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                                                                    EXHIBIT 10.7

[MERRILL LYNCH LOGO]

CONFIRMATION OF OTC WARRANT TRANSACTION
AMENDED AND RESTATED AS OF FEBRUARY 13, 2004

ORIGINAL DATE:    FEBRUARY 11, 2004                               ML REF:

TO:               DICK'S SPORTING GOODS, INC. ("COUNTERPARTY")

ATTENTION:        JEFF R. HENNION

FROM:             MERRILL LYNCH INTERNATIONAL ("ML")
                  Merrill Lynch Financial Centre
                  2 King Edward Street
                  London EC1A 1HQ

Dear Sir / Madam:

         The purpose of this letter agreement (this "CONFIRMATION") is to
confirm the terms and conditions of the above-referenced transaction entered
into between Counterparty and ML through its agent Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("MLPFS" or "AGENT") on the Trade Date specified below (the
"TRANSACTION"). This Confirmation constitutes a "Confirmation" as referred to in
the Agreement specified below. This letter agreement amends and restates the
letter agreement between the parties hereto dated as of February 11, 2004.

         The definitions and provisions contained in the 2000 ISDA Definitions
(the "SWAP DEFINITIONS") and the 2002 ISDA Equity Derivatives Definitions (the
"EQUITY DEFINITIONS" and, together with the Swap Definitions, the
"DEFINITIONS"), in each case as published by the International Swaps and
Derivatives Association, Inc., are incorporated into this Confirmation. In the
event of any inconsistency between the Swap Definitions and the Equity
Definitions, the Equity Definitions will govern, and in the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. References herein to a "Transaction" shall be deemed to be
references to a "Share Option Transaction" for the purposes of the Equity
Definitions and to a "Swap Transaction" for the purposes of the Swap
Definitions. For purposes of this Transaction, "Warrant Style", "Warrant Type",
"Number of Warrants" and "Warrant Entitlement" (each as defined below) shall be
used herein as if such terms were referred to as "Option Style", "Option Type",
"Number of Options" and "Option Entitlement", respectively, in the Definitions.

         This Confirmation evidences a complete binding agreement between you
and us as to the terms of the Transaction to which this Confirmation relates.
This Confirmation (notwithstanding anything to the contrary herein), shall be
subject to an agreement in the 1192 form of the ISDA Master Agreement
(Multicurrency Cross Border) (the "MASTER AGREEMENT" or "AGREEMENT") as if we
had executed an agreement in such form (but without any Schedule and with
elections specified in the "ISDA Master Agreement" Section of this Confirmation)
on the Trade Date of the first such Transaction between us. In the event of any
inconsistency between the provisions of that Agreement and this Confirmation,
this Confirmation will prevail for the purpose of this Transaction.

         The terms of the particular Transaction to which this Confirmation
relates are as follows:

GENERAL TERMS:

Trade Date:                         February 11, 2004

Warrant Style:                      European



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Warrant Type:                       Call

Seller:                             Counterparty

Buyer:                              ML

Shares:                             Shares of common stock, par value of USD
                                    0.01, of Counterparty (Security Symbol:
                                    "DKS").

Number of Warrants:                 2,193,987

Multiple Exercise:                  Inapplicable

Strike Price:                       $[amount redacted]

Premium:                            $[amount redacted] mm

Premium Payment Date:               The fourth Business Day following the Trade
                                    Date.

Exchange:                           NYSE

Related Exchange(s):                Applicable

PROCEDURES FOR EXERCISE:

Expiration Time:                    11:59 pm

Expiration Date:                    February 11, 2009

Exercise Date:                      Expiration Date

Multiple Exercise:                  Not Applicable

Automatic Exercise:                 Applicable

VALUATION:

Valuation Date:                     The last Averaging Date

Averaging Dates:                    The eleven (11) Full Exchange Business Days
                                    beginning on the Averaging Period Start
                                    Date.

Full Exchange Business Day:         A Scheduled Trading Day that has a scheduled
                                    closing time for its regular trading session
                                    that is 4 pm (New York City time) or the
                                    then standard closing time for regular
                                    trading on the Exchange.

Averaging Date Market
Disruption:                         Modified Postponement

Averaging Period
Start Date:                         The third (3rd) Full Exchange Business Day
                                    following the Expiration Date.

SETTLEMENT TERMS:

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Cash Settlement:                    Counterparty may elect to settle this
                                    Transaction by Cash Settlement or Net
                                    Physical Settlement by providing ML with
                                    irrevocable notice ("SETTLEMENT NOTICE") in
                                    accordance with the Settlement Method
                                    Election provisions herein and in Section
                                    7.1 of the Equity Definitions. In the event
                                    that Counterparty does not so notify ML,
                                    this Transaction shall be settled pursuant
                                    to the Default Settlement Method provision
                                    below.

Settlement Currency:                USD

Settlement Price:                   The arithmetic mean of the closing price of
                                    the Shares on the Exchange on each Averaging
                                    Date.

Cash Settlement
Payment Date:                       Four (4) Currency Business Day after the
                                    Valuation Date

Settlement Method Election:         Applicable with respect to Cash Settlement
                                    or Net Physical Settlement only.

Electing Party:                     Counterparty

Settlement Method
Election Date:                      Exercise Date

Default Settlement Method:          Net Physical Settlement. In the event that
                                    this Transaction is settled by Net Physical
                                    Settlement, Counterparty shall deliver to ML
                                    on the seventh Full Exchange Business Day
                                    following the Valuation Date a number of
                                    Shares (the "DELIVERED SHARES") equal to the
                                    Net Physical Settlement Amount divided by
                                    the Settlement Price, with any fractional
                                    Share amounts to be settled in cash.

Net Physical Settlement Amount:     With respect to the Valuation Date, an
                                    amount, as calculated by the Calculation
                                    Agent, equal to the Number of Warrants
                                    multiplied by the Strike Price Differential.

Strike Price Differential:          In respect of the Valuation Date, an amount
                                    equal to the greater of: (a) the excess, if
                                    any, of the Settlement Price over the Strike
                                    Price, and (b) zero.

Net Physical Settlement
Adjustment:                         Subject to the Maximum Deliverable Share
                                    Amount, if ML receives any Delivered Shares
                                    under this Transaction:

                                    (a) ML shall sell the Delivered Shares in a
                                    commercially reasonable manner until the
                                    amount received by ML for the sale of the
                                    Shares (the "PROCEEDS AMOUNT") is equal to
                                    the Net Physical Settlement Amount. Any
                                    remaining Delivered Shares shall be returned
                                    to Counterparty.

