liability with respect to any such plan or received notice of any
claim or demand for withdrawal liability or partial withdrawal liability from
any such plan, and no condition has occurred which, if continued, could result
in a withdrawal or partial withdrawal from any such plan, and no Credit Party
nor any member of the Controlled Group has received any notice that any
Multiemployer Plan is in reorganization, that increased contributions may be
required to avoid a reduction in plan benefits or the imposition of any excise
tax, that any such plan is or has been funded at a rate less than that required
under Section 412 of the Code, that any such plan is or may be terminated, or
that any such plan is or may become insolvent.
Section 3.15 Brokers.
Except as set forth on Schedule 3.15, and except for fees payable to
Administrative Agent and/or Lenders, no broker, finder or other intermediary has
brought about the obtaining, making or closing of the transactions contemplated
by the Operative Documents, and no Credit Party has or will have any obligation
to any Person in respect of any finder’s or brokerage fees in connection
herewith or therewith.
Section 3.16 Material Contracts.
Except for the Operative Documents and the other agreements set forth on
Schedule 3.16 (collectively with the Operative Documents, the “Material
Contracts”), as of the Closing Date there are no (i) employment agreements
covering the management of any Credit Party, (ii) collective bargaining
agreements or other labor agreements covering any employees of any Credit Party,
(iii) agreements for managerial, consulting or similar services to which any
Credit Party is a party or by which it is bound, (iv) agreements regarding any
Credit Party, its assets or operations or any investment therein to which any of
its equityholders is a party or by which it is bound, (v) real estate leases,
Intellectual Property licenses or other lease or license agreements to which any
Credit Party is a party, either as lessor or lessee, or as licensor or licensee,
or (vi) customer, distribution, marketing or supply agreements to which any
Credit Party is a party, in each case with respect to the preceding clauses (i),
(iii), (iv), (v) and (vi) requiring payment of more than $100,000 in any year,
(vii) partnership agreements to which any Credit Party is a general partner or
joint venture agreements to which any Credit Party is a party or (viii) any
other agreements or instruments to which any Credit Party is a party, and the
breach, nonperformance or cancellation of which, or the failure of which to
renew, could reasonably be expected to have a Material Adverse Effect.
Schedule 3.16 sets forth, with respect to each real estate lease agreement to
which any Credit Party is a party as of the Closing Date, the address of the
subject property and the annual rental (or, where applicable, a general
description of the method of computing the annual rental). The consummation of
the transactions contemplated by the Financing Documents and the other Operative
Documents will not give rise to a right of termination in favor of any party to
any Material Contract (other than any Credit Party).
Section 3.17 Compliance with Environmental Requirements; No Hazardous Materials.
Except in each case as set forth on Schedule 3.17:
(a) to Borrower’s knowledge, no Hazardous Materials are located on any
properties now or previously owned, leased or operated by any Credit Party or
have been released into the environment, or deposited, discharged, placed or
disposed of at, on, under or near any of such properties in a manner that would
require the taking of any action under any Environmental Law and have given rise
to, or could reasonably be expected to give rise to, remediation costs and
expenses on the part of the Credit Parties in excess of $50,000.

 

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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.

 

