Document:

exv10w36

 

Execution Copy

EXHIBIT
4.7 and 10.36

AMENDED AND RESTATED

CREDIT AGREEMENT

Among

TANDY BRANDS ACCESSORIES, INC.

as the Borrower,

WELLS FARGO HSBC TRADE BANK, N.A.

as Administrative Agent and as a Lender,

and

CERTAIN FINANCIAL INSTITUTIONS,

as Lenders

and

WELLS FARGO BANK, N.A.

as Arranger

As of

September 7, 2006

$75,000,000.00

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	 
	SECTION 1 DEFINITION OF TERMS	 	 	1	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	1.1	 	 	Definitions

	 	 	1	 
	 	 	 	1.2	 	 	Accounting Terms

	 	 	15	 
	 	 	 	1.3	 	 	Rules of Construction

	 	 	15	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 2 THE REVOLVING CREDIT LOAN	 	 	16	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	2.1	 	 	Revolving Credit Commitments and Total Revolving Credit Commitment

	 	 	16	 
	 	 	 	2.2	 	 	Revolving Credit Loans

	 	 	16	 
	 	 	 	2.3	 	 	Notice of Borrowing

	 	 	17	 
	 	 	 	2.4	 	 	Commitment Fees

	 	 	17	 
	 	 	 	2.5	 	 	Revolving Credit Note and Note Payments

	 	 	17	 
	 	 	 	2.6	 	 	Mandatory Prepayments

	 	 	18	 
	 	 	 	2.7	 	 	Manner and Application of Payments

	 	 	18	 
	 	 	 	2.8	 	 	Interest Options

	 	 	19	 
	 	 	 	2.9	 	 	Quotation of Rates

	 	 	19	 
	 	 	 	2.10	 	 	Default Rate

	 	 	19	 
	 	 	 	2.11	 	 	Interest Recapture

	 	 	19	 
	 	 	 	2.12	 	 	Interest Calculations

	 	 	20	 
	 	 	 	2.13	 	 	Selection of Interest Option

	 	 	20	 
	 	 	 	2.14	 	 	Rollovers and Conversions

	 	 	20	 
	 	 	 	2.15	 	 	Booking Borrowings

	 	 	21	 
	 	 	 	2.16	 	 	Special Provisions for Eurodollar Borrowings

	 	 	21	 
	 	 	 	2.17	 	 	Capital Adequacy

	 	 	23	 
	 	 	 	2.18	 	 	Taxes

	 	 	24	 
	 	 	 	2.19	 	 	Increases in Total Revolving Credit Commitment

	 	 	25	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 3 SWINGLINE ADVANCES	 	 	26	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	3.1	 	 	Swingline Advances

	 	 	26	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 4 LETTERS OF CREDIT	 	 	27	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	4.1	 	 	Letters of Credit

	 	 	27	 
	 	 	 	4.2	 	 	Letter of Credit Requests

	 	 	28	 
	 	 	 	4.3	 	 	Letter of Credit Participations

	 	 	29	 
	 	 	 	4.4	 	 	Increased Costs

	 	 	30	 
	 	 	 	4.5	 	 	Conflict Between Applications and Agreement

	 	 	31	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 5 BANKERS ACCEPTANCES	 	 	31	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	5.1	 	 	Bankers Acceptances

	 	 	31	 
	 	 	 	5.2	 	 	Procedures for Purchase of Bankers Acceptances

	 	 	32	 
	 	 	 	5.3	 	 	Replacement/Renewal/Conversion of Bankers Acceptances

	 	 	32	 
	 	 	 	5.4	 	 	Payment of Bankers Acceptances

	 	 	33	 
	 	 	 	5.5	 	 	Acceptance Exposure

	 	 	33	 
	 	 	 	5.6	 	 	Miscellaneous Bankers Acceptance Provisions

	 	 	34	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 6 GUARANTEES	 	 	34	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	6.1	 	 	Guarantees

	 	 	34	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 7 CONDITIONS PRECEDENT	 	 	34	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	7.1	 	 	Effectiveness of Agreement

	 	 	34	 
	 	 	 	7.2	 	 	All Advances

	 	 	35	 

A&R Credit Agreement — Tandy Brands

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	SECTION 8 REPRESENTATIONS AND WARRANTIES	 	 	36	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	8.1	 	 	Organization and Good Standing

	 	 	36	 
	 	 	 	8.2	 	 	Authorization and Power

	 	 	36	 
	 	 	 	8.3	 	 	No Conflicts or Consents

	 	 	36	 
	 	 	 	8.4	 	 	Enforceable Obligations

	 	 	36	 
	 	 	 	8.5	 	 	No Liens

	 	 	36	 
	 	 	 	8.6	 	 	Financial Condition

	 	 	36	 
	 	 	 	8.7	 	 	Full Disclosure

	 	 	36	 
	 	 	 	8.8	 	 	No Potential Default

	 	 	37	 
	 	 	 	8.9	 	 	Material Agreements

	 	 	37	 
	 	 	 	8.10	 	 	No Litigation

	 	 	37	 
	 	 	 	8.11	 	 	Use of Proceeds; Margin Stock

	 	 	37	 
	 	 	 	8.12	 	 	Taxes

	 	 	37	 
	 	 	 	8.13	 	 	Principal Office, Etc.

	 	 	37	 
	 	 	 	8.14	 	 	Compliance with Law

	 	 	37	 
	 	 	 	8.15	 	 	Subsidiaries

	 	 	38	 
	 	 	 	8.16	 	 	Casualties

	 	 	38	 
	 	 	 	8.17	 	 	Corporate Name

	 	 	38	 
	 	 	 	8.18	 	 	Intellectual Property Rights

	 	 	38	 
	 	 	 	8.19	 	 	ERISA

	 	 	39	 
	 	 	 	8.20	 	 	Labor Matters

	 	 	39	 
	 	 	 	8.21	 	 	Material Contracts

	 	 	39	 
	 	 	 	8.22	 	 	Representations and Warranties

	 	 	39	 
	 	 	 	8.23	 	 	Survival of Representations and Warranties in All Material Respects

	 	 	39	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 9 AFFIRMATIVE COVENANTS	 	 	39	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	9.1	 	 	Financial Statements, Reports, and Documents

	 	 	39	 
	 	 	 	9.2	 	 	Payment of Taxes and Other Liabilities

	 	 	40	 
	 	 	 	9.3	 	 	Maintenance of Existence and Rights; Conduct of Business

	 	 	40	 
	 	 	 	9.4	 	 	Notice of Default

	 	 	41	 
	 	 	 	9.5	 	 	Other Notices

	 	 	41	 
	 	 	 	9.6	 	 	Operations and Properties

	 	 	41	 
	 	 	 	9.7	 	 	Books and Records; Access

	 	 	41	 
	 	 	 	9.8	 	 	Field Examination

	 	 	41	 
	 	 	 	9.9	 	 	Compliance with Law

	 	 	41	 
	 	 	 	9.10	 	 	Insurance

	 	 	41	 
	 	 	 	9.11	 	 	Authorizations and Approvals

	 	 	42	 
	 	 	 	9.12	 	 	Further Assurances

	 	 	42	 
	 	 	 	9.13	 	 	Indemnity by Borrower

	 	 	42	 
	 	 	 	9.14	 	 	After-Acquired Subsidiaries

	 	 	42	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 10 NEGATIVE COVENANTS	 	 	43	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	10.1	 	 	Negative Pledge

	 	 	43	 
	 	 	 	10.2	 	 	Negative Pledge Agreements

	 	 	43	 
	 	 	 	10.3	 	 	Limitations on Indebtedness

	 	 	43	 
	 	 	 	10.4	 	 	Certain Transactions

	 	 	44	 
	 	 	 	10.5	 	 	Limitation on Sale of Assets

	 	 	44	 
	 	 	 	10.6	 	 	Liquidation, Mergers, Consolidations, Recapitalizations,
Reorganizations, and Dispositions of Substantial Assets

	 	 	44	 
	 	 	 	10.7	 	 	Lines of Business; Receivables Policy

	 	 	44	 
	 	 	 	10.8	 	 	Acquisition

	 	 	44	 
	 	 	 	10.9	 	 	Restricted Payments

	 	 	44	 
	 	 	 	10.10	 	 	Prepayment of Other Indebtedness

	 	 	44	 
	 	 	 	10.11	 	 	Limitation on Investments

	 	 	45	 
	 	 	 	10.12	 	 	Sale and Leaseback Transactions

	 	 	45	 

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	 	 	 	10.13	 	 	Leverage Ratio

	 	 	45	 
	 	 	 	10.14	 	 	Fixed Charge Coverage Ratio

	 	 	45	 
	 	 	 	10.15	 	 	Tangible Net Worth

	 	 	45	 
	 	 	 	10.16	 	 	Trading Asset Coverage Ratio

	 	 	46	 
	 	 	 	10.17	 	 	ERISA

	 	 	46	 
	 	 	 	10.18	 	 	Fiscal Year

	 	 	46	 
	 	 	 	10.19	 	 	Trademark License Agreements

	 	 	46	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 11 EVENTS OF DEFAULT	 	 	46	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	11.1	 	 	Events of Default

	 	 	46	 
	 	 	 	11.2	 	 	Remedies Upon Event of Default

	 	 	48	 
	 	 	 	11.3	 	 	Performance by Agent or Lenders

	 	 	48	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 12 AGENT	 	 	49	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	12.1	 	 	Appointment

	 	 	49	 
	 	 	 	12.2	 	 	Responsibilities

	 	 	49	 
	 	 	 	12.3	 	 	Indemnity

	 	 	51	 
	 	 	 	12.4	 	 	Credit Decisions

	 	 	51	 
	 	 	 	12.5	 	 	Resignation

	 	 	51	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 13 MISCELLANEOUS	 	 	52	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	13.1	 	 	Accounting Reports

	 	 	52	 
	 	 	 	13.2	 	 	Waivers and Amendments

	 	 	52	 
	 	 	 	13.3	 	 	Payment of Expenses

	 	 	53	 
	 	 	 	13.4	 	 	Notices

	 	 	53	 
	 	 	 	13.5	 	 	Governing Law

	 	 	54	 
	 	 	 	13.6	 	 	Choice of Forum; Consent to Service of Process and Jurisdiction

	 	 	54	 
	 	 	 	13.7	 	 	Invalid Provisions

	 	 	54	 
	 	 	 	13.8	 	 	Maximum Interest

	 	 	54	 
	 	 	 	13.9	 	 	Non-liability of Lender

	 	 	55	 
	 	 	 	13.10	 	 	Offset

	 	 	55	 
	 	 	 	13.11	 	 	Successors and Assigns

	 	 	56	 
	 	 	 	13.12	 	 	Successors and Assigns; Participations

	 	 	56	 
	 	 	 	13.13	 	 	Headings

	 	 	59	 
	 	 	 	13.14	 	 	Survival

	 	 	59	 
	 	 	 	13.15	 	 	No Third Party Beneficiary

	 	 	59	 
	 	 	 	13.16	 	 	Multiple Counterparts

	 	 	59	 
	 	 	 	13.17	 	 	Entirety

	 	 	59	 
	 	 	 	13.18	 	 	USA PATRIOT Act Notice

	 	 	59	 
	 	 	 	13.19	 	 	Amendment and Restatement

	 	 	60	 

A&R Credit Agreement — Tandy Brands

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Exhibits:

Exhibit A – Revolving Credit Note

Exhibit B – Notice of Borrowing

Exhibit C – Closing Documents

Exhibit D – Subsidiaries

Exhibit E – Amended and Restated Subsidiary Guaranty

Exhibit F – Swingline Note

Exhibit G – Letter of Credit Request

Exhibit H – Assignment and Acceptance

Schedules:

Schedule 1.1(a) – Existing Liens

Schedule 2.1 – Lenders; Revolving Credit Commitments

Schedule 2.2(a) – Domestic Lending Offices

Schedule 2.2(b) – Eurodollar Lending Offices

Schedule 8.14(a) – Compliance with Law

Schedule 8.14(b) – Compliance with Governmental Authorization

Schedule 8.18 – Patents, Trademarks and Copyrights

Schedule 8.19 – ERISA

Schedule 8.21 – Material Contracts

Schedule 10.11 – Investments

Schedule 13.4 – Notices/Credit Matters

A&R Credit Agreement — Tandy Brands

iv

 

AMENDED AND RESTATED

CREDIT AGREEMENT

     THIS AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of the 7th day of
September, 2006 by and among TANDY BRANDS ACCESSORIES, INC., a Delaware corporation (the
“Borrower”), WELLS FARGO HSBC TRADE BANK, N.A., a national banking association (the
“Trade Bank”), as administrative agent for the Lenders (the “Agent”), WELLS FARGO
BANK, N.A., a national banking association (“WFB”), as arranger and in the capacities set
forth herein, and the lenders named in Schedule 2.1 hereto (collectively, together with all
successors and assigns, the “Lenders”).

WITNESSETH:

     WHEREAS, Borrower, Agent, WFB and certain Lenders entered into a Credit Agreement dated
as of June 27, 2001 (as amended, the “Existing Credit Agreement”) to fund general corporate
and working capital needs of Borrower and its Subsidiaries.

     WHEREAS, Borrower, Agent, WFB and the Lenders wish to amend and restate the Existing Credit
Agreement on the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the mutual promises herein contained and for other
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

SECTION 1

DEFINITION OF TERMS

          1.1 Definitions. As used in this Agreement, all exhibits and schedules hereto and in any
note, certificate, report, or other Loan Documents made or delivered pursuant to this Agreement,
the following terms shall have the respective meanings assigned to them in this Section 1 or in the
Section or recital referred to below:

     “Acceptance Date” means any Business Day on which a Bankers Acceptance is issued and accepted
by an Accepting Bank.

     “Acceptance Exposure” means, at any time, the aggregate face amount of all Bankers Acceptances
outstanding at such time for which the Borrower has not yet repaid an Accepting Bank.

     “Accepting Bank” means the Agent or WFB, or collectively the Accepting Banks.

     “Adjusted Eurodollar Rate” means, with respect to any Interest Period, an interest rate per
annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to the quotient of (a) the
Eurodollar Rate with respect to such Interest Period, divided by (b) the remainder of 1.00 minus
the Eurodollar Reserve Requirement in effect on such date.

     “Advance” means (a) the disbursement by the Lenders of a sum or sums lent to the Borrower
pursuant to this Agreement (including, without limitation, Swingline Advances), (b)

A&R Credit Agreement — Tandy Brands

1

 

the conversion
of a Borrowing from one type of Borrowing to another type of Borrowing pursuant to Section
2.14, and (c) the continuation of a Eurodollar Borrowing to a new Interest Period pursuant to
Section 2.14.

     “Advance Date” has the meaning set forth in Section 2.3.

     “Affiliate” of any Person means any other Person directly or indirectly, controlling,
controlled by, or under common control with, such Person.

     “Agreement” means this Credit Agreement, including the schedules and exhibits hereto, as the
same may be modified, amended, renewed, extended or restated from time to time.

     “Alternate Base Borrowing” means a borrowing bearing interest with reference to the Alternate
Base Rate.

     “Alternate Base Rate” means, for any day, a rate per annum (rounded upwards, if necessary, to
the next 1/100 of one percent (1%)) equal to the greater of (a) the Prime Rate in effect on such
day, or (b) the sum of the Federal Funds Effective Rate in effect on such day plus one-half
of one percent (0.5%). For purposes hereof, “Prime Rate” means at any time the rate of
interest most recently announced within WFB at its principal office as its Prime Rate, with the
understanding that the Prime Rate is one of WFB’s base rates and serves as the basis upon which
effective WFB rates of interest are calculated for those loans making reference thereto, and is
evidenced by the recording thereof after its announcement in such internal publication or
publications as WFB may designate. Such rate of interest is a fluctuating reference rate and may
or may not at any time be the best or lowest rate charged by WFB on any loan. WFB may make loans at
rates of interest at, above or below the Prime Rate. “Federal Funds Effective Rate” shall
mean, for any day, the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for the day of such
transactions received by the Agent from three (3) Federal funds brokers of recognized standing
selected by it. If for any reason the Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate,
for any reason, including, the inability or failure of the Agent to obtain sufficient quotations in
accordance with the terms hereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate
due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

     “Applicable Commitment Fee Percentage” means, at any time the Commitment Fee described in
Section 2.4 hereof is to be paid, the following percentages per annum which shall be
determined as a function of the Total Funded Indebtedness to EBITDA Ratio, as set forth on the
most recent certificate showing compliance delivered to the Agent by the Borrower pursuant to
Section 9.1(b):

A&R Credit Agreement — Tandy Brands

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	 	 	APPLICABLE
	 	 	COMMITMENT
	TOTAL FUNDED INDEBTEDNESS	 	FEE
	           TO EBITDA RATIO*	 	PERCENTAGE
	Less than 1.00 to 1.00
	 	 	0.20	%
	Greater than or equal to 1.00 to 1.00 but
less than 2.00 to 1.00
	 	 	0.25	%
	Greater than or equal to 2.00 to 1.00, but
less than 2.50 to 1.00
	 	 	0.30	%
	Greater than or equal to 2.50 to 1.00
	 	 	0.375	%

 

			
	*	 	In calculating this Ratio for purposes of determining the Applicable Commitment Fee
Percentage, EBITDA shall not include the one-time charge described in clause (g) of the
definition of EBITDA.

     “Applicable Lending Office” means, with respect to each Lender, such Lender’s Domestic Lending
Office in the case of an Alternate Base Borrowing and such Lender’s Eurodollar Lending Office in
the case of a Eurodollar Borrowing.

     “Applicable Margin” means, the following percentages per annum, which percentages shall be
added to the applicable interest rates for purposes of calculating the interest rates payable to
the Lenders, as more fully described by Section 2.8:

     (a) The Applicable Margin for Alternate Base Borrowings shall be 0.0%.

     (b) The following Applicable Margins per annum for Eurodollar Borrowings shall apply,
which shall be determined as a function of the Total Funded Indebtedness to EBITDA Ratio, as
set forth on the most recent certificate showing compliance delivered to the Agent by the
Borrower pursuant to Section 9.1(b):

A&R Credit Agreement — Tandy Brands

3

 

	 	 	 	 	 
	 	 	APPLICABLE
	 	 	MARGIN FOR
	TOTAL FUNDED INDEBTEDNESS	 	EURODOLLAR
	           TO EBITDA RATIO*	 	BORROWINGS
	Less than 1.00 to 1.00
	 	 	0.75	%
	Greater than or equal to 1.00 to 1.00 but
less than 1.50 to 1.00
	 	 	1.00	%
	Greater than or equal to 1.50 to 1.00 but
less than 2.00 to 1.00
	 	 	1.25	%
	Greater than or equal to 2.00 to 1.00, but
less than 2.50 to 1.00
	 	 	1.50	%
	Greater than or equal to 2.50 to 1.00
	 	 	1.75	%

 

			
	*	 	In calculating this Ratio for purposes of determining the Applicable Margin, EBITDA
shall not include the one-time charge described in clause (g) of the definition of
EBITDA.

     “Application for Letter of Credit” means the application for a Letter of Credit in the form
provided by the Issuing Bank.

     “Asset Sale” means a sale of assets, properties, rights or business now owned or hereafter
acquired (other than a sale or other disposition of (i) obsolete or assets no longer in use, (ii)
inventory, or (iii) the equity securities of any Subsidiary) by the Borrower or any of its
Subsidiaries outside the ordinary course of business.

     “Asset Sale Limit” has the meaning given such term in Section 2.6 hereof.

     “Assignment and Acceptance” means the assignment and acceptance in the form of Exhibit
H attached hereto and provided for in Section 13.12.

     “Bank” or “Banks” means any Lender (or the Lenders) and WFB.

     “Bankers Acceptance” means a bill of exchange drawn by the Borrower on Agent, duly completed
and accepted by the Agent, in a form customarily used by the Agent in creating bankers’ acceptances
and which meets the eligibility requirements provided for herein and any reasonable requirements of
the Agent.

     “Borrowing” means a Eurodollar Borrowing, an Alternate Base Borrowing or a Swingline Advance.

     “Business Day” means (a) for all purposes, any day other than a Saturday, Sunday, or day on
which national banks are authorized to be closed under the laws of the States of Texas,

A&R Credit Agreement — Tandy Brands

4

 

California, and Colorado, and (b) for purposes of any Eurodollar Borrowing, a day that
satisfies the requirements of clause (a) and is a day when commercial banks are open for domestic
or international business in London.

     “Capital Expenditures” means, for any period, the aggregate of all expenditures and costs of
the Borrower (whether paid in cash or accrued as liabilities during that period and including that
portion of Capital Lease Obligations of the Borrower) during such period that, in conformity with
GAAP, are required to be included in or classified as property, plant or equipment or another
similar fixed asset account reflected on the balance sheet of the Borrower, but not including the
expenditures and costs of a Permitted Acquisition.

     “Capital Lease Obligations” means, as to any Person, the obligations of such Person to pay
rent or other amounts under a lease of (or other agreement conveying the right to use) real and/or
personal property, which obligations are required to be classified and accounted for as a capital
lease on a balance sheet of such Person under GAAP. For purposes of this Agreement, the amount of
such Capital Lease Obligations shall be the capitalized amount thereof, as determined in accordance
with GAAP.

     “Closing Date” means the date of this Agreement.

     “Code” means the Internal Revenue Code of 1986, as amended, and all regulations promulgated
and rulings issued thereunder.

     “Collateral” means all assets, tangible or intangible, personal or mixed, including, without
limitation, all accounts receivable, patents, trademarks, service marks, all other intellectual
property, all software whether purchased by or developed by the Borrower or any of its
Subsidiaries, general intangibles, furniture and equipment of the Borrower and its Subsidiaries,
and all partnership interests, capital stock or equity securities of each Subsidiary of the
Borrower.

     “Commercial Letter of Credit” means a commercial letter of credit as that term is commonly
referred to within the banking industry.

     “Commitment Fee” has the meaning given such term in Section 2.4 hereof.

     “Consolidated Net Income” means consolidated net earnings (after income taxes) of Borrower and
its Subsidiaries, but excluding (a) extraordinary gains, (b) gains due to sales or write-up of
assets, (c) earnings of any Person newly acquired, if earned prior to acquisition, or (d) gains due
to acquisitions of any securities of Borrower or any of its Subsidiaries.

     “Contract Rate” means (a) with respect to an Alternate Base Borrowing, the Alternate Base Rate
plus the Applicable Margin, and (b) with respect to a Eurodollar Borrowing, the Adjusted Eurodollar
Rate plus the Applicable Margin.

     “Current Liabilities” means current liabilities determined in accordance with GAAP.

A&R Credit Agreement — Tandy Brands

5

 

     “Debtor Laws” means all applicable liquidation, conservatorship, bankruptcy, moratorium,
arrangement, receivership, insolvency, reorganization, or similar laws from time to time in effect
affecting the rights of creditors generally.

     “Discount Rate” means the rate, determined by the Agent, calculated on the basis of a year of
360 days, which is the Agent’s current discount rate for bankers’ acceptances having a term and
face amount equal to the term and face amount of the Bankers Acceptance which Borrower has
requested Agent to purchase.

     “Dividends” in respect of any corporation, means (a) cash distributions or other distributions
on, or in respect of, any class of capital stock of such corporation, except for distributions made
solely in shares of stock of the same class, and (b) other payments or transfers made in respect of
the redemption, repurchase, or acquisition of such stock.

     “Dollar” means lawful money of the United States of America.

     “Domestic Lending Office” means, with respect to any Lender, the office of such Lender
specified as its “Domestic Lending Office” opposite its name in Schedule 2.2(a) annexed
hereto, or such other office of such Lender as such Lender may from time to time specify to the
Borrower and the Agent.

     “EBITDA” means, for any period comprising the most recent four quarterly periods, the sum of
(a) Consolidated Net Income for such period, plus (b) Interest Expense paid during such
period which was deducted in determining such Consolidated Net Income, plus (c) all income
taxes which were deducted in determining such Consolidated Net Income, plus (d) all
depreciation and amortization which were deducted in determining such Consolidated Net Income,
plus (e) add-backs allowed pursuant to Article 11, Regulation S-X, of the Securities Act of
1933, plus (f) non-cash losses arising from the impairment of goodwill or intangibles under
FASB 142; plus (g) a one-time charge of $7,100,000 attributable to the women’s segment
inventory write-offs subsequent to February 28, 2006. Upon consummation of a Permitted
Acquisition, EBITDA may be adjusted to include the financial results of the acquired entity or
assets for the period comprising the four quarterly periods prior to the Permitted Acquisition,
including any period of less than a full quarter, provided that the Borrower shall have provided
Agent with (i) audited financial statements prepared not more than fifteen (15) months prior to the
closing date of the Permitted Acquisition, or (ii) if such audited financial statements are not
available, verification of the adjustments for such acquisition prepared by an accounting firm
acceptable to Agent, such statements or verification, as the case may be, to be satisfactory to the
Agent in its sole discretion.

     “Environmental Laws” means any Legal Requirements pertaining to air, emissions, water
discharge, noise emissions, solid or liquid waste disposal, hazardous waste or materials,
industrial hygiene, or other environmental, health, or safety matters or conditions on, under or
about real property or any portion thereof, and similar laws of any Governmental Authority having
jurisdiction over real property as such Legal Requirements may be amended or supplemented from time
to time, and regulations promulgated and rulings issued pursuant to such laws.

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     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder.

     “ERISA Affiliate” means any Subsidiary or trade or business (whether or not incorporated)
which is a member of a group of which Borrower is a member and which is under common control with
Borrower within the meaning of Section 414 of the Code.

     “Eurodollar Borrowing” means a borrowing bearing interest with reference to the Adjusted
Eurodollar Rate.

     “Eurodollar Lending Office” means, with respect to any Lender, the office of such Lender
specified as its “Eurodollar Lending Office” opposite its name in Schedule 2.2(b) annexed
hereto (or, if no such office is specified, its Domestic Lending Office), or such other office of
such Lender as such Lender may from time to time specify to the Borrower and the Agent.

     “Eurodollar Rate” means, for any Eurodollar Rate Borrowing for any Interest Period therefor,
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Dow
Jones Markets Page 3750 (or any successor page) as the London interbank offered rate for deposits
in Dollars at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period. If for any reason such rate
is not available, then the term “Eurodollar Rate” shall mean, for any Eurodollar Rate Borrowing for
any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two (2) Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period; provided however,
if more than one rate is specified on Reuters Screen LEBO Page, then the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%).

     “Eurodollar Reserve Requirement” means, on any day, that percentage (expressed as a decimal
fraction) that is in effect on such day, as provided by the Board of Governors of the Federal
Reserve System (or any successor governmental body) applied for determining the maximum reserve
requirements (including, without limitation, basic, supplemental, marginal, and emergency reserves)
under Regulation D with respect to “Eurocurrency liabilities” as currently defined in Regulation D
or under any similar or successor regulation with respect to Eurocurrency liabilities or
Eurocurrency funding. Each determination by Lender of the Eurodollar Reserve Requirement shall, in
the absence of manifest error, be conclusive and binding.

     “Event of Default” has the meaning set forth in Section 11.1.

     “Financial Statement Delivery Date” shall mean (i) if the Borrower delivers the quarterly or
annual financial statements before 12:00 noon Dallas, Texas time on a Business Day, then the day on
which the quarterly or annual financial statements are delivered to the Agent and/or Lenders
pursuant to Section 9.1, and (ii) if the Borrower delivers the quarterly or annual
financial statements on a day which is not a Business Day or on or after 12:00 noon

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Dallas, Texas time on a Business Day, then the Business Day after the day on which the
quarterly or annual financial statements are delivered to the Agent and/or Lenders pursuant to
Section 9.1.

     “Fiscal Quarter” means the quarterly periods ending September 30, December 31, March 31, and
June 30.

     “Fiscal Year” means the fiscal year of the Borrower and its Subsidiaries for accounting
purposes as designated by the Borrower to the Agent from time to time. The present Fiscal Year of
the Borrower and its Subsidiaries is July 1 to June 30, which Fiscal Year may not be changed
without the consent of the Agent.

     “Fixed Charge Coverage Ratio” means, for the four consecutive fiscal quarterly periods ending
on the date of determination for Borrower and its Subsidiaries, the ratio of (a) EBITDA determined
on a consolidated basis minus Capital Expenditures minus federal, state, local and
foreign income taxes divided by (b) Interest Expense plus payments made in respect
of Capital Lease Obligations plus any cash dividend made by Borrower or any of its
Subsidiaries, plus any payments made by Borrower or any of its Subsidiaries in respect of
the redemption, retirement, acquisition, or prepayment of any of Borrower’s capital stock, or any
other equity interest during the term of this Agreement, plus any cash Investments in
Sheldon following the Closing Date.

     “Funding Loss” has the meaning set forth in Section 2.16(e).

     “GAAP” means those generally accepted accounting principles and practices, applied on a
consistent basis, which are recognized as such by the American Institute of Certified Public
Accountants acting through its Accounting Principles Board and the Financial Accounting Standards
Board and/or their respective successors and which are applicable in the circumstances as of the
date in question.

     “Governmental Authority” means, with respect to any Person, any government (or any political
subdivision or jurisdiction thereof),court, bureau, agency, or other governmental authority having
jurisdiction over such Person or any of its business, operations, or properties.

     “Governmental Authorization” means any approval, consent, license, permit, waiver, or other
authorization issued, granted, given, or otherwise made available by or under the authority of any
Governmental Authority or pursuant to any Legal Requirement.

     “Guarantors” means each of the Subsidiaries of Borrower listed on Exhibit D attached
hereto as well as any After-Acquired Subsidiary as defined in Section 9.14.

     “Guaranty” of any Person means any contract or understanding of such Person pursuant to which
such Person guarantees, or in effect guarantees, any Indebtedness of any other Person in any
manner, whether directly or indirectly, including agreements to assure the holder of the
Indebtedness of the primary obligor against loss in respect thereof; except that “Guaranty” shall
not include endorsements, in the ordinary course of business, of negotiable instruments or
documents for deposit or collection.

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     “Hazardous Materials” means any hazardous, toxic, or dangerous waste, substance, or material
defined as such in or for the purpose of any Environmental Law.

     “Hedge Agreement” means any agreement between the Borrower and any Bank now existing or
hereafter entered into, which provides for an interest rate or commodity swap, cap, floor, collar,
forward foreign exchange transaction, currency swap, cross-currency rate swap, currency option, or
any combination of, or option with respect to, these or similar transactions, for the purpose of
hedging Borrower’s exposure to fluctuations in interest rates, currency valuations or commodity
prices.

     “HSBC” means Hong Kong Shanghai Banking Corporation Limited.

     “Indebtedness” means, with respect to any Person, all indebtedness, obligations, and
liabilities of such Person, contingent or otherwise, including without limitation (a) all
“liabilities” which would be reflected on a balance sheet of such Person, (b) all obligations of
such Person in respect of any Guaranty, letter of credit, or bankers’ acceptance, (c) all
obligations of such Person in respect of any lease, which in conformity with GAAP, is required to
be capitalized for balance sheet purposes, (d) all obligations, indebtedness, and liabilities
secured by any lien or any security interest on any property or assets of such Person, and (e) any
obligations to redeem or repurchase any of such Person’s capital stock, warrants, or stock
equivalents.

     “Intangible Assets” of any Person means those assets of such Person which are (a) deferred
assets, other than prepaid insurance and prepaid taxes, (b) patents, copyrights, trademarks, trade
names, franchises, goodwill, experimental expenses, and other similar assets which would be
classified as intangible assets on a balance sheet of such Person, (c) unamortized debt discount
and expense, and (d) assets located, and notes and receivables due from obligors domiciled, outside
of the United States of America.

     “Interest Expense” means, for Borrower and its Subsidiaries for any period, total interest
expense in respect of Indebtedness actually paid or that is payable during such period, as
determined in accordance with GAAP.

     “Interest Period” means, with respect to a Eurodollar Borrowing, a period commencing:

     (a) on the Advance Date thereof; or

     (b) on the conversion date pertaining to such Eurodollar Borrowing, if such Eurodollar
Borrowing is made pursuant to a conversion as described in Section 2.14; or

     (c) on the last day of the preceding Interest Period in the case of a rollover to a
successive Interest Period;

and ending 1, 2, 3, or 6 months thereafter, as Borrower shall elect in accordance with Section
2.13 or Section 2.14, provided that:

     (i) any Interest Period that would otherwise end on a day which is not a Business Day
shall be extended to the next succeeding Business Day, unless such

A&R Credit Agreement — Tandy Brands

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Business Day falls in another calendar month in which case such Interest Period shall
end on the next preceding Business Day;

     (ii) any Interest Period that begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar month or at the
end of such Interest Period) shall, subject to clause (i) above, end on the last Business
Day of a calendar month; and

     (iii) if the Interest Period for any Eurodollar Borrowing would otherwise end after the
final maturity date of the Loan, then such Interest Period shall end on the final maturity
date of the Loan.

     “Investment” in any Person means any investment, whether by means of share purchase, loan,
advance, extension of credit, capital contribution, or otherwise, in or to such Person, the
Guaranty of any Indebtedness of such Person, or the subordination of any claim against such Person
to other Indebtedness of such Person.

     “Issuing Bank” means (i) in the case of the issuance of Commercial Letters of Credit, the
Trade Bank or HSBC or any of its Affiliates, and (ii) in the case of the issuance of Standby
Letters of Credit, WFB.

     “Legal Requirement” means any federal, state, local, municipal, foreign, international,
multi-national, or other administrative order, constitution, law, ordinance, principle of common
law, regulation, statute, or treaty as in effect on the date in question.

     “Letter of Credit” has the meaning given such term in Section 4.1.

     “Letter of Credit Obligations” mean at any time the sum of (a) the aggregate then undrawn and
unexpired amount of outstanding Letters of Credit and (b) the aggregate amount of drawings under
Letters of Credit not reimbursed.

     “Letter of Credit Request” has the meaning specified in Section 4.2(a).

     “Lien” means any lien, mortgage, security interest, tax lien, pledge, encumbrance, conditional
sale or title retention arrangement, or any other interest in property designed to secure the
repayment of indebtedness, whether arising by agreement or under any statute or law, or otherwise.

     “Liquid Investments” means:

     (a) direct obligations of, or obligations the principal of and interest on which are
guaranteed or insured by, the United States of America or any agency or instrumentality
thereof;

     (b) (i) negotiable or nonnegotiable certificates of deposit, time deposits, bankers’
acceptances or other similar banking arrangements maturing within twelve (12) months from
the date of acquisition thereof (“bank debt securities”), issued by (A) any Lender or any
Affiliate of Lender or (B) any other domestic bank, trust company or

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financial institution which has a combined capital surplus and undivided profit of not
less than $100,000,000 or the dollar equivalent thereof, if at the time of deposit or
purchase, such bank debt securities are rated not less than “BB” (or the then equivalent) by
the rating service of Standard & Poor’s Corporation or of Moody’s Investors Service, (ii)
commercial paper issued by any Person if at the time of purchase such commercial paper is
rated not less than “A-2” (or the then equivalent) by the rating service of Standard &
Poor’s Corporation or not less than “P-2” (or the then equivalent) by the rating service of
Moody’s Investors Service, or upon the discontinuance of both of such services, such other
nationally recognized rating service or services, as the case may be, as shall be selected
by the Borrower, (iii) debt or other securities issued by (A) any Lender or Affiliate of any
Lender or (B) or any other Person, if at the time of purchase such Person’s debt or equity
securities are rated not less than “BB” (or the then equivalent) by the rating service of
Standard & Poor’s Corporation or of Moody’s Investors Service, or upon the discontinuance of
both such services, such other nationally recognized rating service or services, as the case
may be, as shall be selected by the Borrower and (iv) marketable securities of a class
registered pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934, as
amended;

     (c) repurchase agreements relating to investments described in clauses (a) and
(b) above with a market value at least equal to the consideration paid in connection
therewith, with any Person who has a combined capital surplus and undivided profit of not
less than $100,000,000 or the dollar equivalent thereof, if at the time of entering into
such agreement the debt securities of such Person are rated not less than “BBB” (or the then
equivalent) by the rating service of Standard & Poor’s Corporation or of Moody’s Investors
Service, or upon the discontinuance of both such services, such other nationally recognized
rating service or services, as the case may be, as shall be selected by the Borrower; and

     (d) shares of any mutual fund registered under the Investment Company Act of 1940, as
amended, which invests solely in underlying securities of the types described in clauses
(a), (b) and (c) above.

     “Loan” means the Revolving Credit Loans.

     “Loan Documents” means this Agreement, the Notes, the Subsidiary Guaranty, and any agreements,
documents (and with respect to this Agreement, and such other agreements and documents, any
renewals, extensions, amendments, or supplements thereto), or certificates at any time executed or
delivered pursuant to the terms of this Agreement.

     “Material Adverse Change” means any material adverse changes in, or effect upon, (a) the
validity, performance, or enforceability of any Loan Documents, (b) the financial condition or
business operations of Borrower and the Guarantors taken as a whole, or (c) the ability of Borrower
to fulfill its obligations under the Loan Documents.

     “Maximum Rate” has the meaning given such term in Section 13.8 hereof.

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     “Net Worth” means, with respect to any Person and as of the date of its determination, the
excess of the assets of such Person over the sum of the liabilities of such Person and the minority
interests of such Person, as determined in accordance with GAAP.

     “Notes” means the Revolving Credit Notes and the Swingline Note.

     “Notice of Borrowing” means a notice in the form of Exhibit B attached hereto.

     “Obligations” means all present and future indebtedness, obligations, and liabilities, and all
renewals and extensions thereof, or any part thereof, now or hereafter owed to any Bank by
Borrower, pursuant to this Agreement, the Notes and any of the Loan Documents, or any other
financial arrangements between Borrower and any Bank, and all renewals and extensions thereof
(including, but not limited to, all obligations to a Bank under letters of credit), together with
all interest accruing thereon and costs, expenses, and attorneys’ fees incurred in the enforcement
or collection thereof.

     “Obligors” means Borrower and each of the Guarantors, and “Obligor” means any one of the
Obligors.

     “Other Taxes” has the meaning set forth in Section 2.18.

     “Permitted Acquisition” means an acquisition of a business entity or assets:

     (a) (i) if after giving effect to such acquisition the Total Funded Indebtedness on a
consolidated basis to EBITDA Ratio is less than 2.00 to 1.00 and the Borrower is in
compliance with Sections 10.13, 10.14, 10.15 and 10.16, and
(ii) the consideration for such acquisition does not exceed $20,000,000.00; or

     (b) the consideration for such acquisition does not exceed ten percent (10%) of the
Borrower’s consolidated Tangible Net Worth as of the Borrower’s most recent Fiscal Quarter;
or

     (c) for which Borrower has received the prior written consent of the Required Lenders.

     “Permitted Liens” means (a) inchoate liens for taxes, assessments or governmental charges or
levies not yet due or liens for taxes, assessments or governmental charges or levies being
contested in good faith and by appropriate proceedings for which adequate reserves have been
established in accordance with GAAP, (b) Liens in respect to property or assets of the Borrower or
any of its Subsidiaries imposed by law, which were incurred in the ordinary course of business, and
do not secure mechanics’ liens and other similar liens arising in the ordinary course of business,
and which do not in the aggregate materially detract from the value of the Borrower’s or such
Subsidiary’s property or assets or materially impair the use thereof in the operation of the
business of the Borrower or such Subsidiary, or which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of
property or assets subject to any such lien, (c) Liens in existence on the date of this Agreement
as set forth on Schedule 1.1(a), plus renewals and extensions of such liens to the extent
that the aggregate principal amount of the Indebtedness, if any, secured by such liens

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is not increased from the amount outstanding at the time of any such renewal or
extension, and any such renewals or extensions do not encumber any additional assets or properties
of the Borrower or any of its subsidiaries, (d) Liens placed on equipment or machinery or other
property used in the ordinary course of business of Borrower or any of its Subsidiaries, at the
time of acquisition thereof by the Borrower or any such Subsidiary or within sixty days thereafter
to secure Indebtedness incurred to pay all or a portion of the purchase price thereof, provided
that the lien encumbering the equipment or machinery so acquired does not encumber any other asset
of the Borrower or such Subsidiary, and provided further that such Indebtedness is permitted under
Section 10.3(c), (e) easements, right-of-way restrictions, encroachments and other similar
charges or encumbrances and minor title deficiencies in each case not securing Indebtedness and not
materially interfering with the conduct of the business of the Borrower or any of its Subsidiaries,
(f) statutory and common law landlord’s liens under leases to which the Borrower or any of its
Subsidiaries is a party, (g) Liens resulting from pledges or deposits to secure payments of
workmen’s compensation, unemployment insurance or other social security programs or securing the
performance of surety and bid and performance bonds, tenders, leases and other obligations of
similar nature, in each case incurred in the ordinary course of business (exclusive of obligations
in respect to the payment for borrowed money), and (h) Liens granted by Borrower to secure its
obligations under a Hedge Agreement.

     “Person” includes an individual, corporation, limited liability company, joint venture,
general or limited partnership, trust, unincorporated organization, or government, or any agency or
political subdivision thereof.

     “Plan” means an employee benefit plan or other plan maintained by Borrower or any ERISA
Affiliate and which is covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code, as amended.

     “Potential Default” means the occurrence of any event which, with the passage of time or the
giving of notice, or both, could become an Event of Default.

     “Principal Debt” means, as of any date, the sum of the outstanding principal balance of all
outstanding Borrowings hereunder as of such date.

     “Receivables” means all present and future (a) accounts, receivables, contract rights, chattel
paper, documents, tax refunds, or payments of, or owned by, Borrower or its Subsidiaries, (b)
insurance proceeds, patent rights, license rights, rights to refunds or indemnification, and other
general intangibles of every kind or nature of, or owned by, Borrower or its Subsidiaries, and (c)
all forms of obligations whatsoever owing to Borrower or its Subsidiaries together with all
instruments and all documents of title representing any of the foregoing and all right, title, and
interest in, and all securities and guaranties with respect to, each Receivable.

     “Required Lenders” means at any time (a) two (2) or more Lenders holding at least sixty-six
and two-thirds percent
(662/3%) of the then aggregate unpaid principal amount of the Advances, or (b)
if no such principal amount is then outstanding, two (2) or more Lenders having at least sixty-six
and two-thirds percent (662/3%) of the Total Revolving Credit Commitment.

A&R
Credit Agreement — Tandy Brands

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     “Revolving Credit Commitment” means, with respect to any Lender, the Revolving Credit
Commitment of such Lender as set forth in Schedule 2.1 annexed hereto, as the same may be
terminated or reduced from time to time in accordance with the provisions of this Agreement.

     “Revolving Credit Loan” is defined in the recitals hereof.

     “Revolving Credit Notes” means those certain Revolving Credit Promissory Notes dated as of the
date hereof in the form of Exhibit A attached hereto, executed by Borrower, as maker, and
payable to the order of Lenders, as payee, in the aggregate original principal amount of
$75,000,000.00, together with any renewals, extensions, or modifications thereof.”

     “Sheldon” means H. A. Sheldon Canada, Ltd.

     “Standby Letter of Credit” means a standby letter of credit as that term is commonly referred
to within the banking industry.

     “Subordinated Debt” has the meaning given such term in Section 10.3 hereof.

     “Subsidiary” means any corporation or other business entity owned or controlled directly or
indirectly, by Borrower, any Subsidiary, or any combination thereof. For this purpose, “ownership”
means 50% or more of the equity interest in such corporation or other business entity.

     “Subsidiary Guaranty” means the Amended and Restated Subsidiary Guaranty in the form of
Exhibit E attached hereto to be executed by each Guarantor whereby each of the Guarantors
guarantees on a joint and several basis the Obligations of Borrower to Lender under this Agreement
and the Notes.

     “Swingline Advance” means any Advance made to Borrower pursuant to Section 3.1 of this
Agreement.

     “Swingline Lender” means the Trade Bank.

     “Swingline Note” means any Swingline Note of the Borrower, executed and delivered as provided
in Section 3.1 hereof, in substantially the form of Exhibit F hereto, as amended,
modified or supplemented from time to time.

     “Tangible Net Worth” means, with respect to any Person at any date of determination, the sum
of (a) the total amount of capital stock, including preferred stock, of such Person, plus
(b) the paid-in-capital of such Person, plus (c) the retained earnings of such Person,
minus (d) the treasury stock of such Person, minus (e) any Intangible Assets of
such Person, and minus (f) any obligations due from stockholders, employees or Affiliates.

     “Taxes” has the meaning set forth in Section 2.18.

     “Termination Date” means the earliest of (a) June 30, 2009, (b) the date that the Lenders’
commitment to fund Advances hereunder is terminated pursuant to Section 11.2, or (c)

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the date that the Lenders’ commitment to fund Advances hereunder is reduced to zero pursuant
to Section 2.1.

     “Total Funded Indebtedness” means, as of any date, the sum of the following (without
duplication): (i) all Indebtedness of Borrower as of such date, other than consolidated Current
Liabilities, plus (ii) all Indebtedness which would be classified as “funded indebtedness”
or “long-term indebtedness” on a consolidated balance sheet of Borrower prepared as of such date in
accordance with GAAP, plus (iii) all Indebtedness, whether secured or unsecured, of
Borrower having a final maturity or which is renewable or extendible at the option of the Obligor
for a period ending more than one year after the date of creation thereof, notwithstanding the fact
that payments made by the Obligor less than one year after the date of creation thereof and
notwithstanding the fact that any amount thereof is at the time included also in consolidated
Current Liabilities of such Obligor, plus (iv) all Indebtedness of Borrower outstanding
under a revolving credit or similar agreement providing for borrowings (and renewals and extensions
thereof) over a period of more than one year, notwithstanding the fact that any such Indebtedness
is created within one year of the expiration of such agreement, plus (v) all Obligations
arising under this Agreement, minus (vi) Indebtedness or obligations to a Bank under
letters of credit.

     “Total Revolving Credit Commitment” means the sum of the Lenders’ Revolving Credit
Commitments, as the same may be terminated or reduced from time to time in accordance with the
provisions of this Agreement. As of the date of this Agreement, the Total Revolving Credit
Commitment is $75,000,000.00.

     “Unused Commitment” means, as of any date, (a) the Total Revolving Credit Commitment, minus
(b)(i) outstanding Advances under the Revolving Credit Commitment (but not outstanding Swingline
Advances), (ii) Letter of Credit Obligations, and (iii) the Acceptance Exposure.

          1.2 Accounting Terms. As used in this Agreement, in the Notes, and in any certificate,
report, or other document made or delivered pursuant to this Agreement, accounting terms not
defined in Section 1.1, and accounting terms partly defined in Section 1.1 to the
extent not defined, shall have, as of any date, the respective meanings given to them under GAAP
and all references to balance sheets or other financial statements means such statements, prepared
in accordance with GAAP as of such date.

          1.3 Rules of Construction. When used in this Agreement: (a) “or” is not exclusive; (b) a
reference to a law includes any amendment or modification to such law; (c) a reference to a Person
includes its permitted successors and permitted assigns; (d) except as provided otherwise, all
references to the singular shall include the plural, and vice versa; (e) except as provided in this
Agreement, a reference to an agreement, instrument, or document shall include such agreement,
instrument, or document as the same may be amended, modified, or supplemented from time to time in
accordance with its terms and as permitted by the Loan Documents; (f) all references to Sections,
Schedules, or
Exhibits shall be to Sections, Schedules, or Exhibits of this Agreement, unless otherwise
indicated; (g) all Exhibits to this Agreement shall be incorporated into this Agreement; (h) the
words “include,” “includes,” and “including” shall be deemed to be followed by the phrase “without
limitation”; and (i) except as otherwise

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provided herein, in the computation of time from a
specified date to a later specified date, the word “from” means “from and including” and words “to”
and “until” each mean “to but excluding.”