                                    (b) If the Proceeds Amount is less than the
                                    Net Physical Settlement Amount, Counterparty
                                    shall promptly deliver upon notice from ML
                                    additional Shares to ML until the dollar
                                    amount from the sale of such Shares by ML
                                    equals the difference between the Net
                                    Physical Settlement Amount and the Proceeds
                                    Amount. In no event shall Counterparty be
                                    required to deliver to ML a number of Shares
                                    greater than the Maximum Deliverable Share
                                    Amount.

Conditions to Net
Physical Settlement:                (1) At least 15 Exchange Business Days prior
                                    to the Expiration Date, Counterparty shall
                                    (i) make available to ML an effective
                                    registration statement (the "REGISTRATION
                                    STATEMENT") filed pursuant to Rule 415 under
                                    the Securities Act of 1933, as amended (the
                                    "SECURITIES ACT"), and such prospectuses as
                                    ML

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                                    may reasonably request to comply with the
                                    applicable prospectus delivery requirements
                                    (the "PROSPECTUS") for the resale by ML of
                                    such number of Shares as ML shall reasonably
                                    specify, such Registration Statement to be
                                    effective and Prospectus to be current until
                                    the earliest of the date on which (A) all
                                    Delivered Shares have been sold by ML or
                                    returned to Counterparty pursuant to the Net
                                    Physical Settlement Adjustment provision
                                    above or (B) ML has advised Counterparty
                                    that it no longer requires that such
                                    Registration Statement be effective (the
                                    "REGISTRATION PERIOD") or (ii) Counterparty
                                    has provided a legal opinion in form and
                                    substance satisfactory to ML (with customary
                                    assumptions and exceptions) that the Shares
                                    issuable upon exercise of these Warrants
                                    will be freely tradable under the Securities
                                    Act upon delivery to ML and not subject to
                                    any legend restricting transferability. It
                                    is understood that the Registration
                                    Statement and Prospectus may cover a number
                                    of Shares equal to the aggregate number of
                                    Shares (if any) reasonably estimated by ML
                                    to be potentially deliverable by
                                    Counterparty in connection with Net Physical
                                    Settlement hereunder;

                                    In addition, the following representation,
                                    which Counterparty shall be deemed to make
                                    on each day during the Registration Period,
                                    shall be true and correct:

                                             "Counterparty represents that the
                                             Registration Statement, at the time
                                             the same became effective, did not
                                             contain an untrue statement of a
                                             material fact or omit to state a
                                             material fact required to be stated
                                             therein or necessary to make the
                                             statements therein not misleading;
                                             Counterparty represents the
                                             Prospectus (as the same may be
                                             supplemented from time to time)
                                             does not include an untrue
                                             statement of a material fact or
                                             omit to state a material fact
                                             necessary in order to make the
                                             statements therein, in the light of
                                             the circumstances under which they
                                             were made, not misleading."

                                    (2) At least 10 Exchange Business Days prior
                                    to the Expiration Date, Counterparty will
                                    enter into a Registration Rights Agreement
                                    with ML in form and substance reasonably
                                    acceptable to ML, which agreement will
                                    contain among other things, customary
                                    representations and warranties and
                                    indemnification and other rights relating to
                                    the registration of a number of Shares equal
                                    to the number of Delivered Shares and others
                                    Shares deliverable hereunder up to the
                                    Maximum Deliverable Share Amount.

                                    (3) Counterparty shall promptly pay to ML a
                                    $0.04 per Share fee with all Shares
                                    delivered in connection with Net Physical
                                    Settlement pursuant to a Registration
                                    Statement.

                                    In the event Counterparty fails to comply
                                    with any of the conditions set forth in "NET
                                    PHYSICAL SETTLEMENT TERMS" herein,
                                    Counterparty shall settle the Transaction
                                    through Cash Settlement; provided however,
                                    that notwithstanding the foregoing, if
                                    Counterparty shall have been unable to
                                    obtain an effective Registration Statement
                                    by the Cash Settlement Payment Date, then
                                    upon notice to ML, Counterparty may deliver
                                    to ML unregistered Shares in an amount
                                    determined by ML based upon its commercially
                                    reasonable judgment of the market value of
                                    such Shares. In no event shall Counterparty
                                    be required to deliver to ML a number of
                                    Shares greater than the Maximum Deliverable
                                    Share Amount.

                                    Notwithstanding the foregoing, with respect
                                    to any Shares delivered by Counterparty
                                    pursuant to Net Physical Settlement
                                    hereunder, in the event that ML is unable to
                                    sell such Shares on the Exchange without
                                    incurring material

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                                    additional transaction costs, Counterparty
                                    shall promptly pay in cash or Shares an
                                    additional amount to ML equal to 2% of the
                                    Strike Price.

LIMITATIONS ON NET PHYSICAL
SETTLEMENT BY COUNTERPARTY:         The number of Shares that may be delivered
                                    at settlement by Counterparty shall not
                                    exceed two times the total number of
                                    Warrants covered by this Transaction
                                    ("MAXIMUM DELIVERABLE SHARE AMOUNT").

                                    Counterparty represents and warrants that
                                    the number of Available Shares as of the
                                    Trade Date is greater than the Maximum
                                    Deliverable Share Amount. Counterparty
                                    covenants and agrees that Counterparty shall
                                    not take any action of corporate governance
                                    or otherwise to reduce the number of
                                    Available Shares below the Maximum
                                    Deliverable Share Amount.

                                    For this purpose, "AVAILABLE SHARES" means
                                    the number of Shares Counterparty currently
                                    has authorized (but not issued and
                                    outstanding) less the maximum number of
                                    Shares that may be required to be issued by
                                    Counterparty in connection with stock
                                    options, convertibles, and other commitments
                                    of Counterparty that may require the
                                    issuance or delivery of Shares in connection
                                    therewith.

ADJUSTMENTS:

DIVIDENDS:

Extraordinary Dividends:            Any and all dividends paid by Counterparty.

METHOD OF ADJUSTMENT:               Calculation Agent Adjustment

EXTRAORDINARY EVENTS:

Consequences of Merger Events:      (a) Share-for-Share:      Modified
                                                              Calculation Agent
                                                              Adjustment

                                    (b) Share-for-Other:      Cancellation and
                                        Agreed Model:         Payment Applicable
                                        Interest Rate:        USD-LIBOR-BBA

                                    (c) Share-for-Combined:   Component
                                                              Adjustment

With respect to any Extraordinary Events hereunder, upon the occurrence of
Cancellation and Payment in whole or in part, the parties agree that the amount
to be paid, in accordance with the Equity Definitions, shall constitute a
Transaction Early Termination Amount, subject to satisfaction by the payment or
delivery of Shares or cash as set forth in the Early Termination section below.