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Section 3.18 Intellectual Property.
Each Credit Party owns, is licensed to use or otherwise has the right to use,
all Intellectual Property that is material to the condition (financial or
other), business or operations of such Credit Party. All such Intellectual
Property existing as of the Closing Date and registered with any United States
or foreign Governmental Authority is set forth on Schedule 3.18. All
Intellectual Property of each Credit Party is fully protected and/or duly and
properly registered, filed or issued in the appropriate office and jurisdictions
for such registrations, filings or issuances. To Borrower’s knowledge, each
Credit Party conducts its business without infringement or claim of infringement
of any Intellectual Property rights of others and there is no infringement or
claim of infringement by others of any Intellectual Property rights of any
Credit Party, which infringement or claim of infringement could reasonably be
expected to have a Material Adverse Effect.
Section 3.19 Real Property Interests.
Except for leasehold interests disclosed on Schedule 3.16, and except for the
ownership or other interests set forth on Schedule 3.19, no Credit Party has, as
of the Closing Date, any ownership, leasehold or other interest in real
property. Schedule 3.19 sets forth, with respect to each parcel of real estate
owned by any Credit Party as of the Closing Date, the address and legal
description of such parcel.
Section 3.20 Solvency.
Borrower and each additional Credit Party is Solvent.
Section 3.21 Senior Debt.
The Obligations constitute “Senior Debt” under that certain Indenture dated as
of November 26, 2004, as amended to date, between Borrower and The Bank of New
York Trust Company, N.A., as Trustee, and within the meaning of the Convertible
Senior Notes.
Section 3.22 Certain Representations regarding the Acquisition Documents.
The Acquisition Documents have been duly authorized (including, without
limitation, by the stockholders of Old 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, all in reasonable
detail and certified by a Responsible Officer as fairly presenting the financial
condition and results of operations of Borrower and its Consolidated
Subsidiaries and as having been prepared in accordance with GAAP applied on a
basis consistent with the audited financial statements of Borrower, subject to
changes resulting from audit and normal year-end adjustments and the absence of
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(b) as soon as available and in any event within ninety (90) days (ninety-five
(95) days if Borrower shall obtain an extension of time for the filing of its
Annual Report on Form 10-K for an applicable fiscal year pursuant to Rule 12b-25
under the Securities Exchange Act of 1934, as amended) after the end of each
Fiscal Year, a consolidated and consolidating balance sheet of Borrower and its
Consolidated Subsidiaries as of the end of such Fiscal Year and the related
consolidated and consolidating statements of operations, stockholders’ equity
(or the comparable item, if Borrower is not a corporation) and cash flows for
such Fiscal Year, setting forth in each case in comparative form the figures for
the previous Fiscal, 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) intentionally omitted;
(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, and (iii) all Swap Contracts entered into by any
Credit Party;
(g) promptly upon such information becoming available, a summary of all purchase
price and other monetary adjustments that are made pursuant to any of the
Acquisition Documents;
(h) promptly upon any officer of any Credit Party obtaining knowledge (i) of the
existence of any Event of Default or Default, or becoming aware that the holder
of any Debt of any Credit Party in excess of $100,000 has given any notice or
taken any other action with respect to a claimed default thereunder, (ii) of any
change in any Credit Party’s independent registered public accountant or any
resignation, or decision not to stand for re-election, by any member of any
Credit Party’s board of directors (or comparable body), (iii) that any Person
has given any notice to any Credit Party or taken any other action with respect
to a claimed default under any material agreement or instrument (other than the
Financing Documents) to which any Credit Party is a party or by which any of its
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(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 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;

 

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(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) as soon as available and in any event no later than sixty (60) days after
the beginning of each Fiscal Year of Borrower, 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) intentionally omitted;
(o) intentionally omitted;
(p) intentionally omitted;
(q) intentionally omitted;
(r) intentionally omitted;
(s) intentionally omitted;
(t) intentionally omitted;
(u) intentionally omitted; and
(v) with reasonable promptness, such other information and data with respect to
any Credit Party as from time to time may be reasonably requested by
Administrative Agent or any Lender.
Section 4.2 Payment and Performance of Obligations.
Borrower (i) will pay and discharge, and cause each Subsidiary to pay and
discharge, at or before maturity, all of their respective obligations and
liabilities, including tax liabilities, except for such obligations and/or
liabilities (x) that may be the subject of a Permitted Contest and (y) the
nonpayment or nondischarge of which could not reasonably be expected to have a
Material Adverse Effect, (ii) will maintain, and cause each Subsidiary to
maintain, in accordance with GAAP, appropriate reserves for the accrual of all
of their respective obligations and liabilities and (iii) will not breach or
permit any Subsidiary to breach, or permit to exist any default under, the terms
of any lease, commitment, contract, instrument or obligation to which it 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.

 

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

 

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(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 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.

 

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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.
(a) Borrower will use the proceeds of the Revolving Loans solely (i) to
refinance existing senior loan Debt to the Lenders, and for working capital
needs of Borrower and its Subsidiaries; (ii) with the consent of Administrative
Agent and the Required Lenders and otherwise subject to Section 4.7(b), to
refinance existing Debt evidenced by Borrower’s 5.75% Convertible Senior
Subordinated Notes (the “Convertible Senior Notes”); (iii) to finance Capital
Expenditures permitted by Section 7.3, and (iv) to pay for fees and expenses
associated with the foregoing. Borrower will use the proceeds of the WCMA Loans
solely 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).
(b) Borrower agrees that the use of the proceeds of Loans under this Agreement
to refinance existing Debt evidenced by the Senior Notes, or in payment of fees
and expenses in respect thereof, shall be subject to the consent of
Administrative Agent and the Required Lenders, and, in each event, to the
satisfaction of the following additional conditions precedent, each to the
satisfaction of Administrative Agent and the Required Lenders in their
reasonable discretion:
(i) No Default or Event of Default shall have occurred and shall be continuing
at the time of each such use of the proceeds of the Revolving Loans;
(ii) Borrower shall provide Administrative Agent such information concerning
such use of the proceeds of the Revolving Loans as Administrative Agent shall
reasonably request;
(iii) On a pro forma basis (giving effect to each such use of the proceeds of
the Revolving Loans), the consolidated Senior Leverage Ratio of Borrower and its
Subsidiaries shall not exceed 2.00 to 1.00; provided, that the financial
covenant set forth in Section 7.2 shall at all times be applicable;
(iv) On a pro forma basis (giving effect to each such use of the proceeds of the
Revolving Loans), the consolidated Fixed Charge Coverage Ratio shall not exceed
1.50 to 1.00 provided, that the financial covenant set forth in Section 7.1
shall at all times be applicable; and