SECTION 2

THE REVOLVING CREDIT LOAN

          2.1 Revolving Credit Commitments and Total Revolving Credit Commitment. Subject to the terms
and conditions of this Agreement, each Lender agrees to extend to the Borrower from the date hereof
through the Termination Date, a revolving line of credit which shall not exceed the Total Revolving
Credit Commitment less (a) outstanding Advances (including Swingline Advances), (b) Letter of
Credit Obligations, and (c) the Acceptance Exposure. Within the limits of this Section
2.1, during such period, Borrower may borrow, repay, and reborrow under the Total Revolving
Credit Commitment in accordance with this Agreement. Borrower shall have the right, upon three (3)
Business Days’ prior written notice to the Agent, to permanently reduce the unutilized portion of
the Total Revolving Credit Commitment ratably among the Lenders; provided that any partial
reduction shall be in the minimum amount of $2,000,000.00 or a greater integral multiple thereof;
and further provided that the Total Revolving Credit Commitment shall not at any time be reduced to
an amount less than the sum of the Borrowings, Letter of Credit Obligations, and the Acceptance
Exposure then outstanding.

          2.2 Revolving Credit Loans.

      (a) Amounts of Advances. Each Advance which is an Alternate Base Borrowing
shall be in an amount of $500,000.00 or a greater integral multiple of $100,000.00,
and each Advance which is a Eurodollar Borrowing shall be in an amount of
$1,000,000.00 or a greater integral multiple of $500,000.00. Subject to the terms
and conditions in this Agreement, but not later than 10:00 a.m., San Francisco,
California time, on the date specified, the Agent shall make available to Borrower,
at Agent’s offices in San Francisco, California, the amount of a requested Advance
under the Total Revolving Credit Commitment in immediately available funds.

      (b) Loans shall be made ratably by the Lenders in accordance with their
respective Revolving Credit Commitments set forth opposite their names on
Schedule 2.1 hereto; provided, however, that the failure of
any Lender to make any Advance shall not in itself relieve any other Lender of its
obligation to lend hereunder. All Advances shall be made by the Lenders against
delivery to each Lender of one (1) Revolving Credit Note, payable to the order of
such Lender, as referred to in Section 2.5 hereof.

      (c) Each Borrowing shall be either an Alternate Base Borrowing or a Eurodollar
Borrowing as the Borrower may request in accordance with the provisions of this
Agreement. Each Lender may fulfill its obligations under this Agreement by causing
its Applicable Lending Office to make such Borrowing.

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      (d) Each Lender shall make its Advance on the proposed dates thereof by paying
the amount required to the Agent at its principal office in Dallas, Texas in
immediately available funds not later than 10:00 a.m., San Francisco, California
time, and the Agent shall promptly credit the amounts so received to the general
deposit account of the Borrower with the Agent in immediately available funds or, if
Borrowings are not to be made on such date because any condition precedent to a
borrowing herein specified is not met, return the amounts so received to the
respective Lenders.

          2.3 Notice of Borrowing. Borrower may request an Advance under the Total Revolving Credit
Commitment by submitting to the Agent a Notice of Borrowing, which is irrevocable and binding on
the Borrower. Each Notice of Borrowing must be received by the Agent no later than 10 a.m. (San
Francisco, California time) on the third (3rd) Business Day before the date on which funds are
requested (the “Advance Date”) for any Advance that will be a Eurodollar Borrowing or no
later than 10 a.m. (San Francisco, California time) on the Business Day before the Advance Date for
any Advance that will be an Alternate Base Borrowing.

          2.4 Commitment Fees.

      (a) Commitment Fee. Borrower agrees to pay to each Lender a commitment fee
(the “Commitment Fee”) on the daily Unused Commitment. The Commitment Fee
shall be payable quarterly in arrears on the first day of January, April, July and
October during the term hereof, commencing on the first day of October, 2006, and
continuing regularly thereafter so long as the Revolving Credit Commitments are in
effect, and on the Termination Date. The Commitment Fee payable to each Lender
shall be in an amount equal to such Lender’s pro rata share of: (i) the average
daily Unused Commitment applicable to the Total Revolving Credit Commitment during
such quarter (or shorter period commencing on the Closing Date or ending with the
Termination Date), multiplied by (ii) the Applicable Commitment Fee
Percentage then in effect.

      (b) Generally. Borrower acknowledges that the Commitment Fees payable
hereunder are bona fide commitment fees and are intended as reasonable compensation
to the Lenders for committing to make funds available to the Borrower as described
herein and for no other purposes.

          2.5 Revolving Credit Note and Note Payments.

      (a) Revolving Credit Note. The Advances made under Section 2.1 by each
Lender shall be evidenced by the Revolving Credit Notes in substantially the
form of Exhibit A hereto, each of which shall be (i) executed by the
Borrower, (ii) dated the date hereof, (iii) in a principal amount equal to such
respective Lender’s Revolving Credit Commitment, and (iv) payable to the order of
such Lender.

      (b) Payments.

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      (i) Interest Payments. Accrued interest on each Eurodollar Borrowing
and on each Alternate Base Borrowing under the Revolving Credit Loan shall
be due and payable on the first day of each month commencing on the first
day of September, 2006, with a final scheduled interest payment on all such
Borrowings on the Termination Date.

      (ii) Principal Payments. The unpaid Principal Debt shall be due and
payable on the Termination Date.

      (iii) Optional Prepayments. The Borrower shall have the right, from
time to time, to prepay the unpaid Principal Debt, in whole or in part,
without premium or penalty (except for any Funding Loss), upon the payment
of accrued interest on the amount prepaid to and including the date of
payment; provided, however, that partial prepayments of the Principal Debt
shall be in an amount equal to at least $100,000.00 or a greater integral
multiple of (or, if less, the unpaid Principal Debt), and provided further
that the Agent receive notice of any prepayment of an Alternate Base
Borrowing at least one (1) Business Day before the date of such prepayment
and that the Agent receive notice of any prepayment of a Eurodollar
Borrowing at least three (3) Business Days before the date of such
prepayment.

          2.6 Mandatory Prepayments.

      (a) Within ten (10) days after the Borrower’s receipt thereof, the Borrower
shall prepay a portion of the Principal Debt equal to one hundred percent (100%) of
the net cash proceeds from any Asset Sale; provided, however, that
the Borrower shall have no obligation to make any such prepayment pursuant to this
Section 2.6(a) until the Borrower has received, with respect to any Fiscal
Year, aggregate net cash proceeds from Asset Sales in excess of one million dollars
($1,000,000) (the “Asset Sale Limit”). With respect to any particular Asset
Sale which causes the Borrower to exceed the Asset Sale Limit, the Borrower shall
prepay to the Lenders only the amount equal to (i) the net aggregate amount of net
cash proceeds received from all Asset Sales for the Fiscal Year in question after
giving effect to such Asset Sale minus (ii) the Asset Sale Limit.

      (b) Within ten (10) days after the Borrower’s receipt of cash proceeds from the
issuance by the Borrower or any of its Subsidiaries of Subordinated Debt or any of
the Borrower’s or any such Subsidiary’s equity securities (and regardless of whether
such equity securities are issued in a public or private sale),
the Borrower shall prepay a portion of the Principal Debt equal to one hundred
percent (100%) of the net cash proceeds from such Subordinated Debt or any such sale
of equity securities.

          2.7 Manner and Application of Payments.

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      (a) All payments and prepayments by the Borrower on account of principal,
interest, and fees hereunder shall be made in immediately available funds without
set-off, deduction or counterclaim. All such payments shall be made to the Agent at
its principal office in San Francisco, California, not later than 10 a.m., San
Francisco, California time, on the date due and funds received after that hour shall
be deemed to have been received by the Agent on the next following Business Day. If
any payment is scheduled to become due and payable on a day which is not a Business
Day, then such payment shall instead become due and payable on the immediately
following Business Day and interest on the principal portion of such payment shall
be payable at the then applicable rate during such extension. All payments made on
the Revolving Credit Loan shall be applied first to unpaid fees and expenses, then
to accrued interest and then to principal.

      (b) All principal, interest and any fees and expenses due to the Agent and the
Lenders by Borrower under this Agreement, the Notes, or any Note, may, at the sole
discretion of the Agent, be paid by the Agent having WFB debit any of Borrower’s
accounts with WFB and forwarding such amount debited to the Agent and/or the
Lenders, without presentment, protest, demand for reimbursement or payment, notice
of dishonor or any other notice whatsoever, all of which are hereby expressly waived
by Borrower. Such debit may be made at the time principal, interest or any fees and
expenses is due to the Agent and/or the Lenders pursuant to this Agreement, the
Notes, or any collateral document or any Note.

          2.8 Interest Options. Except where specifically otherwise provided, Borrowings under the
Revolving Credit Loan shall bear interest at an annual rate equal to the lesser of either (a) the
sum of (i) the Alternate Base Rate, or (ii) the Adjusted Eurodollar Rate (in each case as
designated by the Borrower in the Notice of Borrowing or deemed designated by Borrower), as the
case may be, plus (iii) the Applicable Margin, or (b) the Maximum Rate. Each change in the
Alternate Base Rate and the Maximum Rate is effective, without notice to the Borrower or any other
Person, upon the effective date of change.

          2.9 Quotation of Rates. A responsible officer of the Borrower may call the Agent before
delivering a Notice of Borrowing to receive an indication of the interest rates then in effect, but
the indicated rates do not bind the Agent or the Lenders or affect the interest rate that is
actually in effect when the Borrower delivers its Notice of Borrowing.

          2.10 Default Rate. If an Event of Default has occurred and is continuing, all Borrowings hereunder shall bear
interest on each day outstanding at the lesser of (a) the Contract Rate plus three percent (3.0%),
or (b) the Maximum Rate, or if there is no Maximum Rate in effect, then at the Contract Rate plus
three percent (3.0%) per annum.

          2.11 Interest Recapture. If the Contract Rate applicable to any Borrowing exceeds the Maximum
Rate, then the interest rate on that Borrowing is limited to the Maximum Rate, but any subsequent
reductions in the Contract Rate shall not reduce the interest rate thereon below the Maximum Rate
until the total amount of accrued interest equals the amount of interest that would have accrued if
Contract Rate had always been in effect. If at the due date (stated or

A&R Credit Agreement — Tandy Brands

19

 

by acceleration) the total
interest paid or accrued is less than the interest that would have accrued if the Contract Rate had
always been in effect, then, at that time and to the extent permitted by law, Borrower shall pay an
amount equal to the difference between (a) the lesser of the amount of interest that would have
accrued if the Contract Rate had always been in effect and the amount of interest that would have
accrued if the Maximum Rate had always been in effect, and (b) the amount of interest actually paid
or accrued on the Borrowings.

          2.12 Interest Calculations.

      (a) Interest on all Borrowings will be calculated on the basis of actual number
of days (including the first day but excluding the last day) elapsed but computed as
if each calendar year consisted of 360 days (unless the calculation would result in
an interest rate greater than the Maximum Rate, in which event interest will be
calculated on the basis of a year of 365 or 366 days, as the case may be). All
interest rate determinations and calculations by Lender are conclusive and binding
absent manifest error.

      (b) The provisions of this Agreement relating to calculation of the Alternate
Base Rate and the Eurodollar Rate are included only for the purpose of determining
the rate of interest or other amounts to be paid under the Agreement that are based
upon those rates. The Agent may fund and maintain its funding of all or any part of
each Borrowing as it selects.

          2.13 Selection of Interest Option. On making a Notice of Borrowing under Section 2.3,
the Borrower shall advise the Agent as to whether the Advance shall be (a) a Eurodollar Borrowing,
in which case the Borrower shall specify the applicable Interest Period therefor or (b) an
Alternate Base Borrowing. Notwithstanding anything to the contrary contained herein, no more than
seven (7) Interest Periods shall be in effect at any one time with respect to Eurodollar
Borrowings.

          2.14 Rollovers and Conversions. Subject to the dollar limits of Section 2.2, the
Borrower may (a) convert a Eurodollar Borrowing under the Revolving Credit Loan on the last day of
the applicable Interest Period to an Alternate Base Borrowing, (b) convert an Alternate Base
Borrowing under the Revolving
Credit Loan at any time to a Eurodollar Borrowing (subject to the Interest Period limitations
contained in Section 2.13), and (c) elect a new Interest Period for a Eurodollar Borrowing,
by giving a Notice of Borrowing to the Agent no later than 10 a.m. San Francisco, California time
on the third (3rd) Business Day before the conversion date or the last day of the Interest Period,
as the case may be (for conversion to a Eurodollar Borrowing or election of a new Interest Period),
and no later than 10 a.m. San Francisco, California time one (1) Business Day before the last day
of the Interest Period (for conversion to an Alternate Base Borrowing). Absent the Borrower’s
Notice of Borrowing, a Eurodollar Borrowing shall be deemed converted to an Alternate Base
Borrowing effective when the applicable Interest Period expires. During the existence and
continuation of an Event of Default hereunder, the Borrower may not make an election to convert an
Alternate Base Borrowing to a Eurodollar Borrowing, or continue a Eurodollar Borrowing as such by
electing a new Interest Period.

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          2.15 Booking Borrowings. To the extent permitted by law, any Lender may make, carry, or
transfer its Borrowings at, to, or for the account of any of its branch offices or the office of
any of its Affiliates. However, no Affiliate is entitled to receive any greater payment under
Section 2.16 than such Lender would have been entitled to receive with respect to those
Borrowings. Each Lender agrees that it will use its reasonable efforts (consistent with its
internal policies and applicable law) to make, carry, maintain, or transfer its Borrowings with its
Affiliates or branch offices in an effort to eliminate or reduce to the extent possible the
aggregate amounts due to it under Sections 2.16 if, in its reasonable judgment, such
efforts will not be disadvantageous to it.

          2.16 Special Provisions for Eurodollar Borrowings.

      (a) Basis Unavailable or Inadequacy of Eurodollar Loan Pricing. If with respect
to an Interest Period for any Eurodollar Borrowing, (a) any Lender determines that,
by reason of circumstances affecting the interbank Eurodollar market generally,
deposits in Dollars (in the applicable amounts) are not being offered to or by such
Lender in the interbank Eurodollar market for such Interest Period, or (b) any
Lender determines that the Eurodollar Rate as determined by such Lender will not
adequately and fairly reflect the cost to such Lender of maintaining or funding the
Eurodollar Borrowing for such Interest Period, then the Agent shall forthwith give
notice thereof to Borrower, whereupon until the Agent notifies the Borrower that the
circumstances giving rise to such suspension no longer exist, (i) the obligation of
the Lenders to make Eurodollar Borrowings shall be suspended and (ii) the Borrower
shall either (A) repay in full the then-outstanding principal amount of the
Eurodollar Borrowings, together with accrued interest thereon by the last day of the
then current Interest Period applicable to such Eurodollar Borrowings, or (B)
convert such Eurodollar Borrowings to Alternate Base Borrowings on the last day of
the then current Interest Period applicable to each such Eurodollar Borrowing.

      (b) Illegality. If, after the date of this Agreement, the adoption of any
applicable law, rule, or regulation, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank, or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender with any request or directive (whether or not
having the force of law) of any such authority, central bank, or comparable agency,
shall make it unlawful or impossible for such Lender to make, maintain or fund
Eurodollar Borrowings, then the Agent shall so notify the Borrower. Before giving
any notice pursuant to this Section, such Lender shall designate a different
Eurodollar Lending Office if such designation will avoid the need for giving such
notice and will not be otherwise disadvantageous to such Lender (as determined in
good faith by such Lender). Upon receipt of such notice, the Borrower shall either
(i) repay in full the then outstanding principal amount of all Eurodollar
Borrowings, together with accrued interest thereon, or (ii) convert each Eurodollar
Borrowing to an Alternate Base Borrowing, on either (A) the last day of the
then-current Interest Period applicable to such Eurodollar Borrowing if such Lender
may lawfully continue to maintain and fund such Eurodollar

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Borrowing to such day or
(B) immediately if such Lender may not lawfully continue to fund and maintain such
Eurodollar Borrowing to such day, provided that the Borrower shall be liable for any
Funding Loss arising pursuant to such conversion.

      (c) Increased Costs for Eurodollar Borrowings. If any Governmental Authority,
central bank, or other comparable authority, shall at any time impose, modify, or
deem applicable any reserve (including, without limitation, any imposed by the Board
of Governors of the Federal Reserve System but excluding any reserve requirement
included in the Eurodollar Reserve Requirement), special deposit, or similar
requirement against assets of, deposits with, or for the account of, or credit
extended by any Lender, or shall impose on any Lender (or its Eurodollar Lending
Office) or the interbank Eurodollar market any other condition affecting its
Eurodollar Borrowings, the Note issued to such Lender, or its obligations to make
Eurodollar Borrowings; and the result of any of the foregoing is to increase the
cost to such Lender of making or maintaining Eurodollar Borrowings, or to reduce the
amount of any sum received or receivable by such Lender under this Agreement, or
under the Note issued to such Lender, by an amount deemed by such Lender to be
material, then, within five (5) Business Days’ after demand by such Lender, the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such increased cost or reduction. Such Lender will
promptly notify Borrower of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Lender to compensation pursuant to this
Section. No failure by any Lender to immediately demand payment of any additional
amounts payable hereunder shall constitute a waiver of such Lender’s right to demand
payment of such amounts at any subsequent time. A certificate of a Lender claiming
compensation under this Section and setting forth the additional amount or amounts
to be paid to it hereunder, together with a description in reasonable detail of the
manner in which such amounts have been calculated, shall be conclusive in the
absence of manifest error. If any Lender demands compensation under this Section,
then the Borrower may at any time, upon at least five (5) Business Days’ prior
notice to the Agent, either (i) repay in full the then outstanding principal
amount of all Eurodollar Borrowings, together with accrued interest thereon, or
(ii) convert such Eurodollar Borrowings to Alternate Base Borrowings in accordance
with the provisions of this Agreement; provided, however, that the
Borrower shall be liable for any Funding Loss arising pursuant to such actions.

      (d) Effect on Subsequent Borrowings. If notice has been given pursuant to
Section 2.16(a) or Section 2.16(b) requiring that Eurodollar
Borrowings to be repaid or converted, then unless and until the Agent notifies the
Borrower that the circumstances giving rise to such repayment no longer apply, all
subsequent Borrowings shall be Alternate Base Borrowings. If the Agent notifies the
Borrower that the circumstances giving rise to such repayment no longer apply, then
the Borrower may thereafter select Borrowings to be Eurodollar Borrowings in
accordance with Section 2.13 and Section 2.14.

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      (e) Funding Losses. Borrower shall indemnify the Agent and the Lenders against
any loss or reasonable expense (such loss or expense is referred to herein as a
“Funding Loss” such term including, but not limited to, any loss or
reasonable expense sustained or incurred or to be sustained or incurred in
liquidating or redeploying deposits from third parties acquired to effect or
maintain such Borrowing or any part thereof as a Eurodollar Borrowing) which Lender
may sustain or incur as a consequence of (i) any failure by Borrower to fulfill on
the date of any Borrowing hereunder the applicable conditions set forth in
Section 7, (ii) any failure by Borrower to borrow hereunder or to convert
Borrowings hereunder after a Notice of Borrowing has been given, (iii) any payment,
prepayment, or conversion of a Eurodollar Borrowing required or permitted by any
other provisions of this Agreement, including, without limitation, payments made due
to the acceleration of the maturity of the Borrowings pursuant to Section
11.2, or otherwise made on a date other than the last day of the applicable
Interest Period, (iv) any default in the payment or prepayment of the principal
amount of any Borrowing or any part thereof or interest accrued thereon, as and when
due and payable (at the due date thereof, by notice of prepayment or otherwise), or
(v) the occurrence of an Event of Default. The term “Funding Loss” includes,
without limitation, an amount equal to the excess, if any, as determined by such
Lender of (A) its cost of obtaining the funds for the Borrowing being paid, prepaid
or converted or not borrowed or converted (based on the Adjusted Eurodollar Rate
applicable thereto) for the period from the date of such payment, prepayment or
conversion or failure to borrow or convert to the last day of the Interest Period
for such Borrowing (or, in the case of a failure to borrow or convert, the Interest
Period for the Borrowing which would have commenced on the date of such failure to
borrow or convert) over (B) the amount of interest (as estimated by such Lender)
that would be realized by such Lender in reemploying the funds so paid, prepaid or
converted or not borrowed or converted for such period or Interest Period, as the
case may be. A certificate of Lender setting forth any amount or amounts which such
Lender is entitled to receive pursuant to this Section 2.16(e), together
with a description in reasonable detail of the manner in which such amounts have
been calculated, shall be delivered to Borrower and shall be conclusive, absent
manifest error. Borrower shall pay to
such Lender the amount shown as due on any certificate within five (5) Business
Days after its receipt of the same. Notwithstanding the foregoing, in no event shall
Lender be permitted to receive any compensation hereunder constituting interest in
excess of the Maximum Rate. Without prejudice to the survival of any other
obligations of Borrower hereunder, the obligations of Borrower under this
Section 2.16(e) shall survive the termination of this Agreement and/or the
payment of the Notes.

          2.17 Capital Adequacy. If, after the date hereof, the Agent or any Lender shall have
determined that either (a) the adoption of any applicable law, rule, regulation, or guideline
regarding capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank, or comparable agency charged
with, the interpretation or administration thereof, or (b) compliance by the Agent or such Lender
(or any lending office of such Lender) with any request or directive regarding capital

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adequacy
(whether or not having the force of law) of any such authority, central bank, or comparable agency,
has or would have the effect of reducing the rate of return on such Lender’s capital as a
consequence of its or Borrower’s obligations hereunder to a level below that which such Lender
could have achieved but for such adoption, change, or compliance (taking into consideration such
Lender’s policies with respect to capital adequacy) by an amount deemed by such Lender to be
material, then from time to time, within fifteen (15) days after demand by Lender, Borrower shall
pay to such Lender such additional amount or amounts as will adequately compensate such Lender for
such reduction. Such Lender or the Agent will promptly notify Borrower of any event of which it
has actual knowledge, occurring after the date thereof, which will entitle such Lender to
compensation pursuant to this Section 2.17. A certificate of such Lender claiming
compensation under this Section 2.17 and setting forth the additional amount or amounts to
be paid to it hereunder, together with the description of the manner in which such amounts have
been calculated, shall be conclusive in the absence of manifest error. In determining such amount,
such Lender may use any reasonable averaging and attribution methods.

          2.18 Taxes.

      (a) Any and all payments by Borrower hereunder or under the Notes shall be made
free and clear of and without deduction for any and all present or fixture taxes,
levies, imposts, deductions, charges, or withholdings, and all liabilities with
respect thereto (hereinafter referred to as “Taxes”, excluding taxes imposed
on any Lender’s income, and franchise taxes imposed on any Lender, by the
jurisdiction under the laws of which any Lender is organized or is or should be
qualified to do business or any political subdivision thereof and, taxes imposed on
any Lender’s income, and franchise taxes imposed on any Lender by the jurisdiction
of such Lender’s lending office or any political subdivision thereof.) If the
Borrower shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder or under the Notes to any Lender, then (i) the sum payable to such
Lender shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under this
Section 2.18), such Lender receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions, and (iii) the Borrower shall pay the full
amount deducted by the relevant taxation authority or other authority in accordance
with applicable law

      (b) In addition, the Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar levies
which arise from any payment made hereunder or under the Loan Documents or from the
execution, delivery, or registration of, or otherwise with respect to, this
Agreement or the other Loan Documents (hereinafter referred to as “Other
Taxes”).

      (c) The Borrower will indemnify the Agent and any Lender for the full amount of
Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section

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2.18) paid
by the Agent or any such Lender or any liability (including penalties and interest)
arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted. This indemnification shall be made within five
(5) Business Days from the date the Agent or any such Lender makes written demand
therefor.

      (d) Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in this
Section 2.18 shall survive the payment in full of principal and interest
hereunder and under the other Loan Documents.

     2.19 Increases in Total Revolving Credit Commitment. The Borrower may request increases in
the Total Revolving Credit Commitment as follows:

      (a) Provided there exists no Event of Default and subject to the conditions set
forth under clause (e) below, upon thirty (30) Business Days notice to the Agent
(which shall promptly notify the Lenders), the Borrower may, from time to time,
request increases in the Total Revolving Credit Commitment in an amount not to
exceed $25,000,000 in the aggregate; provided, that each increase of the Total
Revolving Credit Commitment shall be in a minimum amount of $5,000,000, or integral
multiples of $1,000,000 in excess thereof. At the time of sending such notice, the
Borrower (in consultation with the Agent) shall specify the time period within which
each Lender is requested to respond (which shall in no event be less than ten (10)
Business Days from the date of delivery of such notice to the Lenders).

      (b) Each Lender shall notify the Agent within such time period whether or not
it agrees to increase its Revolving Credit Commitment and, if so, whether by an
amount equal to, greater than, or less than its percentage share of
such requested increase. Any Lender not responding within such time period
shall be deemed to have declined to increase its Revolving Credit Commitment.

      (c) The Agent shall notify the Borrower and each Lender of the Lenders’
responses to the request made hereunder. To achieve the full amount of a requested
increase and subject to the approval of the Agent (which approval shall not be
unreasonably withheld), the Borrower may also invite additional lenders to become
Lenders pursuant to a joinder agreement in form and substance satisfactory to the
Agent and its counsel.

      (d) If the Total Revolving Credit Commitment is increased in accordance with
this subsection, the Agent and the Borrower shall determine the effective date (such
date, the “Increase Effective Date”) and the final allocation of such
increase. The Agent shall promptly notify the Borrower and the Lenders of the final
allocation of such increase in the Total Revolving Credit Commitment and the
Increase Effective Date.

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      (e) As conditions precedent to such increase, (i) the Borrower shall deliver to
the Agent a certificate dated as of the Increase Effective Date signed by an Officer
of the Borrower (y) certifying that each of the conditions set forth in Section
7.2 (a), (b), and (d) have been satisfied by the Borrower, and
(z) certifying and attaching the resolutions adopted by the Borrower and (ii) the
Borrower shall have paid all fees and expenses due and owing to the Agent and the
Lenders. To the extent necessary to keep the outstanding Revolving Credit Loans
ratable with any revised percentage shares of the Lenders arising from any
non-ratable increase in the Total Revolving Credit Commitment under this subsection,
the Borrower shall prepay Revolving Credit Loans outstanding on the Increase
Effective Date and/or Lenders shall make assignments pursuant to arrangements
satisfactory to the Agent.

SECTION 3

SWINGLINE ADVANCES

     3.1 Swingline Advances. Subject to the terms and conditions of this Agreement, the Swingline
Lender agrees to make, from time to time, Swingline Advances to the Borrower from the Closing Date
to the Termination Date, in an aggregate principal amount at any time outstanding not to exceed ten
million dollars ($10,000,000). In addition to the other terms and conditions of this Agreement,
such Swingline Advances shall be subject to the following conditions: (i) At any time when the
Swingline Lender has made Swingline Advances to the Borrower, such outstanding Swingline Advances
shall be included in calculating the amounts outstanding under the Swingline Lender’s Revolving
Credit Commitment; (ii) the obligation of the Borrower to repay the Swingline Advances shall be
evidenced by a Swingline Note prepared by the Borrower, duly executed on behalf of the Borrower,
dated even date herewith, substantially in the form of Exhibit F hereto, delivered by the
Borrower and payable to the Swingline Lender in a principal amount equal of $10,000,000; (iii)
subject to the provisions of Section 13.8 hereof, each Swingline Advance shall
bear interest at a rate per annum equal to the Alternate Base Rate then in effect, which
interest shall be payable on the first day of each month a Swingline Advance is outstanding; (iv)
Swingline Advances shall be considered Alternate Base Borrowings for purposes of Section
2.2(a) hereof; (v) the Borrower shall request a Swingline Advance by submitting a Notice of
Borrowing, which is irrevocable and binding on the Borrower, and which must be received by the
Swingline Lender no later than 10:00 a.m. (San Francisco, California time) on the Business Day on
which funds are requested; (vi) any Swingline Advances made to the Borrower must be repaid in full
to the Swingline Lender within ten (10) Business Days after the date such Swingline Advance is
made; (vii) Swingline Advances shall not be made if such Swingline Advances would cause the unpaid
amount of the Advances, including all Swingline Advances outstanding, together with Letter of
Credit Obligations and the Acceptance Exposure, to exceed the Total Revolving Credit Commitment;
and (viii) any payments made by the Borrower to the Agent during a period when a Swingline Advance
is outstanding shall be applied first to the unpaid interest on such Swingline Advance, secondly to
the unpaid principal of such Swingline Advance, and thereafter in accordance with the terms of this
Agreement. Swingline Advances shall reduce the available amount of the Total Revolving Credit
Commitment, as provided in Section 2.1, but shall not be taken into account as an Advance
in calculating the Unused Commitment for purposes of assessing the Commitment Fee under Section
2.4.

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SECTION 4

LETTERS OF CREDIT

     4.1 Letters of Credit.

      (a) Subject to and upon the terms and conditions herein set forth, the Issuing
Bank agrees that it will at any time and from time to time on or after the Closing
Date and prior to the Termination Date, following its receipt of a Letter of Credit
Request and Application for Letter of Credit, issue for the account of the Borrower
and in support of the obligations of the Borrower or any of its Subsidiaries, one or
more Commercial Letters of Credit and Standby Letters of Credit (collectively, the
“Letters of Credit”), up to a maximum amount outstanding at any one time for
all Letters of Credit of $20,000,000, provided that the Issuing Bank shall not issue
any Letter of Credit if at the time of such issuance: (i) Letter of Credit
Obligations (including such Letter of Credit) shall be greater than an amount which,
when added to all Advances then outstanding and the Acceptance Exposure, would
exceed the Total Revolving Credit Commitment or (ii) the expiry date or, in the case
of any Letter of Credit containing an expiration date that is extendible at the
option of the Issuing Bank, the initial expiry date, of such Letter of Credit is a
date that is later than the Termination Date. In addition to the restrictions
described above, the following shall apply:

      (i) For each Commercial Letter of Credit issued on behalf of the
Borrower:

         (A) the expiry date shall not be longer than one hundred
eighty (180) days from the date of issuance;

         (B) at the time of issuance, the Borrower shall pay to the Agent
for the benefit of the Lenders an issuance fee equal to the greater
of (x) 0.125% of the amount of the Commercial Letter of Credit
issued, or (y) $150; and

         (C) within ten (10) days of issuance, the Borrower shall pay to
the Issuing Bank, such other fronting, amendment, transfer,
negotiation and other fees as determined in accordance with the
Issuing Bank’s then current fee policy regarding Commercial Letters
of Credit;

      (ii) For each Standby Letter of Credit issued on behalf of the
Borrower:

         (D) the expiry date shall not be longer than one (1) year
from the date of issuance;

         (E)
the Borrower shall pay to the Agent for the
benefit of the Lenders a quarterly letter of credit fee equal to (x)
the average daily undrawn amount of such Standby Letter of Credit
during such quarter (or shorter period commencing on the Closing Date
or ending with the Termination Date), multiplied by (y) the

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Applicable Margin per annum for Eurodollar Borrowings, which fees
shall be payable quarterly in arrears on the first day of January,
April, July and October during the term hereof, commencing on the
Closing Date, and continuing regularly thereafter so long as the
Revolving Credit Commitments are in effect, and on the Termination
Date; and

         (F) within ten (10) days of issuance, the Borrower shall pay to
the Issuing Bank such other fronting, amendment, transfer,
negotiation and other fees as determined in accordance with the
Issuing Bank’s then current fee policy regarding Standby Letters of
Credit;

     (b) The Issuing Bank shall neither renew or extend nor permit the renewal or extension
of any Letter of Credit if any of the conditions precedent to such renewal set forth in
Section 7.2 are not satisfied or waived or, after giving effect to such renewal, the
expiry date of such Letter of Credit would be a date that is later than the Termination
Date.

     4.2 Letter of Credit Requests.

      (a) Whenever the Borrower desires that a Letter of Credit be issued for its
account or that the existing expiration date shall be extended, it shall give the
Issuing Bank (and the Issuing Bank shall send copies to the Agent and each other
Lender) (i) in the case of a Letter of Credit to be issued, at least three (3)
Business Days’ prior written request therefor and (ii) in the case of the extension
of the existing expiry date of any Letter of Credit, at least three (3) Business
Days prior
to the date on which the Issuing Bank must notify the beneficiary thereof that
the Issuing Bank does not intend to extend such existing expiry date. Each such
request shall be executed by the Borrower and shall be in the form of Exhibit
G attached hereto (each a “Letter of Credit Request”) and shall be
accompanied by an Application for Letter of Credit therefor, completed to the
satisfaction of the Issuing Bank, and such other certificates, documents and other
papers and information as the Issuing Bank or the Agent may reasonably request.
Each Letter of Credit shall be denominated in U.S. dollars, shall expire no later
than the date specified in Section 4.1, shall not be in an amount greater
than is permitted under Section 4.1(a) and shall be in such form as may be
reasonably approved from time to time by the Issuing Bank and the Borrower.

      (b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower that such Letter of Credit may be issued
in accordance with, and will not violate the requirements of, this Agreement.
Unless the Issuing Bank has determined that or has received notice from any Lender
before it issues the respective Letter of Credit or extends the existing expiry date
of a Letter of Credit that one or more of the conditions specified in Section
7 are not then satisfied, or that the issuance of such Letter of Credit would
violate this Agreement, then the Issuing Bank shall issue the

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requested Letter of
Credit for the account of the Borrower in accordance with the Issuing Bank’s usual
and customary practices. Upon its issuance of any Letter of Credit or the extension
of the existing expiry date of any Letter of Credit, as the case may be, the Issuing
Bank shall promptly notify the Borrower and the Agent and the Agent shall notify
each Lender of such issuance or extension, which notices shall be accompanied by a
copy of the Letter of Credit actually issued or a copy of any amendment extending
the existing expiry date of any Letter of Credit, as the case may be.

     4.3 Letter of Credit Participations.

      (a) All Letters of Credit issued subsequent hereto shall be deemed to have been
sold and transferred by the Issuing Bank to each Lender, and each Lender shall be
deemed irrevocably and unconditionally to have purchased and received from the
Issuing Bank, without recourse or warranty, an undivided interest and participation,
(to the extent of such Lender’s percentage participation in the Revolving Credit
Commitments) in each such Letter of Credit (including extensions of the expiry date
thereof), each substitute Letter of Credit, each drawing made thereunder and the
obligations of the Borrower under this Agreement and the other Loan Documents with
respect thereto, and any security therefor or guaranty pertaining thereto.

      (b) In determining whether to pay under any Letter of Credit, the Issuing Bank
shall have no obligation relative to the Lenders other than to confirm that any
documents required to be delivered under such Letter of Credit appear to have been
delivered and that they appear to comply on their face with the requirements of such
Letter of Credit.

      (c) In the event that the Issuing Bank makes any payment under any Letter of
Credit, the same shall be considered an Alternate Base Borrowing without further
action by any Person. The Issuing Bank shall promptly notify the Agent, which shall
promptly notify each Lender and the Borrower thereof. Each Lender shall immediately
pay to the Agent for the account of the Issuing Bank the amount of such Lender’s
percentage participation of such Advance. If any Lender shall not have so made its
percentage participation available to the Agent, such Lender agrees to pay interest
thereon, for each day from such date until the date such amount is paid at the
lesser of (i) the Federal Funds Effective Rate and (ii) the Maximum Rate.

      (d) The Issuing Bank shall not be liable for, and the obligations of the
Borrower and the Lenders to make payments to the Agent for the account of the
Issuing Bank with respect to Letters of Credit shall not be subject to, any
qualification or exception whatsoever, including any of the following circumstances:

      (i) any lack of validity or enforceability of this Agreement or any of
the other Loan Documents;

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      (ii) the existence of any claim, setoff, defense or other right which
the Borrower may have at any time against a beneficiary named in a Letter of
Credit, any transferee of any Letter of Credit, the Agent, any Issuing Bank,
any Lender, or any other Person, whether in connection with this Agreement,
any Letter of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the Borrower and
the beneficiary named in any such Letter of Credit);

      (iii) any draft, certificate or any other document presented under the
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;

      (iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents; or

      (v) the occurrence of any Event of Default.

      (e) The Issuing Bank shall not be liable for any error, omission, interruption
or delay in transmission, dispatch or delivery of any message or advice, however
transmitted in connection with any Letter of Credit, except for errors or omissions
caused by such Issuing Bank’s gross negligence or willful misconduct. It is the
express intention of the parties hereto that such Issuing Bank, its officers,
directors, employees and agents (other than with respect to any claims by the
Issuing Bank against any such officer, director, employee
or agent thereof) shall be indemnified and held harmless from, subject to the
same type of protections set forth in Section 9.12, any action taken or
omitted by such Person under or in connection with any Letter of Credit or any
related draft or document arising out of or resulting from such Person’s sole or
contributory negligence, but not from the gross negligence or willful misconduct of
such Person. The Borrower agrees that any action taken or omitted by the Issuing
Bank under or in connection with any Letter of Credit or the related drafts or
documents, if done in accordance with the standards of care specified in the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International Chamber
of Commerce, Publication No. 500 (and any subsequent revisions thereof approved by a
Congress of the International Chamber of Commerce and adhered to by the Issuing
Bank) and, to the extent not inconsistent therewith, the Uniform Commercial Code of
the State of Texas, shall not result in any liability of the Issuing Bank to the
Borrower.

     4.4 Increased Costs.

      (a) Notwithstanding any other provision herein, but subject to Section
13.8, if any Lender (including for purposes of this Section 4.4 the Issuing
Bank) shall have determined in good faith that any change after the Closing Date of
any

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law, rule, regulation or guideline or the application or effectiveness of any
applicable law or regulation or any change after the Closing Date in the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) with any applicable guideline or request from any
central bank or governmental authority (whether or not having the force of law)
issued after the Closing Date either (i) shall impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against Letters of Credit
issued, or participated in, by any Lender or (ii) shall impose on any Lender any
other conditions affecting this Agreement or any Letter of Credit; and the result of
any of the foregoing is to increase the cost to any Lender of issuing, maintaining
or participating in any Letter of Credit, or reduce the amount received or
receivable by any Lender hereunder with respect to Letters of Credit, by an amount
deemed by such Lender to be material, then, from time to time, the Borrower shall
pay to the Agent for the account of such Lender such additional amount or amounts as
will reasonably compensate such Lender for such increased cost or reduction by such
Lender.

      (b) Each Lender will notify the Borrower through the Agent of any event
occurring after the date of this Agreement which will entitle such Lender to
compensation pursuant to subsection (a) above, as promptly as practicable. A
certificate of such Lender (i) stating that the compensation sought to be recovered
pursuant to this Section 4.4 is generally being charged to other similarly
situated customers and (ii) setting forth in reasonable detail such amount or
amounts as shall be necessary to compensate such Lender as specified in subsection
(a) above may be delivered to the Borrower (with a copy to the Agent) and shall be
conclusive absent manifest error. The Borrower shall pay to the Agent for the
account of such Lender the amount shown as due on any such certificate upon
demand; provided that with respect to events occurring prior to any notice
given under this Section 4.4(b), such Lender shall only be entitled to
recover compensation for such events occurring over a period of 120 days.

      (c) Except as expressly provided in Section 4.4(b), failure on the part
of any Lender to demand compensation for any increased costs or reduction in amounts
received or receivable or reduction in return on capital with respect to any Letter
of Credit shall not constitute a waiver of such Lender’s rights to demand
compensation for any increased costs or reduction in amounts received or receivable
or reduction in return on capital with respect to such Letter of Credit.

     4.5 Conflict Between Applications and Agreement. To the extent that any provision of any
application related to any Letter of Credit is inconsistent with the provisions of this Agreement,
the provisions of this Agreement shall control.

SECTION 5

BANKERS ACCEPTANCES

     5.1 Bankers Acceptances.

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      (a) The Accepting Banks agree, on the terms and conditions of this Agreement,
to accept and, immediately thereafter, purchase Bankers Acceptances from the
Borrower from and after the Closing Date in an aggregate amount at any one time
outstanding up to, but not exceeding $20,000,000; provided, that the sum of:
(i) the Acceptance Exposure at any one time outstanding, (ii) the outstanding
Advances (including Swingline Advances), and (iii) the Letter of Credit Obligations
at such time shall not exceed the Total Revolving Credit Commitment.

      (b) The purchase price of each Bankers Acceptance presented to the Accepting
Bank for acceptance and purchase will be the face amount of the Bankers Acceptance
less (i) a discount calculated at the Discount Rate, less (ii) an acceptance
commission equal to the Applicable Margin for Eurodollar Borrowings prevailing at
the time the Request for Acceptance and Purchase is received by the Agent
minus 0.125%, less (iii) an administrative fee equal to 0.05% of the face
amount of the Bankers Acceptance.

      (c) To be eligible for acceptance and purchase hereunder, a Bankers’ Acceptance
must meet the following requirements:

      (i) the face amount must be at least $1,000,000 and may not exceed
$5,000,000;

      (ii) The maturity must be 30, 60, 90 or 180 days, and such maturity may
not exceed the Termination Date; and

      (iii) Any additional requirement reasonably imposed by the Accepting
Bank and notified to the Borrower.

     5.2 Procedures for Purchase of Bankers Acceptances. In order to request acceptance and
purchase of a Bankers Acceptance, the Borrower shall give the Accepting Bank a Request for
Acceptance and Purchase (“Request”) not later than 10 a.m. (San Francisco, California time) one (1)
Business Day prior thereto of each request, which Request shall specify (i) the aggregate amount of
Bankers Acceptances to be accepted and purchased by the Accepting Bank, (ii) the maturity of the
Bankers Acceptance, and (iii) the proposed Acceptance Date. Promptly following the receipt of such
Request the Accepting Banks will notify the Borrower of the Discount Rate for the specified
Acceptance Date. The Accepting Banks may at any time and from time to time hold, sell, rediscount
or otherwise dispose of any or all Bankers Acceptances purchased by it.

     5.3 Replacement/Renewal/Conversion of Bankers Acceptances. Subject to the terms of this
Agreement, the Borrower may elect to cause a replacement Bankers Acceptance to be issued, accepted
and purchased to replace all or any part of any Bankers Acceptance at the maturity thereof by
giving a notice of such election to be received by the Accepting Banks not later than 10 a.m. San
Francisco, California time one (1) Business Day prior thereto, specifying the amount of such new
Bankers Acceptance and the maturity date thereof. In the absence of such a timely and proper
election for renewal, if the Borrower does not make payment to the

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Accepting Banks on maturity as
provided in Section 5.4, the Borrower shall be deemed to have elected to convert such
Bankers Acceptance to an Alternate Base Borrowing. All or any part of any Bankers Acceptance may
be renewed as provided herein, provided that (i) any renewal Bankers Acceptance shall meet all
requirements for Bankers Acceptances hereunder, (ii) no Event of Default shall have occurred and be
continuing and (iii) the Borrower shall have paid to the Accepting Banks an amount equal to the
difference, if any, between the amount due on the maturing Bankers Acceptance and the face amount
of the new Bankers’ Acceptance. If an Event of Default shall have occurred and be continuing, each
Bankers Acceptance shall be paid by Borrower at maturity as provided in Section 5.4 and may
not be renewed or converted into an Alternate Base Borrowing.

     5.4 Payment of Bankers Acceptances. Bankers Acceptances shall be payable in accordance with
the following provisions:

      (a) If the Borrower elects not to renew a Bankers Acceptance on maturity as
provided in Section 5.3 or to convert such Bankers Acceptance to an
Alternate Base Borrowing pursuant to Section 5.4(b), the Borrower shall pay
the face amount of the Bankers Acceptance to the Accepting Banks on maturity.

      (b) In the event the Borrower fails to notify the Accepting Banks in writing,
not later than 10 a.m. San Francisco, California time, one (1) Business Day prior to
any maturity date of a Bankers Acceptance, that the Borrower intends to pay with its
own funds the amount of the Bankers Acceptances due on such maturity date, the
Borrower shall be deemed, for all purposes, to have given
the Accepting Banks notice to convert the amount of such Bankers Acceptances
into an Alternate Base Borrowing, except that:

      (i) such maturity date shall be considered to be the borrowing date of
such Alternate Base Borrowing; and

      (ii) the proceeds of such Alternate Base Borrowing shall be used to pay
the amount of the Bankers Acceptance due on such maturity date.

     5.5 Acceptance Exposure. In the event of the occurrence of any Event of Default, the
Accepting Banks may notify the Borrower that an amount equal to the Acceptance Exposure is deemed
to be forthwith due and owing by the Borrower to the Accepting Banks as of the date of any such
occurrence; and upon receipt of such notice the Borrower’s obligation to pay such amount shall be
absolute and unconditional, without regard to maturity dates of the outstanding Bankers
Acceptances, and, to the fullest extent permitted by applicable law, shall not be subject to any
defense or be affected by a right of set-off, counterclaim or recoupment which the Borrower may now
or hereafter have against the Accepting Banks or the Lenders or any other Person for any reason
whatsoever. Payments received by the Accepting Banks shall be held by the Accepting Banks as cash
collateral securing the Acceptance Exposure in an account or accounts at the Accepting Banks’
principal office in San Francisco, California ; and the Borrower hereby, and by its deposit with
the Accepting Banks, grants to the Accepting Banks a security interest in such cash collateral.
In the event of any payments hereunder by the Borrower

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of amounts owing under any Bankers
Acceptances, the Accepting Banks agree, if the Event of Default has been cured or waived or if no
other amounts are then due and payable under this Agreement, the Notes or any other Loan Document,
to remit to the Borrower amounts held hereunder as cash collateral.

     5.6 Miscellaneous Bankers Acceptance Provisions.

      (a) The Borrower waives presentment for payment and, except to the extent of
the gross negligence or willful misconduct of the Accepting Banks, any other defense
to payment of any amounts due to the Accepting Banks in respect of a Bankers
Acceptance accepted and purchased by it pursuant to this Agreement which might exist
solely by reason of such Bankers Acceptance being held, at the maturity thereof, by
the Accepting Banks in its own right and the Borrower agrees not to claim any days
of grace if the Accepting Banks as holder sues the Borrower on the Bankers
Acceptance for payment of the amount payable by the Borrower thereunder. On the
specified maturity date of a Bankers Acceptance, or such earlier date as may be
required or permitted pursuant to the provisions of this Agreement, the Borrower
shall pay the Agent the full face amount of such Bankers Acceptance.

      (b) The Borrower shall pay on demand to the Accepting Banks at the face amount
of any Bankers Acceptance presented to the Accepting Banks for payment and paid by
the Accepting Banks that has been unlawfully issued or used
or put into circulation fraudulently or without authority, and shall indemnify
the Accepting Banks against any loss, cost, damage, expense or claim regardless of
by whomsoever made that the Accepting Banks may suffer or incur by reason of any
fraudulent, unauthorized or unlawful issue or use of any such Bankers Acceptance,
other than as is caused by the gross negligence or willful act or omission of the
Accepting Banks or any of its officers, employees, agents or representatives failing
to use the same standard of care in the custody of such Bankers Acceptance as it
uses in the custody of its own property of a similar nature.

SECTION 6

GUARANTEES

     6.1 Guarantees. Payment of the Borrower’s Obligations shall be guaranteed by each of the
Guarantors pursuant to the Subsidiary Guaranty to be executed by each Guarantor and delivered to
the Agent pursuant to Section 7.1.

