Filed by Bowne Pure Compliance



 




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








 


 









 







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	 
	 
	 	 	 	 






 


-iv-









 





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







 


 









 







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


 


 









 





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.


 


-2-









 





“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).


 


-3-









 






“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.


 


-4-









 





“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;



 


-5-









 






(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.


 


-7-









 





“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.


 


-8-









 





“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.




 


-10-









 







“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.




 


-11-









 






“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.





 


-12-









 







“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.




 


-13-









 







“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.


 


-14-









 





“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.


 


-15-









 





“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.



 


-23-









 









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.



 


-24-









 






(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.



 


-25-









 







(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 footnote disclosures;



 


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(b) as soon as available and in any event within ninety (90) days (ninety-five (95) days if
Borrower shall obtain an extension of time for the filing of its Annual Report on Form 10-K for an
applicable fiscal year pursuant to Rule 12b-25 under the Securities Exchange Act of 1934, as
amended) after the end of each Fiscal Year, a consolidated and consolidating balance sheet of
Borrower and its Consolidated Subsidiaries as of the end of such Fiscal Year and the related
consolidated and consolidating statements of operations, stockholders’ equity (or the comparable
item, if Borrower is not a corporation) and cash flows for such Fiscal Year, setting forth in each
case in comparative form the figures for the previous Fiscal, 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 assets is bound,



 


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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
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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
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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 conditions:


 


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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 such default;


 


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(d) any representation, warranty, certification or statement made by any Credit Party or any
other Person in any Financing Document or in any certificate, financial statement or other document
delivered pursuant to any Financing Document is incorrect in any respect (or in any material
respect if such representation, warranty, certification or statement is not by its terms already
qualified as to materiality) when made (or deemed made);



(e) (1) failure of any Credit Party to pay when due or within any applicable grace period any
principal, interest or other amount on Debt (other than the Loans) or in respect of any Swap
Contract, or the occurrence of any other breach, default, condition or event with respect to any
Debt (other than the Loans) or in respect of any Swap Contract, if (i) such failure or occurrence
occurs upon the scheduled maturity of such Debt or liabilities in respect of such Swap Contract, or
upon automatic acceleration of such Debt or liabilities in respect of such Swap Contract, or (ii)
the effect of such failure or occurrence is to cause or to permit the holder or holders of any such
Debt, or the counterparty under any such Swap Contract, to cause, such Debt or other liabilities to
become or be declared due prior to its stated maturity, and, in each case, such Debt or liabilities
have an individual principal amount (or, in the case of a Swap Contract, a notional amount) in
excess of $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 such right without the prior written consent of
Administrative Agent.



 


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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 respect to this Agreement, the other Financing Documents or
the Collateral;



 


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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 the Financing Documents, and



 


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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.



 


-95-









 





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.



 


-96-









 





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.


 


-97-









 





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.


 


-98-









 





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






 


-99-









 





	 	 	 	 	 	 	 	 	 
	 	 	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





 


-100-









 





	 	 	 	 	 	 	 
	 	 	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






 


-101-









 





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	 	 





 


-102-









 





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	%





 


-103-









 





Annex B




Closing Checklist





 


-104-









 







	 	 	 
	

	 	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









 






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









 





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









 





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









 






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









 





	 	 	 
	

	 	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









 









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









 





	 	 	 	 	 
	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









 





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









 







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









 












Exhibit C to Credit Agreement




This Exhibit has been intentionally omitted.





 


Exhibit C – Page 1









 







	 	 	 
	

	 	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









 





	 	 	 
	

	 	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