 

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(v) Borrower shall enter into such modifications to the Loans and/or this
Agreement and the other Financing Documents as the Administrative Agent may
reasonably request, including as may be necessary to reinstate a borrowing base
formula for the borrowing and maintenance of the Loans hereunder and thereunder
(including borrowing base and collateral related reporting requirements).
Section 4.8 Lenders’ Meetings.
From time to time at the request of Administrative Agent, Borrower will, in each
case to the extent requested by either Administrative Agent or Required Lenders,
conduct a meeting of Administrative Agent and the Lenders to discuss the most
recently reported financial results and the financial condition of Borrower and
its Subsidiaries, at which shall be present a Responsible Officer and such other
officers of the Credit Parties as may be reasonably requested to attend by
Administrative Agent or any Lender, such request or requests to be made within a
reasonable time prior to the scheduled date of such meeting. Such meetings shall
be held at a time and place convenient to the Lenders and to Borrower.
Section 4.9 Intentionally omitted.
Section 4.10 Hazardous Materials; Remediation.
(a) If any release or disposal of Hazardous Materials shall occur or shall have
occurred on any real property or any other assets of Borrower or any other
Credit Party, Borrower will cause, or direct the applicable Credit Party to
cause, the prompt containment and removal of such Hazardous Materials and the
remediation of such real property or other assets as is necessary to comply with
all Environmental Laws and to preserve the value of such real property or other
assets. Without limiting the generality of the foregoing, Borrower shall, and
shall cause each other Credit Party to, comply with each Environmental Law
requiring the performance at any real property by Borrower or any other Credit
Party of activities in response to the release or threatened release of a
Hazardous Material.
(b) Borrower will provide Administrative Agent within thirty (30) days after
demand therefor with a bond, letter of credit or similar financial assurance
evidencing to the satisfaction of Administrative Agent that sufficient funds are
available to pay the cost of removing, treating and disposing of any Hazardous
Materials or Hazardous Materials Contamination and discharging any assessment
which may be established on any property as a result thereof, such demand to be
made, if at all, upon Administrative Agent’s reasonable business determination
that the failure to remove, treat or dispose of any Hazardous Materials or
Hazardous Materials Contamination, or the failure to discharge any such
assessment could reasonably be expected to have a Material Adverse Effect.
Section 4.11 Syndication.
Borrower agrees, as additional conditions precedent to the Optional Revolving
Loan Commitment Increase, Administrative Agent shall successfully syndicate the
Loans and the Loan commitments as determined by Administrative Agent in the
exercise of its reasonable discretion, In connection with any such syndication,
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.

 

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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. 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.
(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”.

 

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(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 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;

 

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(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;
(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;
(h) Debt to Lexington Insurance Company and Zurich American Insurance Company in
an aggregate principal amount at any time outstanding not greater than $600,000,
solely for the purpose of financing insurance premiums and related taxes and
fees in respect of general liability, umbrella, crime and fiduciary insurance
coverages provided by such insurance companies, plus, in each case, interest on
such amount at a rate per annum not to exceed 6.53%,
(i) Unsecured Debt which, together with Contingent Obligations permitted by
Section 5.3(f), shall not exceed $500,000 in the aggregate at any time
outstanding; and
(j) Debt in respect of the Back-to-Back Letter of Credit.
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 except:
(a) Liens created by the Security Documents;
(b) Liens existing on the date of this Agreement and set forth on Schedule 5.2;
(c) any Lien on any asset securing Debt permitted under Section 5.1(d), provided
that such Lien attaches only to the assets financed by such Debt, and such Lien
attaches concurrently with or within ninety (90) days after the acquisition
thereof;
(d) Liens for taxes or other governmental charges not at the time delinquent or
thereafter payable without penalty or the subject of a Permitted Contest;
(e) Liens arising in the Ordinary Course of Business (i) in favor of carriers,
warehousemen, mechanics and materialmen, and other similar Liens imposed by law
and (ii) in connection with worker’s compensation, unemployment compensation and
other types of social security (excluding Liens arising under ERISA) or in
connection with surety bonds, bids, performance bonds and similar obligations
for sums not overdue or the subject of a Permitted Contest and not involving any
deposits or advances or borrowed money or the deferred purchase price of
property or services and, in each case, for which it maintains adequate
reserves;