SECTION 7

CONDITIONS PRECEDENT

     7.1 Effectiveness of Agreement. The effectiveness of this Agreement and the Agent and
Lenders’ obligations hereunder are subject to the conditions precedent that:

      (a) the Agent and the Lenders shall have received duly executed copies of each
of the documents listed on Exhibit C, each dated as of the date of

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the initial Advance, and each in form and substance reasonably satisfactory to the
Agent;

      (b) the Agent and the Lenders shall have performed a due diligence examination
reasonably satisfactory in all respects to the Agent and the Lenders;

      (c) no Material Adverse Change shall have occurred prior to the Closing Date;

      (d) Borrower shall have paid to the Agent and the Lenders (i) all fees to be
received by the Agent and the Lenders pursuant to this Agreement or any other Loan
Document and (ii) an amount disclosed to the Borrower prior to the Closing Date,
approved by the Borrower, and equal to the estimated costs and out-of-pocket
expenses of the Agent’s counsel incurred in connection with the preparation,
execution, and delivery of the Loan Documents and the consummation of the
transactions contemplated thereby; and

      (e) all other matters and conditions relating to the Borrower and the
transactions contemplated hereby shall be reasonably satisfactory to the Agent and
the Lenders.

     7.2 All Advances. The obligations of the Lenders to make any Advance, the Issuing Bank to
issue any Letter of Credit or the Agent to accept and purchase Bankers Acceptances under this
Agreement (including the initial Advance under the Revolving Credit Loan) shall be subject to the
conditions precedent that as of the date of such Advance, Letter of Credit or acceptance of a
Bankers Acceptance and after giving effect thereto:

      (a) there exists no Potential Default or Event of Default;

      (b) no Material Adverse Change has occurred since the date of the financial
statements referenced in Section 8.6;

      (c) the Agent shall have received from Borrower a Notice of Borrowing or a
request for the issuance of a Letter of Credit or acceptance of a Bankers Acceptance
dated as of the date of such Advance, Letter of Credit or acceptance, and all of the
statements contained in such Notice of Borrowing or request for the issuance of a
Letter of Credit or acceptance of a Bankers Acceptance shall be true and correct;
and

      (d) the representations and warranties contained in each of the Loan Documents
shall be true in all material respects as though made on the date of such Advance
except those representations and warranties that specifically relate to a particular
date.

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SECTION 8

REPRESENTATIONS AND WARRANTIES

     To induce the Lenders to make the Advances hereunder, Borrower represents and warrants to the
Agent and the Lenders that:

     8.1 Organization and Good Standing. Each of Borrower and the Guarantors is a corporation duly
organized and in good standing under the laws of the state of its incorporation or organization is
duly qualified as a foreign corporation or other business entity and in good standing in all states
in which Borrower or the Guarantors maintain an office, has the corporate and legal power and
authority to own its properties and assess and to transact the business in which it is engaged in
each jurisdiction in which it operates, and is or will be qualified in those states wherein it
proposes to transact business in the future.

     8.2 Authorization and Power. Each Obligor has full power and authority to execute, deliver, and perform the Loan
Documents to be executed by such Person, all of which has been duly authorized by all proper and
necessary corporate or legal action.

     8.3 No Conflicts or Consents. Neither the execution and delivery of the Loan Documents, nor
the consummation of any of the transactions therein contemplated, nor compliance with the terms and
provisions thereof, will contravene or materially conflict with any Legal Requirement to which any
Obligor is subject, any Governmental Authorization applicable to any Obligor, any indenture, loan
agreement, mortgage, deed of trust, or other agreement or instrument binding on any Obligor, or any
provision of the articles of incorporation, certificate of incorporation, bylaws, certificate of
limited partnership, partnership agreement, or other constituent documents of any Obligor. No
consent, approval, authorization, or order of any court, Governmental Authority, stockholder, or
third party is required in connection with the execution, delivery, or performance by any Obligor
of any of the Loan Documents.

     8.4 Enforceable Obligations. The Loan Documents have been duly executed and delivered by each
Obligor and are the legal and binding obligations of each Obligor, enforceable in accordance with
their respective terms, except as limited by Debtor Laws.

     8.5 No Liens. Except for the Permitted Liens, all of the properties and assets of Borrower
and the Guarantors are free and clear of all Liens and other adverse claims of any nature, and such
Persons have good and marketable title to such properties and assets.

     8.6 Financial Condition. The Borrower has delivered to the Agent and the Lenders copies of
the financial statements of (a) Borrower and its Subsidiaries as of March 31, 2006 which are true
and correct in all material respects, fairly represent the financial condition of Obligors, as of
such date, and have been prepared in all material respects in accordance with GAAP; as of the date
hereof, there are no obligations, liabilities, or Indebtedness (including contingent and indirect
liabilities) of any Obligor which are material and are not reflected in such financial statements;
no Material Adverse Change has occurred since the date of such financial statements.

     8.7 Full Disclosure. There is no material fact known to the Borrower that the Borrower has
not disclosed to the Agent and the Lenders. No certificate or statement delivered

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by any Obligor
to the Agent or the Lenders in connection with this Agreement contains any untrue statement of a
material fact or omits to state any material fact necessary to keep the statements contained herein
or therein from being misleading.

     8.8 No Potential Default. No event has occurred and is continuing which constitutes a Potential Default or an Event
of Default.

     8.9 Material Agreements. No Obligor is in default in any material respect under any contract
or agreement to which it is a party or by which any of its properties is bound.

     8.10 No Litigation. There are no actions, suits, or legal, equitable, arbitration, or
administrative proceedings pending, or to the knowledge of any Obligor threatened, against any
Obligor that could, if adversely determined, reasonably be expected to have a material effect on
the financial condition of such Obligor.

     8.11 Use of Proceeds; Margin Stock. The proceeds of the Advances will be used by the Borrower
solely for the purposes specified in the recitals. None of such proceeds will be used for the
purpose of purchasing or carrying any “margin stock” as defined in Regulations T, U or X of
the Board of Governors of the Federal Reserve System or for any other purpose which might
constitute this transaction a “purpose credit” within the meaning of such Regulations. If requested
by any Lender, then Borrower will furnish to such Lender a statement in conformity with the
requirements of the Federal Reserve Form U-1 referred to in said Regulation U to the
foregoing effect. No part of the proceeds of the Advances will be used for any purpose which
violates, or is inconsistent with, the provisions of Regulation X.

     8.12 Taxes. All material tax returns required to be filed by each Obligor in any jurisdiction
have been filed and all taxes (including mortgage recording taxes), assessments, fees, and other
governmental charges upon each Obligor or upon any of its or their properties, income, or
franchises have been paid, except for taxes being contested in good faith by appropriate
proceedings diligently projected and as to which adequate reserves have been established in
accordance with GAAP. To the best of the Borrower’s knowledge, there is no proposed tax assessment
against any Obligor, and all tax liabilities of each Obligor are adequately provided for. No
income tax liability of any Obligor has been asserted by the Internal Revenue Service for taxes in
excess of those already paid.

     8.13 Principal Office, Etc. The principal office, chief executive office, and principal place
of business of the Borrower is at 690 East Lamar, Suite 200, Arlington, Texas 76011.

     8.14 Compliance with Law.

      (a) Except as disclosed on Schedule 8.14(a): (i) each of Borrower and
its Subsidiaries is in compliance with its respective articles of incorporation,
charter, bylaws, certificate of limited partnership, partnership agreement, and
other constituent documents, and all Legal Requirements which are applicable to it
or to the conduct or operation of its business or the ownership or use of any of its
assets; and (ii) none of Borrower or any of its Subsidiaries has received any notice
or other communication from any Governmental Authority or other Person

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of any event
or circumstance that could reasonably be expected to constitute a violation of, or
failure to comply with, any Legal Requirement.

      (b) Except as disclosed on Schedule 8.14(b): (i) each of Borrower and
its Subsidiaries is in material compliance with all of the terms and requirements of
each Governmental Authorization held by such Person; (ii) none of Borrower or any of
its Subsidiaries has received any notice or other communication from any
Governmental Authority or other Person of any event or circumstance which could
reasonably be expected to constitute a violation of, or failure to comply with, any
term or requirement of any Governmental Authorization, or of any actual or potential
revocation, withdrawal, cancellation, or termination of, or material modification
to, any Governmental Authorization; (iii) all applications required to have been
filed for the renewal of any required Governmental Authorizations have been duly
filed on a timely basis with the appropriate Governmental Authorities, and all other
filings required to have been made with respect to such Governmental Authorizations
have been duly made on a timely basis with the appropriate Governmental Authorities;
(iv) upon consummation of the transactions contemplated hereby, Borrower and its
Subsidiaries will lawfully hold all such Governmental Authorizations; and (v) none
of the Governmental Authorizations of Borrower and its Subsidiaries will terminate
upon consummation of the transactions contemplated hereby.

     8.15 Subsidiaries. Set forth on Exhibit D hereto is a complete and accurate list of
all Subsidiaries of Borrower as of the date hereof, showing as of such date (as to each such
Subsidiary) the jurisdiction of its incorporation or organization, the number of shares of each
class of capital stock or partnership interest outstanding on the date hereof, the owner of the
outstanding shares or partnership interest of each such class owned and the jurisdictions in which
such Subsidiary is qualified to do business as a foreign corporation or partnership. All of the
outstanding capital stock or partnership interests of all Subsidiaries have been validly issued, is
fully paid and nonassessable, and is owned by Borrower or a Subsidiary free and clear of all Liens.

     8.16 Casualties. Neither the business nor the properties of Borrower or any Subsidiary are
affected by any environmental hazard, fire, explosion, accident, strike, lockout, or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God, or other casualty (whether or not
covered by insurance), which could reasonably be expected to cause a Material Adverse Change.

     8.17 Corporate Name. Borrower, during the preceding five (5) years, has not used any other corporate name or
trade name.

     8.18 Intellectual Property Rights. All of the patents, trademarks and copyrights owned by the
Borrower and its Subsidiaries as of the Closing Date or used in the business of the Borrower and
its Subsidiaries under license as of the Closing Date are disclosed on Schedule 8.18
attached hereto.

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     8.19 ERISA. Except as disclosed on Schedule 8.19 attached hereto, neither Borrower
nor any ERISA Affiliate has any Plans.

     8.20 Labor Matters. There are no controversies pending between Borrower or any Subsidiary and
any of their employees which could reasonably be expected to have a Material Adverse Change.

     8.21 Material Contracts. As of the date hereof, except as disclosed on Schedule 8.22
attached hereto neither Borrower nor any Subsidiary is party to any contract, the breach,
violation, or termination of which could reasonably be expected to result in a Material Adverse
Change.

     8.22 Representations and Warranties. Each Notice of Borrowing shall constitute, without the
necessity of specifically containing a written statement, a representation and warranty by Borrower
that no Potential Default or Event of Default exists and that all representations and warranties
contained in this Section 8 or in any other Loan Document are true and correct in all
material respects on and as of the date the requested Advance is to be made except those
representations and warranties that specifically relate only to a stated date.

     8.23 Survival of Representations and Warranties in All Material Respects. All representations
and warranties by Borrower herein shall survive delivery of the Notes and the making of the Loan,
and any investigation at any time made by or on behalf of the Agent or the Lenders shall not
diminish the Agent’s or the Lenders’ rights to rely thereon.

SECTION 9

AFFIRMATIVE COVENANTS

     So long as any Lender has any commitment to make Advances hereunder, and until payment in full
of Obligations, the Borrower agrees that (unless the Required Lenders shall otherwise consent in
writing):

     9.1 Financial Statements, Reports, and Documents. The Borrower shall deliver to the Agent and to each Lender each of the following:

      (a) Annual Statements. As soon as available and in any event within the
earlier of (i) one-hundred twenty (120) days after the last day of each Fiscal Year
of Borrower or (ii) any requirement of the Securities and Exchange Commision as to
furnishing annual financial statements, copies of the audited consolidated and
consolidating balance sheet of Borrower and its Subsidiaries as of the close of such
Fiscal Year end, statements of income, retained earnings, and changes in cash flow
of Borrower and its Subsidiaries for such Fiscal Year, all in reasonable detail and
accompanied by an opinion thereon (which shall not be qualified by reason of any
limitation imposed by Borrower) of independent public accountants of recognized
national standing selected by Borrower and reasonably satisfactory to the Agent, to
the effect that (i) such consolidated financial statements have been prepared in
accordance with GAAP (except for changes in which such accountants concur), and (ii)
the examination of such accounts in connection with such financial statements has
been made in accordance with

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generally accepted auditing standards and, accordingly,
includes such tests of the accounting records and such other auditing procedures as
were considered necessary under the circumstances, accompanied by a certification by
the chief financial officer of the Borrower that the Borrower is in compliance with
each of the covenants set forth in this Agreement;

      (b) Quarterly Statements. As soon as available, and in any event within the
earlier of (i) forty-five (45) days after the last day of each quarterly fiscal
period of each Fiscal Year of Borrower or (ii) any requirement of the Securities and
Exchange Commission as to furnishing quarterly financial statements, copies of the
consolidated balance sheet of Borrower and its Subsidiaries as of the end of such
quarterly fiscal period, and statements of income, retained earnings, and changes in
cash flow of Borrower and its Subsidiaries for that quarterly fiscal period and for
the portion of the Fiscal Year ending with such period, all in reasonable detail,
and certified by the chief financial officer of Borrower as being true and correct
and as having been prepared in accordance with GAAP, subject to year end audit
adjustments, accompanied by a certification by the chief financial officer of the
Borrower that the Borrower is in compliance with each of the covenants set forth in
this Agreement;

      (c) Projections. No later than fifteen (15) days before the beginning of each
Fiscal Year, consolidated, financial operation projections for the Borrower and its
Subsidiaries for such Fiscal Year on a quarterly basis prepared by management and in
form consistent with the financial projections provided prior to the Closing Date;

      (d) Other Information. Such other information concerning the business,
properties, or financial condition of any Obligor as the Agent or any Lender shall
reasonably request including audit reports, registration statements, or other
reports or notices provided to shareholders of the Borrower.

     9.2 Payment of Taxes and Other Liabilities. The Borrower shall, and shall cause each of its
Subsidiaries to, pay and discharge (a) all taxes, assessments, and governmental charges or levies
imposed upon it or upon its income or profits, or upon any property belonging to it, before
delinquent, (b) all lawful claims (including claims for labor, materials and supplies), which, if
unpaid, might give rise to a Lien upon any of its property, and (c) all of its other liabilities,
except as prohibited under the Loan Documents; provided, however, that the Borrower
and each of its Subsidiaries shall not be required to pay any such tax, assessment, charge, or levy
if and so long as the amount, applicability, or validity thereof shall currently be contested in
good faith by appropriate proceedings and appropriate accruals and cash reserves therefor have been
established in accordance with GAAP.

     9.3 Maintenance of Existence and Rights; Conduct of Business. The Borrower shall, and shall
cause each of its Subsidiaries to, preserve and maintain its corporate or legal existence and all
of its rights, privileges, and franchises necessary or desirable in the normal conduct of its
business, and conduct its business in an orderly and efficient manner consistent

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with good business
practices and in accordance with all material Legal Requirements of any Governmental Authority.

     9.4 Notice of Default. The Borrower shall furnish to the Agent, promptly upon becoming aware
of the existence of any condition or event which constitutes a Potential Default or an Event of
Default, written notice specifying the nature and period of existence thereof and the action which
Borrower is taking or proposes to take with respect thereto.

     9.5 Other Notices. The Borrower shall, and shall cause each of its Subsidiaries to, promptly
notify the Agent of (a) any Material Adverse Change in its financial condition or its business, (b)
any default under any material agreement, contract, or other instrument to which it is a party or
by which any of its properties are bound, or any acceleration of the maturity of any material
liabilities owing by the Borrower or any Subsidiary, (c) any material adverse claim against or
affecting any Obligor or any of its properties, and (d) the commencement of, and any material
determination in, any litigation with any third party or any proceeding before any Governmental
Authority affecting any Obligor.

     9.6 Operations and Properties. The Borrower shall, and shall cause each of its Subsidiaries
to, (a) act prudently and in accordance with customary industry standards in managing and operating
its assets and properties, and (b) keep in good working order and condition, ordinary wear and tear
excepted, all of its assets and properties which are necessary to the conduct of its business.

     9.7 Books and Records; Access. The Borrower shall give any representative of the Agent and any Lender access during all
business hours to, and permit such representative to examine, copy, or make excerpts from, any and
all books, records, and documents in the possession of Borrower, and to inspect any of the
properties of Borrower. Borrower shall, and shall cause each of its Subsidiaries to, maintain
complete and accurate books and records of its transactions in accordance with good accounting
practices.

     9.8 Field Examination. The Agent shall be entitled, upon reasonable notice to Borrower, to
conduct a semi-annual field examination of the Borrower’s assets on the premises of the Borrower
and the Subsidiaries at the expense of the Borrower. If an Event of Default has occurred, the
Agent shall be entitled, upon reasonable notice to Borrower, to make an additional examination of
the Borrower’s assets.

     9.9 Compliance with Law. The Borrower shall, and shall cause each of its Subsidiaries to,
comply with all applicable Legal Requirements of any Governmental Authority, a breach of which
could reasonably be expected to cause a Material Adverse Change.

     9.10 Insurance. The Borrower shall, and shall cause each of its Subsidiaries to, keep all
insurable property, real and personal, adequately insured at all times in such amounts and against
such risks as are customary for Persons in similar businesses operating in the same vicinity,
specifically to include a policy of hazard, casualty, fire, and extended coverage insurance
covering all assets, business interruption insurance (where feasible), liability insurance, and
worker’s compensation insurance, in every case under a policy with a financially

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sound and
reputable insurance company and with only such deductibles as are customary, and naming Agent as
loss payee and additional insured.

     9.11 Authorizations and Approvals. The Borrower shall, and shall cause each of its
Subsidiaries to, promptly obtain, from time to time at its own expense, all Governmental
Authorizations as may be required to enable it to comply with its obligations hereunder and under
the other Loan Documents.

     9.12 Further Assurances. The Borrower shall, and shall cause each of its Subsidiaries to,
make, execute, and deliver or file, or cause the same to be done, all such notices, additional
agreements or other assurances, and take any and all such other action, as the Agent or any Lender
may, from time to time, reasonably deem necessary or proper in connection with any of the Loan
Documents, or the obligations of the Borrower or any Subsidiary thereunder.

     9.13 Indemnity by Borrower. The Borrower shall indemnify, defend, and hold harmless the Agent, the Banks and their
directors, officers, agents, attorneys, and employees (each, an “Indemnitee” and
collectively, the “Indemnitees”) from and against any and all loss, liability, obligation,
damage, penalty, judgment, claim, deficiency, and expense(including interest, penalties, attorneys’
fees, and amounts paid in settlement) to which the Indemnitees may become subject arising out of
this Agreement and the other Loan Documents, other than those which arise by reason of the gross
negligence or willful misconduct of the Agent or the Banks, BUT SPECIFICALLY INCLUDING ANY LOSS,
LIABILITY, OBLIGATION, DAMAGE, PENALTY, JUDGMENT, CLAIM, DEFICIENCY, OR EXPENSE ARISING OUT OF THE
SOLE OR CONCURRENT NEGLIGENCE OF THE AGENT OR THE BANKS. The Borrower shall also indemnify,
protect, and hold each Indemnitee harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, proceedings, costs, expenses
(including without limitation all reasonable attorneys’ fees and legal expenses whether or not suit
is brought), and disbursements of any kind or nature whatsoever which may at any time be imposed
on, incurred by, or asserted against such Indemnitees, with respect to or as a direct or indirect
result of the violation by Borrower of any Environmental Law, or with respect to or as a direct or
indirect result of Borrower’s use, generation, manufacture, production, storage, release,
threatened release, discharge, disposal, or presence of a Hazardous Material on, under, from, or
about real property. The provisions of and undertakings and indemnifications set forth in this
Section 9.12 shall survive the satisfaction and payment of the Obligations and termination
of this Agreement, but only as to losses, liabilities, obligations, damages, penalties, judgments,
claims, deficiencies, or expenses arising prior to the satisfaction and payment of the Obligations
and termination of this Agreement.

     9.14 After-Acquired Subsidiaries. Concurrently upon the formation or acquisition by the
Borrower or any Subsidiary of any domestic Subsidiary after the date hereof (an “After-Acquired
Subsidiary”), the Borrower shall cause the After-Acquired Subsidiary to deliver articles of
incorporation, bylaws, other organizational documents, and resolutions and such opinions as the
Agent shall reasonably require and to execute a Subsidiary Guaranty in favor of the Agent for the
benefit of the Lenders.

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SECTION 10

NEGATIVE COVENANTS

     So long as any Lender has any commitment to make Advances hereunder, and until payment in full
of the Obligations, the Borrower agrees that (unless the Required Lenders shall otherwise consent
in writing):

     10.1 Negative Pledge. The Borrower shall not, and shall not permit any of its Subsidiaries
to, create, incur, permit, or suffer to exist any Lien upon any of its property or assets,
including its real property, now owned or hereafter acquired, except for Permitted Liens.

     10.2 Negative Pledge Agreements. The Borrower shall not, and shall not permit any of its domestic Subsidiaries to, enter
into any agreement (excluding this Agreement or any other Loan Documents) prohibiting the creation
or assumption of any Lien upon any of its property, revenues, or assets, whether now owned or
hereafter acquired, or the ability of any Subsidiary to make any payments, directly or indirectly,
to the Borrower by way of dividends, advances, repayments of loans, repayments of expenses,
accruals, or otherwise.

     10.3 Limitations on Indebtedness. The Borrower shall not, and shall not permit any of its
Subsidiaries to create, incur, assume or permit to exist any Indebtedness except:

      (a) Indebtedness existing hereunder;

      (b) Indebtedness of the Borrower or any of its Subsidiaries which is expressly
subordinated to the Obligations pursuant to terms and conditions reasonably
satisfactory to the Agent and the Required Lenders (the “Subordinated
Debt”);

      (c) Purchase money financing not to exceed in the aggregate outstanding at any
time 3.5% of the Borrower’s consolidated Net Worth;

      (d) Indebtedness that constitutes a renewal, refinancing or extension of any
Indebtedness referred to in this Section 10.3; provided, that (i) no Lien
existing at the time of such renewal reflecting an extension shall be extended to
cover any property not already subject to such Lien and (ii) the principal amount of
any Indebtedness renewed, refinanced or extended shall not exceed the amount of such
Indebtedness outstanding immediately prior to such renewal, refinancing or
extension;

      (e) Capital Lease Obligations not to exceed $500,000 in the aggregate
outstanding at any time;

      (f) Indebtedness owing by H.A. Sheldon Canada, Ltd. not to exceed one million
Dollars (US $1,000,000) in the aggregate outstanding at any time; and

      (g) Indebtedness incurred by Borrower under a Hedge Agreement.

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      (h) Indebtedness with respect to letters of credit (not subject to the terms
and conditions of this Agreement), issued by a Bank, such letters of credit not to
exceed $20,000,000 in amounts available to be drawn thereunder at any time.

     10.4 Certain Transactions. The Borrower shall not, and shall not permit any of its
Subsidiaries to, enter into any transaction with, or pay any management fees to, any Affiliate
except on terms not less favorable
to Borrower and its Subsidiaries than would be obtainable at the time in comparable, arms
length transactions with Persons other than Affiliates.

     10.5 Limitation on Sale of Assets. The Borrower shall not, and shall not permit any of its
Subsidiaries to (a) enter into or consummate an Asset Sale for proceeds in excess of $5,000,000 in
the aggregate in any Fiscal Year provided that any net cash proceeds in excess of $1,000,000 during
such Fiscal Year must be applied to prepay outstanding Advances pursuant to Section 2.6(a),
or (b) sell, assign, or discount any Receivables.

     10.6 Liquidation, Mergers, Consolidations, Recapitalizations, Reorganizations, and
Dispositions of Substantial Assets. The Borrower shall not, and shall not permit any of its
Subsidiaries to, (a) dissolve or liquidate, (b) become a party to any merger or consolidation
unless the Borrower or the particular Subsidiary is the surviving corporation, (c) become a party
to a recapitalization or reorganization, or (d) change its place of incorporation or organization.

     10.7 Lines of Business; Receivables Policy. The Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, engage in any business other than those in which it
is presently engaged, or discontinue any of its material existing lines of business. The Borrower
shall not, and shall not permit any of its Subsidiaries to, make any material change in its credit
and collection policy, which change would materially impair the collectibility of its Receivables,
or rescind, cancel, or modify any Receivables, except in the ordinary course of business.

     10.8 Acquisition. The Borrower shall not, and shall not permit any of its Subsidiaries to
make any acquisition for cash, securities or other consideration of a business entity or the assets
of a business other than Permitted Acquisitions

     10.9 Restricted Payments. The Borrower and its Subsidiaries may declare or pay any cash
dividend; redeem, retire, otherwise acquire, or prepay, shares of their capital stock or any other
equity interest; or make any other distribution of any property or cash to owners of an equity
interest in their capacity as such, if, in respect to payments or distributions made by the
Borrower, (a) such payment or distribution is in the form of the issuance of the Borrower’s own
stock, or (b) at the time of making such payment or distribution and as a result thereof there
exists or would exist no Event of Default.

     10.10 Prepayment of Other Indebtedness. The Borrower shall not, and shall not permit any of
its Subsidiaries to, (a) make any voluntary prepayments or defeasements of principal or interest on
any other Indebtedness of the
Borrower and (b) amend any material term (including interest, payment or subordination terms)
of any other Indebtedness including the Subordinated Debt without the prior written consent of the
Required Lenders except such

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amendments of Indebtedness other than Subordinated Debt which do not
make any material term less favorable to the Borrower or the Lenders.

     10.11 Limitation on Investments. The Borrower shall not make or permit to exist any capital
contributions to, or make any advance or loan to, or make any investment in, or purchase or commit
to purchase any stock or other securities or evidences of indebtedness of or interests in any
Person (“Investments”), except the following:

      (a) Liquid Investments;

      (b) Trade and customer accounts receivable which are for goods furnished or
services rendered in the ordinary course of business and are payable in accordance
with customary trade terms;

      (c) Investments existing on the date hereof and described on Schedule
10.11;

      (d) Investments made in connection with Borrower’s Benefit Restoration Plan and
Supplemental Employee Retirement Plan;

      (e) Investments in Subsidiaries which are Guarantors;

      (f) Investments made in connection with Borrower’s Benefit Restoration Plan;
and

      (g) Investments not described in clauses (a) through (f) above in an aggregate
amount not to exceed $750,000.00 per annum.

     10.12 Sale and Leaseback Transactions. The Borrower shall not, and shall not permit any of
its Subsidiaries, to enter into any arrangement, directly or indirectly, with any Person whereby it
shall sell or transfer any property, real or personal, and used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or other property which
it intends to use for substantially the same purpose or purposes as the property being sold or
transferred, except for any such arrangements that are entered into in the Borrower’s ordinary
course of business.

     10.13 Leverage Ratio. Borrower shall not permit the ratio of (a) Total Funded Indebtedness on
a consolidated basis, as of the last day of each Fiscal Quarter of the Borrower to (b) EBITDA, on a
consolidated basis, for the four (4) Fiscal Quarters ending on such day to exceed 3:00 to 1:00.

     10.14 Fixed Charge Coverage Ratio. Borrower shall not permit the Fixed Charge Coverage Ratio as of the last day of each Fiscal
Quarter of Borrower to be less than 1.25 to 1.00.

     10.15 Tangible Net Worth. The Tangible Net Worth of the Borrower and its Subsidiaries on a
consolidated basis shall never be less than the sum of eighty-five percent (85%) of Tangible Net
Worth as of the Closing Date, plus (a) seventy-five percent (75%) of Consolidated Net
Income earned after June 30, 2006 during any Fiscal Quarter, provided,

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however that
Fiscal Quarters in which Consolidated Net Income is a negative amount will be excluded from the
calculation of Consolidated Net Income earned after June 30, 2006, plus (b) an amount equal
to 100% of the net proceeds of any equity offering by the Borrower or any of its Subsidiaries
occurring after the date of this Agreement.

     10.16 Trading Asset Coverage Ratio. Borrower shall not permit the ratio of (a) Trading Assets
to (b) Total Funded Indebtedness plus outstanding Commercial Letters of Credit, as of the
last date of each Fiscal Quarter of Borrower beginning June 30, 2006, to be less than 1.00 to 1.00.
“Trading Assets” means the sum of (i) seventy-five percent (75%) of net accounts
receivable, plus (ii) fifty percent (50%) of inventory, plus (iii) 60% of
outstanding Commercial Letters of Credit, all as of the date of determination.

     10.17 ERISA. Neither Borrower nor any ERISA Affiliate will create any Plan.

     10.18 Fiscal Year. Borrower shall not, and shall not permit any of its Subsidiaries to,
change its Fiscal Year or method of accounting.

     10.19 Trademark License Agreements. The Borrower and its Subsidiaries shall not conclude any
trademark license agreement which is expected to generate sales revenue in excess of $500,000 per
annum, without the prior consent of the Agent (which consent shall not be unreasonably withheld)
unless (a) the Borrower’s or the Subsidiary’s interest in such trademark license agreement
is assignable to the Agent and (b) the Agent receives a consent from the licensor
acceptable to the Agent. If the conditions set forth in (a) and (b) are satisfied, the Borrower or
the Subsidiary is not required to obtain the consent of the Agent to enter into the trademark
license agreement, although such Borrower or Subsidiary shall notify Agent within a reasonable
period of time of the execution of such agreement.

SECTION 11

EVENTS OF DEFAULT

     11.1 Events of Default. An “Event of Default” shall exist if any one or more of the following events
(herein collectively called “Events of Default”) shall occur and be continuing:

      (a) Borrower shall fail to pay when due any principal of any Note or of any
principal amount payable hereunder or in connection with any Letter of Credit,
Acceptance Exposure or Hedge Agreement when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment thereof
or by acceleration thereof or otherwise; or

      (b) Borrower shall fail to pay when due any interest on any Note, any
Commitment Fee, or any other interest payment or fee hereunder or in connection with
any Letter of Credit, Acceptance Exposure or Hedge Agreement when and as the same
shall become due and payable, and the Borrower fails to cure such default within two
(2) Business Days of such due date; or

      (c) any representation or warranty made under this Agreement, or any of the
other Loan Documents, shall prove to be untrue or inaccurate in any

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material respect
as of the date on which such representation or warranty is made or deemed to have
been made; or

      (d) The Borrower or its Subsidiaries shall fail to perform any of the covenants
set forth in Section 9.10 and Section 10; or

      (e) default shall occur in the performance of any of the covenants or
agreements of any Obligor contained herein or in any of the other Loan Documents
(other than the covenants set forth in Section 9.10 and Section 10)
and the continuance thereof for a period of at least thirty (30) days; or

      (f) default shall occur in the payment of any other Indebtedness of any Obligor
in excess of $1,000,000 or default shall occur in respect of any note or credit
agreement relating to any such Indebtedness and such default allows the creditor of
such Indebtedness to accelerate the maturity of such Indebtedness; or

      (g) any of the Loan Documents shall cease to be legal, valid, and binding
agreements enforceable against the Person executing the same in accordance with its
terms, shall be terminated, become or be declared ineffective or inoperative or
cease to provide the respective remedies, powers, or privileges intended to be
provided thereby; or any Obligor shall deny that such Person has any further
liability or obligation under any of the Loan Documents; or

      (h) any Obligor shall (i) apply for or consent to the appointment of a
receiver, trustee, custodian, intervenor, or liquidator of itself or of all or a
substantial part of such Person’s assets, (ii) file a voluntary petition in
bankruptcy, admit in writing that such Person is unable to pay such Person’s debts
as they become due, or generally not pay such Person’s debts as they become due,
(iii) make a general assignment for the benefit of creditors, (iv) file a petition
or answer seeking reorganization of an arrangement with creditors or to take
advantage of any bankruptcy or insolvency laws, (v) file an answer admitting the
material allegations of, or consent to, or default in answering, a petition
filed against such Person in any bankruptcy, reorganization, or insolvency
proceeding, or (vi) take corporate, partnership, or other action for the purpose of
effecting any of the foregoing; or

      (i) an involuntary proceeding shall be commenced against any Obligor seeking
bankruptcy or reorganization of such Person or the appointment of a receiver,
custodian, trustee, liquidator, or other similar official of such Person, or all or
substantially all of such Person’s assets, and such proceeding shall not have been
dismissed within sixty (60) days of the filing thereof; or an order, order for
relief, judgment, or decree shall be entered by any court of competent jurisdiction
or other competent authority approving a petition or complaint seeking
reorganization of any Obligor or appointing a receiver, custodian, trustee,
liquidator, or other similar official of such Person, or of all or substantially all
of such Person’s assets;

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      (j) any final judgment(s) for the payment of money in excess of the sum of
$1,000,000.00 in the aggregate shall be rendered against any Obligor and such
judgment(s) shall not be satisfied or discharged or bonded at least five (5)
business days prior to the date on which any of such Person’s assets could be
lawfully sold to satisfy such judgment; or

      (k) a Material Adverse Change shall have occurred.

     11.2 Remedies Upon Event of Default. If any Event of Default shall occur and is continuing,
then the Agent may, or upon the written consent of the Required Lenders shall, without notice,
exercise any one or more of the following rights and remedies, and any other remedies provided in
any of the Loan Documents: (a) terminate the Banks’ commitment to make Advances, arrange for the
issuance of Letters of Credit, and accept and purchase Bankers Acceptances hereunder; (b) declare
the Obligations or any part thereof to be forthwith due and payable, whereupon the same shall
forthwith become due and payable without presentment, demand, protest, notice of default, notice of
acceleration or of intention to accelerate, or other notice of any kind, all of which Borrower
hereby expressly waives, anything contained herein or in the Notes to the contrary notwithstanding;
(c) reduce any claim to judgment; or (d) pursue and enforce any of the Agent’s and the Banks’
rights and remedies under the Loan Documents, including, without limitation, a demand for payment
from or enforcement action against the Guarantors under the Subsidiary Guaranty, or otherwise
provided under or pursuant to any applicable law or agreement; provided, however, that if any Event
of Default specified in Sections 11.1(h) or (i) shall occur, then the Obligations shall
thereupon become due and payable concurrently therewith, and the Banks’ obligations to make
Advances, arrange for the issuance of Letters of Credit, and accept and purchase Bankers
Acceptances shall immediately terminate hereunder, without any further action by the Agent or the
Banks and without presentment, demand, protest, notice of default, notice of acceleration or of
intention to accelerate, or other notice of any kind, all of which Borrower hereby expressly
waives.

     11.3 Performance by Agent or Lenders. If Borrower fails to perform any covenant, duty, or
agreement contained in any of the Loan Documents, then the Agent and/or the Lenders may perform or
attempt to perform such covenant, duty, or agreement on behalf of Borrower. In such event, Borrower
shall, at the request of the Agent, promptly pay any amount expended by the Agent and/or the
Lenders in such performance or attempted performance to the Agent at its principal office in San
Francisco, California together with interest thereon at the lesser of (a) the Contract Rate for
Eurodollar Borrowing, plus three percent (3%) or (b) Maximum Rate, from the date of such
expenditure until paid. Notwithstanding the foregoing, it is expressly understood that the Agent
and/or the Lenders shall not assume any liability or responsibility for the performance of any
duties of Borrower hereunder or under any of the Loan Documents and none of the covenants or other
provisions contained in this Agreement shall, or shall be deemed to, give the Agent and/or the
Lenders the right or power to exercise control over the management and affairs of Borrower.

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SECTION 12

AGENT

     12.1 Appointment. The Trade Bank is hereby appointed to act as Agent on behalf of the
Lenders. Each of the Lenders and each subsequent holder of any Note by its acceptance thereof,
irrevocably authorizes the Agent to take such action on its behalf and to exercise such powers
hereunder as are specifically delegated to or required of the Agent by the terms hereof and the
terms thereof together with such powers as are reasonably incidental thereto. The Trade Bank
hereby accepts its appointment to act as Agent on behalf of the Lenders and the authorizations set
forth herein. Neither the Agent nor any of its directors, officers, employees or agents shall be
liable as such for any action taken or omitted to be taken by it or them hereunder or in connection
herewith or therewith (a) at the request or with the approval of the Required Lenders (or, if
otherwise specifically required hereunder or thereunder, the consent of all the Lenders) or (b) in
the absence of its or their own gross negligence (but not ordinary negligence) or willful
misconduct.

     12.2 Responsibilities.

      (a) The Agent is hereby expressly authorized on behalf of the Lenders, without
hereby limiting any implied authority, (i) to receive on behalf of each of the
Lenders any payment of principal of or interest hereunder or on the Notes and all
other amounts due hereunder paid to the Agent, and promptly to distribute to each
Lender its proper share of all payments so received, (ii) to distribute to each
Lender copies of all notices, agreements and other material as provided for in this
Agreement as received by the Agent and (iii) to take all actions with respect to
this Agreement and the Loan Documents as are specifically delegated to the Agent.
The Lenders hereby acknowledge that the Agent shall be under no duty to take any
discretionary action permitted to be taken by the Agent pursuant to the provisions
of this Agreement or any other Loan Document unless it shall be requested in writing
to do so by the Required Lenders.

      (b) In the event that (i) the Borrower fails to pay when due the principal of
or interest on any Note or any fee payable hereunder or any amount payable under or
in connection with any Letter of Credit or (ii) the Agent receives written notice of
the occurrence of an Event of Default, the Agent within a reasonable time shall give
written notice thereof to the Lenders, and shall take such action with respect to
such Event of Default or other condition or event as it shall be directed to take by
the Required Lenders; provided, however, that, unless and until the
Agent shall have received such directions, the Agent may take such action or refrain
from taking such action hereunder with respect to an Event of Default as it shall
deem advisable in the best interests of the Lenders, except to the extent that this
Agreement expressly requires that such action be taken, or not be taken, only with
the consent or upon the authorization of the Required Lenders or all of the Lenders.

      (c) The Agent shall not be responsible in any manner to any of the Lenders for
the effectiveness, enforceability, perfection, priority, value,

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genuineness,
validity or due execution of this Agreement or the other Loan Documents with respect
thereto or any other agreements or certificates, requests, financial statements,
notices or opinions of counsel or for any recitals, statements, warranties or
representations contained herein or in any such instrument or be under any
obligation to ascertain or inquire as to the performance or observance of any of the
terms, provisions, covenants, conditions, agreements or obligations of this
Agreement or any of the other Loan Documents or any other agreements on the part of
the Borrower and, without limiting the generality of the foregoing, the Agent shall,
in the absence of knowledge to the contrary, be entitled to accept any certificate
furnished pursuant to this Agreement as conclusive evidence of the facts stated
therein and shall be entitled to rely on any note, notice, consent, certificate,
affidavit, letter, telegram, teletype message, statement, order or other document
which it believes in good faith to be genuine and correct and to have been signed or
sent by the proper Person or Persons. It is understood and agreed that the Agent
may exercise its rights and powers under other agreements and instruments to which
it is or may be a party, and engage in other transactions with the Borrower, as
though it were not Agent of the Lenders hereunder.

      (d) The Agent shall promptly give notice to the Lenders of the receipt or
sending of any notice, schedule, report, projection, financial statement or other
document or information pursuant to this Agreement and shall promptly forward a copy
thereof to each Lender.

      (e) Neither the Agent nor any of its directors, officers, employees or agents
shall have any responsibility to the Borrower on account of the failure or delay in
performance or breach by any Lender other than the Agent of any of its obligations
hereunder or to any Lender on account of the failure of or delay in performance or
breach by any other Lender or the Borrower of any of their respective obligations
hereunder or in connection herewith.

      (f) The Agent may consult with legal counsel selected by it in connection with
matters arising under this Agreement or any other Loan Document and any action taken
or suffered in good faith by it in accordance with the opinion of such counsel shall
be full justification and protection to it. The Agent may exercise any of its
powers and rights and perform any duty under this Agreement or any other Loan
Documents through agents or attorneys.

      (g) The Agent and the Borrower may deem and treat the payee of any Note as the
holder thereof until written notice of transfer shall have been delivered as
provided herein by such payee to the Agent and the Borrower.

      (h) With respect to the Loans, the Notes and the Letters of Credit issued to or
by it, and the Bankers Acceptances accepted and paid by it, the Agent in its
individual capacity and not as an Agent shall have the same rights, powers and
duties hereunder and under any other agreement executed in connection herewith as
any other Lender and may exercise the same as though it were not the Agent, and the
Agent and its affiliates may accept deposits from, lend money to

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      and generally
engage in any kind of business with the Borrower or other affiliate thereof as if it
were not the Agent.

     12.3 Indemnity. EACH LENDER AGREES (A) TO REIMBURSE THE AGENT IN THE AMOUNT OF SUCH LENDER’S
PRO RATA SHARE (BASED ON ITS TOTAL COMMITMENT HEREUNDER) OF ANY EXPENSES INCURRED FOR THE BENEFIT
OF THE LENDERS BY THE AGENT, INCLUDING COUNSEL FEES AND COMPENSATION OF AGENTS AND EMPLOYEES PAID
FOR SERVICES RENDERED ON BEHALF OF THE LENDERS, NOT REIMBURSED BY THE BORROWER AND (B) TO INDEMNIFY
AND HOLD HARMLESS THE AGENT AND ANY OF ITS DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS, ON DEMAND, IN
THE AMOUNT OF ITS PRO RATA SHARE, FROM AND AGAINST ALL LIABILITIES, ACTIONS, AGREEMENTS, JUDGMENTS,
SUITS, COSTS, DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY
OR ASSERTED AGAINST IT IN ITS CAPACITY AS THE AGENT OR ANY OF THEM IN ANY WAY RELATING TO OR
ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY ACTION TAKEN OR OMITTED BY IT OR
ANY OF THEM UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, TO THE EXTENT NOT REIMBURSED BY THE
BORROWER; PROVIDED, HOWEVER, THAT NO LENDER SHALL BE LIABLE TO THE AGENT FOR ANY
PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENT, SUITS,
COSTS, EXPENSES OR DISBURSEMENTS RESULTING FROM THE GROSS NEGLIGENCE (BUT NOT ORDINARY NEGLIGENCE)
OR WILLFUL MISCONDUCT OF THE AGENT OR ANY OF ITS DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS.

     12.4 Credit Decisions. Each Lender acknowledges that it has, independently and without reliance upon the 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 the 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
decisions in taking or not taking action under or based upon this Agreement, any related agreement
or any document furnished hereunder.

     12.5 Resignation. Subject to the appointment and acceptance of a successor Agent as provided
below, the Agent may resign at any time by giving the Lenders and the Borrower at least thirty (30)
days prior notice of such resignation and specifying the day on which such resignation will become
effective, and the Agent may be removed at any time by the Required Lenders if it has breached its
obligations under the Loan Documents. Upon the giving of such notice of resignation by the Agent
or upon the removal of the Agent by the Required Lenders, the Required Lenders shall have the right
to appoint a successor Agent; provided, that so long as no Default or Event of
Default then exists the appointment of such successor Agent shall be subject to the approval of the
Borrower, which approval shall not be withheld or delayed unreasonably. If no successor Agent
shall have been so appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Agent gives notice of its resignation or the removal of
the Agent, then the retiring or removed Agent may, on behalf of the Required Lenders, appoint a
successor Agent which shall be a Lender which is a

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commercial bank organized under the laws of the
United States of America or of any State thereof and having a combined capital and surplus of at
least $100,000,000. Upon the acceptance of any appointment as Agent hereunder by a successor bank,
such successor shall thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Agent and the retiring or removed Agent shall be discharged
from its duties and obligations hereunder. After any Agent’s resignation or removal hereunder, the
provisions of this Article shall continue in effect for its benefit in respect of any actions taken
or omitted to be taken by it while it was acting as Agent.

SECTION 13

MISCELLANEOUS

     13.1 Accounting Reports. All financial reports or projections furnished by any Person to the
Agent or the Lenders pursuant to this Agreement shall be prepared in such form and such detail as
shall be satisfactory to the Agent and Lenders, shall be prepared on the same basis as those
prepared by such Person in prior years, and, where applicable, shall be the same financial reports
and projections as those furnished to such Person’s officers and directors.

     13.2 Waivers and Amendments.

      (a) No failure or delay of any Lender in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise
of any such right or power, or any abandonment or discontinuance of steps to
enforce such right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the Lenders
hereunder are cumulative and not exclusive of any rights or remedies which they may
otherwise have. No waiver of any provision of this Agreement or the Notes nor
consent to any departure by the Borrower therefrom shall in any event be effective
unless the same shall be authorized as provided in paragraph (b) below, and
then such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice to or demand on the Borrower in any case
shall entitle it to any other or further notice or demand in similar or other
circumstances. Each holder of any of the Notes shall be bound by any amendment,
modification, waiver or consent authorized as provided herein, whether or not such
Note shall have been marked to indicate such amendment, modification, waiver or
consent.

      (b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into by
the Borrower and the Required Lenders, and then such waiver or modification shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no such agreement shall, unless in
writing and signed by all the Lenders, do any of the following: (i) increase the
Revolving Credit Commitments of the Lenders or subject the Lenders to any additional
obligations, (ii) reduce the principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, (iii) postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts

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payable
hereunder, (iv) take action which requires the signing of all the Lenders pursuant
to the terms of this Agreement, (v) change the percentage of the Revolving Credit
Commitments or of the aggregate unpaid principal amount of the Notes, or the number
of Lenders which shall be required for the Lenders or any of them to take any action
under this Agreement or any other Loan Document, (vi) release any Guarantor or
otherwise change any obligation of any Guarantor to pay any amount payable by such
Guarantor hereunder or under the other Loan Documents, or (vii) amend this
Section 13.2(b); provided, further, that no amendment,
waiver or consent shall, unless in writing and signed by the Agent in addition to
the Lenders required above to take such action, affect the rights or duties of the
Agent under any Loan Document. Each Lender and holder of any Note shall be bound by
any modification or amendment authorized by this Section 13.2 regardless of
whether its Notes shall be marked to make reference thereto, and any consent by any
Lender or holder of a Note pursuant to this Section 13.2 shall bind any
Person subsequently acquiring a Note from it, whether or not such Note shall be so
marked.

     13.3 Payment of Expenses. Whether or not the transactions contemplated by this Agreement are
consummated, Borrower will promptly (and in any event, within 30 days after any invoice or other
statement or notice) pay: (a) all transfer, stamp, mortgage, documentary or other similar taxes,
assessments or
charges levied by any Governmental Authority in respect of this Agreement or any of the other
Loan Documents or any other document referred to herein or therein; (b) all reasonable costs and
expenses incurred by or on behalf of Agent (including reasonable attorneys’ fees, consultants’ fees
and engineering fees, travel costs and miscellaneous expenses) in connection with: (i) the
negotiation, preparation, execution and delivery of the Loan Documents, and any and all consents,
waivers or other documents or instruments relating thereto; (ii) the filing, recording, refiling
and re-recording of any Loan Documents and any other documents or instruments or further assurances
required to be filed or recorded or refiled or re-recorded by the terms of any Loan Document; (iii)
other action reasonably required in the course of administration hereof; and (iv) monitoring or
confirming (or preparation or negotiation of any document related to) Borrower’s compliance with
any covenants or conditions contained in this Agreement or in any Loan Document, and (c) all
reasonable costs and expenses incurred by or on behalf of any Bank (including reasonable attorneys’
fees, and accounting fees) in connection with the defense or enforcement of any of the Loan
Documents (including this Section) or the defense of any Banks’ exercise or its rights thereunder.
In addition to the foregoing, until all Obligations have been paid in full, Borrower will also pay
or reimburse Agent for all reasonable out-of-pocket costs and expenses of Agent or its agents or
employees in connection with the continuing administration of the Loans and the related due
diligence of Agent, including reasonable travel and miscellaneous expenses and reasonable fees and
expenses of Agent’s outside counsel and consultants engaged in connection with the Loan Documents.