Tender Offer:                                        Not Applicable

Nationalization, Insolvency or Delisting:            Cancellation and Payment

Additional Disruption Events:

                  Change in Law:                     Not Applicable

                  Failure to Deliver:                Applicable; provided that
                                                     if there is an "illiquidity
                                                     on the market" on a day
                                                     that would have been a
                                                     Settlement Date, then the
                                                     Settlement Date shall be
                                                     the first succeeding

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                                                     Exchange Business Day on
                                                     which there is no
                                                     "illiquidity on the
                                                     market," but in no such
                                                     event shall the Settlement
                                                     Date be later than the date
                                                     that is twenty (20)
                                                     Exchange Business Days
                                                     immediately following what
                                                     would have been in the
                                                     Settlement Date but for
                                                     such "illiquidity on the
                                                     market."

                  Insolvency Filing:                 Applicable

                  Hedging Disruption Event:          Not Applicable

                  Increased Cost of Hedging:         Not Applicable

                  Hedging Party:                     ML

                  Loss of Stock Borrow:              Not Applicable

                  Increased Cost of Stock Borrow:    Not Applicable

         Determining Party:                          ML

Non-Reliance:                                        Applicable

Agreements and Acknowledgments
Regarding Hedging Activities:                        Applicable

Additional Acknowledgments:                          Applicable

OTHER PROVISIONS:

Early Termination:                  Notwithstanding any provision to the
                                    contrary, upon the designation of an Early
                                    Termination Date hereunder, a party's
                                    payment obligation in respect of this
                                    Transaction only as determined in accordance
                                    with Second Method and Market Quotation (the
                                    "TRANSACTION EARLY TERMINATION AMOUNT") may,
                                    at the option of Counterparty, be satisfied
                                    by the party owing such amount by the
                                    delivery of a number of Shares equal to the
                                    Transaction Early Termination Amount divided
                                    by the Termination Price ("EARLY TERMINATION
                                    STOCK SETTLEMENT"); provided, however, that
                                    Counterparty must notify ML of its election
                                    of Early Termination Stock Settlement by the
                                    close of business on the day that the notice
                                    designating the Early Termination Date is
                                    effective.

                                    "TERMINATION PRICE" means the closing price
                                    per Share on the Exchange on the Early
                                    Termination Date.

                                    A number of Shares calculated as being due
                                    in respect of any Early Termination Stock
                                    Settlement will be deliverable on the third
                                    Exchange Business Day following the date
                                    that notice pursuant to Section 6(d)(i) of
                                    the Agreement specifying the number of
                                    Shares deliverable is effective. Section
                                    6(d)(i) of the Agreement is hereby amended
                                    by adding the following words after the word
                                    "paid" in the fifth line thereof: "or any
                                    delivery is to be made, as applicable."

                                    If ML receives Shares in connection with an
                                    Early Termination Stock Settlement, ML shall
                                    sell such Shares in a commercially
                                    reasonable manner until the amount received
                                    by ML for the sale of such Shares (net of

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                                    transaction costs) (the "PROCEEDS AMOUNT")
                                    is equal to the Transaction Early
                                    Termination Amount. Any remaining Shares
                                    shall be returned to Counterparty. If the
                                    Proceeds Amount is less than the Transaction
                                    Early Termination Amount, Counterparty shall
                                    promptly deliver additional Shares to ML
                                    upon request until the dollar amount from
                                    the sale of such additional Shares by ML
                                    (net of transaction costs) equals the
                                    difference between the Transaction Early
                                    Termination Amount and the Proceeds Amount.
                                    In no event shall Counterparty be required
                                    to deliver to ML a number of Shares greater
                                    than the Maximum Deliverable Share Amount.

                                    On or prior to the Early Termination Date
                                    (if Early Termination Stock Settlement is
                                    elected), Counterparty shall enter into a
                                    registration rights agreement with ML in
                                    form and substance reasonably acceptable to
                                    ML and shall satisfy the conditions
                                    contained therein and Counterparty shall
                                    file and diligently pursue to effectiveness
                                    a Registration Statement pursuant to Rule
                                    415 under the Securities Act. If and when
                                    such Registration Statement shall have been
                                    declared effective by the Commission,
                                    Counterparty shall have made available to ML
                                    such Prospectuses as ML may reasonably
                                    request to comply with the applicable
                                    prospectus delivery requirements for the
                                    resale by ML of such number of Shares as ML
                                    shall specify (or, if greater, the number of
                                    Shares that Counterparty shall specify).
                                    Such Registration Statement shall be
                                    effective and Prospectus shall be current
                                    until the earliest of the date on which (A)
                                    all Shares delivered by Counterparty in
                                    connection with an Early Termination Date
                                    and all Shares held by ML for hedging
                                    purposes have been sold by ML or (B) ML has
                                    advised Counterparty that it no longer
                                    requires that such Registration Statement be
                                    effective (the "TERMINATION REGISTRATION
                                    PERIOD"). It is understood that the
                                    Registration Statement and Prospectus will
                                    cover a number of Shares equal to the number
                                    of Shares plus the aggregate number of
                                    Shares (if any) reasonably estimated by ML
                                    to be potentially deliverable by
                                    Counterparty in connection with Early
                                    Termination Stock Settlement hereunder. On
                                    each day during the Registration Period
                                    Counterparty shall represent that each of
                                    its filings under the Securities Act, the
                                    Exchange Act, or other applicable securities
                                    laws that are required to be filed have been
                                    filed and that, as of the respective dates
                                    thereof and as of the date of this
                                    representation, there is no misstatement of
                                    a material fact contained therein or
                                    omission of a material fact required to be
                                    stated therein or necessary to make the
                                    statements therein not misleading.

                                    If Counterparty is unable to deliver Shares
                                    subject to an effective Registration
                                    Statement as set forth above, Counterparty
                                    may deliver unregistered Shares in an amount
                                    determined by ML based upon its commercially
                                    reasonable judgment of the market value of
                                    such Shares. In no event shall Counterparty
                                    be required to deliver to ML a number of
                                    Shares greater than the Maximum Deliverable
                                    Share Amount.

COMPLIANCE WITH SECURITIES LAWS:    Each party represents and agrees that it has
                                    complied, and will comply, in connection
                                    with this Transaction and all related or
                                    contemporaneous sales and purchases of
                                    Shares, with the applicable provisions of
                                    the Securities Act, the Exchange Act, and
                                    the rules and regulations thereunder,
                                    including, without limitation, Rule 10b-5
                                    and Regulation M under the Exchange Act,
                                    provided that each party shall be entitled
                                    to rely conclusively on any information
                                    communicated by the other party concerning
                                    such other party's market activities and
                                    provided further that Counterparty shall
                                    have no

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                                    liability as a result of a breach of this
                                    representation due to ML's gross negligence
                                    or willful misconduct.