 

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(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;
(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; and
(h) Liens to secure the Debt permitted by Section 5.1(j), which Liens are
subordinated to the Liens of Administrative Agent in form and substance
satisfactory to Administrative Agent.
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;
(e) Contingent Obligations arising with respect to customary indemnification
obligations in favor of purchasers in connection with dispositions permitted
under Section 5.7; and
(f) Other Contingent Obligations not permitted by clauses (a) through (e) above,
which, together with the unsecured Debt permitted by Section 5.1(i), shall not
exceed $500,000 in the aggregate at any time outstanding.

 

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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, (b) any Subsidiary
from making dividends or distributions, directly or indirectly, to Borrower, or
(c) Borrower from making any purchase, redemption, retirement, defeasance,
surrender, cancellation, termination or acquisition of any shares of its common
stock, $0.01 par value per share, in an amount not to exceed $5,000,000 in the
aggregate, 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) except with the consent of Administrative Agent and the Required
Lenders, and as otherwise expressly permitted under this Agreement, 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 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 its Subsidiaries to take, any such action with respect to any
such items without obtaining such approval from Required Lenders.

 

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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
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 2.2(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;

 

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(ii) Cash Equivalents;
(iii) intentionally omitted;
(iv) bank deposits established in accordance with Section 5.17;
(v) Investments in securities of Account Debtors received pursuant to any plan
of reorganization or similar arrangement upon the bankruptcy or insolvency of
such Account Debtors; and
(vi) Investments in the form of Swap Contracts permitted under Section 5.3(c).
(b) Notwithstanding the provisions of Section 5.8(a), Borrower or one of its
Subsidiaries may acquire all or substantially all of the assets, stock, or other
equity interests of another Person (each, a “Section 5.8(b) Permitted
Acquisition”) upon the following terms and conditions (all in form and substance
satisfactory to the 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;
(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) within ten (10) Business Days after the
consummation of the proposed acquisition, Borrower or such Subsidiary shall have
delivered to Administrative Agent 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
(including, without limitation, the purchase price for the assets, stock or
other equity interests acquired by Borrower and its Subsidiaries) for all
Section 5.8(b) Permitted Acquisitions, shall not exceed $2,000,000; (vi) within
ten (10) Business Days after the consummation of the proposed acquisition,
Borrower and the applicable Subsidiary shall have furnished to Administrative
Agent copies of the financial statements of the acquisition target, and all
Acquisition Documents and other documents and instruments relating to the
proposed acquisition; and (vii) all indebtedness incurred by Borrower or such
Subsidiary shall be fully and completely subordinated to the Obligations.
(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 20 Business Days’
prior notice of such proposed Section 5.8(c) Permitted Acquisition, which notice
shall include a due diligence package including the following materials if
requested by Administrative Agent, each in form and substance reasonably
satisfactory to Administrative Agent:

 

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(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 “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

 

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(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;
(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);

 

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(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) intentionally omitted;
(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.
Section 5.11 Intentionally Omitted.
Section 5.12 Fiscal Year.
Borrower will not, and will not permit any Subsidiary to, change its Fiscal
Year.

 

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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, $3,500,000 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, (a) after the occurrence
and during the continuance of an Event of Default, 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, or (b) at all other times, establish any
new bank account without at least ten (10) days’ prior written notice to
Administrative Agent.
Section 5.18 Compliance with Anti-Terrorism Laws.
(a) Borrower will not, and will not permit any Subsidiary to, directly or
indirectly, knowingly enter into any Operative Documents or Material Contracts
with any Person listed on the OFAC Lists. Borrower shall immediately notify
Administrative Agent if Borrower has knowledge that Borrower, any additional
Credit Party or any of their respective Affiliates or agents acting or
benefiting in any capacity in connection with the transactions contemplated by
this Agreement is or becomes a Blocked Person or (i) is convicted on,
(ii) pleads nolo contendere to, (iii) is indicted on or (iv) is arraigned and
held over on charges involving money laundering or predicate crimes to money
laundering.

 

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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 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.

 

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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.