     13.4 Notices. Any communications required or permitted to be given by any of the Loan
Documents must be (a) in writing and personally delivered or mailed by prepaid certified or
registered mail, or (b) made by facsimile transmission delivered or transmitted, to the party to
whom such notice of communication is directed, to the address of such party shown on Schedule 13.4
hereof. Any such communication shall be deemed to have been given (whether actually received or
not) on the day it is personally delivered or, if transmitted by facsimile transmission,

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on the day
that such communication is transmitted as aforesaid subject to telephone confirmation of receipt;
provided, however, that any notice received by Lender after 10 a.m. San Francisco, California time
on any day from Borrower pursuant to Section 2.3 (with respect to a Notice of Borrowing)
shall be deemed for the purposes of such Section to have been given by Borrower on the next
succeeding day, or if mailed, on the third (3rd) day after it is marked as aforesaid. Any party may
change its address for purposes of this Agreement by giving notice of such change to the other
parties pursuant to this Section 13.4.

     13.5 Governing Law. This Agreement has been prepared, is being executed and delivered, and is
intended to be performed in the State of Texas and the substantive laws of such state and the
applicable federal laws of the United States of America shall govern the validity, construction,
enforcement, and interpretation of this Agreement and all of the other Loan Documents.

     13.6 Choice of Forum; Consent to Service of Process and Jurisdiction
.. Any suit, action, or proceeding against Borrower with respect to this Agreement, the Note,
or other Loan Documents, or any judgment entered by any court in respect thereof, may be brought in
the courts of the State of Texas, County of Dallas, or in the United States courts located in the
State of Texas as the Agent in its sole discretion may elect and Borrower hereby irrevocably
submits to the nonexclusive jurisdiction of such courts for the purpose of any such suit, action,
or proceeding. Borrower hereby irrevocably consents to the service of process in any suit, action,
or proceeding in said court by the mailing thereof by the Agent by registered or certified mail,
postage prepaid, to Borrower’s address shown opposite its name on the signature pages hereof.
Nothing herein or in any of the other Loan Documents shall affect the right of the Agent or any
Lender to serve process in any other manner permitted by law or shall limit the right of the Agent
or any Lender to bring any action or proceeding against Borrower or with respect to any of its
property in courts in other jurisdiction. Borrower hereby irrevocably waives any objections which
it may now or hereafter have to the laying of venue of any suit, action, or proceeding arising out
of or relating to this Agreement, the Note, or any other Loan Documents brought in the courts
located in the State of Texas, County of Dallas, and hereby further irrevocably waives any claim
that any such suit, action, or proceeding brought in any such court has been brought in any
inconvenient forum.

     13.7 Invalid Provisions. Any provision of any Loan Document held by a court of competent
jurisdiction to be illegal, invalid or unenforceable and shall not invalidate the remaining
provisions of such Loan Document which shall remain in full force and the effect thereof shall be
confined to the provision held invalid or illegal.

     13.8 Maximum Interest. It is the intention of the parties to comply strictly with applicable
usury laws. Accordingly, notwithstanding any provision to the contrary in this Agreement, or in any
contract, instrument or document evidencing or securing the payment hereof or otherwise relating
hereto (each, a “Related Document”), in no event shall this Agreement or any Related
Document require the payment or permit the payment, taking, reserving, receiving, collection or
charging of any sums constituting interest under applicable laws that exceed the maximum amount of
interest permitted by such laws, as the same may be amended or modified from time to time (the
“Maximum Rate”). If any such excess interest is called for, contracted for, charged,
taken, reserved or received in connection with this Agreement

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or any Related Document, or in any
communication by the Agent, the Lenders or any other Person to Borrower or any other Person, or in
the event that all or part of the principal or interest hereof or thereof shall be prepaid or
accelerated, so that under any of such circumstances or under any other circumstance whatsoever the
amount of interest contracted for, charged, taken, reserved or received on the amount of principal
actually outstanding from time to time under this Agreement or Related Document shall exceed the
Maximum Rate, then in such event it is agreed that: (i) the provisions of this paragraph shall
govern and control; (ii) neither Borrower nor any other person or entity now or hereafter liable
for the payment of the Obligations under this Agreement or any Related Document shall be obligated
to pay the amount of such interest to the extent it is in excess of the Maximum Rate; (iii) any
such excess interest which is or has been received by the Lenders shall be credited against the
then unpaid principal balance hereof or thereof, or if the Obligations or
any Related Document has been or would be paid in full by such credit, refunded to Borrower;
(iv) all sums paid, or agreed to be paid, to the Agent for the benefit of the Lenders for the use,
forbearance and detention of the amounts owed under this Agreement by Borrower hereunder shall, to
the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the
full term of the Obligations, including all prior and subsequent renewals and extensions, owed
under this Agreement and the Related Documents until payment in full so that the actual rate of
interest is uniform throughout the full term thereof; and (v) the provisions of this Agreement and
each Related Document, and any other communication to Borrower, shall immediately be deemed
reformed and such excess interest reduced, without the necessity of executing any other document,
to the Maximum Rate. The right to accelerate the maturity of the Obligations or any Related
Document does not include the right to accelerate, collect or charge unearned interest, but only
such interest that has otherwise accrued as of the date of acceleration. Without limiting the
foregoing, all calculations of the rate of interest contracted for, charged, taken, reserved or
received in connection with this Agreement and any Related Document which are made for the purpose
of determining whether such rate exceeds the Maximum Rate shall be made to the extent permitted by
applicable laws by amortizing, prorating, allocating and spreading during the period of the full
term of this Agreement or such Related Document, including all prior and subsequent renewals and
extensions hereof or thereof, all interest at any time contracted for, charged, taken, reserved or
received by any Lender. To the extent that the interest rate laws of the State of Texas are
applicable to this Agreement, any Note or any other Loan Document, the applicable interest rate
ceiling is the indicated (weekly) ceiling determined in accordance with Chapter 303 of the Texas
Finance Code, as amended, and, to the extent that any Obligation under this Agreement, any Note or
any other Loan Document is deemed an open end account as such term is defined in Chapter 302 of the
Texas Finance Code, as amended, the Agent retains the right to modify the interest rate in
accordance with applicable law. The terms of this paragraph shall be deemed to be incorporated
into each Related Document.

     13.9 Non-liability of Lender. The relationship between Borrower and the Lenders is, and shall
at all times remain, solely that of borrower and lender, and the Agent and the Lenders have no
fiduciary or other special relationship with Borrower.

     13.10 Offset. Borrower hereby grants to the Agent and the Lenders the right of offset, to
secure repayment of the Obligations, upon any and all moneys, securities, or other property of
Borrower and the proceeds therefrom, now or hereafter held or received by or in transit to the
Agent or its agents, from or for the account of Borrower or any Guarantor, whether for safe

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keeping, custody, pledge, transmission, collection, or otherwise, and also upon any and all
deposits (general or special) and credits of Borrower, and any and all claims of Borrower against
the Agent and/or the Lenders at any time existing.

     13.11 Successors and Assigns. The Loan Documents shall be binding upon and inure to the
benefit of Borrower, the Agent and the Lenders and their respective successors, assigns, and legal
representatives;
provided, however, that Borrower may not, without the prior written consent of all Lenders,
assign any rights, powers, duties, or obligations/hereunder. The Lenders reserve the right to sell
all or a portion of its interest in the Loan, and any Lender shall have the right to disclose any
information in its possession regarding any Obligor in connection herewith to any potential
transferee of the Loans or any part thereof.

     13.12 Successors and Assigns; Participations.

      (a) Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party; and
all covenants, promises and agreements by or on behalf of the Borrower, its
Subsidiaries, the Agent or the Lenders that are contained in this Agreement shall
bind and inure to the benefit of their respective successors and assigns. Without
limiting the generality of the foregoing, the Borrower specifically confirms that
any Lender may at any time and from time to time pledge or otherwise grant a
security interest in any Loan or any Note (or any part thereof) to any entity as
collateral security in accordance with applicable law, including without limitation,
to any Federal Reserve Bank (and its transferees).

      (b) Each Lender, without the consent of the Borrower, may sell participations
to one or more banks or other entities in all or a portion of its rights and
obligations under this Agreement and the other Loan Documents (including, without
limitation, all or a portion of its Revolving Credit Commitment, the Loans owing to
it and the Notes held by it); provided, that, (i) such Lender’s
obligations under this Agreement and the other Loan Documents (including, without
limitation, its Revolving Credit Commitment and to the Borrower hereunder) shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, and (iii) the Borrower, the
Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this Agreement;
and provided, further, that each Lender shall retain the sole right
and responsibility to enforce the obligations of the Borrower and the Guarantors
relating to the Loans and the Loan Documents, including, without limitation, the
right to approve any amendment, modification or waiver of any provision of this
Agreement or the other Loan Documents.

      (c) With the prior written consent of (i) the Borrower (which consent (x) shall
not be withheld or delayed unreasonably and (y) shall not be required if any Event
of Default has occurred and is continuing) and (ii) the Agent (which consent shall
not be withheld or delayed unreasonably), each Lender may assign by novation, to any
one or more banks or other entities, all or a portion of its

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interests, rights and
obligations under this Agreement and the other Loan Documents (including, without
limitation, all or a portion of its Revolving Credit Commitment and the same portion
of the Loans, the participations in outstanding Letters of Credit at the time held
by it and the Note or Notes held by it), provided, that (A) each
such assignment shall be of a constant, and not a varying, percentage of all of the
assigning Lender’s rights and obligations under this
Agreement, which shall include the same percentage interest in the Loans,
Letters of Credit and Notes, (B) the amount of the Revolving Credit Commitment of
the assigning Lender being assigned pursuant to each such assignment (determined as
of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Agent) shall be in a minimum principal amount equal to three
million dollars ($3,000,000) in the aggregate for the Revolving Credit Commitment of
such Lender; provided, however, notwithstanding such minimum, such
Lender may in any event assign all of the Revolving Credit Commitment of such
Lender, and (C) the parties to each such assignment shall execute and deliver to the
Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance, together with any Notes subject to such assignment and a processing and
recordation fee of three thousand five hundred dollars ($3,500) paid by assignee or
assignor. Upon such execution, delivery, acceptance and recording and after receipt
of the written consent of the Agent, from and after the effective date specified in
each Assignment and Acceptance, which effective date shall be at least five (5)
Business Days after the execution thereof, (x) the assignee thereunder shall be a
party hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender under the Loan Documents and (y) the Lender which
is assignor thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the case
of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender’s rights and obligations under this Agreement, such Lender shall
cease to be a party hereto). Notwithstanding anything to the contrary contained in
this subsection (c), each Lender may assign by novation all or a portion of its
interests, rights and obligations under this Agreement and the other Loan Documents
(including, without limitation, all or a portion of its Revolving Credit Commitment
and the same portion of the Loans, the participations in outstanding Letters of
Credit at the time held by it and the Note or Notes held by it) to an Affiliate
without the consent of the Borrower or the Agent and without having to pay the
processing and recordation fee specified above.

      (d) By executing and delivering an Assignment and Acceptance, the Lender which
is assignor thereunder and the assignee thereunder confirm to, and agree with, each
other and the other parties hereto as follows: (i) other than the representation and
warranty that it is the legal and beneficial owner of the interest being assigned
thereunder free and clear of any adverse claim, such Lender makes no representation
or warranty and assumes no responsibility with respect to any statements, warranties
or representations made in or in connection with this Agreement, the other Loan
Documents or the execution, legality, validity, enforceability, perfection,
priority, genuineness, sufficiency or value of this

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Agreement or the other Loan
Documents; (ii) such Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any of the
Guarantors or the performance or observance by the Borrower or any of the Guarantors
of any of their respective obligations under this Agreement or the other Loan
Documents; (iii) such assignee confirms that it has received a copy of this
Agreement and the other
Loan Documents, together with copies of financial statements and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Agent, such Lender 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 this Agreement or the other Loan Documents; (v) such assignee
appoints and authorizes the Agent to take such action as the Agent on its behalf and
to exercise such powers under this Agreement as are delegated to the Agent by the
terms hereof, together with such powers as are reasonably incidental thereto; and
(vi) such assignee agrees that it will perform in accordance with their terms all of
the obligations which by the terms of this Agreement are required to be performed by
it as a Lender.

      (e) The Agent shall maintain at its principal office in San Francisco,
California a copy of each Assignment and Acceptance delivered to it and a register
for the recordation of the names and addresses of the Lenders and the Revolving
Credit Commitment and principal amount of the Loans held by each Lender from time to
time (the “Register”). The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon reasonable
prior notice.

      (f) Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender and an assignee and consented to by the Borrower together with any Note or
Notes subject to such assignment and the written consent to such assignment, the
Agent shall, if such Assignment and Acceptance has been completed and is precisely
in the form of Exhibit H hereto, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register and (iii) give prompt
notice thereof to the Lenders and the Borrower. Within three (3) Business Days
after receipt of such notice, the Borrower, at its own expense, shall execute and
deliver to the Agent in exchange for each surrendered Note or Notes a new Note or
Notes to the order of such assignee in an amount equal to its portion of the
Revolving Credit Commitment assumed by it pursuant to such Assignment and Acceptance
and, if the assigning Lender has retained any Revolving Credit Commitment hereunder,
a new Note or Notes to the order of the assigning Lender in an amount equal to the
Revolving Credit Commitment retained by it hereunder. Such new Note or Notes shall
be in an aggregate principal amount equal to the aggregate principal amount of such

A&R Credit Agreement — Tandy Brands

58

 

surrendered Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit A
hereto. Notes surrendered to the Borrower shall be canceled by the Borrower.

      (g) Notwithstanding any other provision herein, any Lender may, in connection
with any assignment or participation or proposed assignment or
participation pursuant to this Section 13.13, disclose to the assignee
or participant or proposed assignee or participant, any information, including,
without limitation, any Information, relating to the Borrower furnished to such
Lender by or on behalf of the Borrower in connection with this Agreement;
provided, however, that prior to any such disclosure, each such
assignee or participant or proposed assignee or participant shall agree in writing
to preserve the confidentiality of any confidential Information relating to the
Borrower received from such Lender.

     13.13 Headings. Section headings are for convenience of reference only and shall in no way
affect the interpretation of this Agreement.

     13.14 Survival. All representations and warranties made by Borrower herein shall survive
delivery of the Notes and the making of the Loans.

     13.15 No Third Party Beneficiary. The parties do not intend the benefits of this Agreement to
inure to any third party, nor shall any Loan Document or any course of conduct by any party hereto
be construed to make or render the Agent or any Lender or any of its officers, directors, agents,
or employees liable (a) to any materialman, supplier, contractor, subcontractor, purchaser, or
lessee of any property owned by Borrower, or (b) for debts or claims accruing to any such Persons
against Borrower.

     13.16 Multiple Counterparts. This Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one and the same agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart.

     13.17 Entirety. THIS AGREEMENT, THE NOTES, AND THE OTHER LOAN DOCUMENTS REFERRED TO HEREIN
EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO
THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO. THE PROVISIONS OF THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS TO WHICH BORROWER IS A PARTY MAY BE AMENDED OR WAIVED ONLY BY AN INSTRUMENT IN
WRITING SIGNED BY THE PARTIES HERETO.

     13.18 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as hereinafter defined) and the Administrative
Agent (for itself and not on behalf of any Lender)

A&R Credit Agreement — Tandy Brands

59

 

hereby notifies Borrower that pursuant to the
requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that identifies
Borrower, which information includes the name, address and tax identification number of Borrower
and other information regarding Borrower that will allow such Lender or the Agent, as applicable,
to identify Borrower in accordance with the Act. This notice is given in accordance with the
requirements of the Act and is effective as to the Lenders and the Agent.

     13.19 Amendment and Restatement. As of the Closing Date, this Agreement amends and restates
in its entirety the Existing Credit Agreement, provided that such amendment and
restatement shall operate to renew, amend and modify the rights and obligations of the parties
under the Existing Credit Agreement as provided herein, but shall not act as a novation thereof.
The Borrower hereby agrees that (i) the Loans outstanding under the Existing Credit Agreement and
all accrued and unpaid interest thereon, (ii) all Letters of Credit issued and outstanding under
the Existing Credit Agreement, and (iii) all accrued and unpaid fees under the Existing Credit
Agreement shall be deemed to be outstanding under and payable by this Agreement.

A&R Credit Agreement — Tandy Brands

60

 

     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year first
above written.

	 	 	 	 	 
	 	 	BORROWER:
	 
	 	 	 	 
	 	 	TANDY BRANDS ACCESSORIES, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark J. Flaherty
	 

	 	 	 	 
	 

	 	Name:
	 	Mark J. Flaherty
	 

	 	Title:
	 	Chief Financial Officer
	 
	 	 	 	 
	 	 	Tandy Brands Accessories, Inc.
	 	 	690 E. Lamar Boulevard, Suite 200
	 	 	Arlington, TX 76011
	 	 	Telephone: (817) 548-0090
	 	 	Facsimile: (817) 274-7346
	 	 	Email:
mark_flaherty@tandybrands.com

A&R Credit Agreement — Tandy Brands

 

 

	 	 	 	 	 
	 	 	AGENT:
	 
	 	 	 	 
	 	 	WELLS FARGO HSBC TRADE

BANK, N.A.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ John R. Peloubet
	 

	 	 	 	 
	 

	 	Name:
	 	John R. Peloubet
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	Wells Fargo HSBC Trade Bank, N.A.
	 	 	1445 Ross Avenue, Suite 450
	 	 	Dallas, TX 75202
	 	 	Telephone: (214) 740-1585
	 	 	Facsimile: (682) 225-3523
	 	 	Email:
peloubj@wellsfargo.com
	 
	 	 	 	 
	 	 	WELLS FARGO BANK, N. A.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ John W. Johnson
	 

	 	 	 	 
	 

	 	Name:
	 	John W. Johnson
	 

	 	Title:
	 	Senior Vice President
	 
	 	 	 	 
	 	 	Wells Fargo Bank, N.A.
	 	 	1445 Ross Avenue, Suite 450
	 	 	Dallas, TX 75202
	 	 	Telephone: (214) 740-1517
	 	 	Facsimile: (682) 220-2166
	 	 	Email:
john.w.johnson@wellsfargo.com

A&R Credit Agreement — Tandy Brands

 

 

	 	 	 	 	 
	 	 	LENDERS:
	 
	 	 	 	 
	 	 	WELLS FARGO HSBC TRADE BANK, N. A.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ John R. Peloubet
	 

	 	 	 	 
	 

	 	Name:
	 	John R. Peloubet
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	Wells Fargo HSBC Trade Bank, N.A.
	 	 	1445 Ross Avenue, Suite 450
	 	 	Dallas, TX 75202
	 	 	Telephone: (214) 740-1585
	 	 	Facsimile: (682) 225-3523
	 	 	Email:
peloubj@wellsfargo.com

A&R Credit Agreement — Tandy Brands

 

 

	 	 	 	 	 
	 	 	COMERICA BANK
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Donald P. Hellman
	 

	 	 	 	 
	 

	 	Name:
	 	Donald P. Hellman
	 

	 	Title:
	 	Senior Vice President
	 
	 	 	 	 
	 	 	Comerica Bank — Texas
	 	 	8828 Stemmons Freeway, Suite 441
	 	 	Dallas, TX 75247
	 	 	Telephone: (214) 589-4419
	 	 	Facsimile: (214) 589-1360
	 	 	Email:
dphellman@comerica.com

A&R Credit Agreement — Tandy Brands

 

 

	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Allison W. Connally
	 

	 	 	 	 
	 

	 	Name:
	 	Allison W. Connally
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	Bank of America, N.A.
	 	 	901 Main Street, 68th Floor
	 	 	Dallas, TX 75202
	 	 	Telephone: (214) 209-1425
	 	 	Facsimile: (214) 209-9560
	 	 	Email:
allison.connally@bankofamerica.com

A&R Credit Agreement — Tandy Brands

 

 

	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Jerry Petrey
	 

	 	 	 	 
	 

	 	Name:
	 	Jerry Petrey
	 

	 	Title:
	 	 Vice President
	 
	 	 	 	 
	 	 	JPMorgan Chase Bank
	 	 	500 E. Border
	 	 	Arlington, TX 76004-0250
	 	 	Telephone: (817) 856-3125
	 	 	Facsimile: (817) 856-3183
	 	 	Email:
jerry.petrey@chase.com

A&R Credit Agreement — Tandy Brands

 

 

EXHIBIT A

FORM OF REVOLVING CREDIT PROMISSORY NOTE

			
	 	 	 
	U.S. $                    
	 	September 7, 2006

     FOR VALUE RECEIVED, the undersigned, TANDY BRANDS ACCESSORIES, INC., a Delaware corporation
(the “Borrower”), HEREBY PROMISES TO PAY to the order of                                         , a
                                         (the “Lender”), for the account of its Applicable Lending Office (as
defined in that certain Amended and Restated Credit Agreement, dated as of September 7, 2006, by
and among the Borrower, the Lender, certain other lenders from time to time parties thereto
(collectively, the “Lenders”), Wells Fargo HSBC Trade Bank, N.A., a national banking
association, as agent for the Lenders (the “Agent”), and Wells Fargo Bank, N.A., a national
banking association, as arranger (as amended, modified or supplemented from time to time, the
“Credit Agreement”) (capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Credit Agreement) or any other office designated by the Agent, the lesser
of (i) the principal sum of                                          DOLLARS ($                    ), or (ii) the aggregate
unpaid principal amount of all Advances made by the Lender to the Borrower under the Revolving
Credit Commitment.

     The Borrower promises to pay interest on the unpaid principal amount of each such Advance from
the date of such Advance until such principal amount is paid in full, at such interest rates, and
payable at such times, as are specified in the Credit Agreement.

     Both principal and interest are payable in lawful money of the United States of America to
Wells Fargo HSBC Trade Bank, N.A., as Agent, at San Francisco Loan Center, 201 3rd
Street, 8th floor, San Francisco, California 94103, in same day funds. Each Advance
under the Revolving Credit Commitment made by the Lender to the Borrower and all payments made on
account of principal thereof, shall be recorded by the Lender and, prior to any transfer hereof,
endorsed on the grid attached hereto which is part of this Revolving Credit Promissory Note (this
“Note”), provided, however, that failure of the Lender to make such
notation or any error therein shall not in any manner affect the obligation of the Borrower to
repay such Advances in accordance with the terms of this Note.

     This Note is one of the Revolving Credit Notes referred to in, and is subject to and entitled
to the benefits of, the Credit Agreement. The Credit Agreement, among other things, (i) provides
for the making of Advances under the Revolving Credit Commitment by the Lender to the Borrower from
time to time pursuant to Section 2.1 of the Credit Agreement in an aggregate outstanding
amount not to exceed at any time the U.S. dollar amount first above mentioned, the indebtedness of
the Borrower resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain stated events and
also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and
conditions therein specified.

Exhibit A-1

 

     The Borrower hereby waives presentment, demand, protest, notice of intent to accelerate,
notice of acceleration and any other notice of any kind, except as provided in the Credit
Agreement. No failure to exercise, and no delay in exercising, any rights hereunder on the part of
the holder hereof shall operate as a waiver of such rights.

     THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TEXAS.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	TANDY BRANDS ACCESSORIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

Exhibit A-2

 

EXHIBIT B

FORM OF NOTICE OF BORROWING

                                        , 200   

Wells Fargo HSBC Trade Bank, N.A., as Agent

for the Lenders parties

to the Credit Agreement

referred to below

201 3rd Avenue, 8th floor

San Francisco, California 94103

Attention:                                         

Ladies and Gentlemen:

     1. Submission Pursuant to Credit Agreement. The undersigned, Tandy Brands Accessories, Inc.,
a Delaware corporation (the “Borrower”), refers to the Amended and Restated Credit
Agreement, dated as of September 7, 2006 (as amended from time to time in accordance with its
terms, the “Credit Agreement”; capitalized terms defined therein and not defined herein
being used herein as therein defined), among the undersigned, certain Lenders parties thereto,
Wells Fargo HSBC Trade Bank, N.A., a national banking association, as Agent for such Lenders, and
Wells Fargo Bank, N.A., a national banking association, and hereby gives you notice, irrevocably
pursuant to Section 2.3 of the Credit Agreement, that the undersigned hereby requests a
Borrowing under the Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing as required by the Credit Agreement.

     2. Request For Advance. Borrower hereby requests that the Lenders or the Swingline Lender, as
applicable, make an Advance or a Swingline Advance to Borrower pursuant to the Credit Agreement as
follows:

	 	 	 	 	 
	 

	 	A.
	 	Advance Under Revolving Credit Commitment or Swingline Advance?

	 	 	 	 	 	 	 
	 

	 	 	 	                    
	 	Advance under Revolving Credit Commitment
	 
	 	 	 	 	 	 
	 

	 	 	 	                    
	 	Swingline Advance (if Swingline Advance, go
to Section 2(D) of this Notice of Borrowing)

	 	 	 	 	 
	 

	 	B.
	 	Alternate Base Borrowing.

	 	 	 	 	 	 	 
	 

	 	 	 	(i)
	 	Amount of Alternate Base Borrowing: $                                        
(Minimum of $500,000.00 or a greater integral multiple of
$100,000.00).

	 	 	 
	 

	 	                     New Advance
	 
	 	 
	 

	 	                     Rollover/conversion of existing Advance

Exhibit B-1

 

	 	 	 	 	 	 	 
	 

	 	 	 	(ii)
	 	Date of Advance or rollover/conversion of existing Advance:                                         
                                             

	 	 	 	 	 
	 

	 	C.
	 	Eurodollar Borrowing.

	 	 	 	 	 	 	 
	 

	 	 	 	(i)
	 	Amount of Eurodollar Borrowing: $                                                            
(Minimum of $1,000,000.00, or a greater integral multiple of
$500,000.00).

	 	 	 
	 

	 	                     New Advance
	 
	 	 
	 

	 	                     Rollover/conversion of existing Advance

	 	 	 	 	 	 	 
	 

	 	 	 	(ii)
	 	Date of Advance or rollover/conversion of existing Advance:
	 
	 	 	 	 	 	 
	 

	 	 	 	(iii)
	 	Interest Period:                      months

(one, two, three, or six months).

	 	 	 	 	 
	 

	 	D.
	 	Swingline Advance.

	 	 	 	 	 	 	 
	 

	 	 	 	(i)
	 	Amount of Swingline Advance (which must be an
Alternate Base Borrowing): $                                                            

(Minimum of $500,000.00 or a greater integral multiple of
$100,000.00).
	 
	 	 	 	 	 	 
	 

	 	 	 	(ii)
	 	Date of Swingline Advance:                                                                     
            

     3. Representations, Warranties, and Certifications. Borrower hereby represents, warrants, and
certifies to the Agent and the Lenders that, as of the date of the Advance or Swingline Advance
requested herein:

     (a) No Potential Default or Event of Default exists.

     (b) The representations and warranties of a continuing nature contained in the Credit
Agreement and each of the other Loan Documents are true and correct in all material
respects, with the same force and effect as though made on and as of the date of the Advance
or Swingline Advance except those representations and warranties that relate only to a
particular date.

     4. Proceeds of Borrowing. The Agent is authorized to deposit the proceeds of the Advance or
Swingline Advance requested hereby, other than an Advance constituting a rollover or conversion of
an existing Advance, into the general deposit account of the Borrower with the Agent pursuant to
Section 2.2(d) of the Credit Agreement.

     5. Execution Authorized. This Notice of Borrowing is executed on                                                     
        , 200    by
an authorized officer of Borrower. The undersigned, in such capacity, hereby certifies each and
every matter contained herein to be true and correct.

Exhibit B-2

 

     Executed as of the date first above written.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Sincerely,	 	 
	 
	 	 	 	 	 	 
	 	 	TANDY BRANDS ACCESSORIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

Exhibit B-3

 

EXHIBIT C

CLOSING DOCUMENTS

     1. Credit Agreement.

     2. Revolving Credit Notes and Swingline Note.

     3. Subsidiary Guaranty

     4. Notice of Borrowing with respect to the initial Advance meeting the requirements of
Exhibit B.

     5. A Certificate of Solvency executed by the chief financial officer of the Company that,
after giving effect to the transactions contemplated hereby, (i) the aggregate fair value and
present fair salable value of the Borrower’s and each Subsidiary’s assets would exceed the
Borrower’s and each Subsidiary’s total liabilities, including identified contingent liabilities;
(ii) the Borrower and each Subsidiary should be able to pay its debts as they become due in the
ordinary course of business; and (iii) the Borrower and each Subsidiary does not have an
unreasonably small amount of capital to engage in its business as management has indicated it is
now conducted and is proposed to be conducted following the consummation of the transaction
contemplated hereby.

     6. Officer’s Certificate of the Borrower certifying (a) the truth and accuracy, in all
material respects, of all of the representations and warranties contained in the Loan Documents,
(b) compliance with the conditions set forth in Section 7.1 of the Agreement, (c) that no
event has occurred and is continuing, which constitutes a Potential Default or an Event of Default,
(d) the resolutions of Borrower approving the execution, delivery and performance of the Loan
Documents delivered at closing and the transactions contemplated therein, duly adopted by
Borrower’s Board of Directors, (e) the names of the officers of Borrower authorized to sign each of
the Loan Documents delivered at closing, and (f) a copy of the Articles of Incorporation of
Borrower, and all amendments thereto, and a copy of the Bylaws of Borrower, and all amendments
thereto.

     7. Officer’s Certificates of each Guarantor certifying (a) the truth and accuracy, in all
material respects, of all of the representations and warranties contained in the Subsidiary
Guaranty, (b) the resolutions of such Guarantor approving the execution, delivery, and performance
of the Subsidiary Guaranty delivered at closing to which such Guarantor is a party, and the
transactions contemplated therein, duly adopted by such Guarantor’s Boards of Directors, (c) the
names of the officers of such Guarantor authorized to sign the Subsidiary Guaranty delivered at
closing to which such Guarantor is a party, and (d) copies of the Articles of Incorporation of such
Guarantor, and all amendments thereto, and copies of the Bylaws of such Guarantor, and all
amendments thereto.

Exhibit C-1

 

     8. Certificates of existence and good standing for Borrower and the Guarantors issued by the
state of incorporation and in each other state in which the Borrower and/or any Guarantor is
required to be qualified to do business as a foreign corporation.

     9. Opinion from Borrower’s counsel in form and substance reasonably acceptable to the Agent.

     10. Certificates of insurance evidencing the existence of all insurance required to be
maintained pursuant to Section 9.10, hereof along with originally executed loss payee
endorsements and additional insured endorsements, all in favor of the Agent.

     11. Such other documents or information as may be reasonably required by the Agent.

Exhibit C-2

 

EXHIBIT D

SUBSIDIARIES — TANDY BRANDS ACCESSORIES, INC.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Number of	 	 	 	 
	 	 	Jurisdiction	 	Outstanding Shares	 	 	 	 
	 	 	of	 	of Each Class of	 	Owner of	 	Jurisdictions
	 	 	Incorporation	 	Capital Stock or	 	Outstanding Shares	 	Qualified as Foreign
	 	 	or	 	Partnership Interest	 	or Interests of Each	 	Corporation or
	Subsidiary	 	Organization	 	Owned	 	Such Class Owned	 	Partnership
	TBAC-Prince Gardner,
Inc.

	 	Delaware
	 	 	1,000	 	 	Tandy Brands
Accessories, Inc.
	 	Texas
	 
	 	 	 	 	 	 	 	 	 	 
	Amity/Rolfs, Inc.

	 	Delaware
	 	 	1,000	 	 	Tandy Brands
Accessories, Inc.
	 	Texas, Wisconsin
	 
	 	 	 	 	 	 	 	 	 	 
	TBAC Investments, Inc.

	 	Nevada
	 	 	1,000	 	 	Tandy Brands
Accessories, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	TBAC General 

Management Company

	 	Nevada
	 	 	1,000	 	 	Tandy Brands
Accessories, Inc.
	 	Texas
	 
	 	 	 	 	 	 	 	 	 	 
	Accessory Design
Group, Inc.

	 	Delaware
	 	 	1,000	 	 	Tandy Brands
Accessories, Inc.
	 	Texas
	 
	 	 	 	 	 	 	 	 	 	 
	TBAC — Torel, Inc.

	 	Delaware
	 	 	1,000	 	 	Tandy Brands
Accessories, Inc.
	 	Texas
	 
	 	 	 	 	 	 	 	 	 	 
	Tandy Brands
Accessories Handbags,
Inc.

	 	Delaware
	 	 	1,000	 	 	Tandy Brands
Accessories, Inc.
	 	Texas, Hong Kong
	 
	 	 	 	 	 	 	 	 	 	 
	Stagg Industries, Inc.

	 	Alabama
	 		4,700 Class A common

4,700 Class B common
		 	Tandy Brands
Accessories, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	H.A. Sheldon Canada,
Ltd.

	 	Ontario, Canada
	 	 	1,000	 	 	Tandy Brands
Accessories, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	TBAC Investment Trust

	 	Pennsylvania
	 	 	100	 	 	TBAC Investments,
Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	TBAC Management 

Company, LP

	 	Delaware
	 		1% partnership
interest
		 	General Partner -

TBAC General

Management Company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 		99% partnership
interest
		 	Limited Partner -
TBAC
Investments, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	TBAC-Mass Merchant
Quality Control, Inc.

	 	Delaware
	 	 	1,000	 	 	Accessory Design
Group, Inc.
	 	Texas
	 
	 	 	 	 	 	 	 	 	 	 
	TBAC-Acquisition, Inc.

	 	Delaware
	 	 	1,000	 	 	Tandy Brands
Accessories, Inc.
	 	Texas
	 
	 	 	 	 	 	 	 	 	 	 
	Superior Merchandise 

Company

	 	Louisiana
	 	 	250	 	 	TBAC-Acquisition,
Inc.	 	 

Exhibit D

 

 

EXHIBIT E

FORM OF

AMENDED AND RESTATED SUBSIDIARY GUARANTY

     This AMENDED AND RESTATED SUBSIDIARY GUARANTY, dated as of the 7th day of
September, 2006 (this “Guaranty”), is made by TBAC PRINCE GARDNER, INC., a Delaware
corporation (“Prince Gardner”), AMITY/ROLFS, INC., a Delaware corporation
(“Amity/Rolfs”), TBAC INVESTMENTS, INC., a Nevada corporation (“Investments”), TBAC
GENERAL MANAGEMENT COMPANY, a Nevada corporation (“Management Co.”), ACCESSORY DESIGN
GROUP, INC., a Delaware corporation (“Accessory Design”), TBAC-TOREL, INC., a Delaware
corporation (“Torel”), TANDY BRANDS ACCESSORIES HANDBAGS, INC., a Delaware corporation
(“Handbags”), STAGG INDUSTRIES, INC., an Alabama corporation (“Stagg”), TBAC
INVESTMENT TRUST (“Trust”), a Pennsylvania trust, TBAC MANAGEMENT COMPANY L.P., a Delaware
limited partnership (“Management LP”), TBAC-MASS MERCHANT QUALITY CONTROL, INC., a Delaware
corporation (“Mass Merchant”), TBAC-ACQUISITION, INC., a Delaware corporation
(“Acquisition”), and SUPERIOR MERCHANDISE COMPANY, a Louisiana corporation
(“Superior”), (Prince Gardner, Amity/Rolfs, Investments, Management Co., Accessory Design,
Torel, Handbags, Stagg, Trust, Management LP, Mass Merchant, Acquisition and Superior each a
“Guarantor” and collectively, the “Guarantors”), for the benefit of WELLS FARGO
HSBC TRADE BANK, N.A., a national banking association, in its capacity as Agent for the Lenders
party to the Credit Agreement described below and Wells Fargo Bank, N. A. (“WFB”), together
with the Lenders, the “Banks”).

RECITALS:

     WHEREAS, Tandy Brands Accessories, Inc., a Delaware corporation (“Borrower”) is
the legal and beneficial owner of all of the issued and outstanding capital stock of the
Guarantors, with the exception of: (i) Trust which is a wholly owned subsidiary of Investments,
(ii) Management LP, of which Investments owns a 99% limited partnership interest and Management Co.
owns a 1% general partnership interest, (iii) Mass Merchant which is a wholly owned subsidiary of
Accessory Design, and (iv) Superior which is a wholly owned subsidiary of Acquisition;

     WHEREAS, Borrower, Agent and certain of the Banks entered into a Credit Agreement dated as of
June 27, 2001 (as amended, the “Existing Credit Agreement”);

     WHEREAS, Borrower, Agent and the Banks have agreed to amend and restate the Existing Credit
Agreement by entering into an Amended and Restated Credit Agreement dated as of September 7, 2006
(the “Credit Agreement”);

     WHEREAS, certain of the Guarantors and Agent entered into a Subsidiary Guaranty dated as of
June 27, 2001 (the “Existing Guaranty”);

Exhibit E-1

 

     WHEREAS, the Guarantors and Agent wish to amend and restate the Existing Guaranty to guaranty
the payment and performance of Borrower’s indebtedness and obligations to Agent and Banks under the
Credit Agreement; and

     WHEREAS, the Guarantors acknowledge that each, as a direct or indirect wholly owned subsidiary
of Borrower, will receive substantial direct and indirect benefits by reason of the making of loans
to Borrower as provided in the Credit Agreement;

     NOW, THEREFORE, in consideration of the premises and in order to induce Banks to make the
loans and extend other financial accommodations to Borrower under the Credit Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Guarantors hereby agree with Agent, on behalf of and for the benefit of Agent and
Banks, as follows:

     1. Incorporation of Recitals; Defined Terms. The foregoing recitals are incorporated
herein by this reference. Capitalized terms used in this Guaranty without definition shall have the
respective meanings ascribed to such terms in the Credit Agreement.

     2. Guaranty of Payment and Performance. The Guarantors hereby unconditionally and
irrevocably guaranty to Agent and Banks the punctual payment and performance when due, whether at
stated maturity, by acceleration or otherwise, of the Obligations. Without limitation of the
foregoing, the Obligations shall include (a) all costs and expenses (including reasonable
attorneys’ fees and expenses) incurred by Agent and Banks in collecting any amount due Agent and
Banks under this Guaranty or in prosecuting any action against Borrower, any Guarantor or any other
guarantor with respect to all or any part of the Obligations (collectively, the “Enforcement
Costs”), and (b) all interest, fees, costs and expenses due Agent and Banks after the filing of
a bankruptcy petition by or against any Guarantor or Borrower regardless of whether such amounts
can be collected during the pendency of the bankruptcy proceedings. The Guarantors agree that this
Guaranty is a present and continuing guaranty of payment and not of collectibility, and that Banks
shall not be required to prosecute collection, enforcement or other remedies against Borrower, any
other guarantor of the Obligations or any other Person before calling on the Guarantors for
payment. The Guarantors agree that if, for any reason, Borrower or any other guarantor of the
Obligations shall fail or be unable to pay, punctually and fully, any of the Obligations, the
Guarantors shall pay such obligations to Banks in full immediately upon demand. The Guarantors
agree that one or more successive actions may be brought against the Guarantors or any Guarantor as
often as Banks deem advisable, until all of the Obligations are paid and performed in full.
Anything contained in this Guaranty to the contrary notwithstanding, the obligations of the
Guarantors hereunder shall be limited to a maximum aggregate amount equal to the greatest amount
that would not render the Guarantors’ obligations hereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code or any provisions of
applicable state law (collectively, the “Fraudulent Transfer Laws”), in each case after
giving effect to all other liabilities of the Guarantors, contingent or otherwise, that are
relevant under the Fraudulent Transfer Laws (specifically excluding, however, any liabilities of
the Guarantors in respect of intercompany indebtedness to Borrower or Affiliates of Borrower to the
extent such indebtedness would be discharged in an amount equal to the amount paid by the
Guarantors hereunder) and after giving effect as assets to the value (as determined under the
applicable provisions of the Fraudulent Transfer Laws) of any

Exhibit E-2

 

rights of subrogation, contribution, reimbursement, indemnity or similar rights of the
Guarantors pursuant to applicable law or any agreement providing for an equitable allocation among
the Guarantors and other Affiliates of Borrower of obligations arising under guarantees by such
parties.

     3. Continuing Guaranty. The Guarantors agree that the obligations of the Guarantors
pursuant to Section 2 above and any other provision of any of the Loan Documents to which
the Guarantors are a party shall be primary obligations, shall not be subject to any counterclaim,
set-off, abatement, deferment or defense based upon any claim that the Guarantors may have against
Agent, Banks, Borrower, any other guarantor of the Obligations or any other Person, and shall
remain in full force and effect without regard to, and shall not be released, discharged or
affected in any way by any circumstance or condition (whether or not the Guarantors shall have any
knowledge thereof), including without limitation:

     (a) any lack of validity or enforceability of any of the Loan Documents;

     (b) any termination, amendment, modification or other change in any of the Loan
Documents;

     (c) any furnishing, exchange, substitution or release of any collateral, or any failure
to perfect any Lien in any of collateral;

     (d) any failure, omission or delay on the part of Borrower, the Guarantors, any other
guarantor of the Obligations, Agent or Banks to conform or comply with any term of any of
the Loan Documents or any failure of Agent or Banks to give notice of any Event of Default
or of any disposition or intended disposition of any collateral securing the Obligations;

     (e) any waiver, compromise, release, settlement or extension of time of payment or
performance or observance of any of the obligations or agreements contained in any of the
Loan Documents;

     (f) any action or inaction by Agent or Banks under or in respect of any of the Loan
Documents, any failure, lack of diligence, omission or delay on the part of Agent or Banks
to enforce, assert or exercise any right, power or remedy conferred on them in any of the
Loan Documents, or any other action or inaction on the part of Agent or Banks;

     (g) any dissolution of any of the Guarantors or any voluntary or involuntary
bankruptcy, insolvency, reorganization, arrangement, readjustment, assignment for the
benefit of creditors, composition, receivership, liquidation, marshaling of assets and
liabilities or similar events or proceedings with respect to Borrower, any Guarantor or any
other guarantor of the Obligations, as applicable, or any of their respective property or
creditors, or any action taken by any trustee or receiver or by any court in any such
proceeding including, without limitation, any proceeding under Title 11 of the United States
Code (11 U.S.C. Section 101 et seq.), as amended (the “Bankruptcy Code”);

     (h) any merger or consolidation of Borrower, any of the Guarantors or any other
guarantor of the Obligations into or with any Person, or any sale, lease or transfer of

Exhibit E-3

 

any of the assets of Borrower, any of the Guarantors or any other guarantor of the
Obligations to any other Person;

     (i) any change in the ownership of the capital stock of any of the Guarantors, Borrower
or any other guarantor of the Obligations or any change in the relationship between
Borrower, any of the Guarantors or any other guarantor of the Obligations, or any
termination of any such relationship;

     (j) any release or discharge by operation of law of Borrower, any of the Guarantors or
any other guarantor of the Obligations from any obligation or agreement contained in any of
the Loan Documents;

     (k) Agent’s or any Bank’s election, in any proceeding instituted under the Bankruptcy
Code, of the application of Section 1111(b)(2) of the Bankruptcy Code;

     (l) any borrowing or grant of a security interest by Borrower as debtor-in-possession
under Section 364 of the Bankruptcy Code;

     (m) the inability of Agent or any Bank to enforce the Obligations of Borrower as a
result of the automatic stay provisions of Section 362 of the Bankruptcy Code;

     (n) the disallowance, under Section 502 of the Bankruptcy Code;

of all or any portion of Agent’s or any Bank’s claim or claims for repayment of the Obligations; or

     (o) any other occurrence, circumstance, happening or event, whether similar or
dissimilar to the foregoing and whether foreseen or unforeseen, which otherwise might
constitute a legal or equitable defense or discharge of the liabilities of a guarantor or
surety or which otherwise might limit recourse against Borrower or the Guarantors.

     (4) Waivers. The Guarantors unconditionally waive, to the extent permitted by law,
(i) notice of any of the matters referred to in Section 3 above, (ii) all notices which may
be required by statute, rule of law or otherwise, now or hereafter in effect, to preserve intact
any rights against the Guarantors, including, without limitation, any demand, presentment and
protest, proof of notice of non-payment under any of the Loan Documents and notice of any Default
or any Event of Default or any failure on the part of Borrower, the Guarantors or any other
guarantor of the Obligations to perform or comply with any covenant, agreement, term or condition
of any of the Loan Documents, (iii) any right to the enforcement, assertion or exercise against
Borrower, the Guarantors or any other guarantor of the Obligations of any right or remedy conferred
under any of the Loan Documents, (iv) any requirement of diligence on the part of any Person, (v)
any requirement to exhaust any remedies or to mitigate the damages resulting from any default under
any of the Loan Documents, and (vi) any notice of any sale, transfer or other disposition of any
right, title or interest of Agent or Banks under any of the Loan Documents.

     (5) Representations and Warranties. Each Guarantor represents and warrants to
Agent and Banks as follows:

Exhibit E-4

 

     (a) Organization and Qualification. Each Guarantor is a corporation (with the
exception of Trust, which is a trust and Management LP, which is a limited partnership) duly
organized and in good standing under the laws of the jurisdiction of its incorporation or
organization, has all requisite corporate, trust or partnership power and authority to own
its property and to carry on its business as now conducted and as proposed to be conducted,
and is in good standing and authorized to do business in each jurisdiction in which the
failure so to qualify would have a material adverse effect upon the business, operations,
properties, assets or condition (financial or otherwise) of such Guarantor.

     (b) Power and Authority. Each Guarantor has the corporate power and authority
to enter into, execute, deliver and carry out the terms of this Guaranty and the other Loan
Documents to which it is a party and to incur the obligations provided for herein and
therein, all of which have been duly authorized by all proper and necessary action and are
not prohibited by the organizational instruments of such Guarantor.

     (c) Binding Obligation. This Guaranty and the other Loan Documents to which
the Guarantors are a party, when executed and delivered, will constitute the valid and
legally binding obligations of the Guarantors, enforceable against the Guarantors in
accordance with their respective terms.

     (d) No Conflict. The execution, delivery and performance by the
Guarantors of this Guaranty and each of the other Loan Documents to which they are a party
and the consummation of the transactions contemplated thereby do not and will not: (1)
violate any provision of law applicable to the Guarantors, the certificate of incorporation,
bylaws, trust agreement, limited partnership agreement, or articles of incorporation or
organization of each Guarantor, or any order, judgment or decree of any court or other
agency of government binding on any Guarantor; (2) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any contract or
agreement to which any Guarantor is a party or by which any Guarantor or its property is
bound; (3) result in or require the creation or imposition of any material Lien upon any of
the properties or assets of any Guarantor (other than Liens in favor of Agent); or (4)
require any approval or consent of any Person under any contract or agreement to which any
Guarantor is a party or by which any Guarantor or its property is bound.

     (e) Governmental Consents. The execution, delivery and performance by the
Guarantors of this Guaranty and each of the other Loan Documents to which they are a party,
and the consummation of the transactions contemplated thereby do not and will not require
any registration with, consent or approval of, or notice to, or other action to, with or by,
any federal, state, provincial or other governmental authority or regulatory body except
filings required in connection with the perfection of security interests granted pursuant to
the Loan Documents.

     (f) Burdensome Obligations; Solvency. After giving effect to the transactions
contemplated by this Guaranty and the other Loan Documents to which the Guarantors are a
party, the Guarantors (i) do not intend to incur, and do not believe that they will incur,
debts beyond their ability to pay such debts as they become due, (ii) own and will own
property, the fair salable value of which is (1) greater than the total amount of their

Exhibit E-5

 

liabilities (including contingent liabilities) and (2) greater than the amount that
will be required to pay the probable liabilities of their then existing debts as they become
absolute and matured, and (iii) have and will have capital that is not unreasonably small in
relation to their business as presently conducted and as proposed to be conducted.