                                    Each party further represents that if such
                                    party ("X") purchases any Shares from the
                                    other party pursuant to this Transaction,
                                    such purchase(s) will comply in all material
                                    respects with (i) all laws and regulations
                                    applicable to X, and (ii) all contractual
                                    obligations of X.

                                    Counterparty (and in the case of (b) and (c)
                                    below, ML) represents that as of the date
                                    hereof:

                                    (a) each of its filings under the Exchange
                                    Act that are required to be filed from and
                                    including the ending date of Counterparty's
                                    most recent prior fiscal year have been
                                    filed and that, as of the respective dates
                                    thereof and as of the date of this
                                    representation, there is no misstatement of
                                    material fact contained therein or omission
                                    of a material fact required to be stated
                                    therein or necessary to make the statements
                                    therein in light of the circumstances in
                                    which they were made not misleading (when
                                    taken together with Counterparty's previous
                                    filings under the Exchange Act);

                                    (b) Neither ML nor Counterparty, as the case
                                    may be, is entering into this Agreement to
                                    facilitate a distribution of the common
                                    stock or in connection with a future
                                    issuance of securities;

                                    (c) Neither ML nor Counterparty, as the case
                                    may be, is entering into this Agreement to
                                    create actual or apparent trading activity
                                    in the common stock (or any security
                                    convertible into or exchangeable for common
                                    stock) or to manipulate the price of the
                                    common stock (or any security convertible
                                    into or exchangeable for common stock); and

                                    (d) the number of Available Shares on the
                                    date hereof is greater than the Maximum
                                    Deliverable Share Amount.

Account Details:

         Account for payments to Counterparty:       Not Applicable

         Account for payment to ML:                  Chase Manhattan Bank, New
                                                     York
                                                     ABA# 021000021
                                                     FAO: ML Equity Derivatives
                                                     A/C: 066213118

AGREEMENT REGARDING
SHARES:                    Counterparty agrees that, in respect of any Shares
                           delivered to ML, such Shares shall be, upon such
                           delivery, duly and validly authorized, issued and
                           outstanding, fully paid and nonassessable and subject
                           to no adverse claims of any other party. The issuance
                           of such Shares does not and will not require the
                           consent, approval, authorization, registration or
                           qualification of any government authority, except
                           such as shall have been obtained on or before the
                           delivery date of any Shares or in connection with any
                           Registration Statement filed with respect to any
                           Shares.

COVENANT REGARDING
SHARES:                    Counterparty covenants that it shall not take any
                           action to decrease the number of Available Shares
                           below the Maximum Deliverable Share Amount.

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BANKRUPTCY RIGHTS:         In the event of Counterparty's bankruptcy, ML's
                           rights in connections with this Transaction shall not
                           exceed those rights held by common shareholders. For
                           the avoidance of doubt, the parties acknowledge and
                           agree that ML' rights with respect to any other claim
                           arising from this Transaction prior to Counterparty's
                           bankruptcy shall remain in full force and effect and
                           shall not be otherwise abridged or modified in
                           connection herewith.

SET-OFF:                   The Set-off provisions in the Agreement shall apply
                           to this Transaction, except in the event of
                           Counterparty's bankruptcy, in which case Set-off
                           shall not apply.

COLLATERAL:                None.

TRANSFER:                  Neither party may transfer its rights or obligations
                           under this Transaction except in accordance with
                           Section 7 of the Master Agreement; provided, however,
                           that ML may assign its rights and delegate its
                           obligations hereunder, in whole or in part, to any
                           other person with prior consent of the Counterparty
                           not to be unreasonably withheld, (an "ASSIGNEE"),
                           effective (the "TRANSFER EFFECTIVE DATE") upon
                           delivery to Counterparty of (a) an executed
                           acceptance and assumption by the Assignee (an
                           "Assumption") of the transferred obligations of ML
                           under this Transaction (the "TRANSFERRED
                           OBLIGATIONS"); (b) and if such Assignee is an
                           affiliate of Merrill Lynch & Co., Inc. ("ML&CO.") an
                           executed guarantee (the "GUARANTEE") of ML&Co. of the
                           Transferred Obligations. On the Transfer Effective
                           Date, (a) ML shall be released from all obligations
                           and liabilities arising under the Transferred
                           Obligations; and (b) the Transferred Obligations
                           shall cease to be a Transaction(s) under the
                           Agreement and shall be deemed to be a Transaction(s)
                           under the ISDA Master Agreement between Assignee and
                           Counterparty, provided that, if at such time Assignee
                           and Counterparty have not entered into a ISDA Master
                           Agreement, Assignee and Counterparty shall be deemed
                           to have entered into an ISDA form of Master Agreement
                           (Multicurrency-Cross Border) without any Schedule
                           attached thereto.

REGULATION:                ML is regulated by The Securities and Futures
                           Authority Limited and has entered into this
                           Transaction as principal.

INDEMNITY:                 Counterparty agrees to indemnify ML and its
                           Affiliates and their respective directors, officers,
                           agents and controlling parties (ML and each such
                           person being an "INDEMNIFIED PARTY") from and against
                           any and all losses, claims, damages and liabilities,
                           joint and several, to which such Indemnified Party
                           may become subject because of a breach by
                           Counterparty of any representation or covenant
                           hereunder, in the Agreement or any other Agreement
                           relating to the Agreement or Transaction and will
                           reimburse any Indemnified Party for all reasonable
                           expenses (including reasonable legal fees and
                           expenses) as they are incurred in connection with the
                           investigation of, preparation for, or defense of, any
                           pending or threatened claim or any action or
                           proceeding arising therefrom, whether or not such
                           Indemnified Party is a party thereto.


ADDITIONAL AGREEMENTS, REPRESENTATIONS AND COVENANTS OF COUNTERPARTY, ETC.:

         (a)      Counterparty hereby represents and warrants to ML, on each day
                  from the Trade Date to and including the date by which ML is
                  able to initially complete a hedge of its position created by
                  this Transaction, that:

                  (1)      it will not, and will not permit any person or entity
                           subject to its control to, bid for or purchase Shares
                           during such period except as disclosed in the
                           Offering Memorandum relating to the Reference Notes;
                           and

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                  (2)      it has publicly disclosed all material information
                           necessary for it to be able to purchase or sell
                           Shares in compliance with applicable federal
                           securities laws and that it has publicly disclosed
                           all material information with respect to its
                           condition (financial or otherwise).

         (b)      The parties hereby agree that all documentation with respect
                  to this Transaction is intended to qualify this Transaction as
                  an equity instrument for purposes of EITF 00-19.

         (c)      No collateral shall be required by either party for any reason
                  in connection with this Transaction.