 

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ARTICLE 7
FINANCIAL COVENANTS
Borrower agrees that, so long as any Credit Exposure exists:
Section 7.1 Fixed Charge Coverage Ratio.
Borrower will not permit the Fixed Charge Coverage Ratio 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 1.15 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 2.50 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; provided, however, that from the period
from and including January 1, 2008 to and including December 31, 2008, the
Borrower may incur an additional $2,000,000 of Capital Expenditures in
connection with the purchase of certain computer hardware and software for Dixie
Sporting Goods Co., Inc. and Kesslers Team Sports, Inc.
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 date of this
Agreement and of any LC Issuer to issue any Lender Letter of Credit on the date
of this Agreement shall be subject to the receipt by Administrative Agent of
each agreement, document and instrument set forth on the Closing Checklist, each
in form and substance reasonably satisfactory to Administrative Agent, and to
the satisfaction of the following conditions precedent, each to the satisfaction
of Administrative Agent and Lenders in their reasonable discretion:
(a) the payment of all fees, expenses and other amounts due and payable under
each Financing Document, including, without limitation, the Administrative Agent
Fee Letter;
(b) the satisfaction of Administrative Agent as to the absence, since June 30,
2007, of any Material Adverse Effect or any event or condition which could
reasonably be expected to result in a Material Adverse Effect;
(c) all other transactions contemplated to occur in connection with the closing
of this loan and letter of credit facility shall have been consummated in
accordance with applicable Law and the documentation relating thereto, which
shall be satisfactory to Administrative Agent and the Lenders in form and
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(d) no Default or Event of Default shall have occurred and shall be continuing;
(e) all governmental and third party approvals, if any, 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;
(f) Borrower, 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;
(g) 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;
(h) 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
(i) 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 date of this
Agreement) is subject to the satisfaction of the following additional
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(i) in the case of a Revolving Loan Borrowing, receipt by Administrative Agent
of a Notice of Borrowing (or telephonic or electronic notice, as permitted by
Section 2.2(b)(ii)) in accordance with Section 2.2(b) and, in the case of any
Support Agreement or Lender Letter of Credit, receipt by Administrative Agent of
a Notice of LC Credit Event in accordance with Section 2.5(a);
(ii) the fact that, immediately after such borrowing and after application of
the proceeds thereof or after such issuance, the Revolving Loan Outstandings
will not exceed the Revolving Loan Limit;
(iii) the fact that, immediately before and after such borrowing or issuance, no
Default or Event of Default shall have occurred and be continuing;
(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
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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 $350,000; 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 $350,000,
(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 $350,000;

 

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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 $350,000 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.

 