     6. Reinstatement. The obligations of the Guarantors pursuant to this Guaranty shall
continue to be effective or automatically be reinstated, as the case may be, if at any time payment
of any of the Obligations is rescinded or otherwise must be restored or returned by Agent or Banks
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any Guarantor,
Borrower or any other guarantor of the Obligations or otherwise, all as though such payment had not
been made.

     7. Successors and Assigns. This Guaranty shall inure to the benefit of Agent and
Banks, and their respective successors and assigns. This Guaranty shall be binding on the
Guarantors, their successors and assigns, and shall continue in full force and effect until all of
the Obligations are paid and performed in full.

     8. No Waiver of Rights. No delay or failure on the part of Agent or Banks to exercise
any right, power or privilege under this Guaranty or any of the other Loan Documents shall
operate as a waiver thereof, and no single or partial exercise of any right, power or privilege
shall preclude any other or further exercise thereof or the exercise of any other power or right,
or be deemed to establish a custom or course of dealing or performance between the parties hereto.
The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies
provided by law. No notice to or demand on the Guarantors in any case shall entitle the Guarantors
to any other or further notice or demand in the same, similar or other circumstance.

     9. Modification. The terms of this Guaranty may be waived, discharged, or terminated
only by an instrument in writing signed by the party against which enforcement of the change,
waiver, discharge or termination is sought. No amendment, modification, waiver or other change of
any of the terms of this Guaranty shall be effective without the prior written consent of Agent and
Banks.

     10. Costs and Expenses. The Guarantors agree to pay on demand all costs and expenses
incurred by or on behalf of Agent and Banks (including, without limitation, attorneys’ fees and
expenses) in enforcing the obligations of the Guarantors under this Guaranty.

     11. Joinder. The Guarantors agree that any action to enforce this Guaranty may be
brought against the Guarantors without any joinder of Borrower or any other guarantor of the
Obligations in such action.

     12. Joint and Several Liability. Each Guarantor agrees that its shall be held jointly
and severally liable under this Guaranty.

     13. Severability. If any provision of this Guaranty is deemed to be invalid by reason
of the operation of any law, or by reason of the interpretation placed thereon by any court or
other governmental authority, this Guaranty shall be construed as not containing such provision and
the invalidity of such provision shall not affect the validity of any other provision hereof,

Exhibit E-6

 

and any and all other provisions hereof which otherwise are lawful and valid shall remain in
full force and effect.

     14. Notices. Unless otherwise specifically provided herein, any notice or other
communication required or permitted to be given shall be in writing addressed to the respective
party as set forth below and may be personally served, telecopied, telexed or sent by overnight
courier service or United States mail and shall be deemed to have been given: (a) if delivered in
person, when delivered; (b) if delivered by telecopy or telex, on the date of transmission if
transmitted on a Business Day before 4:00 p.m. (Dallas time) or, if not, on the next succeeding
Business Day; (c) if delivered by overnight courier, two days after delivery to such courier
properly addressed; or (d) if by U.S. Mail, three Business Days after depositing in the United
States mail, with postage prepaid and properly addressed.

     Notices shall be addressed as follows:

	 	 	 	 	 
	 

	 	If to any Guarantor:
	 	c/o Tandy Brands Accessories, Inc.
	 

	 	 	 	690 E. Lamar, Suite 200
	 

	 	 	 	Arlington, Texas 76011-3862
	 

	 	 	 	Attn: Mr. Mark Flaherty
	 

	 	 	 	Fax: 817/274-7346
	 
	 	 	 	 
	 

	 	If to Agent:
	 	Wells Fargo HSBC Trade Bank, N.A.
	 

	 	 	 	1445 Ross Avenue, Suite 450
	 

	 	 	 	Dallas, Texas 75202
	 

	 	 	 	Attn: Mr. John R. Peloubet
	 

	 	 	 	Fax: 214/740-1585

or to such other address as the party addressed shall have previously designated by written notice
to the serving party given in accordance with this Section 14. A notice not given as
provided above shall, if it is in writing, be deemed given if and when actually received by the
party to whom given.

     15. Additional Guarantors. Any Person that becomes a Subsidiary of Borrower
subsequent to the date hereof and that was not a “Guarantor” under this Guaranty at the time of
initial execution hereof shall become a “Guarantor” hereunder by executing and delivering to Agent
an Additional Subsidiaries Supplement in the form attached hereto as Exhibit A. Any such
Subsidiary shall thereafter be deemed a “Guarantor” for all purposes under this Guaranty.

     16. Foreign Currency Obligations. Each Guarantor will make payment relative to each
Obligation in the currency (the “Original Currency”) in which Borrower is required to pay such
Obligation. If a Guarantor makes payment relative to any Obligation in a currency (the “Other
Currency”) other than the Original Currency (whether voluntarily or pursuant to an order or
judgment of a court or tribunal of any jurisdiction), such payment will constitute a discharge of
the liability of such Guarantor hereunder in respect of such Obligation only to the extent of the
amount of the Original Currency which the Agent is able to purchase at Toronto, Ontario with the
amount it receives on the date of receipt. If the amount of the Original Currency which the Agent
is able to purchase is less than the amount of such currency originally due to it in respect

Exhibit E-7

 

to the relevant Obligation, such Guarantor will indemnify and save the Agent and the Lenders
harmless from and against any loss or damage arising as a result of such deficiency. This
indemnity will constitute an obligation separate and independent from the other obligations
contained in this Guaranty, will give rise to a separate and independent cause of action, will
apply irrespective of any indulgence granted by the Agent or any Lender and will continue in full
force and effect notwithstanding any judgment or order in respect of any amount due hereunder or
under any judgment or order.

     17. Taxes and Set-off by Guarantors. All payments to be made by any Guarantor
hereunder will be made without set-off or counterclaim and without deduction for any taxes, levies,
duties, fees, deductions, withholdings, restrictions or conditions of any nature whatsoever. If at
any time any applicable law, regulation or international agreement requires a Guarantor to make any
such deduction or withholding from any such payment, the sum due from such Guarantor with respect
to such payment will be increased to the same extent, and subject to the same conditions, as
provided in Section 2.18 of the Credit Agreement.

     18. APPLICABLE LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.

     19. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. THE GUARANTORS HEREBY CONSENT TO
THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF DALLAS, STATE OF TEXAS
AND IRREVOCABLY AGREE THAT, SUBJECT TO AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF
OR RELATING TO THIS GUARANTY SHALL BE LITIGATED IN SUCH COURTS. THE GUARANTORS EXPRESSLY SUBMIT
AND CONSENT TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM NON
CONVENIENS. THE GUARANTORS HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREE THAT ALL
SUCH SERVICE OF PROCESS MAY BE MADE UPON THE GUARANTORS BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, ADDRESSED TO THE GUARANTORS, AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND
SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED. IN ANY LITIGATION,
TRIAL, ARBITRATION OR OTHER DISPUTE RESOLUTION PROCEEDING RELATING TO THIS GUARANTY OR ANY OF THE
OTHER LOAN DOCUMENTS, ALL DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS OF EACH GUARANTOR OR OF ANY OF
THEIR AFFILIATES SHALL BE DEEMED TO BE EMPLOYEES OR MANAGING AGENTS OF SUCH GUARANTOR FOR PURPOSES
OF ALL APPLICABLE LAW OR COURT RULES REGARDING THE PRODUCTION OF WITNESSES BY NOTICE FOR TESTIMONY
(WHETHER IN A DEPOSITION, AT TRIAL OR OTHERWISE). THE GUARANTORS AGREE THAT AGENT’S OR ANY BANK’S
COUNSEL IN ANY SUCH DISPUTE RESOLUTION PROCEEDING MAY EXAMINE ANY OF THESE INDIVIDUALS AS IF UNDER
CROSS-EXAMINATION AND THAT ANY DISCOVERY DEPOSITION OF ANY OF THEM MAY BE USED IN THAT PROCEEDING
AS IF IT WERE AN EVIDENCE DEPOSITION. THE GUARANTORS IN ANY EVENT WILL USE ALL COMMERCIALLY
REASONABLE

Exhibit E-8

 

EFFORTS TO PRODUCE IN ANY SUCH DISPUTE RESOLUTION PROCEEDING, AT THE TIME AND IN THE MANNER
REQUESTED BY AGENT OR ANY BANK, ALL PERSONS, DOCUMENTS (WHETHER IN TANGIBLE, ELECTRONIC OR OTHER
FORM) OR OTHER THINGS UNDER ITS CONTROL AND RELATING TO THE DISPUTE.

     20. WAIVER OF JURY TRIAL. THE GUARANTORS, AGENT AND BANKS HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
GUARANTY. THE GUARANTORS, AGENT AND BANKS ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS
GUARANTY AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. THE
GUARANTORS, AGENT AND BANKS WARRANT AND REPRESENT 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.

     21. Amendment and Restatement. This Guaranty amends and restates in its entirety the
Existing Guaranty, provided that such amendment and restatement shall operate to renew, amend and
modify the rights and obligations of the parties under the Existing Guaranty as provided herein,
but shall not act as a novation thereof. The Guarantors hereby agree that the Obligations
guaranteed hereunder include (i) the Loans outstanding under the Existing Credit Agreement and all
accrued and unpaid interest thereon, (ii) all Letters of Credit issued and outstanding under the
Existing Credit Agreement, and (iii) all accrued and unpaid fees under the Existing Credit
Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

Exhibit E-9

 

     IN WITNESS WHEREOF, the Guarantors have executed this Guaranty as of the date first above
written.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	TBAC-PRINCE GARDNER, INC.,
	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	AMITY/ROLFS, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TBAC INVESTMENTS, INC.,	 	 
	 	 	a Nevada corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TBAC GENERAL MANAGEMENT COMPANY,	 	 
	 	 	a Nevada corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ACCESSORY DESIGN GROUP, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

Exhibit E-10

 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	TBAC-TOREL, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TANDY BRANDS ACCESSORIES HANDBAGS, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	STAGG INDUSTRIES, INC.,	 	 
	 	 	an Alabama corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TBAC INVESTMENT TRUST,	 	 
	 	 	a Pennsylvania trust	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TBAC MANAGEMENT COMPANY, L.P.,	 	 
	 	 	a Delaware limited partnership	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

Exhibit E-11

 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	TBAC-MASS MERCHANT QUALITY CONTROL, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TBAC-ACQUISITION, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	SUPERIOR MERCHANDISE COMPANY,	 	 
	 	 	a Louisiana corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

Exhibit E-12

 

EXHIBIT A

ADDITIONAL SUBSIDIARIES SUPPLEMENT

     This ADDITIONAL SUBSIDIARIES SUPPLEMENT, dated                                         , 200    to the Amended and Restated
Subsidiary Guaranty, dated as of September 7, 2006 (as amended, supplemented and otherwise
modified, the “Guaranty”), made by certain Subsidiaries of Tandy Brands Accessories, Inc.,
a Delaware corporation (“Borrower”), from time to time parties hereto (collectively, the
“Guarantors”).

RECITALS:

     WHEREAS, the Guaranty provides that any Subsidiary of Borrower, although not a Guarantor
thereunder at the time of the initial execution thereof, may become a Guarantor under the Guaranty
upon the delivery to the Agent of a supplement in substantially the form of this Additional
Subsidiaries Supplement; and

     WHEREAS, the undersigned was not a Subsidiary of Borrower on the date of the Guaranty and,
therefore, was not a party to the Guaranty but now desires to become a Guarantor thereunder;

     NOW, THEREFORE, the undersigned hereby agrees as follows:

     The undersigned agrees to be bound by all of the provisions of the Guaranty applicable to a
Guarantor thereunder and agrees that it shall, on the date this Additional Subsidiaries Supplement
is accepted by the Agent, become a Guarantor, for all purposes of the Guaranty to the same extent
as if originally a party thereto with the representations and warranties contained therein being
deemed to be made by the undersigned as of the date hereof.

     Unless otherwise defined herein, capitalized terms which are defined in the Guaranty are used
herein as so defined.

     IN WITNESS WHEREOF, the undersigned has caused this Additional Subsidiaries Supplement to be
executed and delivered by a duly authorized officer on the date first above written.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	[NAME OF SUBSIDIARY]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

Exhibit E-13

 

EXHIBIT F

FORM OF SWINGLINE NOTE

			
	 	 	 
	U.S. $10,000,000.00
	 	September 7, 2006

     FOR VALUE RECEIVED, the undersigned, TANDY BRANDS ACCESSORIES, INC., a Delaware corporation
(the “Borrower”), HEREBY PROMISES TO PAY to the order of WELLS FARGO HSBC TRADE BANK, N.A.,
a national banking association (the “Lender”), for the account of its Domestic Lending
Office (as defined in that certain Amended and Restated Credit Agreement, dated as of September 7,
2006 by and among the Borrower, the Lender, certain other lenders from time to time parties thereto
(collectively, the “Lenders”) Wells Fargo HSBC Trade Bank, N.A., a national banking
association, as Agent for the Lenders, and Wells Fargo Bank, N.A., a national banking association,
(as amended, modified or supplemented from time to time, the “Credit Agreement”))
(capitalized terms used herein and not otherwise defined shall have the meanings set forth in the
Credit Agreement) or any other office designated by the Lender, the lesser of (i) the principal sum
of TEN MILLION AND NO/100 DOLLARS ($10,000,000.00), or (ii) the aggregate unpaid principal amount
of all Swingline Advances made by the Lender to the Borrower.

     The Borrower promises to pay the entire unpaid principal balance hereof at such time as
specified in the Credit Agreement. In addition, the Borrower promises to pay interest on the
unpaid principal balance hereof from and after the date hereof until such principal amount is paid
in full, at such interest rates, and payable at such times, as are specified in the Credit
Agreement.

     Both principal and interest are payable in lawful money of the United States of America to
Wells Fargo HSBC Trade Bank, N.A. at San Francisco Loan Center, 201 3rd Street,
8th floor, San Francisco, California 94103, in same day funds. All payments made on
account of principal thereof, shall be recorded by the Lender and, prior to any transfer hereof,
endorsed on the grid attached hereto which is part of this Swingline Note, provided,
however, that failure of the Lender to make such notation or any error therein shall not in
any manner affect the obligation of the Borrower to repay such Swingline Advances in accordance
with the terms of this Swingline Note.

     This Swingline Note is one of the Swingline Notes referred to in, and is subject to and
entitled to the benefits of, the Credit Agreement. The Credit Agreement, among other things, (i)
provides for the making of Swingline Advances by the Lender to the Borrower from time to time
pursuant to Section 3.1 of the Credit Agreement in an aggregate outstanding amount not to
exceed at any time the U.S. dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Swingline Advance being evidenced by this Swingline Note, and (ii)
contains provisions for acceleration of the maturity hereof upon the happening of certain stated
events.

     The Borrower hereby waives presentment, demand, protest, notice of intent to accelerate,
notice of acceleration and any other notice of any kind, except as provided in the Credit
Agreement. No failure to exercise, and no delay in exercising, any rights hereunder on the part of
the holder hereof shall operate as a waiver of such rights.

Exhibit F-1

 

     THIS SWINGLINE NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF TEXAS.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	TANDY BRANDS ACCESSORIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

Exhibit F-2

 

LOANS, MATURITIES

AND PAYMENTS OF PRINCIPAL AND INTEREST

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Rate of	 	 	 	 	 	 	 	 
	 	 	 	 	Interest	 	Amount of	 	Amount of	 	Unpaid	 	 
	Borrowing	 	Amount and	 	Applicable to	 	Principal Paid	 	Interest Paid	 	Principal	 	Notation
	Date	 	Type of Loan	 	Loan	 	or Prepaid	 	or Prepaid	 	Balance	 	Made By
	 
	 	 	 	 	 	 	 	 	 	 	 	 

Exhibit F-3

 

EXHIBIT G

FORM OF LETTER OF CREDIT REQUEST

                                        , 200   

	 	 
	(Address to Issuing Bank)
	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 

Attention:                                                             

Ladies and Gentlemen:

     Reference is made to the Amended and Restated Credit Agreement dated as of September 7, 2006
(as amended from time to time, the “Credit Agreement”) among the undersigned, certain
Lenders parties thereto, Wells Fargo HSBC Trade Bank, N.A., a national banking association, as
Agent for such Lenders, and Wells Fargo Bank, N.A., a national banking association. Capitalized
terms used herein not otherwise defined herein shall have the meanings assigned to such terms in
the Credit Agreement.

     The Borrower hereby requests the issuance of a [Standby] [Commercial] Letter of Credit under
the Credit Agreement, and in that connection sets forth below the information relating to such
Letter of Credit (“Proposed Letter of Credit”) as required by Section 4.2 of the
Credit Agreement. The Proposed Letter of Credit must be issued:

	 	(a)	 	on or before                                         , 200  1
	 
	 	(b)	 	for the benefit of                                         
	 
	 	(c)	 	in the amount of $                                        
	 
	 	(d)	 	having an expiry date of                                         , 200  2
	 
	 	(e)	 	subject to the conditions set forth in the
Application for Letter of Credit submitted herewith.

 

			
	1	 	Must be not less than three (3) Business Days
after notice is given to the Issuing Bank.
	 
	2	 	Must be not later than the earlier of (A) the
Termination Date or (B) (i) one hundred eighty (180) days from the date of
issuance for a Commercial Letter of Credit or (ii) one (1) year from the date
of issuance for a Standby Letter of Credit.

Exhibit G-1

 

     [The Borrower hereby refers to Letter of Credit Number                      (the “Expiring
Letter of Credit”) which has an existing expiry date of                     . The Borrower
hereby requests that the expiry date of the Expiring Letter of Credit be extended to
                    .]

     The Borrower hereby certifies that after giving effect to the [issuance of the Proposed Letter
of Credit] or [the extension of the Expiring Letter of Credit] (a) the maximum amount outstanding
under all Letters of Credit does not exceed $20,000,000 and (b) the sum of the Letter of Credit
Obligations plus all Advances under the Revolving Credit Commitment plus all Swingline Advances
plus the Acceptance Exposure do not exceed $75,000,000. The Borrower hereby certifies that on the
date hereof all applicable conditions to the issuance of the Proposed Letter of Credit set forth in
Section 7 of the Credit Agreement have been satisfied and that the Proposed Letter of
Credit complies with the terms of the Credit Agreement, and upon the issuance of the Proposed
Letter of Credit, the Borrower will be deemed to have recertified the foregoing on such issuance
date.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Sincerely,	 	 
	 
	 	 	 	 	 	 
	 	 	TANDY BRANDS ACCESSORIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

Exhibit G-2

 

EXHIBIT H

FORM OF ASSIGNMENT AND ACCEPTANCE

     Reference is made to the Amended and Restated Credit Agreement, dated as of September 7, 2006
(as amended, supplemented, waived or otherwise modified from time to time, the “Credit
Agreement”), among Tandy Brands Accessories, Inc., a Delaware corporation (the
“Borrower”), the lenders named in Schedule 2.1 thereto (the “Lenders”),
Wells Fargo HSBC Trade Bank, N.A., as Agent (in such capacity, the “Agent”), and Wells
Fargo Bank, N.A..

     Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall
have the meanings given to them in the Credit Agreement.

     The Assignor named on Schedule I (the “Assignor”) and the Assignee named on
Schedule I (the “Assignee”) agree as follows:

     1. The Assignor hereby irrevocably sells and assigns to the Assignee without recourse to the
Assignor, and the Assignee hereby irrevocably purchases and assumes from the Assignor without
recourse to the Assignor, as of the Transfer Effective Date (as defined in Section 4
below), an interest (the “Assigned Interest”) as specified in Schedule I in and to
the Assignor’s rights and obligations under the Credit Agreement and the other Loan Documents with
respect to the Total Revolving Credit Commitment provided for in the Credit Agreement as set forth
on Schedule I (the “Assigned Facility”), in a principal amount for the Assigned
Facility as set forth on Schedule I.

     2. The Assignor (a) makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in connection with the Credit
Agreement or any other Loan Document or the execution, legality, validity, enforceability,
perfection, priority, genuineness, sufficiency or value of the Credit Agreement, any other Loan
Document or any other instrument or document furnished pursuant thereto, other than that it is the
legal and beneficial owner of the interest being assigned thereunder free and clear of any adverse
claim upon the interest being assigned by it hereunder; (b) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the Borrower, any of the
Guarantors or any other obligor or the performance or observance by the Borrower, any of the
Guarantors or any other obligor of any of their respective obligations under the Credit Agreement,
any other Loan Document or any other instrument or document furnished pursuant hereto or thereto;
and (c) attaches the Note(s), if any, held by it evidencing the Assigned Facility and requests that
the Borrower exchange such Note(s) for a new Note or Notes payable to the Assignee and (if the
Assignor has retained any interest in the Assigned Facility) a new Note or Notes payable to the
Assignor in the respective amounts which reflect the assignment being made hereby (and after giving
effect to any other assignments which have become effective on the Transfer Effective Date).

     3. The Assignee (a) represents and warrants that it is legally authorized to enter into this
Assignment and Acceptance; (b) confirms that it has received a copy of the Credit Agreement and the
other Loan Documents, together with copies of the financial statements and

Exhibit H-1

 

such other documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (c) agrees that it will,
independently and without reliance upon the Assignor, the 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 action under the Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or thereto; (d) appoints
and authorizes the Agent to take such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto as are delegated to the Agent by the terms thereof, together
with such powers as are incidental thereto; (e) agrees that it will be bound by the provisions of
the Credit Agreement and will perform in accordance with its terms all the obligations which by the
terms of the Credit Agreement are required to be performed by it as a Lender; (f) specifies as its
Domestic Lending Office (and address for notices) and Eurodollar Lending Office the offices set
forth beneath its name on Schedule I; and (g) attaches the forms prescribed by the Internal
Revenue Service of the United States of America certifying as to the Assignee’s status for purposes
of determining exemption from United States of America withholding taxes with respect to all
payments to be made to the Assignee under the Credit Agreement and its Note(s) or such other
documents as are necessary to indicate that all such payments are subject to such rates at a rate
reduced by an applicable tax treaty.

     4. The Transfer Effective Date of this Assignment and Acceptance shall be as specified on
Schedule I. Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance by it and recording by the Agent pursuant to Section
13.12 of the Credit Agreement, and it shall be effective as of the Transfer Effective Date
(which shall not, unless otherwise agreed to by the Agent, be earlier than five (5) Business Days
after the date of such acceptance and recording by the Agent). The Agent shall give prompt notice
of any such Assignment and Acceptance to the Borrower and the Lenders.

     5. Upon such acceptance and recording, from and after the Transfer Effective Date, the Agent
shall make all payments in respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignee whether such amounts have accrued prior to the
Transfer Effective Date or accrue subsequent to the Transfer Effective Date. The Assignor and the
Assignee shall make all appropriate adjustments in payments by the Agent for periods prior to the
Transfer Effective Date or with respect to the making of this assignment directly between
themselves.

     6. From and after the Transfer Effective Date, (a) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and under the other Loan Documents and shall be bound by the
provisions thereof and (b) the Assignor shall, to the extent provided in this Assignment and
Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement,
(and, in case of an Assignment and Acceptance covering all or the remaining portion of an
Assignor’s rights and obligations under this Agreement, such Lender shall cease to be a party to
the Loan Documents), but shall nevertheless continue to be entitled to the benefits of Sections
2.18 and 9.13 thereof.

Exhibit H-2

 

     7. Notwithstanding any other provision hereof, if the consents of the Borrower and the Agent
hereto are required under Section 13.12 of the Credit Agreement, this Assignment and
Acceptance shall not be effective unless such consents shall have been obtained as evidenced by
Schedule I attached hereto.

     8. This Assignment and Acceptance shall be governed by and construed in accordance with the
laws of the State of Texas without regard to the principles of conflict of laws thereof.

     9. This Assignment and Acceptance may be executed by one or more of the parties to this
Assignment and Acceptance on any number of separate counterparts (including by facsimile
transmission), and all of said counterparts taken together shall be deemed to constitute one and
the same instrument.

     IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be
executed as of the date indicated by the signatures of their respective duly authorized officers on
Schedule I hereto.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

Exhibit H-3

 

SCHEDULE I TO

Assignment and Acceptance

Re: Amended and Restated Credit Agreement, dated as of September 7, 2006, among
Tandy Brands Accessories, Inc., the Lenders named in Schedule 2.1 thereto,
Wells Fargo HSBC Trade Bank, N.A., as Agent, and Wells Fargo Bank, N.A..

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Name of Assignor:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Name of Assignee:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Transfer Effective Date of Assignment:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 
	Credit Principal	 	Commitment	 	 
	Facility Assigned	 	Amount Assigned	 	Percentage Assigned
	Revolving Credit Commitment
	 	$                    	 	                    %

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	[NAME OF ASSIGNEE]	 	 	 	[NAME OF ASSIGNOR]	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Domestic Lending Office:	 	 	 	Eurodollar Lending Office:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

Exhibit H-4

 

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	Accepted for recording in the Register:	 	 	 	Consented to:	 	 
	WELLS FARGO HSBC TRADE BANK,	 	 	 	TANDY BRANDS ACCESSORIES, INC.	 	 
	N.A., as Agent	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

Exhibit H-5

 

Schedule 1.1(a)

Existing Liens

None

Schedule 1.1(a)

 

Schedule 2.1

Revolving Credit Commitments

	 	 	 	 	 	 	 	 	 
	 	 	Amount of	 	Percentage of
	 	 	Commitment	 	Commitment
	Wells Fargo HSBC Trade Bank, N. A.
	 	$	30,500,000.00	 	 	 	40.666666666	%
	 
	 	 	 	 	 	 	 	 
	Comerica Bank
	 	$	19,500,000.00	 	 	 	26.000000000	%
	 
	 	 	 	 	 	 	 	 
	Bank of America, N.A.
	 	$	12,500,000.00	 	 	 	16.666666667	%
	 
	 	 	 	 	 	 	 	 
	JPMorgan Chase Bank, N.A.
	 	$	12,500,000.00	 	 	 	16.666666667	%
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total:
	 	$	75,000,000.00	 	 	 	100.00	%

Schedule 2.1

 

Schedule 2.2(a)

Domestic Lending Office

Wells Fargo HSBC Trade Bank, N.A.

San Francisco Loan Center

201 3rd Street, 8th Floor

San Francisco, California

Attn: Paul Miyashiro

Phone: (415) 477-5422

Facsimile: (415) 512-9408

Wells Fargo Bank, N.A.

1445 Ross Avenue, Suite 450

MAC 5301-044

Dallas, Texas 75202

Attn: John R. Peloubet

Phone: (214) 740-1585

Facsimile: (682) 225-3523

Comerica Bank

8828 Stemmons Frwy., Suite 441

Dallas, Texas 75247

Attn: Corey Bailey

Phone: (214) 589-1314

Facsimile: (214) 589-1360

Bank of America, N.A.

1201 Main St., 6th Fl.

Dallas, TX 75202

Attn: Stacia Morgan

Phone: (214) 508-8317

Facsimile: (214) 508-8419

JPMorgan Chase Bank, N.A.

500 E. Border

Arlington, TX 76004-0250

Attn: Jerry Petrey

Phone: (817) 856-3125

Facsimile: (817) 856-3183

Schedule 2.2(a)

 

Schedule 2.2(b)

Eurodollar Lending Office

Wells Fargo HSBC Trade Bank, N.A.

San Francisco Loan Center

201 3rd Street, 8th Floor

San Francisco, California

Attn: Paul Miyashiro

Phone: (415) 477-5422

Facsimile: (415) 512-9408

Wells Fargo Bank, N.A.

1445 Ross Avenue, Suite 450

MAC 5301-044

Dallas, Texas 75202

Attn: John R. Peloubet

Phone: (214) 740-1585

Facsimile: (682) 225-3523

Comerica Bank

8828 Stemmons Frwy., Suite 441

Dallas, Texas 75247

Attn: Corey Bailey

Phone: (214) 589-1314

Facsimile: (214) 589-1360

Bank of America, N.A.

1201 Main St., 6th Fl.

Dallas, TX 75202

Attn: Stacia Morgan

Phone: (214) 508-8317

Facsimile: (214) 508-8419

JPMorgan Chase, N.A.

500 E. Border

Arlington, TX 76004-0250

Attn: Jerry Petrey

Phone: (817) 856-3125

Facsimile: (817) 856-3183

Schedule 2.2(b)

 

Schedule 8.14(a)

Compliance with Law

None.

Schedule 8.14(a)

 

 

Schedule 8.14(b)

Compliance with Governmental Authorization

None.

Schedule 8.14(b)

 

 

Schedule 8.18

Patents, Trademarks and Copyrights

TRADEMARK SCHEDULE

	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	Argentina
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	2277331	 	1837127
	Australia
	 	 	 	 
	 
	 	 	 	 
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	892927	 	892927
	PRINCE GARDNER
	 	 	 	 
	 
	 	231794	 	B231794
	AMITY
	 	 	 	 
	 
	 	278248	 	B278248
	ROLFS
	 	 	 	 
	 
	 	278246	 	B278246
	ROLFS
	 	 	 	 
	 
	 	278245	 	B278245
	AMITY
	 	 	 	 
	 
	 	278247	 	B278247
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	860134	 	860134
	HICKOK & Crest Design
	 	 	 	 
	 
	 	A113576	 	A113576
	HICKOK & Crest Design
	 	 	 	 
	 
	 	A113575	 	A113575
	HICKOK & Crest Design
	 	 	 	 
	 
	 	A113386	 	A113386
	HICKOK & Crest Design
	 	 	 	 
	 
	 	A210910	 	A210910
	HICKOK & Crest Design
	 	 	 	 
	 
	 	A212122	 	A212122
	Austria
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	AM5103/89	 	129593
	Benelux
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	736275	 	466944
	CANTERBURY
	 	 	 	 

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	 
	 	034040	 	034040
	AMITY
	 	 	 	 
	 
	 	42874	 	364305
	Brazil
	 	 	 	 
	 
	 	 	 	 
	AMITY
	 	 	 	 
	 
	 	818058536	 	818058536
	AMITY
	 	 	 	 
	 
	 	818058544	 	818058544
	Canada
	 	 	 	 
	 
	 	 	 	 
	ROLFS
	 	 	 	 
	 
	 	277400	 	140458
	CREDIT GUARD
	 	 	 	 
	 
	 	732321	 	429760
	ROLFS RESERVE
	 	 	 	 
	 
	 	1232446	 	 
	DIRECTOR
	 	 	 	 
	 
	 	8814	 	8814
	HICKOK
	 	 	 	 
	 
	 	122845	 	TMDA37290
	ROLFS RESERVE
	 	 	 	 
	 
	 	1232447	 	 
	CANTERBURY (and Design)
	 	 	 	 
	 
	 	373967	 	214806
	KEY KADDY
	 	 	 	 
	 
	 	283761	 	187501
	PROTECTA-CARD
	 	 	 	 
	 
	 	395665	 	230689
	ROYAL CREST
	 	 	 	 
	 
	 	345828	 	TMA189656
	AMITY
	 	 	 	 
	 
	 	0167700	 	UCA007845
	BARRY WELLS & Design
	 	 	 	 
	 
	 	664310	 	TMA402798
	PRINCE GARDNER
	 	 	 	 
	 
	 	325290	 	170954
	Chile
	 	 	 	 
	 
	 	 	 	 
	AMITY
	 	 	 	 
	 
	 	178555	 	622848
	PRINCESS GARDNER
	 	 	 	 
	 
	 	332000	 	332000

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	China P.R.
	 	 	 	 
	 
	 	 	 	 
	AMITY
	 	 	 	 
	 
	 	94013987	 	1082193
	PRINCESS GARDNER (and Design)
	 	 	 	 
	 
	 	5251145	 	 
	HICKOK & Crest Design
	 	 	 	 
	 
	 	1057358	 	1057358
	CANTERBURY
	 	 	 	 
	 
	 	95082437	 	960353
	HICKOK & Design
	 	 	 	 
	 
	 	1057357	 	1057357
	PRINCE GARDNER
	 	 	 	 
	 
	 	200213563	 	1082380
	HICKOK & Wreath with Banner Design
	 	 	 	 
	 
	 	1070730	 	1070730
	HICKOK & Wreath with Banner Design
	 	 	 	 
	 
	 	1057356	 	1057356
	CANTERBURY
	 	 	 	 
	 
	 	95083548	 	936939
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	3012389	 	 
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	2001120783	 	1923543
	ROLFS
	 	 	 	 
	 
	 	2001042288	 	1927338
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	2000198556	 	1927045
	Columbia
	 	 	 	 
	 
	 	 	 	 
	HICKOK
	 	 	 	 
	 
	 	20358A	 	20358A
	HICKOK
	 	 	 	 
	 
	 	421511	 	158155
	HICKOK
	 	 	 	 
	 
	 	20358	 	20358
	HICKOK
	 	 	 	 
	 
	 	93421510	 	158156
	HICKOK
	 	 	 	 
	 
	 	20358B	 	20358B
	Community Trademark
	 	 	 	 
	 
	 	 	 	 
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	002441327	 	002441327
	AMITY
	 	 	 	 
	 
	 	216556	 	216556

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	ROLFS
	 	 	 	 
	 
	 	216325	 	216325
	BRACETAC
	 	 	 	 
	 
	 	37887	 	37887
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	001993443	 	001993443
	Costa Rica
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	75033	 	75033
	PRINCE GARDNER
	 	 	 	 
	 
	 	73691	 	73691
	Dominican Republic
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	48334	 	48334
	PRINCE GARDNER
	 	 	 	 
	 
	 	48277	 	48277
	France
	 	 	 	 
	 
	 	 	 	 
	AMITY
	 	 	 	 
	 
	 	531993	 	1557347
	PRINCE GARDNER
	 	 	 	 
	 
	 	1560673	 	1560673
	Germany
	 	 	 	 
	 
	 	 	 	 
	HICKOK
	 	 	 	 
	 
	 	92409	 	692409
	AMITY
	 	 	 	 
	 
	 	8453/18WZ	 	1182263
	BRACETAC
	 	 	 	 
	 
	 	1867/26	 	1152740
	AMITY
	 	 	 	 
	 
	 	2695/18	 	1008037
	PRINCE GARDNER
	 	 	 	 
	 
	 	522366/18 WZ	 	875811
	ROLFS
	 	 	 	 
	 
	 	48452/18	 	1177058
	Great Britain
	 	 	 	 
	 
	 	 	 	 
	HICKOK
	 	 	 	 
	 
	 	59312	 	659312
	AMITY
	 	 	 	 
	 
	 	857839	 	857839
	PRINCESS GARDNER
	 	 	 	 
	 
	 	1024369	 	1024369

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	HICKOK
	 	 	 	 
	 
	 	59311	 	659311
	Greece
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	146.134	 	146.134
	Hong Kong
	 	 	 	 
	 
	 	 	 	 
	AMITY & DESIGN
	 	 	 	 
	 
	 	591/1977	 	93/1978
	HICKOK
	 	 	 	 
	 
	 	291/47	 	19490461
	LA GARDE
	 	 	 	 
	 
	 	1562/87	 	B2458/1989
	CANTERBURY BELTS LTD. & Design
	 	 	 	 
	 
	 	2035/1981	 	2035/1981
	AMITY & DESIGN
	 	 	 	 
	 
	 	591/1977	 	94/78
	AMITY & DESIGN
	 	 	 	 
	 
	 	591/1977	 	95/1978
	PRINCE GARDNER
	 	 	 	 
	 
	 	B660/1972	 	B660/1972
	HICKOK
	 	 	 	 
	 
	 	291/47	 	19490462
	AMITY & DESIGN
	 	 	 	 
	 
	 	512/78	 	442/1979
	AMITY & Design
	 	 	 	 
	 
	 	591/1977	 	1829/1977
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	2000/26720	 	03341/2003
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	19212/2001	 	03487/2003
	Italy
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	MI2001C002290	 	 
	Japan
	 	 	 	 
	 
	 	 	 	 
	HICKOK
	 	 	 	 
	 
	 	34973/93	 	3241945
	HICKOK
	 	 	 	 
	 
	 	34974/93	 	3134459
	AMITY
	 	 	 	 
	 
	 	74855/76	 	1802179
	ROLFS
	 	 	 	 
	 
	 	66290/74	 	1375473
	HICKOK
	 	 	 	 

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	 
	 	120705/87	 	2255925
	HICKOK
	 	 	 	 
	 
	 	2240798	 	2240798
	HICKOK
	 	 	 	 
	 
	 	510326	 	510326
	HICKOK A MAN’S COMPANY & Wreath Design
	 	 	 	 
	 
	 	211570/81	 	925996
	HICKOK
	 	 	 	 
	 
	 	220134/77	 	509870
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	2000-140180	 	4560009
	HICKOK
	 	 	 	 
	 
	 	200015/88	 	518159
	Malaysia
	 	 	 	 
	 
	 	 	 	 
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	2000/18726	 	 
	ROLFS
	 	 	 	 
	 
	 	90/07467	 	90/07467
	P G PRINCESS GARDNER (and Design)
	 	 	 	 
	 
	 	2002/00157	 	02000157
	Mexico
	 	 	 	 
	 
	 	 	 	 
	PRINCESS GARDNER
	 	 	 	 
	 
	 	298962	 	588202
	AMITY
	 	 	 	 
	 
	 	106318	 	 
	HICKOK
	 	 	 	 
	 
	 	53764	 	53764
	HICKOK
	 	 	 	 
	 
	 	165074	 	471497
	ROLFS
	 	 	 	 
	 
	 	559221	 	820343
	ROLFS
	 	 	 	 
	 
	 	559222	 	 
	HICKOK
	 	 	 	 
	 
	 	275362	 	275362
	HICKOK
	 	 	 	 
	 
	 	564949	 	 
	ROYALLE BY PRINCESS GARDNER
	 	 	 	 
	 
	 	298964	 	585568
	DL (Stylized)
	 	 	 	 
	 
	 	794849	 	 
	DL (Stylized)
	 	 	 	 
	 
	 	794855	 	 

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	DL (Stylized)
	 	 	 	 
	 
	 	794854	 	 
	DL (Stylized)
	 	 	 	 
	 
	 	794853	 	 
	DL (Stylized)
	 	 	 	 
	 
	 	794851	 	 
	DON LOPER
	 	 	 	 
	 
	 	746340	 	 
	DON LOPER
	 	 	 	 
	 
	 	746341	 	 
	DON LOPER
	 	 	 	 
	 
	 	746343	 	 
	DON LOPER
	 	 	 	 
	 
	 	746345	 	 
	HICKOK
	 	 	 	 
	 
	 	179484	 	179484
	DL (Stylized)
	 	 	 	 
	 
	 	794857	 	 
	DON LOPER
	 	 	 	 
	 
	 	794856	 	 
	WILD HICKOK
	 	 	 	 
	 
	 	212168	 	538846
	DON LOPER
	 	 	 	 
	 
	 	746347	 	 
	HICKOK
	 	 	 	 
	 
	 	635269	 	822611
	CANTERBURY
	 	 	 	 
	 
	 	242853	 	579135
	WILD HICKOK
	 	 	 	 
	 
	 	212171	 	495299
	WILD HICKOK
	 	 	 	 
	 
	 	212170	 	538848
	HICKOK
	 	 	 	 
	 
	 	241858	 	241858
	HICKOK
	 	 	 	 
	 
	 	242036	 	242036
	HICKOK
	 	 	 	 
	 
	 	178896	 	178896
	WILD HICKOK
	 	 	 	 
	 
	 	212169	 	538847
	New Zealand
	 	 	 	 
	 
	 	 	 	 
	HICKOK
	 	 	 	 
	 
	 	44877	 	44877

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	HICKOK & Crest Design
	 	 	 	 
	 
	 	55920	 	55920
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	647954	 	647954
	HICKOK & Crest Design
	 	 	 	 
	 
	 	55921	 	55921
	HICKOK
	 	 	 	 
	 
	 	44878	 	44878
	AMITY
	 	 	 	 
	 
	 	108198	 	108198
	HICKOK & Crest Design
	 	 	 	 
	 
	 	55919	 	55919
	AMITY
	 	 	 	 
	 
	 	108197	 	108197
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	628836	 	628836
	Norway
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	895378	 	148313
	Panama
	 	 	 	 
	 
	 	 	 	 
	HICKOK
	 	 	 	 
	 
	 	4838	 	4838
	AMITY
	 	 	 	 
	 
	 	285184	 	21974
	AMITY
	 	 	 	 
	 
	 	285183	 	21904
	Philippines
	 	 	 	 
	 
	 	 	 	 
	LIFESTYLES UNLIMITED
	 	 	 	 
	 
	 	83199	 	60218
	PG PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	4-2004-05184	 	 
	HICKOK
	 	 	 	 
	 
	 	89847	 	21170
	HICKOK LIFESTYLES UNLIMITED & Design
	 	 	 	 
	 
	 	50901	 	38774
	HICKOK LIFESTYLES UNLIMITED & design
	 	 	 	 
	 
	 	50898	 	38806
	PRINCE GARDNER
	 	 	 	 
	 
	 	101958	 	4-1995-104229
	HICKOK LIFESTYLES UNLIMITED (and Design)
	 	 	 	 
	 
	 	27420	 	29785
	HICKOK (and Design)
	 	 	 	 
	 
	 	27421	 	29666

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	Puerto Rico
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	16141	 	16141
	CANTERBURY & Design
	 	 	 	 
	 
	 	23268	 	23268
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	52386	 	52386
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	56494	 	56494
	CANTERBURY
	 	 	 	 
	 
	 	23269	 	23269
	Singapore
	 	 	 	 
	 
	 	 	 	 
	ROLFS
	 	 	 	 
	 
	 	S/1286/89	 	1286/89
	ROLFS
	 	 	 	 
	 
	 	S/6675/89	 	T89/06675B
	ROLFS
	 	 	 	 
	 
	 	S/6874/90	 	6874/90
	HICKOK
	 	 	 	 
	 
	 	9509	 	9509
	HICKOK
	 	 	 	 
	 
	 	9508	 	9508
	AMITY & Design
	 	 	 	 
	 
	 	S/71692	 	71692
	AMITY & Design
	 	 	 	 
	 
	 	S/71693	 	71693
	AMITY
	 	 	 	 
	 
	 	S/6872/90	 	6872/90
	South Africa
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	69/3118	 	1969/03118
	HICKOK & Crest Design
	 	 	 	 
	 
	 	1861/54	 	1859-1861/
	HICKOK & Crest Design
	 	 	 	 
	 
	 	1859-1861/	 	1859-1861/
	HICKOK & Crest Design
	 	 	 	 
	 
	 	1859-1861/	 	1859-1861/
	Spain
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	2381921	 	2381921
	Switzerland
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	8120	 	337176

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	Taiwan
	 	 	 	 
	 
	 	 	 	 
	ROLFS
	 	 	 	 
	 
	 	77-48206	 	439075
	CANTERBURY
	 	 	 	 
	 
	 	43233	 	141167
	ROLFS
	 	 	 	 
	 
	 	77-48205	 	438955
	ROLFS
	 	 	 	 
	 
	 	77-48207	 	441247
	AMITY
	 	 	 	 
	 
	 	77-48204	 	441246
	AMITY
	 	 	 	 
	 
	 	77-48203	 	439074
	Turkey
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	2001/12185	 	2001/12185
	United States
	 	 	 	 
	 
	 	 	 	 
	CANTERBURY
	 	 	 	 
	 
	 	72/327445	 	0911958
	PRINCESS
	 	 	 	 
	 
	 	72/265332	 	0844803
	PRINCESS GARDNER
	 	 	 	 
	 
	 	74/556406	 	2187999
	BRACETAC
	 	 	 	 
	 
	 	73/731419	 	1550618
	CANTERBURY
	 	 	 	 
	 
	 	74/693222	 	2049808
	THE PRINCESS GARDNER & design
	 	 	 	 
	 
	 	71/414102	 	367247
	SPOKES (and Design)
	 	 	 	 
	 
	 	75/874966	 	2393745
	ROYALLE BY PRINCE GARDNER
	 	 	 	 
	 
	 	75/453145	 	2319811
	CARLOS TOMASINI
	 	 	 	 
	 
	 	75/035106	 	2035301
	CANTERBURY & design
	 	 	 	 
	 
	 	72/201369	 	0791884
	CANTERBURY & design
	 	 	 	 
	 
	 	73/009645	 	0998500
	PRINCE GARDNER ACCESSORIES & design
	 	 	 	 
	 
	 	74/713656	 	2041364
	ROLFS
	 	 	 	 
	 
	 	73/170121	 	1118634

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	IDENTIFIER
	 	 	 	 
	 
	 	72/096178	 	710096
	PRINCE GARDNER (stylized)
	 	 	 	 
	 
	 	71/542652	 	0516773
	TOWNSMAN
	 	 	 	 
	 
	 	72/045442	 	669459
	CREDIT GUARD
	 	 	 	 
	 
	 	73/075924	 	1050073
	DIRECTOR
	 	 	 	 
	 
	 	71/394447	 	351388
	PRINCESS GARDNER ACCESSORIES (and Design)
	 	 	 	 
	 
	 	74/713654	 	2082144
	CANTERBURY
	 	 	 	 
	 
	 	72/037631	 	0674224
	PRINCE GARDNER
	 	 	 	 
	 
	 	74/040455	 	1638232
	PROTECTA-CARD
	 	 	 	 
	 
	 	73/075927	 	1050074
	ROYAL CREST
	 	 	 	 
	 
	 	73/679465	 	1485277
	CREDENTIAL
	 	 	 	 
	 
	 	72/096179	 	731338
	DL (Stylized)
	 	 	 	 
	 
	 	76/429184	 	 
	SURPLUS (and Design) (Left of Circle)
	 	 	 	 
	 
	 	76/269006	 	2897619
	COLLAR-EASE
	 	 	 	 
	 
	 	75/054062	 	2095928
	INSIDE-OUT
	 	 	 	 
	 
	 	76/647976	 	 
	ACE BY CANTERBURY (and Design)
	 	 	 	 
	 
	 	76/662159	 	 
	ACE BY CANTERBURY (and Design)
	 	 	 	 
	 
	 	76/662158	 	 
	ROLFS WEEKENDER
	 	 	 	 
	 
	 	76/657177	 	 
	ACTIVE ESSENTIALS BY ROLFS and Design
	 	 	 	 
	 
	 	76/603551	 	 
	ACTIVE ESSENTIALS BY ROLFS
	 	 	 	 
	 
	 	76/603550	 	 
	ROLFS RESERVE
	 	 	 	 
	 
	 	76/585642	 	3066421
	ROLFS RESERVE
	 	 	 	 

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	 
	 	76/585633	 	2956784
	ETON
	 	 	 	 
	 
	 	75/143036	 	2404968
	TANDY BRANDS ACCESSORIES, INC. OUTLET STORE
	 	 	 	 
	 
	 	76/497225	 	2812643
	ETON
	 	 	 	 
	 
	 	74/125681	 	1721441
	DL Stylized
	 	 	 	 
	 
	 	76/433943	 	2763803
	DON LOPER
	 	 	 	 
	 
	 	76/433633	 	2823928
	DON LOPER
	 	 	 	 
	 
	 	76/429247	 	2752354
	AMITY LIFESTYLE ACCESSORIES
	 	 	 	 
	 
	 	76/386026	 	2686096
	CROSS IN CIRCLE AND DOTS Design (Right)
	 	 	 	 
	 
	 	76/975185	 	2714536
	CROSS IN CIRCLE Design
	 	 	 	 
	 
	 	76/320961	 	2798556
	CROSS IN CIRCLE AND DOTS Design (RIGHT)
	 	 	 	 
	 
	 	76/320962	 	2685683
	CROSS IN CIRCLE Design
	 	 	 	 
	 
	 	76/320731	 	2594330
	TOREL
	 	 	 	 
	 
	 	76/379875	 	2659342
	SPOKES
	 	 	 	 
	 
	 	75/590226	 	2425629
	COLETTA
	 	 	 	 
	 
	 	76/568946	 	2917096
	DON LOPER
	 	 	 	 
	 
	 	257209	 	842497
	TANDY BRANDS ACCESSORIES
	 	 	 	 
	 
	 	73/756261	 	1752430
	LE-BIL’S (stylized)
	 	 	 	 
	 
	 	73/605579	 	1433020
	LUCARELLI
	 	 	 	 
	 
	 	596787	 	1421197
	LUCARELLI
	 	 	 	 
	 
	 	73/477534	 	1399411
	LUCARELLI
	 	 	 	 
	 
	 	477532	 	1396878
	HICKOK
	 	 	 	 
	 
	 	543425	 	1381527

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	ORLEANS
	 	 	 	 
	 
	 	500683	 	1348132
	HICKOK
	 	 	 	 
	 
	 	72/082979	 	700221
	HICKOK
	 	 	 	 
	 
	 	65361	 	0684952
	HICKOK
	 	 	 	 
	 
	 	71/595957	 	0548994
	STAYS ‘N CASE
	 	 	 	 
	 
	 	76/440003	 	2724002
	BARRY WELLS (stylized)
	 	 	 	 
	 
	 	74/029450	 	1630139
	BACK TO SCHOOL
	 	 	 	 
	 
	 	76/232341	 	 
	DON LOPER
	 	 	 	 
	 
	 	73/707382	 	1552433
	HICKOK
	 	 	 	 
	 
	 	373338	 	0338625
	HICKOK
	 	 	 	 
	 
	 	373339	 	0337194
	ALOTTA WALLET
	 	 	 	 
	 
	 	76/632709	 	 
	FISHMASTER
	 	 	 	 
	 
	 	75/825665	 	 
	SNAPS
	 	 	 	 
	 
	 	78/807711	 	 
	STAYS ‘N CASE
	 	 	 	 
	 
	 	75/064244	 	2028047
	SPORTS PLAY
	 	 	 	 
	 
	 	76/292027	 	2792151
	MARDIGRASBEADS.COM
	 	 	 	 
	 
	 	76/337840	 	2650875
	CORKY
	 	 	 	 
	 
	 	76/345269	 	2698645
	HICKOK
	 	 	 	 
	 
	 	76/379885	 	2962740
	ESSENTIALS BY ROLFS
	 	 	 	 
	 
	 	75/279231	 	2352242
	THEFT-GUARD
	 	 	 	 
	 
	 	73/749693	 	1541535
	TOREL
	 	 	 	 
	 
	 	76/268901	 	2642164
	SPORTA BOUT
	 	 	 	 
	 
	 	73/114498	 	1081722

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	SNAP HAPPY
	 	 	 	 
	 
	 	72/221333	 	817206
	SHOP & GO
	 	 	 	 
	 
	 	73/674394	 	1478676
	SIDEKICK
	 	 	 	 
	 
	 	72/418486	 	961820
	ROLFS ROYAL CREST
	 	 	 	 
	 
	 	73/681589	 	1485278
	POP TOP
	 	 	 	 
	 
	 	73/114499	 	1081043
	NOSTALGIA
	 	 	 	 
	 
	 	74/396910	 	1821361
	AMITY & Design
	 	 	 	 
	 
	 	73/125993	 	1105460
	GLO-GETTER
	 	 	 	 
	 
	 	73/749770	 	1541147
	TRAVEL LITE
	 	 	 	 
	 
	 	73/683149	 	1623664
	COURIER
	 	 	 	 
	 
	 	72/237072	 	829612
	CHANGEABLE
	 	 	 	 
	 
	 	74/189236	 	1745862
	CAR CADDY
	 	 	 	 
	 
	 	72/056291	 	682112
	CACHE
	 	 	 	 
	 
	 	73/815513	 	1585671
	BRACELINC
	 	 	 	 
	 
	 	73/755691	 	1552060
	BODY BILLFOLD
	 	 	 	 
	 
	 	72/454486	 	988166
	AMITY & Thick Line Design
	 	 	 	 
	 
	 	71/091140	 	110105
	AMITY CLASSIC
	 	 	 	 
	 
	 	74/199601	 	1708196
	AMERICAN CLASSIC & eagle design
	 	 	 	 
	 
	 	73/386959	 	1301680
	LA GARDE
	 	 	 	 
	 
	 	71/158540	 	163698
	NITE & DAY
	 	 	 	 
	 
	 	73/822549	 	1588883
	DESIGNED AND CRAFTED FOR LIFE
	 	 	 	 
	 
	 	76/975051	 	2678999
	DANIEL ADAM
	 	 	 	 
	 
	 	76/362819	 	2736047

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	STACY RYAN
	 	 	 	 
	 
	 	76/223824	 	2653563
	BEACH BUNDLE
	 	 	 	 
	 
	 	75/982154	 	2595287
	NECESSITIES BY ROLFS
	 	 	 	 
	 
	 	76/059964	 	2782299
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	76/976720	 	2921373
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	76/975574	 	2760187
	PRINCE GARDNER
	 	 	 	 
	 
	 	74/556405	 	2187998
	JAMES B. FAIRCHILD
	 	 	 	 
	 
	 	74/021220	 	1829864
	SPRINTKIT
	 	 	 	 
	 
	 	73/308133	 	1228487
	DESIGNED AND CRAFTED FOR LIFE
	 	 	 	 
	 
	 	76/975428	 	2733308
	TUCK-N-TAKE
	 	 	 	 
	 
	 	73/093705	 	1067699
	SPOKES
	 	 	 	 
	 
	 	75/874968	 	2393746
	TANDY BRANDS
	 	 	 	 
	 
	 	73/756262	 	1751187
	ROSE IN TRIANGLE design
	 	 	 	 
	 
	 	75/603133	 	2511417
	DESIGNED AND CRAFTED FOR LIFE ON THE ROAD
	 	 	 	 
	 
	 	76/975578	 	2760189
	SPOKES
	 	 	 	 
	 
	 	75/591789	 	2559269
	SPOKES & Design
	 	 	 	 
	 
	 	75/590228	 	2579134
	LA GARDE
	 	 	 	 
	 
	 	73/652855	 	1485246
	ROLFS
	 	 	 	 
	 
	 	71/656539	 	604067
	ROLFS
	 	 	 	 
	 
	 	76/405168	 	2777432
	ROLFS
	 	 	 	 
	 
	 	74/662841	 	2032901
	DESIGNED AND CRAFTED FOR LIFE
	 	 	 	 
	 
	 	76/976166	 	2818258
	 
	 	 	 	 
	Uruguay
	 	 	 	 

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	233808	 	323810
	 
	 	 	 	 
	Venezuela
	 	 	 	 
	 
	 	 	 	 
	HICKOK
	 	 	 	 
	 
	 	F-019787	 	19787
	AMITY
	 	 	 	 
	 
	 	1424	 	92.249-F
	AMITY
	 	 	 	 
	 
	 	1425	 	90.419-F

PATENT SCHEDULE

	 	 	 	 	 
	Title	 	Application Number	 	Patent Number
	 
	 	 	 	 
	Canada
	 	 	 	 
	 
	 	 	 	 
	Releasably Locking Button Pin
	 	 	 	 
	 
	 	1997-1959	 	84068
	Personal Accessory with Quick-Access
	 	 	 	 
	 
	 	2471793	 	 
	 
	 	 	 	 
	China P.R.
	 	 	 	 