         (d)      ML may elect to defer exercise of any Warrant hereunder as
                  provided below, and Automatic Exercise shall not apply with
                  respect to any Warrant, to the extent the exercise of such
                  Warrant would cause ML to become, directly or indirectly, the
                  beneficial owner of more than 8.0 percent of the class of the
                  Counterparty's equity securities that is comprised of the
                  Shares for purposes of Section 13 of the Securities Exchange
                  Act of 1934, as amended (in such case, an "EXCESS SHARE
                  OWNER").

                  ML shall provide prior notice to Counterparty, through the
                  Agent, if the exercise of any Warrant hereunder would cause ML
                  to become directly or indirectly, an Excess Share Owner;
                  provided that the failure of ML to provide such notice shall
                  not alter the effectiveness of the provisions set forth in the
                  preceding sentence and any purported exercise in violation of
                  such provisions shall be void and have no effect.

                  If ML elects not to exercise any Warrant because such exercise
                  would cause ML to become, directly or indirectly, an Excess
                  Share Owner and ML thereafter disposes of Shares owned by it
                  or any action is taken that would then permit ML to exercise
                  such Warrant without such exercise causing it to become,
                  directly or indirectly, an Excess Share Owner, then ML shall
                  provide notice of the taking of such action to Counterparty,
                  through the Agent, and such Warrant shall then become
                  exercisable by ML to the extent such Warrant is otherwise or
                  had otherwise become exercisable hereunder. In such event, the
                  Expiration Date with respect to such Warrant shall be the date
                  on which Counterparty receives such notice from ML, and the
                  related Settlement Date shall be as soon as reasonably
                  practicable after receipt of such notice but no more than
                  three (3) Business Days thereafter (but in no event shall the
                  Settlement Date occur prior to the date on which it would have
                  otherwise occurred but for the provisions of this paragraph
                  (d)); provided that the related Net Physical Settlement Amount
                  shall be the same as the Net Physical Settlement Amount but
                  for the provisions of this paragraph (d). In addition, within
                  30 days of the maturity date of the Settlement Date,
                  Counterparty shall use its reasonable efforts to refrain from
                  activities which could reasonable be expected to result in
                  ML's ownership of Shares exceeding 10% of all issued and
                  outstanding Shares.

         (e)      ML hereby agrees that from the Trade Date through to and
                  including each Settlement Date, it will:

                  (1)      use its reasonable efforts to not become an
                           "affiliate" of Counterparty as such term is defined
                           in Regulation 144(a)(1) under the Securities Act;

                  (2)      not vote any Shares, as to which it has the right to
                           exercise a vote; and

                  (3)      not permit any director, officer, employee, agent or
                           affiliate of ML to serve as a member of the board of
                           directors of Counterparty.

ISDA MASTER AGREEMENT

With respect to the Agreement, ML and Counterparty each agree as follows:

SPECIFIED ENTITIES:

         (i) in relation to ML, for the purposes of:

                                       10
<PAGE>

         Section 5(a)(v):   not applicable
         Section 5(a)(vi):  not applicable
         Section 5(a)(vii): not applicable
         Section 5(b)(iv):  not applicable

         and (ii) in relation to Counterparty, for the purposes of:

         Section 5(a)(v):   not applicable
         Section 5(a)(vi):  not applicable
         Section 5(a)(vii): not applicable
         Section 5(b)(iv):  not applicable

"SPECIFIED TRANSACTION" will have the meaning specified in Section 14 of this
Agreement.

The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) of the Agreement
will apply to ML and Counterparty.

The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) of the Agreement
will not apply to ML or to Counterparty.

PAYMENTS ON EARLY TERMINATION for the purpose of Section 6(e) of the Agreement:
(i) Market Quotation shall apply; and (ii) the Second Method shall apply.

"TERMINATION CURRENCY" means USD.

TAX REPRESENTATIONS:

         (I)      For the purpose of Section 3(e) of the Agreement, each party
                  represents to the other party that it is not required by any
                  applicable law, as modified by the practice of any relevant
                  governmental revenue authority, of any Relevant Jurisdiction
                  to make any deduction or withholding for or on account of any
                  Tax from any payment (other than interest under Section 2(e),
                  6(d)(ii), or 6(e) of the Agreement) to be made by it to the
                  other party under the Agreement. In making this
                  representation, each party may rely on (i) the accuracy of any
                  representations made by the other party pursuant to Section
                  3(f) of the Agreement, (ii) the satisfaction of the agreement
                  contained in Section 4(a)(i) or 4(a)(iii) of the Agreement,
                  and the accuracy and effectiveness of any document provided by
                  the other party pursuant to Section 4(a)(i) or 4(a)(iii) of
                  the Agreement, and (iii) the satisfaction of the agreement of
                  the other party contained in Section 4(d) of the Agreement;
                  provided that it will not be a breach of this representation
                  where reliance is placed on clause (ii) above and the other
                  party does not deliver a form or document under Section
                  4(a)(iii) of the Agreement by reason of material prejudice to
                  its legal or commercial position.

         (II)     For the purpose of Section 3(f) of the Agreement, each party
                  makes the following representations to the other party:

                  (i)      ML represents that it is a corporation organized
                           under the laws of England and Wales.

                  (ii)     Counterparty represents that it is a corporation
                           incorporated under the laws of the State of Delaware.

DELIVERY REQUIREMENTS: For the purpose of Sections 3(d), 4(a)(i) and (ii) of the
Agreement, each party agrees to deliver the following documents:

                                       11
<PAGE>


         Tax forms, documents or certificates to be delivered are:

                  Each party agrees to complete (accurately and in a manner
                  reasonably satisfactory to the other party), execute, and
                  deliver to the other party, United States Internal Revenue
                  Service Form W-9 or W-8 BEN, or any successor of such form(s):
                  (i) before the first payment date under this agreement; (ii)
                  promptly upon reasonable demand by the other party; and (iii)
                  promptly upon learning that any such form(s) previously
                  provided by the other party has become obsolete or incorrect.