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(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 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
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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 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
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second, to all fees, costs, indemnities, liabilities, obligations and expenses
incurred by or owing to any Lender with respect to this Agreement, the other
Financing Documents or the Collateral; third, to accrued and unpaid interest on
the Obligations; fourth, to the principal amount of the Obligations outstanding;
fifth to Obligations owing to any Eligible Swap Counterparty in respect of any
Swap Contracts permitted by the terms of this Agreement; sixth to provide cash
collateral to secure any then outstanding Loans, Letter of Credit Liability and
payment of related fees; seventh to provide cash collateral to secure any other
then outstanding Obligations, other than in respect of Swap Contracts permitted,
but not required, by the terms of this Agreement, eighth to provide cash
collateral to secure Obligations in respect of Swap Contracts permitted, but not
required, by the terms of this Agreement; and ninth to any other indebtedness or
obligations of Borrower owing to Administrative Agent or any Lender under the
Financing Documents.
(d) Any balance remaining after giving effect to the applications set forth in
this Section 9.6 shall be delivered to Borrower or to whoever may be lawfully
entitled to receive such balance or as a court of competent jurisdiction may
direct. In carrying out any of the applications set forth in this Section 9.6,
(x) amounts received shall be applied in the numerical order provided until
exhausted prior to the application to the next succeeding category and (y) each
of the Persons entitled to receive a payment in any particular category shall
receive an amount equal to its pro rata share of amounts available to be applied
pursuant thereto for such category.
ARTICLE 10
EXPENSES AND INDEMNITY
Section 10.1 Expenses.
Borrower hereby agrees to promptly pay (i) all costs and expenses of
Administrative Agent (including without limitation the reasonable fees, costs
and expenses of counsel to, and independent appraisers and consultants retained
by Administrative Agent) in connection with the examination, review, due
diligence investigation, documentation, negotiation, closing and syndication of
the transactions contemplated by the Financing Documents, in connection with the
performance by Administrative Agent of its rights and remedies under the
Financing Documents and in connection with the continued administration of the
Financing Documents including (x) any amendments, modifications, consents and
waivers to and/or under any and all Financing Documents and (y) any periodic
public record searches conducted by or at the request of Administrative Agent
(including, without limitation, title investigations, UCC searches, fixture
filing searches, judgment, pending litigation and tax lien searches and searches
of applicable corporate, limited liability, partnership and related records
concerning the continued 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
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(iv) all costs and expenses incurred by Lenders in connection with any
litigation, dispute, suit or proceeding relating to any Financing Document and
in connection with any workout, collection, bankruptcy, insolvency and other
enforcement proceedings under any and all Financing Documents, provided, that to
the extent that the costs and expenses referred to in this clause (iv) consist
of fees, costs and expenses of counsel, Borrower shall be obligated to pay such
reasonable fees, costs and expenses for counsel to Administrative Agent and for
only one counsel acting for all Lenders (other than Administrative Agent).
Section 10.2 Indemnity.
Borrower hereby agrees to indemnify, pay and hold harmless Administrative Agent
and Lenders and the officers, directors, employees, trustees, agents, investment
advisors, collateral managers, servicers, and counsel of Administrative Agent
and Lenders (collectively called the “Indemnitees”) from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(including the fees and disbursements of counsel for such Indemnitee) in
connection with any investigative, response, remedial, administrative or
judicial matter or proceeding, whether or not such Indemnitee shall be
designated a party thereto and including any such proceeding initiated by or on
behalf of a Credit Party, and the reasonable expenses of investigation by
engineers, environmental consultants and similar technical personnel and any
commission, fee or compensation claimed by any broker (other than any broker
retained by Administrative Agent or Lenders) asserting any right to payment for
the transactions contemplated hereby, which may be imposed on, incurred by or
asserted against such Indemnitee as a result of or in connection with the
transactions contemplated hereby or by the other Operative Documents (including
(i)(A) as a direct or indirect result of the presence on or under, or escape,
seepage, leakage, spillage, discharge, emission or release from, any property
now or previously owned, leased or operated by Borrower, any Subsidiary or any
other Person of any Hazardous Materials or any Hazardous Materials
Contamination, (B) arising out of or relating to the offsite disposal of any
materials generated or present on any such property or (C) arising out of or
resulting from the environmental condition of any such property or the
applicability of any governmental requirements relating to Hazardous Materials,
whether or not occasioned wholly or in part by any condition, accident or event
caused by any act or omission of Borrower or any Subsidiary, and (ii) proposed
and actual extensions of credit under this Agreement) and the use or intended
use of the proceeds of the Loans and Letters of Credit, except that Borrower
shall have no obligation hereunder to an Indemnitee with respect to any
liability resulting from the gross negligence or willful misconduct of such
Indemnitee, as determined by a final non-appealable judgment of a court of
competent jurisdiction. To the extent that the undertaking set forth in the
immediately preceding sentence may be unenforceable, Borrower shall contribute
the 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.

 

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

 

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

 

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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 be taken by
any of them while the retiring Administrative Agent was acting or was continuing
to act as Administrative Agent.

 

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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.

 

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(ii) On a Business Day of each week as selected from time to time by
Administrative Agent, or more frequently (including daily), if Administrative
Agent so elects (each such day being a "Settlement Date”), Administrative Agent
will advise each Revolving Lender by telephone, facsimile or e-mail of the
amount of each such Revolving Lender’s Pro Rata Share of the Revolving Loan
balance as of the close of business of the Business Day immediately preceding
the Settlement Date. In the event that payments are necessary to adjust the
amount of such Revolving Lender’s actual Pro Rata Share of the Revolving Loan
balance to such Lender’s required Pro Rata Share of the Revolving Loan balance
as of any Settlement Date, the party from which such payment is due shall pay
Administrative Agent, without setoff or discount, to the Payment Account not
later than noon (Chicago time) on the Business Day following the Settlement Date
the full amount necessary to make such adjustment. Any obligation arising
pursuant to the immediately preceding sentence shall be absolute and
unconditional and shall not be affected by any circumstance whatsoever. In the
event settlement shall not have occurred by the date and time specified in the
second preceding sentence, interest shall accrue on the unsettled amount at the
Federal Funds Rate, for the first three (3) days following the scheduled date of
settlement, and thereafter at the Base Rate plus the Base Rate Margin applicable
to Revolving Loans.
(iii) On each Settlement Date, Administrative Agent shall advise each Revolving
Lender by telephone, facsimile or e-mail of the amount of such Revolving
Lender’s Pro Rata Share of principal, interest and fees paid for the benefit of
Revolving Lenders with respect to each applicable Revolving Loan, to the extent
of such Revolving Lender’s credit exposure with respect thereto, and shall make
payment to such Revolving Lender not later than noon (Chicago time) on the
Business Day following the Settlement Date of such amounts in accordance with
wire instructions delivered by such Revolving Lender to Administrative Agent, as
the same may be modified from time to time by written notice to Administrative
Agent; provided, that, in the case such Revolving Lender is a Defaulted Lender,
Administrative Agent shall be entitled to set off the funding short-fall against
that Defaulted Lender’s respective share of all payments received from Borrower.
(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) Intentionally Omitted.
(c) Return of Payments.
(i) If Administrative Agent pays an amount to a Lender under this Agreement in
the belief or expectation that a related payment has been or will be received by
Administrative Agent from Borrower and such related payment is not received by
Administrative Agent, then Administrative Agent will be entitled to recover such
amount from such Lender on demand without setoff, counterclaim or deduction of
any kind, together with interest accruing on a daily basis at the Federal Funds
Rate.
(ii) If Administrative Agent determines at any time that any amount received by
Administrative Agent under this Agreement must be returned to Borrower or paid
to any other Person pursuant to any insolvency law or otherwise, then,
notwithstanding any other term or condition of this Agreement or any other
Financing Document, Administrative Agent will not be required to distribute any
portion thereof to any Lender. In addition, each Lender will repay to
Administrative Agent on demand any portion of such amount that Administrative
Agent has distributed to such Lender, together with interest at such rate, if
any, as Administrative Agent is required to pay to Borrower or such other
Person, without setoff, counterclaim or deduction of any kind.