	 
	 	 	 	 
	Carrier for Digital Player and Headphones
	 	 	 	 
	 
	 	ZL200530124574.1	 	 
	 
	 	 	 	 
	European Community
	 	 	 	 
	 
	 	 	 	 
	Carrier for Digital Player and Headphones (design)
	 	 	 	 
	 
	 	000399423	 	000399423-0001
	 
	 	 	 	 
	Germany
	 	 	 	 
	 
	 	 	 	 
	Suspender Button
	 	 	 	 
	 
	 	M8801493.2	 	M8801493.2
	 
	 	 	 	 
	Great Britian
	 	 	 	 
	 
	 	 	 	 
	SUSPENDER BUTTON
	 	 	 	 
	 
	 	1052949	 	1052949
	 
	 	 	 	 
	Mexico
	 	 	 	 
	 
	 	 	 	 
	PERSONAL ACCESSORY WITH QUICK-ACCESS
	 	 	 	 
	 
	 	PA/a/2004/006813	 	 
	 
	 	 	 	 
	Philippines
	 	 	 	 
	 
	 	 	 	 
	CARRIER FOR DIGITAL PLAYER AND HEADPHONES
	 	 	 	 
	 
	 	32005000896	 	 
	 
	 	 	 	 
	Taiwan
	 	 	 	 

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Title	 	Application Number	 	Patent Number
	 
	 	 	 	 
	 
	 	 	 	 
	 
	CARRIER FOR DIGITAL PLAYER AND HEADPHONES
	 	 	 	 
	 
	 	94305410	 	 
	 
	 	 	 	 
	United States
	 	 	 	 
	 
	 	 	 	 
	TRAVEL BAG WITH MULTIPLE COMPARTMENTS
	 	 	 	 
	 
	 	07/324296	 	4966260
	TRAVEL BAG WITH MULTIPLE COMPARTMENT
	 	 	 	 
	 
	 	07/060723	 	4821853
	CELL PHONE PURSE
	 	 	 	 
	 
	 	29/214830	 	D512560
	GUN PROTECTOR
	 	 	 	 
	 
	 	29/213233	 	D520235
	DISPLAY FIXTURE WITH BUILT-IN SIGN HOLDER
	 	 	 	 
	 
	 	29/137335	 	D451703
	POCKET BOOK FASTENER
	 	 	 	 
	 
	 	29/005208	 	DES. 355767
	NECKTIE LABEL
	 	 	 	 
	 
	 	29/003513	 	D350370
	METHOD AND APPARATUS FOR MANUFACTURING COIN POUCH
	 	 	 	 
	 
	 	08/228698	 	5480605
	WALLET WITH CARRYING STRAP
	 	 	 	 
	 
	 	07/012492	 	DES.343951
	PORTFOLIO
	 	 	 	 
	 
	 	07/175852	 	DES.322628
	AUTOMOBILE ACCESSORY
	 	 	 	 
	 
	 	29/032392	 	DES.366356
	TRAVEL KIT
	 	 	 	 
	 
	 	07/414075	 	DES.325124
	EXPANDABLE CUP HOLDER
	 	 	 	 
	 
	 	29/087911	 	D407951
	POINT OF SALE DISPLAY BOX AND UNIT
	 	 	 	 
	 
	 	09/288857	 	6070717
	HELMET BEAD
	 	 	 	 
	 
	 	29/176075	 	D487409
	ELECTRIC ICE SCRAPER
	 	 	 	 
	 
	 	29/136973	 	D456576
	DOG LEASH AND LIGHT COMBINATION
	 	 	 	 
	 
	 	29/137093	 	D453386

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Title	 	Application Number	 	Patent Number
	 
	 	 	 	 
	BOTTLE CADDY
	 	 	 	 
	 
	 	29/127089	 	D450445
	GOLF BAG PORTABLE COOLER
	 	 	 	 
	 
	 	29/110050	 	D425761
	RICE AND BEAN BEADS
	 	 	 	 
	 
	 	29/102111	 	D420931
	SET OF GUMBO BEADS
	 	 	 	 
	 
	 	29/092837	 	D412680
	 
	 	 	 	 
	COMBINATION SUSPENDERS FOR USE WITH BUTTON AND BUTTONLESS TROUSERS
	 
	 	 	 	 
	 
	 	07/714496                   517	 	2429
	SET OF JAZZ BEADS
	 	 	 	 
	 
	 	29/092377	 	D410866
	MULTI-CARD ELEMENT FOR A BILLFOLD
	 	 	 	 
	 
	 	07/906549	 	5263523
	DECORATIVE BEAD
	 	 	 	 
	 
	 	29/075162	 	D398879
	DRINK HOLDER
	 	 	 	 
	 
	 	29/011921	 	D352827
	RELEASABLY LOCKING BUTTON PIN
	 	 	 	 
	 
	 	29/066168	 	D390162
	CARRIER FOR DIGITAL PLAYER AND HEADPHONES
	 	 	 	 
	 
	 	29/224985	 	D519275
	GUN PROTECTOR
	 	 	 	 
	 
	 	10/942330	 	 
	GUN SLING WITH SINGLE-HANDED ADJUSTMENT MECHANISM
	 	 	 	 
	 
	 	10/360191	 	 
	ORNAMENTAL BEAD AND RADIO COMBINATION
	 	 	 	 
	 
	 	10/793874	 	 
	PERSONAL ACCESSORY WITH QUICK-ACCESS
	 	 	 	 
	 
	 	10/025542	 	6601622
	BELT RACK TAB
	 	 	 	 
	 
	 	29/022042	 	D366065
	CRAWFISH BEAD
	 	 	 	 
	 
	 	29/092379	 	D411967

Schedule 8.18

 

COPYRIGHT SCHEDULE

	 	 	 	 	 
	Title of Work	 	Application Number	 	Registration Number
	 
	 	 	 	 
	Amity Racing Almanac CD
	 	 	 	 
	 

	 	TXu-1-114-703
	 	TXu-1-114-703
	 
	 	 	 	 
	Rolfs Sports Almanac CD
	 	 	 	 
	 

	 	TXu 1-099-544
	 	TXu 1-099-544
	 
	 	 	 	 
	Waterfowl Duck Tie #3
	 	 	 	 
	 

	 	VA 577-760
	 	VA 577-760
	 
	 	 	 	 
	Waterfowl Duck Tie #2
	 	 	 	 
	 

	 	VA 557-757
	 	VA 577-757
	 
	 	 	 	 
	Waterfowl Duck Tie #1
	 	 	 	 
	 

	 	VA 577-756
	 	VA 577-756
	 
	 	 	 	 
	Waterfowl Duck Tie #5
	 	 	 	 
	 

	 	VA 577-759
	 	VA 577-759
	 
	 	 	 	 
	Waterfowl Duck Tie #4

	 	VA 577-758
	 	VA 577-758

LICENSE SCHEDULE

Capital Mercury

Churchill Downs, Licensing Partners

Collegiate Licensing Co. (CLC)

Eileen West

Haggar

Indiana University Research & Tech

Jones New York

Jordache

Levi Strauss & Co / Dockers for Women

Levi Strauss & Co / Levi Signature

Levi Strauss & Co / Levi’s Brand

License Resource Group (LRG)

Major League Baseball (MLB)

Michigan State University

National Basketball Association (NBA)

National Football League (NFL)

National Hockey League (NHL)

Ohio State

Totes

Travel Sentry (Marketing License Agreement)

Schedule 8.18

 

U of CA Berkeley

U of Iowa Hawkeyes

U of Southern CA

West Virginia University

Woolrich

Dallas_1\4485322\2

13118-122 9/6/2006

Schedule 8.18

 

Schedule 8.19

ERISA

Tandy Brands Accessories, Inc. Employees Investment Plan, as amended and restated effective July 1,
2000, as the same has been amended, modified or supplemented from time to time.

Schedule 8.19

 

 

Schedule 8.22

Material Contracts

Trademark license agreements that generate sales revenue in excess of $1,000,000 per annum.

Schedule 8.22

 

 

Schedule 10.11

Investments

Investments in H.A. Sheldon Canada, Ltd.

Schedule 10.11

 

 

Schedule 13.4

Notices/Credit Matters

Tandy Brands Accessories, Inc.

690 E. Lamar Boulevard, Suite 200

Arlington, TX 76011

Attention: Mark J. Flaherty

Telephone: (817) 548-0090

Facsimile: (817) 274-7346

Email: mark_flaherty@tandybrands.com

Wells Fargo HSBC Trade

Bank, N.A.

1445 Ross Avenue, Suite 450

Dallas, TX 75202

Attention: John R. Peloubet

Telephone: (214) 740-1585

Facsimile: (682) 225-3523

Email: peloubj@wellsfargo.com

Wells Fargo Bank, N. A.

1445 Ross Avenue, Suite 450

Dallas, TX 75202

Attention: John W. Johnson

Telephone: (214) 740-1517

Facsimile: (682) 220-2166

Email: john.w.johnson@wellsfargo.com

Comerica Bank

8828 Stemmons Freeway, Suite 441

Dallas, TX 75247

Attention: Corey R. Bailey

Telephone: (214) 589-1314

Facsimile: (214) 589-1360

Email: crbailey@comerica.com

Bank of America, N.A.

901 Main Street, 68th Floor

Dallas, TX 75202

Attention: Allison W. Connally

Telephone: (214) 209-1425

Facsimile: (214) 209-9560

Email: allison.connally@bankofamerica.com

Schedule 13.4

 

 

JPMorgan Chase Bank, N.A.

500 E. Border

Arlington, TX 76004-0250

Attention: Jerry Petrey

Telephone: (817) 856-3125

Facsimile: (817) 856-3183

Email: jerry.petrey@chase.com

Schedule 13.4exv10w1

 

EXHIBIT 10.1

CREDIT AGREEMENT

DATED AS OF JUNE 29, 2006

AMONG

COLLEGIATE PACIFIC INC.,

MERRILL LYNCH CAPITAL,

a Division of Merrill Lynch Business Financial Services Inc.,

as Administrative Agent, as a Lender and

as Sole Bookrunner and Sole Lead Arranger

AND

THE ADDITIONAL LENDERS

FROM TIME TO TIME PARTY HERETO

 

 

TABLE OF CONTENTS

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

-i-

 

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

-ii-

 

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

-iii-

 

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

-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

	 	-
	 	Borrowing Base Certificate
	Exhibit D

	 	-
	 	Notice of Borrowing
	Exhibit E

	 	-
	 	Payment Notification
	 
	 	 	 	 
	SCHEDULES
	 
	 	 	 	 
	Schedule 3.1

	 	-
	 	Existence, Organizational Identification Numbers, Foreign Qualification, Prior Names
	Schedule 3.4

	 	-
	 	Capitalization
	Schedule 3.6

	 	-
	 	Litigation
	Schedule 3.15

	 	-
	 	Brokers
	Schedule 3.16

	 	-
	 	Material Contracts
	Schedule 3.17

	 	-
	 	Environmental Compliance
	Schedule 3.18

	 	-
	 	Intellectual Property
	Schedule 3.19

	 	-
	 	Owned Real Estate
	Schedule 5.1

	 	-
	 	Debt
	Schedule 5.2

	 	-
	 	Liens
	Schedule 5.3

	 	-
	 	Contingent Obligations
	Schedule 5.8

	 	-
	 	Investments
	Schedule 5.9

	 	-
	 	Affiliate Transactions
	Schedule 5.13

	 	-
	 	Business Description

 

 

CREDIT AGREEMENT

     CREDIT AGREEMENT dated as of June 29, 2006 among COLLEGIATE PACIFIC INC., a Delaware
corporation, as Borrower, the financial institutions or other entities from time to time parties
hereto, each as a Lender, and MERRILL LYNCH CAPITAL, a division of Merrill Lynch Business Financial
Services Inc., individually as a Lender, as Administrative Agent, Sole Bookrunner and Sole Lead
Arranger.

RECITALS:

          WHEREAS, Borrower and Merrill Lynch Business Financial Services Inc. (“MLBFS”) are parties to
a WCMA Loan and Security Agreement No. 586-07067 dated December 16, 2003, as amended and/or
extended to date (the “MLBFS Credit Agreement”), pursuant to which MLBFS has provided working
capital and other financing to Borrower; and

          WHEREAS, Borrower desires to refinance the financing provided by MLBFS under the MLBFS Credit
Agreement, and desires that Lenders extend certain term credit and working capital facilities to
Borrower to provide working capital financing for Borrower, to provide funds for other general
business purposes of Borrower and for the other purposes set forth herein; and

          WHEREAS, Borrower desires to secure all of the Obligations under the Financing Documents by
granting to Administrative Agent, for the benefit of Administrative Agent and Lenders, a security
interest in and lien upon all of its personal and real property, including without limitation all
of the outstanding capital stock or other equity securities, as applicable, of each Subsidiary (as
hereinafter defined) owned by Borrower; and

          WHEREAS, the Subsidiaries are each willing to guaranty all of the Obligations of Borrower to
Lenders under the Financing Documents, and to grant to Administrative Agent, for the benefit of
Administrative Agent and Lenders, a security interest in and lien upon all of its personal and real
property to secure all of the Obligations.

          NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants
herein contained, Borrower, Lenders and Administrative Agent agree as follows:

ARTICLE 1

DEFINITIONS

     Section 1.1 Certain Defined Terms.

     The following terms have the following meanings:

     “Acceleration Event” means the occurrence of an Event of Default (i) in respect of which
Administrative Agent has declared all or any portion of the Obligations to be immediately due and
payable, in accordance with the provisions of Section 9.2, (ii) pursuant to Section 9.1(a), and in
respect of which Administrative Agent has suspended or terminated the Revolving Loan Commitment
pursuant to Section 9.2 and/or (iii) pursuant to either Section 9.1(f) and/or Section 9.1(g).

 

 

     “Account Debtor” means “account debtor”, as defined in Article 9 of the UCC.

     “Accounts” means “accounts” (as defined in Article 9 of the UCC), including any and all rights
to payment for the sale or lease of goods or rendition of services, whether or not they have been
earned by performance.

     “Acquisition Documents” means any merger agreement, purchase agreement or other acquisition
agreement in respect of a Permitted Section 5.8(b) Acquisition or a Permitted Section 5.8(c)
Acquisition, and all agreements, documents and instruments executed and/or delivered pursuant
thereto or in connection therewith.

     “Acquisition Revolving Loan Commitment Increase” has the meaning set forth in Section 2.2(g).

     “Acquisition Pro Forma” has the meaning set forth in Section 5.8(c).

     “Acquisition Projections” has the meaning set forth in Section 5.8(c).

     “Acquisition Revolving Loan Commitment Increase Conditions” has the meaning set forth in
Section 8.2.

     “Adjustment Date” means the first Business Day of each January, April, July and October of
each year, commencing with the first Business Day of January 2007.

     “Adjustments to Advance Rates” means such reductions in the advance rates of Eligible Accounts
and Eligible Inventory and other assets, if applicable, contained in the definition of Borrowing
Base as Administrative Agent may from time to time determine in its reasonable discretion,
including, without limitation: (a) to reflect events, conditions, contingencies or risks which, as
determined by Administrative Agent in the exercise of its sole reasonable discretion: (i) adversely
affect, or could reasonably be expected to adversely affect, any of the Collateral or any other
property which is security for the Obligations or its value, (ii) materially and adversely affect,
or could reasonably be expected to materially and adversely affect, the assets, business or
prospects of any Credit Party, or (iii) adversely affect, or could reasonably be expected to
adversely affect, the Liens and other rights of Administrative Agent or any Lender in the
Collateral (including the enforceability, perfection and priority thereof), (b) to reflect
Administrative Agent’s belief that any collateral report or financial information furnished by or
on behalf of any Credit Party to Administrative Agent is or may have been incomplete, inaccurate or
misleading in any material respect, (c) to reflect accrued and unpaid interest and fees, or (d)
otherwise in the reasonable credit judgment of Administrative Agent.

     “Administrative Agent” means Merrill Lynch in its capacity as administrative agent for the
Lenders hereunder, as such capacity is established in, and subject to the provisions of, Article
11, and the successors of Merrill Lynch in such capacity.

     “Administrative Agent Fee Letter” means the letter agreement dated the date hereof between
Borrower and the Administrative Agent, pursuant to which, among other things, Borrower shall pay to
Administrative Agent, in such capacity and in its capacity as a Lender, for

-2-

 

its own account, certain fees, as the same may be amended, supplemented, restated or otherwise
modified from time to time.

     “Affected Lender” has the meaning set forth in Section 12.6(c).

     “Affiliate” means with respect to any Person (i) any Person that directly or indirectly
controls such Person, (ii) any Person which is controlled by or is under common control with such
controlling Person, (iii) each of such Person’s (other than, with respect to any Lender, any
Lender’s) officers or directors (or Persons functioning in substantially similar roles) and the
spouses, parents, descendants and siblings of such officers, directors or other Persons. As used
in this definition, the term “control” of a Person means the possession, directly or indirectly, of
the power to vote at least a majority of any class of voting securities of such Person or the power
to direct or cause the direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

     “Agreement” means this Credit Agreement, as the same may be amended, supplemented, restated or
otherwise modified from time to time.

     “Anti-Terrorism Laws” means any Laws relating to terrorism or money laundering, including
Executive Order No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the Laws comprising
or implementing the Bank Secrecy Act, and the Laws administered by OFAC.

     “Approved Fund” means any (i) investment company, fund, trust, securitization vehicle or
conduit that is (or will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its business or (ii)
any Person (other than a natural person) which temporarily warehouses loans for any Lender or any
entity described in the preceding clause (i) and that, with respect to each of the preceding
clauses (i) and (ii), is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or
(c) a Person (other than a natural person) or an Affiliate of a Person (other than a natural
person) that administers or manages a Lender.

     “Asset Disposition” means any sale, lease, license, transfer, assignment or other consensual
disposition by any Credit Party of any asset, but excluding (i) dispositions of Inventory in the
Ordinary Course of Business, and (ii) dispositions of Cash Equivalents.

     “Assignment Agreement” means an agreement substantially in the form of Exhibit A hereto.

     “Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”.

     “Base Rate” means a variable per annum rate, as of any date of determination, equal to the
greater of (i) the Federal Funds Rate plus one-half of one percent (0.50%) per annum and
(ii) the rate of interest which is identified and normally published by Bloomberg Professional
Service Page Prime as the “Prime Rate” (or, if more than one rate is published as the Prime Rate,
then the highest of such rates). Any change in the Base Rate will become effective as of the date
the rate of interest which is so identified as the “Prime Rate” is different from that published on

-3-

 

the preceding Business Day. If Bloomberg Professional Service no longer reports the Prime
Rate, or if such Page Prime no longer exists, or Administrative Agent determines in good faith that
the rate so reported no longer accurately reflects an accurate determination of the prevailing
Prime Rate, Administrative Agent may select a reasonably comparable index or source to use as the
basis for the Base Rate.

     “Base Rate Loans” means Loans which accrue interest by reference to the Base Rate, in
accordance with the terms of this Agreement.

     “Base Rate Margin” means (i) as of the Closing Date, 0.25% per annum, (ii) thereafter, as of
each Adjustment Date, the Base Rate Margin shall be adjusted, if necessary, to the applicable
percent per annum set forth in the Pricing Table corresponding to the Senior Leverage Ratio for the
twelve (12) month period ending on such date; provided, that if an Event of Default has occurred
and is continuing on an Adjustment Date, no reduction in the Base Rate Margin shall occur on such
Adjustment Date.

     “Blocked Account” has the meaning set forth in Section 6.1.

     “Blocked Person” means any Person: (i) listed in the annex to, or is otherwise subject to the
provisions of, Executive Order No. 13224; (ii) a Person owned or controlled by, or acting for or on
behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of,
Executive Order No. 13224; (iii) a Person with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law; (iv) a Person that commits,
threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224;
or (v) a Person that is named a “specially designated national” or “blocked person” on the most
current list published by OFAC or other similar list.

     “Borrower” means Collegiate Pacific Inc, a Delaware corporation.

     “Borrower Security Agreement” means the Security Agreement dated the date hereof by the
Borrower in favor of the Administrative Agent, as the same may be amended, supplemented, restated
or otherwise modified from time to time.

     “Borrower’s Account” means the account specified on the signature pages hereof below
Borrower’s name into which Loans shall, absent other instructions, be made, or such other account
as Borrower may specify by notice to Administrative Agent.

     “Borrowing Base” means, as of any date of calculation, a dollar amount calculated pursuant to
the Borrowing Base Certificate most recently delivered to Administrative Agent in accordance with
the terms hereof, (i) prior to the effectiveness of the Acquisition Revolving Loan Commitment
Increase, a dollar amount calculated pursuant to the Borrowing Base Certificate most recently
delivered to Administrative Agent in accordance with the terms hereof, equal to the sum of (a) up
to 85% of Eligible Accounts and (b) the lesser of (A) up to 50% of Eligible Inventory or (B)
$10,000,000, minus (x) a Reserve in respect of the Term Loan in the amount of $4,000,000
and (y) any Reserves then and from time to time established by the Administrative Agent, and (ii)
after the effectiveness of the Acquisition Revolving Loan Commitment Increase, a dollar amount
calculated pursuant to the Borrowing Base Certificate

-4-

 

most recently delivered to Administrative Agent in accordance with the terms hereof, equal to
the sum of (a) up to 85% of Eligible Accounts and (b) the lesser of (A) up to 50% of Eligible
Inventory or (B) $10,000,000, minus (x) a Reserve in respect of the Term Loan in the amount
of $3,000,000 and (y) any Reserves then and from time to time established by the Administrative
Agent.

     “Borrowing Base Certificate” means a certificate, duly executed by a Responsible Officer,
appropriately completed and substantially in the form of Exhibit C hereto.

     “Business Day” means any day except a Saturday, Sunday or other day on which either the New
York Stock Exchange is closed, or on which commercial banks in Chicago and New York City are
authorized by law to close and, in the case of a Business Day which relates to a LIBOR Loan, a day
on which dealings are carried on in the London interbank eurodollar market.

     “Capital Lease” of any Person means any lease of any property by such Person as lessee which
would, in accordance with GAAP, be required to be accounted for as a capital lease on the balance
sheet of such Person.

     “Cash Equivalents” means any Investment in (i) direct obligations of the United States or any
agency thereof, or obligations guaranteed by the United States or any agency thereof with a
maturity date of no more than one (1) year from the date of acquisition, (ii) commercial paper with
a duration of not more than nine (9) months rated at least A-1 by Standard & Poor’s Ratings Service
and P-1 by Moody’s Investors Services, Inc., which is issued by a Person (other than any Credit
Party or an Affiliate of any Credit Party) organized under the laws of any State of the United
States or of the District of Columbia, (iii) time deposits, certificates of deposit and banker’s
acceptances with a duration of not more than six (6) months issued by any office located in the
United States of any bank or trust company which is organized under the laws of the United States
or any State thereof, or is licensed to conduct a banking business in the United States, and has
capital, surplus and undivided profits of at least $500,000,000 and which issues (or the parent of
which issues) certificates of deposit or commercial paper with a rating described in clause (ii)
above, (iv) repurchase agreements and reverse repurchase agreements with a duration of not more
than 30 days with respect to securities described in clause (i) above entered into with an office
of a bank or trust company meeting the criteria specified in clause (iii) above, or (v) any money
market or mutual fund which invests only in the foregoing types of investments, has portfolio
assets in excess of $5,000,000,000 and is rated AAA by Standard & Poor’s Ratings Service and Aaa by
Moody’s Investors Services, Inc.

     “CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of
1980.

     “Change of Control of the Borrower” means (i) (a) a change in the beneficial ownership (as
defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended) at any time by an entity
or individual, either directly or indirectly, of equity securities or interests of Borrower or of
any parent corporation of the Borrower, the voting power of which constitutes more than the lesser
of (A) fifty percent (50%) or more of the aggregate voting power of the outstanding equity
securities or interests, as the case may be, of Borrower or of any parent corporation of the
Borrower, or (B) that percentage of the outstanding aggregate voting power

-5-

 

necessary at all times to elect a majority of the board of directors (or similar governing body)
Borrower or of any parent corporation of the Borrower or to direct the management policies and
decisions of Borrower or of any parent corporation of the Borrower, or (b) the majority of the
seats (other than vacant seats) on the Board of Directors of Borrower (or any parent corporation of
the Borrower) cease to be occupied by Persons who either (A) were members of the Board of Directors
of Borrower on the date hereof or (B) were nominated for election by the Board of Directors of
Borrower (or of any parent corporation of the Borrower), a majority of whom were directors on the
date hereof or whose election or nomination for election was previously approved by a majority of
such directors; (ii) any merger, consolidation or reorganization of Borrower or of any parent
corporation of the Borrower in which the stockholders of Borrower or of any parent corporation of
the Borrower immediately before the transaction do not own at least fifty percent (50%) of the
combined voting power of the voting securities of the surviving entity or its parent immediately
after the transaction; (iii) any sale or transfer of all or substantially all of the assets of
Borrower or of any parent corporation of the Borrower, to a purchaser or other transferee in which
the stockholders of the subject company immediately before the transaction do not own at least
fifty percent (50%) of the combined voting power of the voting securities of the surviving entity
or its parent immediately after the transaction; (iv) a “Change of Control” shall occur under any
Change in Control, severance, termination or similar agreement to which Borrower or any Subsidiary
is a party; and (v) except as expressly permitted by Section 5.7, Borrower shall cease to, directly
or indirectly, own and control one hundred percent (100%) of each class of the outstanding equity
interests of each Subsidiary.

     “Chattel Paper” means “chattel paper”, as defined in Article 9 of the UCC.

     “Closing Checklist” means Annex B to this Agreement.

     “Closing Date” means the date of this Agreement.

     “Code” means the Internal Revenue Code of 1986.

     “Collateral” means all property, now existing or hereafter acquired, mortgaged or pledged to,
or purported to be subjected to a Lien in favor of, Administrative Agent, for the benefit of
Administrative Agent and Lenders, pursuant to the Security Documents.

     “Commitment Annex” means Annex A to this Agreement.

     “Commitment Expiry Date” means June 1, 2009.

     “Compliance Certificate” means a certificate, duly executed by a Responsible Officer,
appropriately completed and substantially in the form of Exhibit B hereto.

     “Consolidated Subsidiary” means at any date any Subsidiary or other Person the accounts of
which would be consolidated with those of Borrower (or any other Person, as the context may require
hereunder) in its consolidated financial statements if such statements were prepared as of such
date.

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     “Contingent Obligation” means, with respect to any Person, any direct or indirect liability of
such Person: (i) with respect to any debt, lease, dividend or other obligation of another Person
if the purpose or intent of such Person incurring such liability, or the effect thereof, is to
provide assurance to the obligee of such liability that such liability will be paid or discharged,
or that any agreement relating thereto will be complied with, or that any holder of such liability
will be protected, in whole or in part, against loss with respect thereto; (ii) with respect to any
undrawn portion of any letter of credit issued for the account of such Person or as to which such
Person is otherwise liable for the reimbursement of any drawing; (iii) under any Swap Contract, to
the extent not yet due and payable; (iv) to make take-or-pay or similar payments if required
regardless of nonperformance by any other party or parties to an agreement; or (v) for any
obligations of another Person pursuant to any agreement to purchase, repurchase or otherwise
acquire any obligation or any property constituting security therefor, to provide funds for the
payment or discharge of such obligation or to preserve the solvency, financial condition or level
of income of another Person. The amount of any Contingent Obligation shall be equal to the amount
of the obligation so guaranteed or otherwise supported or, if not a fixed and determinable amount,
the maximum amount so guaranteed or otherwise supported.

     “Controlled Group” means all members of a group of corporations and all members of a group of
trades or businesses (whether or not incorporated) under common control which, together with
Borrower, are treated as a single employer under Section 414(b), (c), (m) or (o) of the Code or
Section 4001(b) of ERISA.

     “Convertible Senior Notes” has the meaning set forth in Section 5.6.

     “Credit Exposure” means any period of time during which the Revolving Loan Commitment is
outstanding or any Loan, Reimbursement Obligation or other Obligation remains unpaid or any Letter
of Credit or Support Agreement remains outstanding; provided, that no Credit Exposure shall be
deemed to exist solely due to the existence of contingent indemnification liability, absent the
assertion of a claim, or the known existence of a claim reasonably likely to be asserted, with
respect thereto.

     “Credit Party” means any of Borrower and any Subsidiary of Borrower, whether now existing or
hereafter acquired or formed; and “Credit Parties” means all such Persons, collectively.

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

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duplication of any of the foregoing, Debt of Borrower shall include any and all Loans and
Letter of Credit Liabilities.

     “Default” means any condition or event which with the giving of notice or lapse of time or
both would, unless cured or waived, become an Event of Default.

     “Defaulted Lender” means, so long as such failure shall remain in existence and uncured, any
Lender which shall have failed to make any Loan or other credit accommodation, disbursement or
reimbursement required pursuant to the terms of any Financing Document.

     “Deposit Account Control Agreement” means an agreement, in form and substance satisfactory to
Administrative Agent, among Administrative Agent, Borrower or a Subsidiary of Borrower maintaining
a deposit account at any bank, and such bank, which agreement provides that (x) such bank shall
comply with instructions originated by Administrative Agent directing disposition of the funds in
such deposit account without further consent by Borrower or such Subsidiary (as applicable), and
(y) such bank shall agree that it shall have no Lien on, or right of setoff against, such deposit
account or the contents thereof, other than in respect of commercially reasonable fees and other
items expressly consented to by Administrative Agent, and containing such other terms and
conditions as Administrative Agent may reasonably require, including as to any such agreement
pertaining to any Blocked Account, acknowledging that the Blocked Account and all items received or
deposited in such Blocked Account are subject to the Liens of Administrative Agent, as set forth in
the Financing Documents, and, to secure the Obligations upon notice from Administrative Agent to
such Bank, that such bank shall wire, or otherwise transfer, in immediately available funds, on a
daily basis to the Payment Account all funds received or deposited into such Blocked Account.

     “Domestic Subsidiary” means a Subsidiary organized, incorporated or otherwise formed under the
laws of the United States or any State thereof.

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

     “Eligible Accounts” means all Accounts of Borrower and its Domestic Subsidiaries except for
any Account:

     (A) that is unpaid more than sixty (60) days after the due date therefor, not to exceed
ninety (90) days after the date of the original invoice therefor, in the case of dated
accounts, or more than ninety (90) days after the date of the original invoice therefor, in
the case of undated accounts;

     (B) that is the obligation of an Account Debtor if fifty percent (50%) or more of the
dollar amount of all Accounts owing by that Account Debtor are ineligible under the other
criteria set forth herein;

     (C) that arises from a sale to any director, officer, other employee, supplier, trade
creditor or other creditor or Affiliate of any Credit Party, or to any Person (other than a
natural person) which has any common officer or director with any Credit Party;

-8-

 

     (D) that is the obligation of an Account Debtor located in a foreign country unless (i)
the Account Debtor has delivered to, and for the benefit of, the Borrower or the applicable
Subsidiary an irrevocable letter of credit issued or confirmed by a bank satisfactory to
Administrative Agent and payable only in the United States and in United States dollars,
sufficient to cover such Account, in form and substance satisfactory to Administrative Agent
and, if required by Administrative Agent, the original of such letter of credit has been
delivered to Administrative Agent or Administrative Agent’s agent, and Borrower or such
Subsidiary has assigned the proceeds of such letter of credit to Administrative Agent
pursuant to documentation in form and substance acceptable to Administrative Agent or
otherwise named Administrative Agent as transferee beneficiary thereunder, as Administrative
Agent may specify, (ii) such Account is subject to credit insurance payable to
Administrative Agent issued by an insurer and on terms and in an amount acceptable to
Administrative Agent, or (iii) such Account is otherwise acceptable in all respects to
Administrative Agent (subject to such limits or lending formulae with respect thereto as
Administrative Agent may determine);

     (E) that is the obligation of an Account Debtor that is the United States government or
a political subdivision thereof, or any state or municipality or department, agency or
instrumentality thereof unless Administrative Agent, in its sole discretion, has agreed to
the contrary and Borrower or the applicable Subsidiary, if requested by Administrative
Agent, has complied in a manner acceptable to Administrative Agent with the Federal
Assignment of Claims Act of 1940 or any applicable state statute or municipal ordinance of
similar purpose and effect, with respect to such obligation;

     (F) as to which any proceedings or actions known to any Credit Party (or to
Administrative Agent) are threatened or pending against an Account Debtor which could
reasonably be expected to have a material adverse change in any such Account Debtor’s
financial condition (including, without limitation, any bankruptcy, dissolution,
liquidation, reorganization or similar proceeding);

     (G) that consists of progress billings (such that the obligation of the Account Debtors
with respect to such Account is conditioned upon Borrower’s or the applicable Subsidiary’s
satisfactory completion of any further performance under the agreement giving rise thereto),
bill and hold invoices or retainage invoices, except as to bill and hold invoices, if
Administrative Agent shall have received an agreement from the Account Debtor, in form and
substance satisfactory to Administrative Agent, confirming the unconditional obligation of
the Account Debtor to take the goods related thereto and pay such invoice;

     (H) owed by an Account Debtor obligated in respect of Accounts constituting more than
twenty percent (20%) of the aggregate amount of all Accounts (but the portion of the
Accounts not in excess of the applicable percentages may be deemed Eligible Accounts);

     (I) to the extent any defense, counterclaim, setoff or dispute is asserted as to such
Account;

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     (J) to the extent such Account is evidenced by a judgment, Instrument or Chattel Paper;

     (K) as to which Administrative Agent’s Lien therein, for the benefit of itself and
Lenders, is not a first priority perfected security interest, or as to which the goods
giving rise thereto are not, and were not at the time of the applicable sale, subject to a
first priority perfected security interest in favor of Administrative Agent, on behalf of
itself and Lenders;

     (L) that (i) is not owned by Borrower or the applicable Subsidiary or (ii) is subject
to any right, claim, Lien or other interest of any other Person, other than Liens in favor
of Administrative Agent, on behalf of itself and Lenders;

     (M) upon which (i) Borrower’s or the applicable Subsidiary’s right to receive payment
is not absolute or is contingent upon the fulfillment of any condition whatsoever (including
any Account that arises from a sale on consignment, guaranteed sale, sale and return, sale
on approval or other terms under which payment by the Account Debtor may be conditioned or
contingent) or (ii) Borrower or the applicable Subsidiary is not able to bring suit or
otherwise enforce its remedies against the Account Debtor through judicial process;

     (N) that does not arise from the actual and bona fide sale and delivery of goods or the
performance of services by Borrower or the applicable Subsidiary in the Ordinary Course of
Business, which transactions are completed in accordance with the terms and provisions
contained in any documents related thereto;

     (O) that is payable in any currency other than United States dollars;

     (P) to the extent constituting the obligation of an Account Debtor in respect of
interest, service or similar charges or fees;

     (Q) that is reissued in respect of partial payment, including without limitation debit
memos and charge backs;

     (R) that arises in connection with cash on delivery or other cash sales;

     (S) to the extent such Account exceeds any credit limit established by Administrative
Agent, in its reasonable discretion;

     (T) owed by an Account Debtor having a credit standing unsatisfactory to Administrative
Agent, in its reasonable discretion;

     (U) to the extent credits are due to the applicable Account Debtor, or to the extent
any Credit Party is liable for goods sold or services rendered by the applicable Account
Debtor to such Credit Party, but only to the extent of the potential offset;

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     (V) as to which any facts, events or occurrences exist which could reasonably be
expected to impair the validity, enforceability or collectability of such Account or reduce
the amount payable or delay payment thereunder;

     (W) as to which any of the representations or warranties pertaining to such Account set
forth in any Financing Document is untrue;

     (X) with respect to which an invoice, acceptable to Administrative Agent in form and
substance, has not been sent to the applicable Account Debtor; and

     (Y) that is otherwise unacceptable to Administrative Agent (including, without limiting
the generality of the foregoing, as a result of the examinations, audits, analyses, and
appraisals contemplated by Sections 4.1(t), 4.6 and 6.2) in the exercise of its reasonable
credit judgment.

Notwithstanding the foregoing, Administrative Agent may, from time to time in the exercise of its
reasonable credit judgment, change the criteria for Eligible Accounts as reflected on the Borrowing
Base Certificate based on either: (i) an event, condition or other circumstance arising after the
Closing Date, or (ii) an event, condition or other circumstance existing on the Closing Date to the
extent Administrative Agent has no written notice thereof from a Credit Party prior to the Closing
Date, in either case under clause (i) or (ii) which adversely affects or, in the judgment of
Administrative Agent, could reasonably be expected to adversely affect, the Accounts as determined
by Administrative Agent in the exercise of its reasonable credit judgment. For purposes of this
Agreement, the amount of Eligible Accounts at any time shall be equal to the face amount of such
Eligible Accounts at such time less any and all returns, rebates, discounts (which may, at
Administrative Agent’s option, be calculated on shortest terms), credits, allowances or excise
taxes of any nature issued, owing, claimed by Account Debtors, granted, outstanding or payable in
connection with such Accounts at such time. Any Accounts of Borrower and its Subsidiaries which
are not Eligible Accounts shall nevertheless be part of the Collateral. In addition, and
notwithstanding the foregoing or anything else contained in this Agreement to the contrary, the
eligibility as Eligible Accounts of Accounts of any future parent corporation or Subsidiary
(including, without limitation, SSG), and the inclusion of such Eligible Accounts in the Borrowing
Base shall be determined by Administrative Agent in its reasonable discretion after the completion
of its due diligence with regard to such future parent corporation or Subsidiary, which shall
include, without limitation, the completion of a third party field exam.

     “Eligible Assignee” means (i) a Lender, (ii) an Affiliate of a Lender, (iii) an Approved Fund,
and (iv) any other Person (other than a natural person) approved by (a) Administrative Agent, (b)
in the case of any assignment of any portion of the Revolving Loan Commitment, Swingline Lender,
and (c) unless an Event of Default has occurred and is continuing and unless the proposed assignee
shall be an affiliate of a Lender or Administrative Agent, Borrower (such approval of Borrower not
to be unreasonably withheld or delayed, and shall be deemed provided unless expressly withheld by
Borrower within three (3) Business Days of request therefor); provided that notwithstanding the
foregoing, (x) “Eligible Assignee” shall not include Borrower or any of Borrower’s Affiliates or
Subsidiaries and (y) no proposed assignee intending to assume all or any portion of the Revolving
Loan Commitment shall be an Eligible Assignee unless such

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proposed assignee either already holds a
portion of the Revolving Loan Commitment, or has been approved as an Eligible Assignee by Administrative Agent and Swingline
Lender.

     “Eligible Inventory” means all Inventory of Borrower and its Domestic Subsidiaries, except for
any Inventory:

     (A) that consists of work-in-process or raw materials;

     (B) that in Administrative Agent’s reasonable determination or in the determination of
Borrower’s management is excess, obsolete, unsaleable, shopworn, seconds, damaged or unfit
for sale;

     (C) that is not of a type held for sale by Borrower or the applicable Subsidiary in the
Ordinary Course of Business;

     (D) as to which Administrative Agent’s security interest therein, on behalf of itself
and Lenders, is not a first priority perfected security interest;

     (E) that is not owned by Borrower or any applicable Subsidiary free and clear of all
Liens and rights of any other Person (including the rights of a purchaser that has made
progress payments and the rights of a surety that has issued a bond to assure performance
with respect to that Inventory), except the Liens in favor of Administrative Agent, on
behalf of itself and Lenders;

     (F) that (i) is located on Premises owned or operated by SSG, or where any inventory or
other properties or assets of SSG are located or (ii) is located on premises leased by
Borrower or any applicable Subsidiary, or stored with a bailee, warehouseman, processor or
similar Person, unless (a) Administrative Agent has given its prior consent thereto, (b) a
Lien waiver and collateral access agreement, in form and substance satisfactory to
Administrative Agent has been delivered to Administrative Agent, together with any and all
duly authorized UCC financing statements required by Administrative Agent naming such Person
as debtor, Borrower or the applicable Subsidiary as secured creditor and Administrative
Agent as assignee or (c) Reserves satisfactory to Administrative Agent have been established
with respect thereto;

     (G) that is placed on consignment, is in transit, is outside the possession or control
of Borrower or the applicable Subsidiary (other than as described in the preceding clause
(F)) or is in possession of Borrower or any applicable Subsidiary on a sale-on-approval or
sale-on-return basis or subject to any other repurchase or return agreement;

     (H) that is manufactured, assembled or otherwise produced in violation of the Fair
Labor Standards Act and subject to the “hot goods” provisions contained in Title 25 U.S.C.
215(a)(i);

     (I) that is not covered by casualty insurance acceptable to Administrative Agent;

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     (J) that consists of display items, samples or packing or shipping materials,
packaging, manufacturing supplies or replacement or spare parts;

     (K) that consists of goods which have been returned by the buyer;

     (L) that consists of any costs associated with “freight-in” charges;

     (M) as to which any of the representations or warranties pertaining to such Inventory
set forth in any Financing Document is untrue;

     (N) that consists of Hazardous Materials or goods that can be transported or sold only
with licenses that are not readily available;

     (O) that is covered by a negotiable document of title, unless such document has been
delivered to Administrative Agent;

     (P) that is bill and hold Inventory;

     (Q) that is located outside the United States of America; and

     (R) that is otherwise unacceptable to Administrative Agent in its reasonable credit
judgment (including, without limiting the generality of the foregoing, as a result of the
examinations, audits, analyses, and appraisals contemplated by Sections 4.1(t), 4.6 and
6.2).