         Other documents to be delivered:-

<TABLE>
<CAPTION>
                                                                                             COVERED BY
PARTY REQUIRED TO                                                                           SECTION 3(d)
 DELIVER DOCUMENT        DOCUMENT REQUIRED TO BE DELIVERED             WHEN REQUIRED       REPRESENTATION
----------------------------------------------------------------------------------------------------------
<S>                    <C>                                            <C>                  <C>
Counterparty           Evidence of the authority and true             Upon or before            Yes
                       signatures of each official or                 execution and
                       representative signing this Confirmation       delivery of this
                                                                      Confirmation
----------------------------------------------------------------------------------------------------------
Counterparty           Certified copy of the resolution of the        Upon or before            Yes
                       Board of Directors or equivalent document      execution and
                       authorizing the execution and delivery of      delivery of this
                       this Confirmation Confirmation
----------------------------------------------------------------------------------------------------------
ML                     Guarantee of its Credit Support Provider,      Upon or before            Yes
                       substantially in the form of Exhibit A         execution and
                       attached hereto, together with evidence        delivery of this
                       of the authority and true signatures of        Confirmation
                       the signatories, if applicable
----------------------------------------------------------------------------------------------------------
</TABLE>

ADDRESSES FOR NOTICES: For the purpose of Section 12(a) of the Agreement:

ADDRESS FOR NOTICES OR COMMUNICATIONS TO ML:

Address:          Merrill Lynch International
                  Merrill Lynch Financial Centre
                  2 King Edward Street, London EC1A 1HQ
Attention:        Manager, Fixed Income Settlements
Facsimile No.:    44 207 995 2004            Telephone No.: 44 207 995 3769

(FOR ALL PURPOSES)

Additionally, a copy of all notices pursuant to Sections 5, 6, and 7 as well as
any changes to Counterparty's address, telephone number or facsimile number
should be sent to:

                  GMI Counsel
                  Merrill Lynch World Headquarters
                  4 World Financial Center
                  New York, New York 10080
                  Attention: Global Equity Derivatives
                  Facsimile No.:    212 449-6576     Telephone No.: 212 449-6309

ADDRESS FOR NOTICES OR COMMUNICATIONS TO COUNTERPARTY FOR ALL PURPOSES:

                               12
<PAGE>


PROCESS AGENT: For the purpose of Section 13(c) of the Agreement, ML appoints as
its process agent:

                  Merrill Lynch, Pierce, Fenner & Smith Incorporated
                  222 Broadway, 16th Floor
                  New York, NY 10038
                  Attention: Litigation Department

                  [COUNTERPARTY DOES NOT APPOINT A PROCESS AGENT.]

MULTIBRANCH PARTY. For the purpose of Section 10(c) of the Agreement: Neither ML
nor Counterparty is a Multibranch Party.

CALCULATION AGENT. The Calculation Agent is ML.

CREDIT SUPPORT DOCUMENT.

ML: Guarantee of ML&Co. in the form attached hereto as Exhibit A.

Counterparty: Not Applicable

CREDIT SUPPORT PROVIDER.

With respect to ML: Merrill Lynch and Co. and with respect to Counterparty, Not
Applicable.

GOVERNING LAW. This Confirmation will be governed by, and construed in
accordance with, the substantive laws of the State of New York.

NETTING OF PAYMENTS. The provisions of Section 2(c) of the Agreement shall not
be applicable to this Transaction; provided, however, that with respect to this
Agreement or any other ISDA Master Agreement between the parties, any Share
delivery obligations on any day of Counterparty, on the one hand, and ML, on the
other hand, shall be netted. The resulting Share delivery obligation of a party
upon such netting shall be rounded down to the nearest number of whole Common
Shares, such that neither party shall be required to deliver any fractional
Common Shares.

ACCURACY OF SPECIFIED INFORMATION. Section 3(d) of the Agreement is hereby
amended by adding in the third line thereof after the word "respect" and before
the period the words "or, in the case of audited or unaudited financial
statements or balance sheets, a fair presentation of the financial condition of
the relevant person."

BASIC REPRESENTATIONS. Section 3(a) of the Agreement is hereby amended by the
deletion of "and" at the end of Section 3(a)(iv); the substitution of a
semicolon for the period at the end of Section 3(a)(v) and the addition of
Sections 3(a)(vi), as follows:

         ELIGIBLE CONTRACT PARTICIPANT; LINE OF BUSINESS. It is an "eligible
         contract participant" as defined in the Commodity Futures Modernization
         Act of 2000 and it has entered into this Confirmation and this
         Transaction in connection with its business or a line of business
         (including financial intermediation), or the financing of its business.

AMENDMENT OF SECTION 3(a)(iii). Section 3(a)(iii) of the Agreement is modified
to read as follows:

         NO VIOLATION OR CONFLICT. Such execution, delivery and performance do
         not materially violate or conflict with any law known by it to be
         applicable to it, any provision of its constitutional documents, any
         order or judgment of any court or agency of government applicable to it
         or any of its assets or any material contractual restriction relating
         to Specified Indebtedness binding on or affecting it or any of its
         assets.

                                       13
<PAGE>


AMENDMENT OF SECTION 3(a)(iv). Section 3(a)(iv) of the Agreement is modified by
inserting the following at the beginning thereof:

         "To such party's best knowledge,"

ADDITIONAL REPRESENTATIONS:

COUNTERPARTY REPRESENTATIONS. Counterparty (i) has such knowledge and experience
in financial and business affairs as to be capable of evaluating the merits and
risks of entering into this Transaction; (ii) has consulted with its own legal,
financial, accounting and tax advisors in connection with this Transaction; and
(iii) is entering into this Transaction for a bona fide business purpose to
hedge the Reference Notes.

Counterparty is not and has not been the subject of any civil proceeding of a
judicial or administrative body of competent jurisdiction that could reasonably
be expected to impair materially Counterparty's ability to perform its
obligations hereunder.

Counterparty will by the next succeeding Business Day notify ML upon obtaining
knowledge of the occurrence of any event that would constitute an Event of
Default, a Potential Event of Default or a Potential Adjustment Event.

As of the date hereof, Counterparty is not insolvent.

ACKNOWLEDGEMENTS:

(1)      The parties acknowledge and agree that there are no other
representations, agreements or other undertakings of the parties in relation to
this Transaction, except as set forth in this Confirmation.

(2)      The parties hereto intend for:

         (a)      this Transaction to be a "securities contract" as defined in
         Section 741(7) of Title 11 of the United States Code (the "BANKRUPTCY
         CODE"), qualifying for the protections under Section 555 of the
         Bankruptcy Code;

         (b)      a party's right to liquidate this Transaction and to exercise
         any other remedies upon the occurrence of any Event of Default under
         the Agreement with respect to the other party to constitute a
         "contractual right" as defined in the Bankruptcy Code;

         (c)      any cash, securities or other property provided as performance
         assurance, credit, support or collateral with respect to this
         Transaction to constitute "margin payments" as defined in the
         Bankruptcy Code; and

         (d)      all payments for, under or in connection with this
         Transaction, all payments for the Shares and the transfer of such
         Shares to constitute "settlement payments" as defined in the Bankruptcy
         Code.

(3)      The parties acknowledge and agree that in the event of an Early
Termination Date as a result of an Event of Default, the amount payable under
the Agreement will be a cash amount calculated as described therein and that any
delivery specified in this Transaction will no longer be required.