 

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(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 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.

 

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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 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.

 

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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.
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.

 

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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 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 2.2(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) 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; (ii) 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
(iii) 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.

 

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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
(and, as applicable, a Note in the principal amount of that portion of the
Revolving Loan Commitment retained by the assigning Lender). Upon receipt by the
assigning Lender of such Note, the assigning Lender shall return to Borrower any
prior Note held by it.
(iii) Administrative Agent, acting solely for this purpose as an agent of
Borrower, shall maintain at its offices located in Chicago, Illinois a copy of
each Assignment Agreement delivered to it and a register for the recordation of
the names and addresses of each Lender, and the commitments of, and principal
amount of the Loans owing to, such Lender pursuant to the terms hereof. The
entries in such register shall be conclusive, and Borrower, Administrative Agent
and Lenders may treat each Person whose name is recorded therein pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. Such register shall be available for
inspection by Borrower and any Lender, at any reasonable time upon reasonable
prior notice to Administrative Agent.

 

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(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 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.

 

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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 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.

 

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(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 of this financing
executed and delivered by Administrative Agent or any Lender prior to the date
hereof.

 

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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 SO MADE SHALL BE
COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.

 

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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.
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.

 

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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.

                      SPORT SUPPLY GROUP, INC.
 
                    By:   /s/ John Pitts                   Name: John Pitts    
    Title: Senior Vice President of Finance
 
               
 
      Address:   1901 Diplomat Drive
 
        Dallas, TX 75234
 
               
 
      Facsimile number: (214) 484-1377
 
      E-Mail Address: JPitts@SportSupplyGroup.com
 
      Taxpayer Identification Number: 2980248
 
       
 
    Payment Account Designation:
 
       
 
      Bank of America
 
      Reference:   Sport Supply Group, Inc. (WCMA, Revolver)
 
      ABA No.: 026009593
 
      Account No.: 8188101946
 
      Account Name: MLBFS – Middle Market
 
            With a copy to:
 
            VINSON & ELKINS LLP
 
  Address:     2001 Ross Avenue, Suite 3700
 
      Dallas, Texas  75201
 
      Attention: Alan Bogdanow, Esq.     Facsimile number: (214) 999-7857    
E-Mail Address: abogdanow@velaw.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 Sport Supply Group, 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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                  BANK OF AMERICA, N.A., as a Lender
 
           
 
  By:   /s/ Charles Dale
 
       
 
      Name:   Charles Dale
 
      Title:   Vice President
 
           
 
      Address:   1201 Main Street
 
          Dallas, TX (TX1-609-06-02)
 
      Attention:   Stacia Morgan
 
                Facsimile number: (214) 508-8419     E-Mail Address:
charles.dale@bankofamerica.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.

                  DIXIE SPORTING GOODS CO., INC.
 
           
 
  By:   /s/ John Pitts    
 
           
 
  Its:   Chief Financial Officer    
 
                KESSLERS TEAM SPORTS, INC.
 