Notwithstanding the foregoing, Administrative Agent may, from time to time, in the exercise of its
reasonable credit judgment, change the criteria for Eligible Inventory as reflected on the
Borrowing Base Certificate, based on either: (i) an event, condition or other circumstance arising
after the Closing Date, or (ii) an event, condition or other circumstance existing on the Closing
Date to the extent Administrative Agent has no written notice thereof from a Credit Party prior to
the Closing Date, in either case under clause (i) or (ii) which adversely affects or, in the
judgment of Administrative Agent, could reasonably be expected to adversely affect, the Inventory
as determined by Administrative Agent in the exercise of its reasonable credit judgment. For
purposes of this Agreement, the amount of Eligible Inventory shall be determined on a first-in,
first-out, lower of cost or market basis in accordance with GAAP. Any Inventory of Borrower and
its Subsidiaries which is not Eligible Inventory shall nevertheless be part of the Collateral. In
addition, and notwithstanding the foregoing or anything else contained in this Agreement to the
contrary, the eligibility as Eligible Inventory of Inventory of any future parent corporation or
Subsidiary (including, without limitation, SSG), and the inclusion of such Eligible Inventory in
the Borrowing Base shall be determined by Administrative Agent in its reasonable discretion after
the completion of its due diligence with regard to such future parent corporation or Subsidiary,
which shall include, without limitation, the completion of a third party field exam.

     “Eligible Swap Counterparty” means Administrative Agent, any Affiliate of Administrative
Agent, any Lender and/or any Affiliate of any Lender that (i) at any time it occupies such role or
capacity enters into a Swap Contract with Borrower or any Subsidiary and (ii) in the case of a
Lender or an Affiliate of a Lender other than Administrative Agent, is

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expressly identified by Administrative Agent as maintaining a reporting system acceptable to
Administrative Agent with respect to Swap Contract exposure and agrees with Administrative Agent to
provide regular reporting to Administrative Agent, in form and content reasonably satisfactory to
Administrative Agent, with respect to such exposure.

     “Environmental Laws” means any and all Laws relating to the environment or the effect of the
environment on human health or to emissions, discharges or releases of pollutants, contaminants,
Hazardous Materials or wastes into the environment, including ambient air, surface water, ground
water or land, or otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, Hazardous Materials or wastes
or the clean-up or other remediation thereof.

     “Equipment” means, collectively, “equipment” and “fixtures” (as each term is defined in
Article 9 of the UCC).

     “ERISA” means the Employee Retirement Income Security Act of 1974.

     “ERISA Plan” means any “employee benefit plan”, as such term is defined in Section 3(3) of
ERISA (other than a Multiemployer Plan), which Borrower or any of its Subsidiaries maintains,
sponsors or contributes to, or, in the case of an employee benefit plan which is subject to Section
412 of the Code or Title IV of ERISA, to which Borrower, any of its Subsidiaries or any member of
the Controlled Group may have any liability, including any liability by reason of having been a
substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding
five years, or by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.

     “Event of Default” has the meaning set forth in Section 9.1.

     “Extraordinary Receipts” means any cash received by or paid to or for the account of any
Credit Party not in the Ordinary Course of Business (and not consisting of proceeds described in
any of clauses (ii), (iii) and/or (iv) of Section 2.1(c)), including without limitation amounts
received in respect of foreign, United States, State or local tax refunds to the extent not
included in the calculation of EBITDA, pension plan reversions, purchase price and other monetary
adjustments made pursuant to any Acquisition Document and/or indemnification payments made pursuant
to any Acquisition Document (other than such indemnification payments to the extent that the
amounts so received are applied by a Credit Party for the purpose of replacing, repairing or
restoring any assets or properties of a Credit Party, thereby satisfying the condition giving rise
to the claim for indemnification, or otherwise covering any out-of-pocket expenses incurred by any
Credit Party in obtaining such payments); provided that Extraordinary Receipts shall exclude any
single or related series of amounts received in an aggregate amount less than $100,000.

     “Federal Funds Rate” means, for any day, the rate of interest per annum (rounded upwards, if
necessary, to the nearest whole multiple of 1/100 of 1%) equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day, provided that (i) if

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such day is not a Business Day, the Federal Funds Rate for such day shall be such rate
on such transactions on the next preceding Business Day and (ii) if no such rate is so published on
such next preceding Business Day, the Federal Funds Rate for such day shall be the average rate
quoted to Administrative Agent on such day on such transactions as determined by Administrative
Agent.

     “Financing Documents” means this Agreement, any Notes, the Security Documents, the Information
Certificate, any fee letter between Merrill Lynch and Borrower relating to the transactions
contemplated hereby (including, without limitation, the Administrative Agent Fee Letter), the
Subordination Agreements, the Information Certificate, any subordination or intercreditor agreement
(other than the Subordination Agreement) pursuant to which any Debt and/or any Liens securing such
Debt is subordinated to all or any portion of the Obligations and all other documents, instruments
and agreements contemplated herein or thereby and heretofore executed, executed concurrently
herewith or executed at any time and from time to time hereafter, as any or all of the same may be
amended, supplemented, restated or otherwise modified from time to time.

     “Fiscal Year” means a fiscal year of Borrower, ending on June 30 of each calendar year.

     “Fixed Charge Coverage Ratio” has the meaning provided in the Compliance Certificate.

     “Foreign Lender” has the meaning set forth in Section 2.8(c).

     “GAAP” means generally accepted accounting principles set forth from time to time in the
opinions and pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and authority within the
United States accounting profession), which are applicable to the circumstances as of the date of
determination.

     “Governmental Authority” means any nation or government, any state or other political
subdivision thereof, and any agency, department or Person exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government and any corporation
or other Person owned or controlled (through stock or capital ownership or otherwise) by any of the
foregoing, whether domestic or foreign.

     “Guarantee” by any Person means any obligation, contingent or otherwise, of such Person
directly or indirectly guaranteeing any Debt or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise) or (ii) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other obligation of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part), provided that the
term Guarantee shall not include endorsements for collection or deposit in the

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Ordinary Course of Business. The term “Guarantee” used as a verb has a corresponding
meaning.

     “Hazardous Materials” means (i) any “hazardous substance” as defined in CERCLA, (ii) any
“hazardous waste” as defined by the Resource Conservation and Recovery Act, (iii) asbestos, (iv)
polychlorinated biphenyls, (v) petroleum, its derivatives, by-products and other hydrocarbons, (vi)
mold and (vii) any other pollutant, toxic, radioactive, caustic or otherwise hazardous substance
regulated under Environmental Laws.

     “Hazardous Materials Contamination” means contamination (whether now existing or hereafter
occurring) of the improvements, buildings, facilities, personalty, soil, groundwater, air or other
elements on or of the relevant property by Hazardous Materials, or any derivatives thereof, or on
or of any other property as a result of Hazardous Materials, or any derivatives thereof, generated
on, emanating from or disposed of in connection with the relevant property.

     “Holding Company” means any holding company formed for the purpose of holding the equity
securities of Borrower.

     “Indemnitees” has the meaning set forth in Section 10.2.

     “Information Certificate” means that certain Information Certificate dated as of the date
hereof executed and delivered to Administrative Agent by Borrower.

     “Instrument” means “instrument”, as defined in Article 9 of the UCC.

     “Intellectual Property” means, with respect to any Person, all patents, trademarks, trade
names, trade styles, trade dress, service marks, logos and other business identifiers, copyrights,
technology, know-how and processes, computer hardware and software and all applications and
licenses therefor, used in or necessary for the conduct of business by such Person.

     “Interest Period” means, as to any LIBOR Loan, the period commencing on the date such Loan is
borrowed or continued as, or converted into, a LIBOR Loan and ending on the date one (1), two (2),
three (3) or six (6) months thereafter, as selected by Borrower pursuant to Section 2.3(e);
provided, that: (a) if any Interest Period would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the following Business Day unless the result of such
extension would be to carry such Interest Period into another calendar month, in which event such
Interest Period shall end on the preceding Business Day; (b) any Interest Period that begins on a
day for which there is no numerically corresponding day in the calendar month at the end of such
Interest Period shall end on the last Business Day of the calendar month at the end of such
Interest Period; (c) Borrower may not select any Interest Period for a Revolving Loan which would
extend beyond the Commitment Expiry Date; and (d) Borrower may not select any Interest Period for
the Term Loan if, after giving effect to such selection, the aggregate principal amount of the Term
Loan having Interest Periods ending after any date on which an installment of the Term Loan is
scheduled to be repaid would exceed the aggregate principal amount of the Term Loan scheduled to be
outstanding after giving effect to such repayment.

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     “Inventory” means “inventory” (as defined in Article 9 of the UCC).

     “Investment” means any investment in any Person, whether by means of acquiring (whether for
cash, property, services, securities or otherwise) or holding securities, capital contributions,
loans, time deposits, advances, Guarantees or otherwise. The amount of any Investment shall be the
original cost of such Investment plus the cost of all additions thereto, without any
adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with
respect thereto.

     “Laws” means any and all federal, state, local and foreign statutes, laws, judicial decisions,
regulations, guidances, guidelines, ordinances, rules, judgments, orders, decrees, codes, plans,
injunctions, permits, concessions, grants, franchises, governmental agreements and governmental
restrictions, whether now or hereafter in effect.

     “LC Issuer” means one or more banks, trust companies or other Persons in each case expressly
identified by Administrative Agent from time to time, in its sole discretion, as an LC Issuer for
purposes of issuing one or more Letters of Credit hereunder. Without limitation of Administrative
Agent’s discretion to identify any Person as an LC Issuer, no Person shall be designated as an LC
Issuer unless such Person maintains reporting systems acceptable to Administrative Agent with
respect to letter of credit exposure and agrees to provide regular reporting to Administrative
Agent satisfactory to it with respect to such exposure.

     “Lender” means each of (i) Merrill Lynch, (ii) each other Person party hereto in its capacity
as a lender, (iii) each other Eligible Assignee that becomes a party hereto pursuant to Section
12.6, (iv) Administrative Agent, to the extent of any Revolving Loans made by Administrative Agent
which have not been settled among the Lenders pursuant to Section 11.13, and (v) the respective
successors of all of the foregoing, and “Lenders” means all of the foregoing. In addition to the
foregoing, solely for the purpose of identifying the Persons entitled to share in payments and
collections from the Collateral as more fully set forth in this Agreement and the Security
Documents (and not for purposes of any other rights, including voting rights hereunder), the term
“Lender” shall include Eligible Swap Counterparties. In connection with any such distribution of
payments and collections, Administrative Agent shall be entitled to assume that no amounts are due
to any Eligible Swap Counterparty unless such Eligible Swap Counterparty has notified
Administrative Agent of the amount of any such liability owed to it prior to such distribution.

     “Lender Letter of Credit” means a Letter of Credit issued by an LC Issuer that is also, at the
time of issuance of such Letter of Credit, a Lender.

     “Letter of Credit” means a documentary (trade) letter of credit issued for the account of
Borrower by an LC Issuer which expires by its terms within one year after the date of issuance and
in any event at least thirty (30) days prior to the Commitment Expiry Date. Notwithstanding the
foregoing, a Letter of Credit may provide for automatic extensions of its expiry date for one or
more successive one (1) year periods provided that the LC Issuer that issued such Letter of Credit
has the right to terminate such Letter of Credit on each such annual expiration date and no renewal
term may extend the term of the Letter of Credit to a date that is later than the thirtieth
(30th) day prior to the Commitment Expiry Date.

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     “Letter of Credit Liabilities” means, at any time of calculation, the sum of (i) without
duplication, the amount then available for drawing under all outstanding Lender Letters of Credit
and all Supported Letters of Credit, in each case without regard to whether any conditions to
drawing thereunder can then be met plus (ii) without duplication, the aggregate unpaid amount of
all reimbursement obligations in respect of previous drawings made under all such Lender Letters of
Credit and Supported Letters of Credit.

     “LIBOR” means, with respect to any LIBOR Loan for any Interest Period, a rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to (i) the rate of interest which
is identified and normally published by Bloomberg Professional Service Page BBAM 1 as the offered
rate for loans in United States dollars for the applicable Interest Period under the caption
British Bankers Association LIBOR Rates as of 11:00 a.m. (London time), on the second full Business
Day next preceding the first day of such Interest Period (unless such date is not a Business Day,
in which event the next succeeding Business Day will be used); divided by (ii) the sum of one minus
the daily average during such Interest Period of the aggregate maximum reserve requirement
(expressed as a decimal) then imposed under Regulation D of the Board of Governors of the Federal
Reserve System (or any successor thereto) for “Eurocurrency Liabilities” (as defined therein). If
Bloomberg Professional Service no longer reports the LIBOR or Administrative Agent determines in
good faith that the rate so reported no longer accurately reflects the rate available to
Administrative Agent in the London Interbank Market or if such index no longer exists or if Page
BBAM 1 no longer exists or accurately reflects the rate available to Administrative Agent in the
London Interbank Market, Administrative Agent may select a replacement index or replacement page,
as the case may be.

     “LIBOR Loans” means any Loans, other than Swingline Loans, which accrue interest by reference
to the LIBOR, in accordance with the terms of this Agreement.

     “LIBOR Margin” means (i) as of the Closing Date, 1.75% per annum, and (ii) thereafter, as of
each Adjustment Date, the LIBOR Margin shall be adjusted, if necessary, to the applicable percent
per annum set forth in the Pricing Table corresponding to the Senior Leverage Ratio for the twelve
(12) month period ending on such date; provided, that if an Event of Default has occurred and is
continuing on an Adjustment Date, no reduction in the LIBOR Margin shall occur on such Adjustment
Date.

     “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind, or any other type of preferential arrangement that has the practical
effect of creating a security interest, in respect of such asset. For the purposes of this
Agreement and the other Financing Documents, Borrower or any Subsidiary shall be deemed to own
subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, Capital Lease or other title retention agreement
relating to such asset.

     “Litigation” means any action, suit or proceeding before any court, mediator, arbitrator or
Governmental Authority.

     “Loan Account” has the meaning set forth in Section 2.6(b).

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     “Loans” means the Term Loan, the Revolving Loans and the Swingline Loans, or any combination
of the foregoing, as the context may require.

     “Major Casualty Proceeds” means (i) the aggregate insurance proceeds received in connection
with one or more related events under any Property Insurance Policy or (ii) any award or other
compensation with respect to any eminent domain, condemnation of property or similar proceedings
(or any transfer or disposition of property in lieu of condemnation), if the amount of such
aggregate insurance proceeds or award or other compensation exceeds $250,000.

     “Margin Stock” has the meaning assigned thereto in Regulation U of the Federal Reserve Board.

     “Material Adverse Effect” means, with respect to any event, act, condition or occurrence of
whatever nature (including any adverse determination in any litigation, arbitration, or
governmental investigation or proceeding), whether singly or in conjunction with any other event or
events, act or acts, condition or conditions, occurrence or occurrences, whether or not related, a
material adverse change in, or a material adverse effect upon, any of (i) the condition (financial
or otherwise), operations, business, properties or prospects of any of the Credit Parties, (ii) the
rights and remedies of Administrative Agent or Lenders under any Financing Document, or the ability
of any Credit Party to perform any of its obligations under any Financing Document to which it is a
party, (iii) the legality, validity or enforceability of any Financing Document, or (iv) the
existence, perfection or priority of any security interest granted in any Financing Document or the
value of any material Collateral. For purposes of this definition, the term “prospects” shall not
include the possibility of obtaining business from a prospective customer of a Credit Party.

     “Material Contracts” has the meaning set forth in Section 3.16.

     “Maximum Lawful Rate” has the meaning set forth in Section 2.7(b).

     “Merrill Lynch” means Merrill Lynch Capital, a division of Merrill Lynch Business Financial
Services Inc., and its successors.

     “Multiemployer Plan” means a multiemployer plan, that is intended to meet the definition set
forth in Section 4001(a)(3) of ERISA, to which Borrower or any member of the Controlled Group may
have any liability.

     “Net Borrowing Availability” means, as of any date of calculation, the total amount of
Revolving Loans available to be borrowed by Borrower in accordance with the terms of this
Agreement, excluding any and all outstanding Revolving Loans on such date of calculation.

     “Net Cash Proceeds” means, with respect to any transaction or event, an amount equal to the
cash proceeds received by any Credit Party from or in respect of such transaction or event
(including proceeds of any non-cash proceeds of such transaction), less (i) any out-of-pocket
expenses paid to a Person that are reasonably incurred by such Credit Party in connection therewith
and (ii) in the case of an Asset Disposition, the amount of any Debt secured by a Lien on the
related asset and discharged from the proceeds of such Asset Disposition and any taxes

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paid or reasonably estimated by the applicable Credit Party to be payable by such Person in
respect of such Asset Disposition (provided, that if the actual amount of taxes paid is less than
the estimated amount, the difference shall immediately constitute Net Cash Proceeds).

     “Non-Funding Revolving Lender” means a Revolving Lender that has delivered a notice to each of
Administrative Agent and Swingline Lender stating that such Revolving Lender shall cease making
Revolving Loans due to the non-satisfaction of one or more conditions set forth in Article 8, and
specifying any such non-satisfied conditions; provided, that any Revolving Lender delivering any
such notice shall be a Non-Funding Revolving Lender solely over the period commencing on the
Business Day following receipt by Administrative Agent and Swingline Lender of such notice, and
terminating on such date that such Revolving Lender has either revoked the effectiveness of such
notice or acknowledged to each of Administrative Agent and Swingline Lender the satisfaction of the
condition specified in such notice.

     “Notes” means the Term Notes, the Revolving Loan Notes and the Swingline Loan Note, or any
combination of the foregoing, as the context may require.

     “Notice of Borrowing” means a notice of a Responsible Officer, appropriately completed and
substantially in the form of Exhibit D hereto.

     “Notice of LC Credit Event” means a notice from a Responsible Officer to Administrative Agent
with respect to any issuance, increase or extension of a Letter of Credit specifying: (i) the date
of issuance or increase of a Letter of Credit; (ii) the identity of the LC Issuer with respect to
such Letter of Credit, (iii) the expiry date of such Letter of Credit; (iv) the proposed terms of
such Letter of Credit, including the face amount; and (v) the transactions that are to be supported
or financed with such Letter of Credit or increase thereof.

     “Obligations” means all obligations, liabilities and indebtedness (monetary (including
post-petition interest, whether or not allowed) or otherwise) of each Credit Party under this
Agreement or any other Financing Document, in each case howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become
due. In addition to, but without duplication of, the foregoing, the Obligations shall include,
without limitation, all obligations, liabilities and indebtedness arising from or in connection
with (i) all Support Agreements, (ii) all Lender Letters of Credit and (iii) all Swap Contracts
entered into with any Eligible Swap Counterparty.

     “OFAC” means the U.S. Department of Treasury Office of Foreign Assets Control.

     “OFAC Lists” means, collectively, the Specially Designated Nationals and Blocked Persons List
maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001)
and/or any other list of terrorists or other restricted Persons maintained pursuant to any of the
rules and regulations of OFAC or pursuant to any other applicable Executive Orders.

     “Operative Documents” means the Financing Documents and the Subordinated Debt Documents.

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     “Optional Revolving Loan Commitment Increase” has the meaning set forth in Section 2.2(f).

     “Ordinary Course of Business” means, in respect of any transaction involving any Credit Party,
the ordinary course of such Credit Party’s business, as conducted by such Credit Party
substantially in accordance with past practices.

     “Organizational Documents” means, with respect to any Person other than a natural person, the
documents by which such Person was organized (such as a certificate of incorporation, certificate
of limited partnership or articles of organization, and including, without limitation, any
certificates of designation for preferred stock or other forms of preferred equity) and which
relate to the internal governance of such Person (such as by-laws, a partnership agreement or an
operating, limited liability company or members agreement).

     “Overadvance Revolving Loans” has the meaning set forth in Section 2.2(a)(ii).

     “Participant” has the meaning set forth in Section 12.6(b).

     “Payment Account” means the account specified on the signature pages hereof into which all
payments by or on behalf of Borrower to Administrative Agent under the Financing Documents shall be
made, or such other account as Administrative Agent shall from time to time specify by notice to
Borrower.

     “Payment Notification” means a written notification substantially in the form of Exhibit E
hereto.

     “PBGC” means the Pension Benefit Guaranty Corporation and any Person succeeding to any or all
of its functions under ERISA.

     “Pension Plan” means any ERISA Plan that is subject to Section 412 of the Code or Title IV of
ERISA.

     “Permits” has the meaning set forth in Section 3.1.

     “Permitted Contest” means a contest maintained in good faith by appropriate proceedings
promptly instituted and diligently conducted and with respect to which such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP shall have been made;
provided that compliance with the obligation that is the subject of such contest is effectively
stayed during such challenge.

     “Permitted Liens” means Liens permitted pursuant to Section 5.2.

     “Person” means any natural person, corporation, limited liability company, professional
association, limited partnership, general partnership, joint stock company, joint venture,
association, company, trust, bank, trust company, land trust, business trust or other organization,
whether or not a legal entity, and any Governmental Authority.

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     “Pricing Table” means the following tables, as applicable:

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

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

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

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

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

     “Property Insurance Policy” means any insurance policy maintained by any Credit Party covering
losses with respect to tangible real or personal property or improvements or losses from business
interruption.

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     “Pro Rata Share” means (i) with respect to a Lender’s right to receive payments of principal
and interest with respect to the Term Loan, the Term Loan Commitment Percentage of such Lender,
(ii) with respect to a Lender’s obligation to make Revolving Loans, such Lender’s right to receive
payments of principal and interest with respect thereto, such Lender’s right to receive the unused
line fee described in Section 2.3(b), and such Lender’s obligation to share in Letter of Credit
Liabilities and to receive the related Letter of Credit fee described in Section 2.5(b), the
Revolving Loan Commitment Percentage of such Lender, and (iv) for all other purposes (including
without limitation the indemnification obligations arising under Section 11.6) with respect to any
Lender, the percentage obtained by dividing (x) the sum of the Revolving Loan Commitment Amount of
such Lender (or, in the event the Revolving Loan Commitment shall have been terminated, such
Lender’s then existing Revolving Loan Outstandings), plus such Lender’s then outstanding principal
amount of the Term Loan by (y) the sum of the Revolving Loan Commitment (or, in the event the
Revolving Loan Commitment shall have been terminated, the then existing Revolving Loan
Outstandings) of all Lenders, plus the then outstanding principal amount of the Term Loan of all
Lenders.

     “Reimbursement Obligations” means, at any date, the obligations of Borrower then outstanding
to reimburse (i) Administrative Agent for payments made by Administrative Agent under a Support
Agreement and/or (ii) any LC Issuer, for payments made by such LC Issuer under a Lender Letter of
Credit.

     “Reinvestment Reserve” has the meaning set forth in Section 2.1(c).

     “Replacement Lender” has the meaning set forth in Section 12.6(c).

     “Required Lenders” means, subject to the provisions of Section 11.13(d), at any time Lenders
holding (i) sixty-six and two thirds percent (66 2/3%) (one hundred percent (100%) if the number of
total Lenders shall be less than three (3)) or more of the sum of the Revolving Loan Commitment and
the outstanding principal balance of the Term Loan (taken as a whole) or (ii) if the Revolving Loan
Commitment has been terminated, sixty-six and two thirds percent (66 2/3%) (one hundred percent
(100%) if the number of total Lenders shall be less than three (3)) or more of the sum of (x) the
then aggregate outstanding principal balance of the Loans plus (y) the then aggregate amount of
Letter of Credit Liabilities.

     “Required Revolving Lenders” means, subject to the provisions of Section 11.13(d), at any time
Revolving Lenders holding (i) sixty-six and two thirds percent (66 2/3%) or more of the Revolving
Loan Commitment or (ii) if the Revolving Loan Commitment has been terminated, sixty-six and two
thirds percent (66 2/3%) or more of the sum of (x) the then aggregate outstanding principal balance
of the Revolving Loans plus (y) the then aggregate amount of Letter of Credit Liabilities.

     “Reserves” means such amounts as Administrative Agent may from time to time establish and
revise, in each case in the exercise of its reasonable discretion, reducing the amount of Revolving
Loans, Support Agreements and Lender Letters of Credit which would otherwise be available to
Borrower under the lending formula(s) provided for herein: (a) to reflect events, conditions,
contingencies or risks which, as determined by Administrative Agent in the exercise of its
reasonable credit judgment: (i) adversely affect, or could reasonably be expected to

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adversely affect, the Collateral or any other property which is security for the Obligations
or its value, (ii) materially adversely affect, or could reasonably be expected to materially
adversely affect, the assets, business or prospects of any Credit Party or (iii) adversely affect,
or could reasonably be expected to adversely affect, the Liens and other rights of Administrative
Agent or any Lender in the Collateral (including the enforceability, perfection and priority
thereof), (b) to reflect Administrative Agent’s good faith belief that any collateral report or
financial information furnished by or on behalf of any Credit Party to Administrative Agent is or
may have been incomplete, inaccurate or misleading in any material respect, (c) to reflect accrued
and unpaid interest and fees, or (d) otherwise in the reasonable credit judgment of Administrative
Agent. To the extent Administrative Agent may, in accordance with any other terms hereof, revise
the lending formula(s) used to determine the Borrowing Base or establish new criteria or revise
existing criteria for Eligible Accounts or Eligible Inventory, Administrative Agent shall not also
establish a Reserve for the same purpose. The amount of any Reserve established by Administrative
Agent shall have a reasonable relationship to the event, condition or other matter which is the
basis for such Reserve as determined by Administrative Agent in good faith. Without limitation of
the foregoing, Administrative Agent shall have the right to establish a Reserve in respect of
obligations arising under Swap Contracts.

     “Responsible Officer” means any of the Chief Executive Officer or Chief Financial Officer of
Borrower.

     “Restricted Distribution” means as to any Person (i) any dividend or other distribution
(whether in cash, securities or other property) on any equity interest in such Person (except those
payable solely in its equity interests of the same class) or (ii) any payment by such Person on
account of (a) the purchase, redemption, retirement, defeasance, surrender, cancellation,
termination or acquisition of any equity interests in such Person or any claim respecting the
purchase or sale of any equity interest in such Person or (b) any option, warrant or other right to
acquire any equity interests in such Person.

     “Revolving Lender” means each Lender having a Revolving Loan Commitment Amount in excess of
zero (or, in the event the Revolving Loan Commitment shall have been terminated at any time, each
Lender at such time having Revolving Loan Outstandings in excess of zero).

     “Revolving Loan Borrowing” means a borrowing of a Revolving Loan.

     “Revolving Loan Commitment” means the sum of each Lender’s Revolving Loan Commitment Amount.

     “Revolving Loan Commitment Amount” means, as to any Lender, the dollar amount set forth
opposite such Lender’s name in the applicable table on the Commitment Annex under the column
“Revolving Loan Commitment Amount” (if such Lender’s name is not so set forth thereon, then the
dollar amount in the applicable table on the Commitment Annex for the Revolving Loan Commitment
Amount for such Lender shall be deemed to be zero), as such amount may be adjusted from time to
time by any “Amounts Assigned” (with respect to such Lender’s portion of Revolving Loans
outstanding and its commitment to make Revolving Loans) pursuant to the terms of any and all
effective Assignment Agreements to which such Lender is a party.

-24-

 

     “Revolving Loan Commitment Percentage” means, as to any Lender, (i) on the Closing Date, the
percentage set forth opposite such Lender’s name in the applicable table on the a Commitment Annex
under the column “Revolving Loan Commitment Percentage” (if such Lender’s name is not so set forth
thereon, then, on the Closing Date, such percentage for such Lender shall be deemed to be zero) and
(ii) on any date following the Closing Date, the percentage equal to the Revolving Loan Commitment
Amount of such Lender on such date divided by the Revolving Loan Commitment on such date.

     “Revolving Loan Limit” means, at any time, the lesser of (i) the Revolving Loan Commitment
minus the amount of Swingline Loan Outstandings and (ii) the Borrowing Base minus
the amount of Swingline Loan Outstandings.

     “Revolving Loan Note” has the meaning set forth in Section 2.4.

     “Revolving Loan Outstandings” means at any time of calculation (i) the sum of the then
existing aggregate outstanding principal amount of Revolving Loans and the then existing Letter of
Credit Liabilities and (ii) when used with reference to any single Lender, the sum of the then
existing outstanding principal amount of Revolving Loans advanced by, or for the account of, such
Lender and the then existing Letter of Credit Liabilities for the account of such Lender.

     “Revolving Loans” has the meaning set forth in Section 2.2(a).

     “Section 5.8(b) Permitted Acquisition” has the meaning set forth in Section 5.8(b).

     “Section 5.8(c) Permitted Acquisition” has the meaning set forth in Section 5.8(c).

     “Security Documents” means any agreement, document or instrument executed concurrently
herewith or at any time hereafter pursuant to which one or more Credit Parties or any other Person
either (i) Guarantees payment or performance of all or any portion of the Obligations and/or (ii)
provides, as security for all or any portion of the Obligations, a Lien on any of its assets in
favor of Administrative Agent for its own benefit and the benefit of the Lenders, as any or all of
the same may be amended, supplemented, restated or otherwise modified from time to time.

     “Senior Leverage Ratio” means the ratio of (i) the difference between (a) Total Debt less (b)
Subordinated Debt to (ii) EBITDA.

     “Settlement Date” has the meaning set forth in Section 11.13(a).

     “Settlement Service” has the meaning set forth in Section 12.6(a).

     “Solvent” means, with respect to any Person, that such Person (i) owns and will own assets the
fair saleable value of which are (a) greater than the total amount of its liabilities (including
Contingent Obligations) and (b) greater than the amount that will be required to pay the probable
liabilities of its then existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to it; (ii) has capital that
is not unreasonably small in relation to its business as presently conducted or after

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giving effect to any contemplated transaction; and (iii) does not intend to incur and does not
believe that it will incur debts beyond its ability to pay such debts as they become due.

     “SSG” means Sport Supply Group, Inc., a Delaware corporation.

     “Stated Rate” has the meaning set forth in Section 2.7(b).

     “Subordinated Debt” means Debt of Borrower owing to Kenneth L. Caravati, Michael Caravati,
Daniel F. Salkeld, and Albert A. Messier in an original principal amount of $480,000 (together with
capitalized interest, fees, costs and other amounts) incurred pursuant to the terms of the
Subordinated Debt Documents.

     “Subordinated Debt Documents” means (i) the Promissory Note, dated July 26, 2004, executed by
Borrower and payable to Kenneth L. Caravati in the stated principal amount of $250,000, and the
Subordination Agreement dated the date hereof among Mr. Caravati, Borrower and Administrative
Agent, (ii) the Promissory Note, dated July 26, 2004, executed by Borrower payable to C. Michael
Caravati in the stated principal amount of $250,000, and the Subordination Agreement dated the date
hereof among Mr. Caravati, Borrower and Administrative Agent, (iii) the Promissory Note, dated May
11, 2005, executed by Borrower payable to Albert A. Messier in the stated principal amount of
$100,000, and the Subordination Agreement dated the date hereof among Mr. Messier, Borrower and
Administrative Agent, and (iv) Promissory Note, dated May 11, 2005, executed by Borrower payable to
Daniel F. Salkeld in the stated principal amount of $130,000 and the Subordination Agreement dated
the date hereof among Mr. Salkeld, Borrower and Administrative Agent.

     “Subordination Agreements” means (i) the Subordination Agreement dated the date hereof among
Kenneth L. Caravati, Borrower and Administrative Agent, (ii) the Subordination Agreement dated the
date hereof among Michael. Caravati, Borrower and Administrative Agent, (iii) the Subordination
Agreement dated the date hereof among Albert A. Messier, Borrower and Administrative Agent, and
(iv) the Subordination Agreement dated the date hereof among Daniel F. Salkeld, Borrower and
Administrative Agent.

     “Subsidiary” means, with respect to any Person, (i) any corporation (other than SSG as long as
Borrower shall not own 100% of the issued and outstanding shares of common stock of SSG), of which
an aggregate of more than 50% of the outstanding capital stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of whether, at the
time, capital stock of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the time, directly or indirectly,
owned legally or beneficially by such Person or one or more Subsidiaries of such Person, or with
respect to which any such Person has the right to vote or designate the vote of more than 50% of
such capital stock whether by proxy, agreement, operation of law or otherwise, and (ii) any
partnership or limited liability company in which such Person and/or one or more Subsidiaries of
such Person shall have an interest (whether in the form of voting or participation in profits or
capital contribution) of more than 50% or of which any such Person is a general partner or may
exercise the powers of a general partner. Unless the context otherwise requires, each reference to
a Subsidiary shall be a reference to a Subsidiary of Borrower.

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     “Support Agreement” has the meaning set forth in Section 2.5(a).

     “Supported Letter of Credit” means a Letter of Credit issued by an LC Issuer in reliance on
one or more Support Agreements.

     “Swap Contract” means any “swap agreement”, as defined in Section 101 of the Bankruptcy Code,
that is intended to provide protection against fluctuations in interest or currency exchange rates.

     “Swingline Lender” means Merrill Lynch or any Lender expressly identified by Merrill Lynch as
the Swingline Lender or, if Merrill Lynch shall at any time resign as Swingline Lender, a Lender
other than Merrill Lynch selected by Administrative Agent in its sole discretion and reasonably
acceptable to Borrower.

     “Swingline Loan” has the meaning set forth in Section 2.2(e).

     “Swingline Loan Borrowing” means a borrowing of a Swingline Loan.

     “Swingline Loan Limit” means, at any time, the smallest of the following amounts: (i) $0, (ii)
the Revolving Loan Commitment minus the amount of Revolving Loan Outstandings and (iii) the
Borrowing Base minus the amount of Revolving Loan Outstandings.

     “Swingline Loan Note” has the meaning set forth in Section 2.4.

     “Swingline Loan Outstandings” means, at any time of calculation, the then existing aggregate
outstanding principal amount of Swingline Loans.

     “Target” has the meaning set forth in Section 5.8(c).

     “Taxes” has the meaning set forth in Section 2.8.

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

     “Term Loan Commitment Percentage” means, as to any Lender, (i) on the Closing Date, the
percentage set forth opposite such Lender’s name in the applicable table on the Commitment Annex
under the column “Term Loan Commitment Percentage” (if such Lender’s name is not so set forth
thereon, then, on the Closing Date, such percentage for such Lender shall be deemed to be zero) and
(ii) on any date following the Closing Date, the percentage equal to the principal amount of the
Term Loan held by such Lender on such date divided by the aggregate principal amount of the Term
Loan on such date.

     “Term Note” has the meaning set forth in Section 2.4.

     “Termination Date” has the meaning set forth in Section 2.2(c).

     “Total Debt” has the meaning provided in the Compliance Certificate.

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     “UCC” means the Uniform Commercial Code of the State of Illinois or of any other state the
laws of which are required to be applied in connection with the perfection of security interests in
any Collateral.

     “United States” means the United States of America.

     “Wholly-Owned Subsidiary” means, with respect to any Person, any Subsidiary of such Person of
which all of the equity securities (other than, in the case of a corporation, directors’ qualifying
shares, to the extent legally required) are directly or indirectly owned and controlled by such
Person or one or more Wholly-Owned Subsidiaries of such Person.

     Section 1.2 Accounting Terms and Determinations.

     Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder (including without limitation determinations made pursuant to
the exhibits hereto) shall be made, and all financial statements required to be delivered hereunder
shall be prepared on a consolidated basis in accordance with GAAP applied on a basis consistent
with the most recent audited consolidated financial statements of Borrower and its Consolidated
Subsidiaries delivered to Administrative Agent and each of the Lenders. If at any time any change
in GAAP would affect the computation of any financial ratio or financial requirement set forth in
any Financing Document, and either Borrower or the Required Lenders shall so request, the
Administrative Agent, the Lenders and Borrower shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in GAAP (subject to the
approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement
shall continue to be computed in accordance with GAAP prior to such change therein and (ii)
Borrower shall provide to the Administrative Agent and the Lenders financial statements and other
documents required under this Agreement which include a reconciliation between calculations of such
ratio or requirement made before and after giving effect to such change in GAAP.

     Section 1.3 Other Definitional Provisions and References.

     References in this Agreement to “Articles”, “Sections”, “Annexes”, “Exhibits” or “Schedules”
shall be to Articles, Sections, Annexes, Exhibits or Schedules of or to this Agreement unless
otherwise specifically provided. Any term defined herein may be used in the singular or plural.
“Include”, “includes” and “including” shall be deemed to be followed by “without limitation”.
Except as otherwise specified or limited herein, references to any Person include the successors
and assigns of such Person. References “from” or “through” any date mean, unless otherwise
specified, “from and including” or “through and including”, respectively. Unless otherwise
specified herein, the settlement of all payments and fundings hereunder between or among the
parties hereto shall be made in lawful money of the United States and in immediately available
funds. Time is of the essence in Borrower’s and each other Credit Party’s performance under this
Agreement and all other Financing Documents. All amounts used for purposes of financial
calculations required to be made herein shall be without duplication. References to any statute or
act shall include all related current regulations and all amendments and any successor statutes,
acts and regulations. References to any statute or act, without additional reference, shall be
deemed to refer to federal statutes and acts of the United States.

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References to any agreement, instrument or document shall include all schedules, exhibits,
annexes and other attachments thereto. References to the “discretion” or “election” of
Administrative Agent, the Required Lenders, or the Required Revolving Lenders shall be deemed to
mean its or their sole and absolute discretion or election (whether or not so stated with each
particular use), unless reasonable discretion is specified.

ARTICLE 2

LOANS AND LETTERS OF CREDIT

     Section 2.1 Term Loan.

     (a) Term Loan Amounts. On the terms and subject to the conditions set forth herein,
the Lenders hereby agree to make a term loan in an original principal amount equal to $10,000,000
(“Term Loan”) on the Closing Date. Each Lender’s obligation to fund the Term Loan shall be limited
to such Lender’s Term Loan Commitment Percentage of the Term Loan, and no Lender shall have any
obligation to fund any portion of the Term Loan required to be funded by any other Lender, but not
so funded. Borrower shall not have any right to reborrow any portion of the Term Loan which is
repaid or prepaid from time to time.

     (b) Scheduled Repayments. There shall become due and payable, and Borrower shall
repay the Term Loan through, twelve (12) scheduled payments, as follows: the first eleven (11)
installments shall be in the principal amount of $500,000 and shall be due and payable on the last
day of each March, June, September and December, commencing on September 30, 2006 and continuing through
and including March 31, 2009, and a twelfth (12th) and final payment of the remaining
outstanding principal amount of the Term Loan shall be due and payable on the Commitment Expiry
Date. Notwithstanding the payment schedule set forth above, the outstanding principal amount of
the Term Loan shall become immediately due and payable in full on the Termination Date.

     (c) Mandatory Prepayments. There shall become due and payable and Borrower shall
prepay the Term Loan (and the Revolving Loans and Swingline Loans, to the extent required by
Section 2.1(e)(i)) in the following amounts and at the following times:

          (i) on the date on which any Credit Party (or Administrative Agent as loss payee or assignee)
receives any Major Casualty Proceeds, an amount equal to one hundred percent (100%) of such Major
Casualty Proceeds; provided, that, so long as no Default or Event of Default has occurred and is
continuing, the recipient (other than Administrative Agent) of any Major Casualty Proceeds may
reinvest the amount of such Major Casualty Proceeds within ninety (90) days, in replacement assets
comparable to the assets giving rise to such Major Casualty Proceeds; provided, that the aggregate
amount which may be reinvested by Borrower and its Subsidiaries pursuant to the preceding proviso
may not exceed $250,000 in any Fiscal Year; provided, further, that if the applicable Credit Party
does not intend to fully reinvest such Major Casualty Proceeds, or if the time period set forth in
this sentence expires without such Credit Party having reinvested such Major Casualty Proceeds,
Borrower shall prepay the Loans

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in an amount equal to such Major Casualty Proceeds (to the extent not
reinvested or intended to be reinvested within such time period);

          (ii) upon receipt by any Credit Party of the proceeds from the issuance and sale of any Debt
or equity securities (other than (1) proceeds of Debt securities expressly permitted pursuant to
Section 5.1, (2) proceeds of the issuance of equity securities to Borrower or any Wholly-Owned
Subsidiary), and (3) proceeds of the issuance of equity securities of Borrower (or a parent company
of Borrower) upon the exercise of any stock option to acquire securities of Borrower, in each case
in an amount equal to one hundred percent (100%) of the Net Cash Proceeds of such issuance and
sale;

          (iii) upon receipt by any Credit Party of the proceeds of any Asset Disposition, an amount
equal to one hundred percent (100%) of the Net Cash Proceeds of such Asset Disposition; provided,
that no prepayment shall be required pursuant to this Section 2.1(c)(iii) unless and until the
aggregate Net Cash Proceeds received during any Fiscal Year from Asset Dispositions exceeds
$350,000 (in which case all Net Cash Proceeds in excess of such amount shall be used to make
prepayments pursuant to this Section 2.1(c)(iii)), and provided, that, so long as no Default or
Event of Default has occurred and is continuing, the recipient of such Net Cash Proceeds may
reinvest the amount of such Net Cash Proceeds within ninety (90) days, in replacement fixed assets
of a kind then used or usable in the business of such Credit Party. If the applicable Credit Party
does not intend to so reinvest such Net Cash Proceeds, or if the time period set forth in the
immediately preceding sentence expires without such Credit Party having reinvested such Net Cash
Proceeds, Borrower shall prepay the Loans in an amount equal to such Net Cash Proceeds; and

          (iv) upon receipt by any Credit Party of any Extraordinary Receipts, an amount equal to one
hundred percent (100%) of such Extraordinary Receipts.

Any amounts permitted to be reinvested pursuant to the preceding clauses (ii) or (iii) shall be
immediately applied by Borrower as a prepayment against then outstanding Revolving Loans, and
Administrative Agent shall establish a Reserve (the “Reinvestment Reserve”) against the Revolving
Loan Limit in an amount equal to such permitted reinvestment amount. So long as no Default or
Event of Default then exists, Administrative Agent shall permit Revolving Loan Borrowings to
finance the making of reinvestments permitted pursuant to the preceding clauses (ii) and (iii), and
shall concurrently reduce the Reinvestment Reserve by an equivalent amount. Any remaining portion
of the Reinvestment Reserve shall be reduced to zero (0) upon the expiration of the applicable
reinvestment periods pursuant to the preceding clauses (ii) and (iii).

     (d) Optional Prepayments. Borrower may from time to time, with at least two (2)
Business Days prior delivery to Administrative Agent of an appropriately completed Payment
Notification, prepay any Term Loan in whole or in part, without premium or penalty; provided that
any such partial prepayment shall be in an amount equal to $100,000 or a higher integral multiple
of $25,000.

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     (e) All Prepayments.

          (i) Any prepayment of a LIBOR Loan (including a prepayment in respect of a permanent reduction
of the Revolving Loan Commitment) on a day other than the last day of an Interest Period therefor
shall include interest on the principal amount being repaid and shall be subject to Section
2.3(e)(iv). All prepayments of a Loan (including a prepayment in respect of a permanent reduction
of the Revolving Loan Commitment) shall be applied first to that portion of such Loan comprised of
Base Rate Loans and then to that portion of such Loan comprised of LIBOR Loans, in direct order of
Interest Period maturities. Any required prepayment in respect of either Major Casualty Proceeds
or Net Cash Proceeds of any Asset Disposition shall be applied first against outstanding Revolving
Loans and Swingline Loans, to the extent that, after giving effect to the event giving rise to such
proceeds, and any related modification of the most recently delivered Borrowing Base Certificate to
reflect such event, a mandatory prepayment of Revolving Loans and/or Swingline Loans would be
required pursuant to either of Section 2.2(c)(ii) or Section 2.2(e)(i), with the remaining amount
of such proceeds being applied to the Term Loan as provided herein. All prepayments of the Term
Loan shall be applied in the inverse order of maturity to the remaining installments thereof.
Following the payment in full of the Term Loan, any remaining amounts required by Section 2.1(c) to
be used to prepay the Term Loan shall instead be applied first, as a repayment of the outstanding
Revolving Loans pro rata among all Lenders having a Revolving Loan Commitment Percentage and
second, at any time the Revolving Loans have been repaid in full, as a repayment of the outstanding
Swingline Loans.

          (ii) Borrower shall deliver to Administrative Agent an appropriately completed Payment
Notification at least two (2) Business Days prior to each mandatory prepayment pursuant to Section
2.1(c) and each voluntary prepayment pursuant to Section 2.1(d), and Administrative Agent shall
promptly notify each Lender of such notice.

     Section 2.2 Revolving Loans and Swingline Loans.

     (a) Revolving Loans and Borrowings.

     (i) On the terms and subject to the conditions set forth herein, each Lender severally agrees
to make Loans to Borrower from time to time as set forth herein (each a “Revolving Loan”, and
collectively, “Revolving Loans”) equal to such Lender’s Revolving Loan Commitment Percentage of
Revolving Loans requested by Borrower hereunder, provided that after giving effect thereto, the
Revolving Loan Outstandings shall not exceed the Revolving Loan Limit. Within the foregoing
limits, Borrower may borrow under this Section 2.2(a)(i), may prepay or repay Revolving Loans from
time to time and may reborrow Revolving Loans pursuant to this Section 2.2(a)(i).

     (ii) If Borrower requests that Revolving Lenders make, or permit to remain outstanding,
Revolving Loans in an aggregate principal amount in excess of the then existing Revolving Credit
Limit, Administrative Agent may in its discretion (unless otherwise determined by Required
Revolving Lenders) elect to cause all Revolving Lenders to make, or permit to remain outstanding,
such excess Revolving Loans (such excess Revolving Loans being referred to as “Overadvance
Revolving Loans”), provided, however, that Revolving Lenders shall not

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make, or permit to remain outstanding, (a) Revolving Loans in excess of the
Revolving Loan Commitment less the sum at such time of (i) the Swingline Loan Outstandings and (ii)
the Letter of Credit Liabilities or (b) Overadvance Revolving Loans in excess of 10% of the
Revolving Loan Commitment. If Overadvance Revolving Loans are made, or permitted to remain
outstanding, pursuant to the preceding sentence, then (a) clauses (i) and (ii) of the definition of
Revolving Loan Limit and clauses (ii) and (iii) of the definition of Swingline Loan Limit,
respectively, shall each be deemed increased by the amount of such permitted Overadvance Revolving
Loans, but only for so long as such Overadvance Revolving Loans are outstanding and (b) all
Revolving Lenders shall be bound to make, or permit to remain outstanding such Overadvance
Revolving Loans based upon their Pro Rata Shares of the Revolving Loan Commitment in accordance
with the terms of this Agreement.

     (b) Advancing Revolving Loans.