AMENDMENT OF SECTION 6(d)(ii). Section 6(d)(ii) of the Agreement is modified by
deleting the words "on the day" in the second line thereof and substituting
therefor "on the day that is three Local Business Days after the day". Section
6(d)(ii) is further modified by deleting the words "two Local Business Days" in
the fourth line thereof and substituting therefor "three Local Business Days."

AMENDMENT OF DEFINITION OF REFERENCE MARKET-MAKERS. The definition of "Reference
Market-Makers" in Section 14 is hereby amended by adding in clause (a) after the
word "credit" and before the word "and" the words "or to enter into transactions
similar in nature to Transactions."

                                       14
<PAGE>

CONSENT TO RECORDING. Each party consents to the recording of the telephone
conversations of trading and marketing personnel of the parties and their
Affiliates in connection with this Confirmation. To the extent that one party
records telephone conversations (the "Recording Party") and the other party does
not (the Non-Recording Party"), the Recording Party shall in the event of any
dispute, make a complete and unedited copy of such party's tape of the entire
day's conversations with the Non-Recording Party's personnel available to the
Non-Recording Party. The Recording Party's tapes may be used by either party in
any forum in which a dispute is sought to be resolved and the Recording Party
will retain tapes for a consistent period of time in accordance with the
Recording Party's policy unless one party notifies the other that a particular
transaction is under review and warrants further retention.

DISCLOSURE. Each party hereby acknowledges and agrees that ML has authorized
Counterparty to disclose this Transaction and any related hedging transaction
between the parties if and to the extent that Counterparty reasonably determines
(after consultation with ML) that such disclosure is required by law or by the
rules of Nasdaq or any securities exchange.

SEVERABILITY. If any term, provision, covenant or condition of this
Confirmation, or the application thereof to any party or circumstance, shall be
held to be invalid or unenforceable in whole or in part for any reason, the
remaining terms, provisions, covenants, and conditions hereof shall continue in
full force and effect as if this Confirmation had been executed with the invalid
or unenforceable provision eliminated, so long as this Confirmation as so
modified continues to express, without material change, the original intentions
of the parties as to the subject matter of this Confirmation and the deletion of
such portion of this Confirmation will not substantially impair the respective
benefits or expectations of parties to this Agreement; provided, however, that
this severability provision shall not be applicable if any provision of Section
2, 5, 6 or 13 of the Agreement (or any definition or provision in Section 14 to
the extent that it relates to, or is used in or in connection with any such
Section) shall be so held to be invalid or unenforceable.

AFFECTED PARTIES. For purposes of Section 6(e) of the Agreement, each party
shall be deemed to be an Affected Party in connection with Illegality and any
Tax Event.

Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.

                                       15
<PAGE>

Very truly yours,

MERRILL LYNCH INTERNATIONAL

By: /s/ Marcella Vullo
    --------------------------------
Name: Marcella Vullo
Title: Authorized Signatory

Confirmed as of the date first above written:

DICK'S SPORTING GOODS, INC.

By: /s/ Michael F. Hines
    --------------------------------
Name: Michael F. Hines
Title: Executive Vice President, Chief
       Financial Officer and Secretary

Acknowledged and agreed as to matters relating to the Agent:

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
         solely in its capacity as Agent hereunder

By: /s/ Patricia Moore
    --------------------------------
    Name: Patricia Moore
    Title: Vice President

Amended and Restated

                                       16
<PAGE>

                                                                       EXHIBIT A

                     GUARANTEE OF MERRILL LYNCH & CO., INC.

         FOR VALUE RECEIVED, receipt of which is hereby acknowledged, MERRILL
LYNCH & CO., INC., a corporation duly organized and existing under the laws of
the State of Delaware ("ML & Co."), hereby unconditionally guarantees to Dick's
Sporting Goods, Inc. (the "Company"), the due and punctual payment of any and
all amounts payable by Merrill Lynch International, a company organized under
the laws of England and Wales ("ML"), under the terms of the Confirmation of OTC
Warrant Transaction between the Company and ML, dated as of February 11, 2004
and amended and restated as of February 13, 2004 (the "Confirmation"),
including, in case of default, interest on any amount due, when and as the same
shall become due and payable, whether on the scheduled payment dates, at
maturity, upon declaration of termination or otherwise, according to the terms
thereof. In case of the failure of ML punctually to make any such payment, ML &
Co. hereby agrees to make such payment, or cause such payment to be made,
promptly upon demand made by the Company to ML & Co.; provided, however that
delay by the Company in giving such demand shall in no event affect ML & Co.'s
obligations under this Guarantee. This Guarantee shall remain in full force and
effect or shall be reinstated (as the case may be) if at any time any payment
guaranteed hereunder, in whole or in part, is rescinded or must otherwise be
returned by the Company upon the insolvency, bankruptcy or reorganization of ML
or otherwise, all as though such payment had not been made.

ML & Co. hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Confirmation;
the absence of any action to enforce the same; any waiver or consent by the
Company concerning any provisions thereof; the rendering of any judgment against
ML or any action to enforce the same; or any other circumstances that might
otherwise constitute a legal or equitable discharge of a guarantor or a defense
of a guarantor. ML & Co. covenants that this guarantee will not be discharged
except by complete payment of the amounts payable under the Confirmation. This
Guarantee shall continue to be effective if ML merges or consolidates with or
into another entity, loses its separate legal identity or ceases to exist.

         ML & Co. hereby waives diligence; presentment; protest; notice of
protest, acceleration, and dishonor; filing of claims with a court in the event
of insolvency or bankruptcy of ML; all demands whatsoever, except as noted in
the first paragraph hereof; and any right to require a proceeding first against
ML.

         ML & Co. hereby certifies and warrants that this Guarantee constitutes
the valid obligation of ML & Co. and complies with all applicable laws.

         This Guarantee shall be governed by, and construed in accordance with,
the laws of the State of New York.

         This Guarantee may be terminated at any time by notice by ML & Co. to
the Company given in accordance with the notice provisions of the Confirmation,
effective upon receipt of such notice by the Company or such later date as may
be specified in such notice; provided, however, that this Guarantee shall
continue in full force and effect with respect to any obligation of ML under the
Confirmation entered into prior to the effectiveness of such notice of
termination.

This Guarantee becomes effective concurrent with the effectiveness of the
Confirmation, according to its terms.

         IN WITNESS WHEREOF, ML & Co. has caused this Guarantee to be executed
in its corporate name by its duly authorized representative.

<PAGE>

                                             MERRILL LYNCH & CO., INC.