           
 
  By:   /s/ John Pitts    
 
           
 
  Its:   Chief Financial Officer    

 

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Annex A
Commitment Annex

                                      Revolving Loan   Revolving Loan   WCMA
Loan   WCMA Loan     Commitment   Commitment   Commitment   Commitment Lender  
Amount   Percentage   Amount   Percentage
Merrill Lynch
  $ 15,000,000       60 %   $ 5,000,000       100 %
Bank of America, N.A.
  $ 10,000,000       40 %     —       —  
TOTALS
  $ 25,000,000       100 %   $ 5,000,000       100 %

 

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Annex B
Closing Checklist

 

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(MERRILL LYNCH LOGO) [c71400c7140002.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 October 30, 2007 (as amended or otherwise modified from time to
time, the "Credit Agreement”) among Sport Supply Group, 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,

 

Exhibit A – Page 1

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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 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.

 

Exhibit A – Page 2

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

 

Exhibit A – Page 3

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

                  ASSIGNOR:
 
           
 
  By:        
 
           
 
  Title:        
 
           
 
                ASSIGNEE:
 
           
 
  By:        
 
           
 
  Title:        
 
           
 
                Consented to:
 
                Merrill Lynch Business Financial Services Inc.,
as Administrative Agent and Swingline Lender    
 
           
 
  By:        
 
           
 
  Title:        
 
           
 
                Sport Supply Group, Inc.
 
           
 
  By:        
 
           
 
  Title:        
 
           

 

Exhibit A – Page 4

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Schedule to Assignment Agreement

         
Assignor:
       
 
 
 
   
Assignee:
       
 
 
 
   
Effective Date:
       
 
 
 
   

Amended and Restated Credit Agreement dated as of October 30, 2007 among Sport
Supply Group, 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:

          Commitment/Loan   Revolving Loan Commitment
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) [c71400c7140002.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 October 30, 2007 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                 LIBOR/One- Tier   Senior Leverage Ratio   Base Rate2
  Month LIBOR
V
  Greater than or equal to 2.00 to 1.00     0.25 %     1.75 %
IV
  Greater than or equal to 1.50 to 1.00, but less than 2.00 to 1.00     0.00 %  
  1.50 %
III
  Greater than or equal to 1.00 to 1.00, but less than 1.50 to 1.00     -0.25 %
    1.25 %
II
  Greater than or equal to 0.50 to 1.00, but less than 1.00 to 1.00     -0.50 %
    1.00 %
I
  Less than .0.50 to 1.00     -0.75 %     0.75 %

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

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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 payments of principal for the Defined Period with respect to all
Debt (including the portion of scheduled payments under Capital Leases allocable
to principal but excluding mandatory prepayments required by Section 2.2(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   $                     

 

Exhibit B – Page 3

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          Operating Cash Flow:       EBITDA for the Defined Period (calculated
in the manner required by Annex 1 to the Compliance Certificate)  
$                    
 
       
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 1.00
 
        Minimum Fixed Charge Coverage for the Defined Period           to 1.00  
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: 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    
 
        Additional Capital Expenditures for the period of January 1, 2008 to
December 31, 2008 pursuant to Section 7.3 of the Credit Agreement  $  
 
        Capital Expenditures  $  
 
        Permitted Capital Expenditures  $  
 
        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
income3                         
 
  Amortization and depreciation deducted in the determination of net income for
the Defined Period                       
 
        EBITDA for the Defined Period   $                    

 

3  
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.

 

Exhibit B – Page 8

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

 

Exhibit B – Page 9

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(MERRILL LYNCH LOGO) [c71400c7140002.gif]
Exhibit C to Credit Agreement
This Exhibit has been intentionally omitted.

 

Exhibit C – Page 1

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( MERRILL LYNCH LOGO) [c71400c7140002.gif]
  Exhibit D to Amended and Restated Credit Agreement   (Notice of Borrowing)

SPORT SUPPLY GROUP, INC.
 
Date:                                         ,                     
This certificate is given by                                         , a
Responsible Officer of Sport Supply Group, Inc. (“Borrower”), pursuant to
Section [2.2(b)/2.3(e)] of that certain Amended and Restated Credit Agreement
dated as of October 30, 2007 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 Revolving Loans, 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 Revolving Loans, 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

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(MERRILL LYNCH LOGO) [c71400c7140002.gif]
  Exhibit E to Amended and Restated Credit Agreement   (Payment Notification)

SPORT SUPPLY GROUP, INC.

Date:                                         ,                     
Reference is hereby made to the Amended and Restated Credit Agreement dated
October 30, 2007 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 mandatory prepayment is being made pursuant to Section 2.2(c)
                                         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:
  Sport Supply Group, Inc. (WCMA, Revolver)
 
       
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