                                             By: /s/ Patricia Kropiewnicki
                                                 -------------------------------
                                                 Name: Patricia Kropiewnicki
                                                 Title: Designated Signatory
                                                 Date: February 13, 2004

Amended and Restated

                                       18
<PAGE>

[MERRILL LYNCH LOGO]

                                 COVER STATEMENT
                        CLIENT/COUNTERPARTY RELATIONSHIP

Dear Client/Counterparty:

                           Merrill Lynch is pleased to provide the attached
statement of Generic Risks Associated with Over-the-Counter Derivative
Transactions under this Cover Statement that concerns, among other things, the
nature of our relationship with you in the context of such transactions. This
statement was developed for our new and our ongoing client/counterparties in
response to suggestions that OTC derivative dealers consider taking steps to
ensure that market participants utilizing OTC derivatives understand their risk
exposures and the nature of their relationships with dealers before they enter
into OTC derivative transactions.

         Merrill Lynch ("we") are providing to you and your organization ("you")
the attached statement of Generic Risks Associated with Over-the-Counter
Derivative in order to identify, in general terms, certain of the principal
risks associated with individually negotiated over-the-counter ("OTC")
derivative transactions. The attached statement does not purport to identify the
nature of the specific market or other risks associated with a particular
transaction.

         Before entering into an OTC derivative transaction, you should ensure
that you fully understand the terms of the transaction, relevant risk factors,
the nature and extent of your risk of loss and the nature of the contractual
relationship into which you are entering. You should also carefully evaluate
whether the transaction is appropriate for you in light of your experience,
objectives, financial resources, and other relevant circumstances and whether
you have the operational resources in place to monitor the associated risks and
contractual obligations over the term of the transaction. If you are acting as a
financial adviser or agent, you should evaluate these considerations in light of
the circumstances applicable to your principal and the scope of your authority.

         If you believe you need assistance in evaluating and understanding the
terms or risks of a particular OTC derivative transaction, you should consult
appropriate advisers before entering into the transaction.

         Unless we have expressly agreed in writing to act as your adviser with
respect to a particular OTC derivative transaction pursuant to terms and
conditions specifying the nature and scope of our advisory relationship, we are
acting in the capacity of an arm's length contractual counterparty to you in
connection with the transaction and not as your financial adviser or fiduciary.
Accordingly, unless we have so agreed to act as your adviser, you should not
regard transaction proposals, suggestions or other written or oral
communications from us as recommendations or advice or as expressing our view as
to whether a particular transaction is appropriate for you or meets your
financial objectives.

         Finally, we and/or our affiliates may from time to time take
proprietary positions and/or make a market in instruments identical or
economically related to OTC derivative transactions entered into with you, or
may have an investment banking or other commercial relationship with and access
to information from the issuer(s) of securities, financial instruments, or other
interests underlying OTC derivative transactions entered into with you. We may
also undertake proprietary activities, including hedging transactions related to
the initiation or termination of an OTC derivative transaction with you, that
may adversely affect the market price, rate index or other market factor(s)
underlying an OTC derivative transaction entered into with you and consequently
the value of the transaction.

<PAGE>

[MERRILL LYNCH LOGO]

                          GENERIC RISKS ASSOCIATED WITH
                    OVER-THE-COUNTER DERIVATIVE TRANSACTIONS

OTC derivative transactions, like other financial transactions, involve a
variety of significant risks. The specific risks presented by a particular OTC
derivative transaction necessarily depend upon the terms of the transaction and
your circumstances. In general, however, all OTC derivative transactions involve
some combination of market risk, credit risk, funding risk and operational risk.

         MARKET RISK is the risk that the value of a transaction will be
         adversely affected by fluctuations in the level or volatility of or
         correlation or relationship between one or more market prices, rates or
         indices or other market factors or by illiquidity in the market for the
         relevant transaction or in a related market.

         CREDIT RISK is the risk that a counterparty will fail to perform its
         obligations to you when due.

         FUNDING RISK is the risk that, as a result of mismatches or delays in
         the timing of cash flows due from or to your counterparties in OTC
         derivative transactions or related hedging, trading, collateral or
         other transactions, you or your counterparty will not have adequate
         cash available to fund current obligations.

         OPERATIONAL RISK is the risk of loss to you arising from inadequacies
         in or failures of your internal systems and controls for monitoring and
         quantifying the risks and contractual obligations associated with OTC
         derivative transactions, for recording and valuing OTC derivative and
         related transactions, or for detecting human error, systems failure or
         management failure.

There may be other significant risks that you should consider based on the terms
of a specific transaction. Highly customized OTC derivative transactions in
particular may increase liquidity risk and introduce other significant risk
factors of a complex character. Highly leveraged transactions may experience
substantial gains or losses in value as a result of relatively small changes in
the value or level of an underlying or related market factor.

Because the price and other terms on which you may enter into or terminate an
OTC derivative transaction are individually negotiated, these may not represent
the best price or terms available to you from other sources.

In evaluating the risks and contractual obligations associated with a particular
OTC derivative transaction, you should also consider that an OTC derivative
transaction may be modified or terminated only by mutual consent of the original
parties and subject to agreement on individually negotiated terms. Accordingly,
it may not be possible for you to modify, terminate or offset your obligations
or your exposure to the risks associated with a transaction prior to its
scheduled termination date.

Similarly, while market makers and dealers generally quote prices or terms for
entering into or terminating OTC derivative transactions and provide indicative
or mid-market quotations with respect to outstanding OTC derivative
transactions, they are generally not contractually obligated to do so. In
addition, it may not be possible to obtain indicative or mid-market quotations
for an OTC derivative transaction from a market maker or dealer that is not a
counterparty to the transaction. Consequently, it may also be difficult for you
to establish an independent value for an outstanding OTC derivative transaction.
You should not regard your counterparty's provision of a valuation or indicative
price at your request as an offer to enter into or terminate the relevant
transaction at that value or price, unless the value or price is identified by
the counterparty as firm or binding.

THIS BRIEF STATEMENT DOES NOT PURPORT TO DISCLOSE ALL OF THE RISKS AND OTHER
MATERIAL CONSIDERATIONS ASSOCIATED WITH OTC DERIVATIVE TRANSACTIONS. YOU SHOULD
NOT CONSTRUE THIS GENERIC DISCLOSURE STATEMENT AS BUSINESS, LEGAL, TAX OR
ACCOUNTING ADVICE OR AS MODIFYING APPLICABLE LAW. YOU SHOULD CONSULT YOUR OWN
BUSINESS, LEGAL,

<PAGE>

TAX AND ACCOUNTING ADVISERS WITH RESPECT TO PROPOSED OTC DERIVATIVE TRANSACTIONS
AND YOU SHOULD REFRAIN FROM ENTERING INTO ANY OTC DERIVATIVE TRANSACTION UNLESS
YOU HAVE FULLY UNDERSTOOD THE TERMS AND RISKS OF THE TRANSACTION, INCLUDING THE
EXTENT OF YOUR POTENTIAL RISK OF LOSS.