          (i) Borrower shall deliver to Administrative Agent a Notice of Borrowing with respect to each
proposed Revolving Loan Borrowing (other than Revolving Loans made pursuant to clause (iii) below),
such Notice of Borrowing to be delivered no later than noon (Chicago time) (1) on the day of such
proposed borrowing, in the case of Base Rate Loans in an aggregate principal amount equal to or
less than $5,000,000, (2) on the Business Day prior to such proposed borrowing, in the case of Base
Rate Loans in an aggregate principal amount greater than $5,000,000 and (3) on the third (3rd)
Business Day prior to such proposed borrowing, in the case of all LIBOR Loans. Once given, except
as provided in Section 2.3(e)(ii), a Notice of Borrowing shall be irrevocable and Borrower shall be
bound thereby.

          (ii) Borrower hereby authorizes Lenders and Administrative Agent to make Revolving Loans
(other than LIBOR Loans) based on telephonic notices made by any Person which Administrative Agent,
in good faith, believes to be acting on behalf of Borrower. Borrower agrees to deliver to
Administrative Agent a Notice of Borrowing in respect of each Revolving Loan requested by telephone
no later than one Business Day following such request. If the Notice of Borrowing differs in any
respect from the action taken by Administrative Agent and Lenders, the records of Administrative
Agent and the Lenders shall govern absent manifest error. Borrower further hereby authorizes
Lenders and Administrative Agent to make Revolving Loans based on electronic notices made by any
Person which Administrative Agent, in good faith, believes to be acting on behalf of Borrower, but
only after Administrative Agent shall have established procedures acceptable to Administrative
Agent for accepting electronic Notices of Borrowing, as indicated by Administrative Agent’s written
confirmation thereof.

          (iii) Borrower and each Revolving Lender hereby authorizes Administrative Agent to make
Revolving Loans (which shall be Base Rate Loans) on behalf of Revolving Lenders, at any time in its
sole discretion, (x) as provided in Section 2.2(e)(ii), with respect to obligations arising in
respect of Swingline Loans, (y) as provided in Section 2.5(c), with respect to obligations arising
under Support Agreements and/or Lender Letters of Credit, and (z) to pay principal owing in respect
of the Loans (excluding principal payments in respect of the Loans, commencing one Business Day
following receipt by Administrative Agent of a written notice from any Lender, in accordance with
the provisions of Section 11.11, of the occurrence of an Event of Default) and interest, fees,
expenses and other charges of any Credit Party from time to time arising under this Agreement or
any other Financing Document, so long as, in each case

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after giving effect to any such Revolving Loans, the Revolving Loan Outstandings do not exceed
the Revolving Loan Limit; provided, that (1) Administrative Agent shall have no obligation at any
time to make any Revolving Loan pursuant to the provisions of the preceding sub-clause (z) and (2)
Administrative Agent shall have no right to make Revolving Loans (A) as provided in each of Section
2.2(e)(ii) and Section 2.5(c) for the account of any Revolving Lender that was a Non-Funding
Revolving Lender at the time Swingline Lender advanced a Swingline Loan, Administrative Agent
executed a Support Agreement, or at the time of issuance of any Lender Letter of Credit, for which,
in any case, reimbursement obligations have arisen pursuant to either Section 2.2(e)(ii) and/or
Section 2.5(c) and (B) for the account of any then existing Non-Funding Revolving Lender to pay
interest, fees, expenses and other charges of any Credit Party (other than reimbursement
obligations that have arisen pursuant to either Section 2.2(e)(ii) and/or Section 2.5(c) in respect
of Support Agreements executed or Lender Letters of Credit issued at the time any such Non-Funding
Revolving Lender was not then a Non-Funding Revolving Lender). Subject to the preceding provisions
of this clause (iii), Administrative Agent shall have the right to make Revolving Loans pursuant to
the provisions of this clause (iii) regardless of whether the conditions precedent set forth in
Section 8.3 are then satisfied, including the existence of any Default or Event of Default either
before or after giving effect to the making of such Revolving Loans.

     (c) Mandatory Revolving Loan Repayments and Prepayments.

          (i) The Revolving Loan Commitment shall terminate upon the earlier to occur of (i) the
Commitment Expiry Date and (ii) any date on which Administrative Agent or Required Lenders elect to
terminate the Revolving Loan Commitment pursuant to Section 9.2 (such earlier date being the
“Termination Date”). On the Termination Date, there shall become due, and Borrower shall pay the
entire outstanding principal amount of each Revolving Loan and of each Swingline Loan, together
with accrued and unpaid Obligations pertaining thereto.

          (ii) If at any time the Revolving Loan Outstandings exceed the Revolving Loan Limit, then, on
the next succeeding Business Day, Borrower shall repay the Revolving Loans and/or Swingline Loans
or cash collateralize Letter of Credit Liabilities in the manner specified in Section 2.5(e) or
cancel outstanding Letters of Credit, or any combination of the foregoing, in an aggregate amount
equal to such excess.

     (d) Optional Prepayments; Permanent Reduction of Revolving Loan Commitment; Early
Termination.

          (i) Subject to the provisions of Section 2.3(e)(iv), Borrower may from time to time prepay the
Revolving Loans and/or Swingline Loans in whole or in part, without premium or penalty; provided
that any such partial prepayment shall be in an amount equal to $100,000 or a higher integral
multiple of $25,000.

          (ii) After the effectiveness of the Acquisition Revolving Loan Commitment Increase, Borrower
may voluntarily elect to permanently reduce the Revolving Loan Commitment, in part from time to
time, by giving the Administrative Agent an appropriately completed Payment Notification not less
then two (2) Business Days prior to the requested permanent reduction as follows; (i) the aggregate
amount of permanent reductions that Borrower

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may elect may not exceed (A) after the effectiveness of both the Optional Revolving Loan
Commitment Increase and the Acquisition Revolving Loan Commitment Increase, $10,000,000, and (B)
after the effectiveness of the Acquisition Revolving Loan Commitment Increase, but before the
effectiveness of the Optional Revolving Loan Commitment Increase, $5,000,000; (ii) each such
reduction shall be $1,000,000 or an integral multiple of $1,000,000 in excess thereof; and (iii) no
such reduction shall be made that would result in the payment or prepayment of any portion of any
LIBOR Loan on any date other than the last day of the Interest Period for such LIBOR Loan. Each
such reduction shall be accompanied by a prepayment of the Loans in the amount, if any, necessary
to make the aggregate outstanding principal balance of the Revolving Loan Outstandings less then
the Revolving Loan Limit. Each such reduction shall reduce the Revolving Loan Commitment Amount
between or among the Lenders pro rata in accordance with each Lender’s Pro Rata Share. Except as
otherwise mutually agreed to by Borrower and the Administrative Agent, only one (1) request by
Borrower to permanently reduce the Revolving Credit Commitment may be made by Borrower during any
twelve (12) month period during the term of this Agreement.

          (iii) Borrower may, upon not less than thirty (30) days’ prior written notice to
Administrative Agent, terminate this Agreement by making a full and final payment to Administrative
Agent, for its benefit and the benefit of all Lenders and all LC Issuers, of all Obligations
(including, without limitation, at the option of Administrative Agent, providing cash collateral to
be held by Administrative Agent in respect of all outstanding Letter of Credit Liabilities in the
manner specified in Section 2.5(e), or canceling all outstanding Letters of Credit, or any
combination of the foregoing, all in form and substance satisfactory to Administrative Agent).
Upon termination of this Agreement in accordance with this paragraph, the unused line fee required
by Section 2.3(b) shall not thereafter be payable.

     (e) Swingline Loans.

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

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          (ii) Swingline Lender shall give Administrative Agent prompt notice of each Swingline Loan
advanced by Swingline Lender. In the event that on any Business Day Swingline Lender desires that
all or any portion of the outstanding Swingline Loans should be reduced, in whole or in part,
Swingline Lender shall notify Administrative Agent to that effect and indicate the portion of the
Swingline Loan to be so reduced. Administrative Agent agrees to transmit to Revolving Lenders the
information contained in each notice received by Administrative Agent from Swingline Lender
regarding the reduction of outstanding Swingline Loans and shall concurrently notify such Lenders
of each such Lender’s Pro Rata Share of the obligation to make a Revolving Loan to repay
outstanding Swingline Loans (or the applicable portion thereof). Each of the Revolving Lenders,
other than any Revolving Lender that was a Non-Funding Revolving Lender at the time the applicable
Swingline Loans were advanced, hereby unconditionally and irrevocably agrees to fund to the Payment
Account, for the benefit of Swingline Lender, not later than noon (Chicago time) on the Business
Day immediately following the Business Day of such Lender’s receipt of such notice from
Administrative Agent (provided that if any Revolving Lender shall receive such notice at or prior
to 10:00 a.m. (Chicago time) on a Business Day, such funding shall be made by such Lender on such
Business Day), such Lender’s Pro Rata Share of a Revolving Loan (which Revolving Loan shall be a
Base Rate Loan and shall be deemed to be requested by Borrower) in the principal amount of such
portion of the Swingline Loan which is required to be paid to Swingline Lender under this Section
2.2(e). The proceeds of any such Revolving Loans shall be immediately paid over to Administrative
Agent for the benefit of Swingline Lender for application against then outstanding Swingline Loans.
For purposes of this clause (ii), Swingline Lender shall be conclusively entitled to assume that,
at the time of the advance of any Swingline Loan, each Revolving Lender, other than any then
existing Non-Funding Revolving Lender, will fund its Pro Rata Share of the Revolving Loans provided
for in this clause (ii).

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

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Payment Account not later than noon (Chicago time) on the Business Day immediately following
the Business Day of receipt of such notice (provided that if any such Lender shall receive such
notice at or prior to 10:00 a.m. (Chicago time) on a Business Day, such funding shall be made by
such Lender on such Business Day), an amount equal to such Lender’s participation in the Swingline
Loan.

          (iv) In the event any Revolving Lender (other than Non-Funding Revolving Lenders, as specified
above) fails to make available to Swingline Lender when due the amount of such Lender’s
participation in the Swingline Loans, Swingline Lender shall be entitled to recover such amount on
demand from such Lender together with interest at the Federal Funds Rate, for the first three (3)
days following the due date, and thereafter at the Base Rate plus the Base Rate Margin in respect
of Swingline Loans. Any Lender’s failure to make any payment requested under this Section 2.2(e)
shall not relieve any other Lender of its obligations hereunder, but no Lender shall be responsible
for the failure of any other Lender to make available to Swingline Lender such other Lender’s
required payment hereunder. The obligations of the Lenders under this Section 2.2(e) shall be
deemed to be binding upon Administrative Agent, Swingline Lender and Lenders notwithstanding the
occurrence of any Default or Event of Default, or any insolvency or bankruptcy proceeding
pertaining to Borrower or any other Credit Party.

     (f) Optional Revolving Loan Commitment Increase Request. Provided no Default or Event
of Default shall have occurred and shall be continuing, Borrower may request that the Lenders
increase the Revolving Loan Commitment by an amount not greater than $10,000,000 in the aggregate
(the “Optional Revolving Loan Commitment Increase”), as set forth on the Commitment Annex in the
table under the heading “After Effectiveness of the Optional Revolving Loan Commitment Increase”.
The Optional Revolving Loan Commitment Increase shall be subject to the approval of Administrative
Agent and the Lenders in their respective sole discretion, and shall also be subject to the terms
and provisions of Section 4.11, including, without limitation, such modifications to the Financing
Documents as Administrative Agent shall reasonably request as necessary to effect the Optional
Revolving Loan Commitment Increase, and other matters considered appropriate by Agent in its
reasonable discretion. Only one such increase in the Revolving Loan Commitment may be requested by
Borrower pursuant to this Section 2.2(f).

     (g) Acquisition Revolving Loan Commitment Increase Request. Provided no Default or
Event of Default shall have occurred and shall be continuing, upon the satisfaction of the
Acquisition Revolving Loan Commitment Increase Conditions, Borrower may request that the Lenders
increase the Revolving Loan Commitment by $15,000,000 as set forth on the Commitment Annex in the
table under the heading “After Effectiveness of Acquisition Revolving Loan Commitment Increase”
(the “Acquisition Revolving Loan Commitment Increase”). The Acquisition Revolving Loan Commitment
shall be subject to the approval of Administrative Agent and the Lenders in their respective sole
discretion, and shall also be subject to the terms and provisions of Section 4.11, including,
without limitation, such modifications to the Financing Documents as Administrative Agent shall
reasonably request as necessary to effect the Acquisition Revolving Loan Commitment Increase, and
other matters

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considered appropriate by Agent in its reasonable discretion. Only one such increase in the
Revolving Loan Commitment may be requested by Borrower pursuant to this Section 2.2(g).

     Section 2.3 Interest, Interest Calculations and Certain Fees.

     (a) Interest. From and following the Closing Date, depending upon Borrower’s election
from time to time, subject to the terms hereof, to have portions of the Loans accrue interest
determined by reference to the Base Rate or the LIBOR, the Loans and the other Obligations shall
bear interest at the applicable rates set forth below:

          (i) If a Base Rate Loan, or any other Obligation other than a LIBOR Loan, then at the sum of
the Base Rate plus the applicable Base Rate Margin.

          (ii) If a LIBOR Loan, then at the sum of the LIBOR plus the applicable LIBOR Margin.

     (b) Unused Line Fee. From and following the Closing Date, Borrower shall pay
Administrative Agent, for the benefit of all Lenders committed to make Revolving Loans, in
accordance with their respective Pro Rata Shares, a fee in an amount equal to (1) (a) the Revolving
Loan Commitment less (b) the average daily balance of the Revolving Loan Outstandings during the
preceding month, multiplied by (2) 0.375% per annum. Such fee is to be paid quarterly in arrears
on the last day of each calendar quarter.

     (c) Administrative Agent Fee Letter. Borrower shall pay Administrative Agent the fees
set forth in the Administrative Agent Fee Letter in accordance with the terms and provisions
thereof.

     (d) Computation of Interest and Related Fees. All interest and fees under each
Financing Document shall be calculated on the basis of a 360-day year for the actual number of days
elapsed. The date of funding of a Base Rate Loan and the first day of an Interest Period with
respect to a LIBOR Loan shall be included in the calculation of interest. The date of payment of a
Base Rate Loan and the last day of an Interest Period with respect to a LIBOR Loan shall be
excluded from the calculation of interest. If a Loan is repaid on the same day that it is made,
one (1) day’s interest shall be charged. Interest on all Base Rate Loans is payable in arrears on
the last day of each month and on the maturity of such Loans, whether by acceleration or otherwise.
Interest on LIBOR Loans shall be payable on the last day of the applicable Interest Period, unless
the Interest Period is greater than three (3) months, in which case interest will be payable on the
last day of each three (3) month interval. In addition, interest on LIBOR Loans is due on the
maturity of such Loans, whether by acceleration or otherwise.

     (e) LIBOR Provisions.

          (i) LIBOR Election. All Loans made on the Closing Date shall be Base Rate Loans and
shall remain so until three (3) Business Days after the Closing Date. Thereafter, subject to the
provisions of Section 9.4, Borrower may request that Revolving Loans permitted to be made hereunder
be LIBOR Loans, that outstanding portions of Revolving Loans permitted to be made hereunder and
outstanding portions of each Term Loan be converted to LIBOR Loans

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and that all or any portion of a LIBOR Loan be continued as a LIBOR Loan upon expiration of
the applicable Interest Period. Any such request will be made by submitting a Notice of Borrowing
to Administrative Agent. Once given, and except as provided in clause (ii) below, a Notice of
Borrowing shall be irrevocable and Borrower shall be bound thereby. Upon the expiration of an
Interest Period, in the absence of a new Notice of Borrowing submitted to Administrative Agent not
less than three (3) Business Days prior to the end of such Interest Period, the LIBOR Loan then
maturing shall be automatically converted to a Base Rate Loan. There may be no more than six (6)
LIBOR Loans outstanding at any one time. Each request for a LIBOR Loan, whether by original
issuance, conversion or continuation, shall be in a minimum amount of $250,000 and, if in excess of
such amount, in an integral multiple of $50,000 in excess of such amount. Loans which are not
requested as LIBOR Loans in accordance with this Section 2.3(e)(i) shall be Base Rate Loans.
Administrative Agent shall notify Lenders, by telephonic or facsimile notice, of each Notice of
Borrowing received by Administrative Agent not less than two (2) Business Days prior to the first
day of the Interest Period of the LIBOR Loan requested thereby.

          (ii) Inability to Determine LIBOR. In the event, prior to commencement of any
Interest Period relating to a LIBOR Loan, Administrative Agent shall determine or be notified by
Required Lenders that adequate and reasonable methods do not exist for ascertaining LIBOR,
Administrative Agent shall promptly provide notice of such determination to Borrower and Lenders
(which shall be conclusive and binding on Borrower and Lenders). In such event (1) any request for
a LIBOR Loan or for a conversion to or continuation of a LIBOR Loan shall be automatically
withdrawn and shall be deemed a request for a Base Rate Loan, (2) each LIBOR Loan will
automatically, on the last day of the then current Interest Period relating thereto, become a Base
Rate Loan and (3) the obligations of Lenders to make LIBOR Loans shall be suspended until
Administrative Agent or Required Lenders determine that the circumstances giving rise to such
suspension no longer exist, in which event Administrative Agent shall so notify Borrower and
Lenders.

          (iii) Illegality. Notwithstanding any other provisions hereof, if any Law shall make
it unlawful for any Lender to make, fund or maintain LIBOR Loans, such Lender shall promptly give
notice of such circumstances to Administrative Agent, Borrower and the other Lenders. In such an
event, (1) the commitment of such Lender to make LIBOR Loans, continue LIBOR Loans as LIBOR Loans
or convert Base Rate Loans to LIBOR Loans shall be immediately suspended and (2) such Lender’s
outstanding LIBOR Loans shall be converted automatically to Base Rate Loans on the last day of the
Interest Period thereof or at such earlier time as may be required by law.

          (iv) LIBOR Breakage Fee. Upon (i) any default by Borrower in making any borrowing of,
conversion into or continuation of any LIBOR Loan following Borrower’s delivery to Administrative
Agent of any applicable Notice of Borrowing or (ii) any payment of a LIBOR Loan on any day that is
not the last day of the Interest Period applicable thereto (regardless of the source of such
prepayment and whether voluntary, by acceleration or otherwise), Borrower shall promptly pay
Administrative Agent, for the benefit of all Lenders that funded or were prepared to fund any such
LIBOR Loan, an amount equal to the amount of any losses, expenses and liabilities (including,
without limitation, any loss (including interest paid) in

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connection with the re-employment of such funds) that any Lender may sustain as a result of
such default or such payment. For purposes of calculating amounts payable to a Lender under this
paragraph, each Lender shall be deemed to have actually funded its relevant LIBOR Loan through the
purchase of a deposit bearing interest at LIBOR in an amount equal to the amount of that LIBOR Loan
and having a maturity and repricing characteristics comparable to the relevant Interest Period;
provided, however, that each Lender may fund each of its LIBOR Loans in any manner it sees fit, and
the foregoing assumption shall be utilized only for the calculation of amounts payable under this
subsection.

          (v) Increased Costs. If, after the Closing Date, the adoption or taking effect of, or
any change in, any Law, or any change in the interpretation, administration or application of any
Law by any Governmental Authority, central bank or comparable agency charged with the
interpretation, administration or application thereof, or compliance by any Lender with any
request, guideline or directive (whether or not having the force of law) of any such authority,
central bank or comparable agency: (1) shall impose, modify or deem applicable any reserve
(including any reserve imposed by the Board of Governors of the Federal Reserve System, or any
successor thereto, but excluding any reserve included in the determination of the LIBOR pursuant to
the provisions of this Agreement), special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit extended or
participated in by any Lender; or (2) shall impose on any Lender any other condition affecting its
LIBOR Loans, any of its Notes (if any) or its obligation to make LIBOR Loans; and the result of
anything described in clauses (1) above and (2) is to increase the cost to (or to impose a cost on)
such Lender of making or maintaining any LIBOR Loan, or to reduce the amount of any sum received or
receivable by such Lender under this Agreement or under any of its Notes (if any) with respect
thereto, then upon demand by such Lender (which demand shall be accompanied by a statement setting
forth the basis for such demand and a calculation of the amount thereof in reasonable detail, a
copy of which shall be furnished to Administrative Agent), Borrower shall promptly pay directly to
such Lender such additional amount as will compensate such Lender for such increased cost or such
reduction, so long as such amounts have accrued on or after the day which is one hundred eighty
(180) days prior to the date on which such Lender first made demand therefor.

     Section 2.4 Notes.

     The portion of the Term Loan made by each Lender shall be evidenced, if so requested by such
Lender, by a promissory note executed by Borrower (a “Term Note”), and the portion of the Revolving
Loans made by each Lender shall be evidenced, if so requested by such Lender, by a promissory note
executed by Borrower (a “Revolving Loan Note”) in an original principal amount equal to such
Lender’s Pro Rata Share of the Term Loan, and the Revolving Loan Commitment, respectively. The
Swingline Loans made by Swingline Lender shall be evidenced, if so requested by Swingline Lender,
by a promissory note executed by Borrower (a “Swingline Loan Note”) in an original principal amount
equal to the amount identified in clause (i) of the definition of Swingline Loan Limit.

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     Section 2.5 Letters of Credit and Letter of Credit Fees.

     (a) Letter of Credit. On the terms and subject to the conditions set forth herein,
the Revolving Loan Commitment may be used by Borrower, in addition to the making of Revolving Loans
hereunder, for the issuance, prior to the Termination Date, by (i) Administrative Agent, of letters
of credit, guarantees or other agreements or arrangements (each, a “Support Agreement”) to induce
an LC Issuer to issue or increase the amount of, or extend the expiry date of, one or more Letters
of Credit and (ii) a Lender, identified by Administrative Agent, as an LC Issuer, of one or more
Lender Letters of Credit, so long as, in each case:

          (i) Administrative Agent shall have received a Notice of LC Credit Event at least two (2)
Business Days before the relevant date of issuance, increase or extension; and

          (ii) after giving effect to such issuance, increase or extension, (x) the aggregate Letter of
Credit Liabilities under all Letters of Credit do not exceed $4,000,000 and (y) the Revolving Loan
Outstandings do not exceed the Revolving Loan Limit.

Nothing in this Agreement shall be construed to obligate any Lender to issue, increase the amount
of or extend the expiry date of any letter of credit, which act or acts, if any, shall be subject
to agreements to be entered into from time to time between Borrower and such Lender. Each Lender
that is an LC Issuer hereby agrees to give Administrative Agent prompt written notice of each
issuance of a Lender Letter of Credit by such Lender and each payment made by such Lender in
respect of Lender Letters of Credit issued by such Lender.

     (b) Letter of Credit Fee. Borrower shall pay to Administrative Agent, for the benefit
of the Revolving Lenders, a letter of credit fee with respect to the Letter of Credit Liabilities
for each Letter of Credit, computed for each day from the date of issuance of such Letter of Credit
to the date that is the last day a drawing is available under such Letter of Credit, at a rate per
annum equal to the LIBOR Margin then applicable to Revolving Loans. Such fee shall be payable in
arrears on the last day of each calendar month prior to the Termination Date and on such date. In
addition, Borrower agrees to pay promptly to the LC Issuer any fronting or other fees that it may
charge in connection with any Letter of Credit.

     (c) Reimbursement Obligations of Borrower. If either (x) Administrative Agent shall
make a payment to an LC Issuer pursuant to a Support Agreement, or (y) any Lender shall honor any
draw request under, and make payment in respect of, a Lender Letter of Credit, (i) Borrower shall
promptly reimburse Administrative Agent or such Lender, as applicable, for the amount of such
payment and (ii) Borrower shall be deemed to have immediately requested that Revolving Lenders make
a Revolving Loan, which shall be a Base Rate Loan, in a principal amount equal to the amount of
such payment (but solely to the extent Borrower shall have failed to directly reimburse
Administrative Agent or, with respect to Lender Letters of Credit, the applicable LC Issuer, for
the amount of such payment). Administrative Agent shall promptly notify Revolving Lenders of any
such deemed request and each Revolving Lender (other than any such Revolving Lender that was a
Non-Funding Revolving Lender at the time the applicable Supported Letter of Credit or Lender Letter
of Credit was issued) hereby agrees to make available to Administrative Agent not later than noon
(Chicago time) on the Business Day following such notification from Administrative Agent such
Revolving Lender’s Pro Rata Share of such Revolving Loan

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(calculated to disregard any interest
of any Non-Funding Revolving Lender in the Revolving Loans). Each Revolving Lender (other than any
applicable Non-Funding Revolving Lender specified above) hereby absolutely and unconditionally
agrees to fund such Revolving Lender’s Pro Rata Share of the Loan described in the immediately
preceding sentence, unaffected by any circumstance whatsoever, including (without limitation) (i)
the occurrence and continuance of a Default or Event of Default, (ii) the fact that, whether before
or after giving effect to the making of any such Revolving Loan, the Revolving Loan Outstandings
exceed or will exceed the Revolving Loan Limit and/or (iii) the non-satisfaction of any conditions
set forth in Section 8.3. Administrative Agent hereby agrees to apply the gross proceeds of each
Revolving Loan deemed made pursuant to this Section 2.5(c) in satisfaction of Borrower’s
reimbursement obligations arising pursuant to this Section 2.5(c). Borrower shall pay interest, on
demand, on all amounts so paid by Administrative Agent for each day until Borrower reimburses
Administrative Agent therefor at a rate per annum equal to the then current interest rate
applicable to Revolving Loans (which are Base Rate Loans) for such day.

     (d) Reimbursement and Other Payments by Borrower. The obligations of Borrower to
reimburse Administrative Agent and/or the applicable LC Issuer pursuant to Section 2.5(c) shall be
absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the
terms of this Agreement, under all circumstances whatsoever, including the following:

          (i) any lack of validity or enforceability of, or any amendment or waiver of or any consent to
departure from, any Letter of Credit or any related document;

          (ii) the existence of any claim, set-off, defense or other right which Borrower may have at
any time against the beneficiary of any Letter of Credit, the LC Issuer (including any claim for
improper payment), Administrative Agent, any Lender or any other Person, whether in connection with
any Financing Document or any unrelated transaction, provided that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory counterclaim;

          (iii) any statement or any other document presented under any Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;

          (iv) any affiliation between the LC Issuer and Administrative Agent; or

          (v) to the extent permitted under applicable Law, any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing.

     (e) Deposit Obligations of Borrower. In the event any Letters of Credit are
outstanding at the time that Borrower prepays or is required to repay the Obligations or the
Revolving Loan Commitment is terminated, Borrower shall (i) deposit with Administrative Agent for
the benefit of all Revolving Lenders cash in an amount equal to one hundred and five percent (105%)
of the aggregate outstanding Letter of Credit Liabilities to be available to Administrative Agent,
for its benefit and the benefit of issuers of Lender Letters of Credit, to
reimburse payments of drafts drawn under such Letters of Credit and pay any fees and expenses
related thereto and (ii) prepay the fee payable under Section 2.5(b) with respect to such Letters of

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Credit for the full remaining terms of such Letters of Credit. Upon termination of any such
Letter of Credit and provided no Event of Default then exists, the unearned portion of such prepaid
fee attributable to such Letter of Credit shall be refunded to Borrower, together with the deposit
described in the preceding clause attributable to such Letter of Credit, but only to the extent not
previously applied by Administrative Agent in the manner described herein.

     (f) Participations in Support Agreements and Lender Letters of Credit.

          (i) Concurrently with the issuance of each Supported Letter of Credit, Administrative Agent
shall be deemed to have sold and transferred to each Revolving Lender (other than any Non-Funding
Revolving Lenders at the time of such issuance), and each such Revolving Lender shall be deemed
irrevocably and immediately to have purchased and received from Administrative Agent, without
recourse or warranty, an undivided interest and participation in, to the extent of such Lender’s
Pro Rata Share of the Revolving Loan Commitment, Administrative Agent’s Support Agreement
liabilities and obligations in respect of such Letters of Credit and Borrower’s Reimbursement
Obligations with respect thereto (calculated to disregard any interest of any Non-Funding Revolving
Lender in the Revolving Loans). Concurrently with the issuance of each Lender Letter of Credit,
the LC Issuer in respect thereof shall be deemed to have sold and transferred to each Revolving
Lender (other than any Non-Funding Revolving Lenders at the time of such issuance), and each such
Revolving Lender shall be deemed irrevocably and immediately to have purchased and received from
such LC Issuer, without recourse or warranty, an undivided interest and participation in, to the
extent of such Lender’s Pro Rata Share of the Revolving Loan Commitment, such Lender Letter of
Credit and Borrower’s Reimbursement Obligations with respect thereto (calculated to disregard any
interest of any Non-Funding Revolving Lender in the Revolving Loans). Any purchase obligation
arising pursuant to the immediately two preceding sentences shall be absolute and unconditional and
shall not be affected by any circumstances whatsoever.

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

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accruing daily at the Federal Funds Rate, for the first three (3) days following such Lender’s receipt of
such notice, and thereafter at the Base Rate plus the Base Rate Margin in respect of Revolving
Loans. Any Revolving Lender’s failure to make available to Administrative Agent or the applicable
LC Issuer, as applicable, its Pro Rata Share of any such payment or disbursement shall not relieve
any other Lender of its obligation hereunder to make available such other Revolving Lender’s Pro
Rata Share of such payment, but no Revolving Lender shall be responsible for the failure of any
other Lender to make available such other Lender’s Pro Rata Share of any such payment or
disbursement.

     Section 2.6 General Provisions Regarding Payment; Loan Account.

     (a) All payments to be made by Borrower under any Financing Document, including payments of
principal and interest made hereunder and pursuant to any other Financing Document, and all fees,
expenses, indemnities and reimbursements, shall be made without set-off or counterclaim. If any
payment hereunder becomes due and payable on a day other than a Business Day, such payment shall be
extended to the next succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension (it being understood and
agreed that, solely for purposes of calculating financial covenants and computations contained
herein and determining compliance therewith, if payment is made, in full, on any such extended due
date, such payment shall be deemed to have been paid on the original due date without giving effect
to any extension thereto). Any payments received in the Payment Account before noon (Chicago time)
on any date shall be deemed received by Administrative Agent on such date, and any payments
received in the Payment Account after noon (Chicago time) on any date shall be deemed received by
Administrative Agent on the next succeeding Business Day. Any optional or mandatory prepayment of
the Term Loan shall be accompanied by timely delivery to Administrative Agent of an appropriately
completed Payment Notification, as provided in Section 2.1(e). In the absence of receipt by
Administrative Agent of an appropriately completed Payment Notification on or prior to such
prepayment, Borrower and each Lender hereby fully authorizes and directs Administrative Agent,
notwithstanding any contrary application provisions contained herein, to apply payments and/or
prepayments received from Borrower against then outstanding Revolving Loans, and second, if no
Revolving Loans are then outstanding, pro rata against the outstanding Term Loan in accordance with
the provisions of Section 2.1(e); provided, that (i) if Administrative Agent receives an
appropriately completed Payment Notification within two (2) Business Days of the making of any such
payment or prepayment, Administrative Agent shall be fully authorized by Borrower and each Lender
to apply such amounts received in accordance with the terms of such Payment Notification and to
make any corresponding Loan Account reversals in respect thereof and (ii) if Administrative Agent
at any time determines that payments received by Administrative Agent were in respect of a
mandatory prepayment event, Administrative Agent shall apply such payments in accordance with the
provisions of Section 2.1(e), and shall be fully authorized by Borrower and each Lender to make any
corresponding Loan Account reversals in respect thereof.

     (b) Administrative Agent shall maintain a loan account (the “Loan Account”) on its books to
record Loans and other extensions of credit made by the Lenders hereunder or under any other
Financing Document, and all payments thereon made by Borrower. All entries in the

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Loan Account
shall be made in accordance with Administrative Agent’s customary accounting practices as in effect
from time to time. The balance in the Loan Account, as recorded on Administrative Agent’s most
recent printout or other written statement, shall be conclusive and binding evidence of the amounts
due and owing to Administrative Agent by Borrower absent clear and convincing evidence to the
contrary; provided that any failure to so record or any error in so recording shall not limit or
otherwise affect Borrower’s duty to pay all amounts owing hereunder or under any other Financing
Document. Unless Borrower notifies Administrative Agent of any objection to any such printout or
statement (specifically describing the basis for such objection) within thirty (30) days after the
date of receipt thereof, it shall be deemed final, binding and conclusive upon Borrower in all
respects as to all matters reflected therein.

     Section 2.7 Maximum Interest.

     (a) In no event shall the interest charged with respect to the Notes (if any) or any other
obligations of Borrower under any Financing Document exceed the maximum amount permitted under the
laws of the State of Illinois or of any other applicable jurisdiction.

     (b) Notwithstanding anything to the contrary herein or elsewhere, if at any time the rate of
interest payable hereunder or under any Note or other Financing Document (the “Stated Rate”) would
exceed the highest rate of interest permitted under any applicable law to be charged (the “Maximum
Lawful Rate”), then for so long as the Maximum Lawful Rate would be so exceeded, the rate of
interest payable shall be equal to the Maximum Lawful Rate; provided, that if at any time
thereafter the Stated Rate is less than the Maximum Lawful Rate, Borrower shall, to the extent
permitted by law, continue to pay interest at the Maximum Lawful Rate until such time as the total
interest received is equal to the total interest which would have been received had the Stated Rate
been (but for the operation of this provision) the interest rate payable. Thereafter, the interest
rate payable shall be the Stated Rate unless and until the Stated Rate again would exceed the
Maximum Lawful Rate, in which event this provision shall again apply.

     (c) In no event shall the total interest received by any Lender exceed the amount which it
could lawfully have received had the interest been calculated for the full term hereof at the
Maximum Lawful Rate. If, notwithstanding the prior sentence, any Lender has received interest
hereunder in excess of the Maximum Lawful Rate, such excess amount shall be applied to the
reduction of the principal balance of the Loans or to other amounts (other than interest) payable
hereunder, and if no such principal or other amounts are then outstanding, such excess or part
thereof remaining shall be paid to Borrower.

     (d) In computing interest payable with reference to the Maximum Lawful Rate applicable to any
Lender, such interest shall be calculated at a daily rate equal to the Maximum Lawful Rate divided
by the number of days in the year in which such calculation is made.

     Section 2.8 Taxes.

     (a) All payments of principal and interest on the Loans and all other amounts payable
hereunder shall be made free and clear of and without deduction for any present or future income,
excise, stamp, documentary, property or franchise taxes and other taxes, fees, duties,

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levies,
assessments, withholdings or other charges of any nature whatsoever (including interest and
penalties thereon) imposed by any taxing authority, excluding taxes imposed on or measured by
Administrative Agent’s or any Lender’s net income by the jurisdiction under which Administrative
Agent or such Lender is organized or conducts business (other than solely as the result of entering
into any of the Financing Documents or taking any action thereunder) (all non-excluded items being
called “Taxes”). If any withholding or deduction from any payment to be made by Borrower hereunder
is required in respect of any Taxes pursuant to any applicable Law, then Borrower will: (i) pay
directly to the relevant authority the full amount required to be so withheld or deducted; (ii)
promptly forward to Administrative Agent an official receipt or other documentation satisfactory to
Administrative Agent evidencing such payment to such authority; and (iii) pay to Administrative
Agent for the account of Administrative Agent and Lenders such additional amount or amounts as is
necessary to ensure that the net amount actually received by Administrative Agent and each Lender
will equal the full amount Administrative Agent and such Lender would have received had no such
withholding or deduction been required. If any Taxes are directly asserted against Administrative
Agent or any Lender with respect to any payment received by Administrative Agent or such Lender
hereunder, Administrative Agent or such Lender may pay such Taxes and Borrower will promptly pay
such additional amounts (including any penalty, interest or expense) as is necessary in order that
the net amount received by such Person after the payment of such Taxes (including any Taxes on such
additional amount) shall equal the amount such Person would have received had such Taxes not been
asserted so long as such amounts have accrued on or after the day which is ninety (90) days prior
to the date on which Administrative Agent or such Lender first made demand therefor.

     (b) If Borrower fails to pay any Taxes when due to the appropriate taxing authority or fails
to remit to Administrative Agent, for the account of Administrative Agent and the respective
Lenders, the required receipts or other required documentary evidence, Borrower shall indemnify
Administrative Agent and Lenders for any incremental Taxes, interest or penalties that may become
payable by Administrative Agent or any Lender as a result of any such failure.

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

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     Section 2.9 Capital Adequacy.

     If any Lender shall reasonably determine that the adoption or taking effect of, or any change
in, any applicable Law regarding capital adequacy, in each instance, after the Closing Date, or any
change after the Closing Date in the interpretation, administration or application thereof by any
Governmental Authority, central bank or comparable agency charged with the interpretation,
administration or application thereof, or the compliance by any Lender or any Person controlling
such Lender with any request, guideline or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental Authority, central bank or comparable agency
adopted or otherwise taking effect after the Closing Date, has or would have the effect of reducing
the rate of return on such Lender’s or such controlling Person’s capital as a consequence of such
Lender’s obligations hereunder or under any Support Agreement or Lender Letter of Credit to a level
below that which such Lender or such controlling Person could have achieved but for such adoption,
taking effect, change, interpretation, administration, application or compliance (taking into
consideration such Lender’s or such controlling Person’s policies with respect to capital adequacy)
then from time to time, upon demand by such Lender (which demand shall be accompanied by a
statement setting forth the basis for such demand and a calculation of the amount thereof in
reasonable detail, a copy of which shall be furnished to Administrative Agent), Borrower shall
promptly pay to such Lender such additional amount as will compensate such Lender or such
controlling Person for such reduction, so long as such amounts have accrued on or after the day
which is ninety (90) days prior to the date on which such Lender first made demand therefor.

     Section 2.10 Mitigation Obligations.

     If any Lender requests compensation under either Section 2.3(e)(v) or Section 2.9, or requires
Borrower to pay any additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 2.8, then, upon the written request of Borrower, such Lender
shall use reasonable efforts to designate a different lending office for funding or booking its
Loans hereunder or to assign its rights and obligations hereunder (subject to the provisions of
Section 12.6) to another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or materially reduce amounts payable
pursuant to any such Section, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender (as determined in its sole discretion). Without limitation of the provisions of Section
10.1, Borrower hereby agrees to pay all costs and expenses incurred by any Lender in connection
with any such designation or assignment.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

     To induce Administrative Agent and Lenders to enter into this Agreement and to make the Loans
and other credit accommodations contemplated hereby, Borrower hereby represents and warrants to
Administrative Agent and each Lender that:

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     Section 3.1 Existence and Power.

     Each Credit Party is an entity as specified on Schedule 3.1, is duly organized, validly
existing and in good standing under the laws of the jurisdiction specified on Schedule 3.1, has the
same legal name as it appears in such Credit Party’s Organizational Documents as amended to the
date of this Agreement and an organizational identification number (if any), in each case as
specified on Schedule 3.1, and has all powers and all governmental licenses, authorizations,
registrations, permits, consents and approvals required under all applicable Laws and required in
order to carry on its business as now conducted (collectively, “Permits”), except where the failure
to have such Permits could not reasonably be expected to have a Material Adverse Effect. Each
Credit Party is qualified to do business as a foreign entity in each jurisdiction in which it is
required to be so qualified, which jurisdictions as of the Closing Date are specified on Schedule
3.1, except where the failure to be so qualified could not reasonably be expected to have a
Material Adverse Effect. Except as set forth on Schedule 3.1, no Credit Party (i) has had, over
the five (5) year period preceding the Closing Date, any name other than its current name or (ii)
was incorporated or organized under the laws of any jurisdiction other than its current
jurisdiction of incorporation or organization.

     Section 3.2 Organization and Governmental Authorization; No Contravention.

     The execution, delivery and performance by each Credit Party of the Operative Documents to
which it is a party are within its powers, have been duly authorized by all necessary action
pursuant to its Organizational Documents, require no further action by or in respect of, or filing
with, any Governmental Authority and do not violate, conflict with or cause a breach or a default
under (i) any Law or any of the Organizational Documents of any Credit Party or (ii) any agreement
or instrument binding upon it, except for such violations, conflicts, breaches or defaults as could
not, with respect to this clause (ii), reasonably be expected to have a Material Adverse Effect.

     Section 3.3 Binding Effect.

     Each of the Operative Documents to which any Credit Party is a party constitutes a valid and
binding agreement or instrument of such Credit Party, enforceable against such Credit Party in
accordance with its respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws relating to the enforcement of creditors’ rights
generally and by general equitable principles.

     Section 3.4 Capitalization.

     The authorized equity securities of each of the Credit Parties as of the Closing Date is as
set forth on Schedule 3.4. All issued and outstanding equity securities of each of the Credit
Parties (other than Borrower) are duly authorized and validly issued, fully paid, nonassessable,
free and clear of all Liens other than those in favor of Administrative Agent for the benefit of
Administrative Agent and Lenders, and such equity securities were issued in compliance with all
applicable Laws. The identity of the holders of the equity securities of each of the Credit
Parties (other than Borrower) and the percentage of their fully-diluted ownership of the equity
securities of each of the Credit Parties (other than Borrower) as of the Closing Date is set forth on

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Schedule 3.4. No shares of the capital stock or other equity securities of any Credit Party (other
than Borrower), other than those described above, are issued and outstanding as of the Closing
Date. Except as set forth on Schedule 3.4, as of the Closing Date there are no preemptive or other
outstanding rights, options, warrants, conversion rights or similar agreements or understandings
for the purchase or acquisition from any Credit Party (other than Borrower) of any equity
securities of any such entity.

     Section 3.5 Financial Information.

     (a) The consolidated balance sheet of Borrower and its Consolidated Subsidiaries as of June
30, 2005 and the related consolidated statements of operations, stockholders’ equity (or comparable
calculation, if such Person is not a corporation) and cash flows for the fiscal year then ended,
reported on by Grant Thornton LLP, copies of which have been delivered to Agent, fairly present, in
conformity with GAAP, the consolidated financial position of Borrower and its Consolidated
Subsidiaries as of such date and their consolidated results of operations, changes in stockholders’
equity (or comparable calculation) and cash flows for such period.

     (b) The unaudited consolidated balance sheet of Borrower and its Consolidated Subsidiaries as
of March 31, 2006 and the related unaudited consolidated statements of operations and cash flows
for the nine months then ended, copies of which have been delivered to Agent, fairly present, in
conformity with GAAP applied on a basis consistent with the financial statements referred to in
Section 3.5(a), the consolidated financial position of Borrower and its Consolidated Subsidiaries
as of such date and their consolidated results of operations and cash flows for the nine months
then ended (subject to normal year-end adjustments and the absence of footnote disclosures).

     (c) The information contained in the most recently delivered Borrowing Base Certificate is
complete and correct in all material respects and the amounts shown therein as “Eligible
Receivables” and “Eligible Inventory” have been determined as provided in the Financing Documents.

     (d) Since March 31, 2006 there has been no material adverse change in the business,
operations, properties, prospects or condition (financial or otherwise) of Borrower and its
Consolidated Subsidiaries, taken as a whole; provided, that the term “prospects” shall not include
the possibility of obtaining business from a prospective customer of a Credit Party.

     Section 3.6 Litigation.

     Except as set forth on Schedule 3.6, as of the Closing Date there is no Litigation pending
against, or to Borrower’s knowledge threatened against or affecting, any Credit Party or, to
Borrower’s knowledge, any party to any Operative Document other than a Credit Party. There is no
Litigation pending in which an adverse decision could reasonably be expected to have a Material
Adverse Effect or which in any manner draws into question the validity of any of the Operative
Documents.

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     Section 3.7 Ownership of Property.

     Borrower and each of its Subsidiaries is the lawful owner of, has good and marketable title to
and is in lawful possession of, or has valid leasehold interests in, all properties and other
assets (real or personal, tangible, intangible or mixed) purported or reported to be owned or
leased (as the case may be) by such Person, except as may have been disposed of in the Ordinary
Course of Business or otherwise in compliance with the terms hereof.

     Section 3.8 No Default.

     No Default or Event of Default has occurred and is continuing. No Credit Party is in breach
or default under or with respect to any contract, agreement, lease or other instrument to which it
is a party or by which its property is bound or affected, which breach or default could reasonably
be expected to have a Material Adverse Effect.

     Section 3.9 Labor Matters.

     As of the Closing Date, there are no strikes or other labor disputes pending or, to Borrower’s
knowledge, threatened against any Credit Party. Hours worked and payments made to the employees of
the Credit Parties have not been in violation of the Fair Labor Standards Act or any other
applicable Law dealing with such matters. All payments due from the Credit Parties, or for which
any claim may be made against any of them, on account of wages and employee and retiree health and
welfare insurance and other benefits have been paid or accrued as a liability on their books, as
the case may be. The consummation of the transactions contemplated by the Financing Documents and
the other Operative Documents will not give rise to a right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement to which it is a
party or by which it is bound.

     Section 3.10 Regulated Entities.

     No Credit Party is an “investment company” or a company “controlled” by an “investment
company” or a “subsidiary” of an “investment company,” all within the meaning of the Investment
Company Act of 1940.

     Section 3.11 Margin Regulations.

     None of the proceeds from the Loans have been or will be used, directly or indirectly, for the
purpose of purchasing or carrying any Margin Stock, for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any Margin Stock or for any other
purpose which might cause any of the Loans to be considered a “purpose credit” within the meaning
of Regulation T, U or X of the Federal Reserve Board.

     Section 3.12 Compliance With Laws; Anti-Terrorism Laws.

     (a) Each Credit Party is in compliance with the requirements of all applicable Laws, except
for such Laws the noncompliance with which could not reasonably be expected to have a Material
Adverse Effect.

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     (b) None of the Credit Parties, their Affiliates or any of their respective agents acting or
benefiting in any capacity in connection with the transactions contemplated by this Agreement is
(i) in violation of any Anti-Terrorism Law, (ii) engages in or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law, (iii) a Blocked Person, or is
controlled by a Blocked Person, (iv) acting or will act for or on behalf of a Blocked Person, (v)
associated with, or will become associated with, a Blocked Person or (vi) is providing, or will
provide, material, financial or technological support or other services to or in support of acts of
terrorism of a Blocked Person. No Credit Party nor, to the knowledge of any Credit Party, any of
its Affiliates or agents acting or benefiting in any capacity in connection with the transactions
contemplated by this Agreement, (x) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Blocked Person, or (y) deals
in, or otherwise engages in any transaction relating to, any property or interest in property
blocked pursuant to Executive Order No. 13224, any similar executive order or other Anti-Terrorism
Law.

     Section 3.13 Taxes.

     All Federal, state, local and foreign tax returns, reports and statements required to be filed
by or on behalf of each Credit Party have been filed with the appropriate Governmental Authorities
in all jurisdictions in which such returns, reports and statements are required to be filed and,
except to the extent subject to a Permitted Contest, all Taxes (including real property Taxes) and
other charges shown to be due and payable in respect thereof have been timely paid prior to the
date on which any fine, penalty, interest, late charge or loss may be added thereto for nonpayment
thereof. Except to the extent subject to a Permitted Contest, all state and local sales and use
Taxes required to be paid by each Credit Party have been paid. All Federal and state returns have
been filed by each Credit Party for all periods for which returns were due with respect to employee
income tax withholding, social security and unemployment taxes, and, except to the extent subject
to a Permitted Contest, the amounts shown thereon to be due and payable have been paid in full or
adequate provisions therefor have been made.

     Section 3.14 Compliance with ERISA.

     (a) Each ERISA Plan (and the related trusts and funding agreements) complies in form and in
operation with, has been administered in compliance with, and the terms of each ERISA Plan satisfy,
the applicable requirements of ERISA and the Code in all material respects. Each ERISA Plan which
is intended to be qualified under Section 401(a) of the Code is so qualified, and the United States
Internal Revenue Service has issued a favorable determination letter with respect to each such
ERISA Plan which may be relied on currently. No Credit Party has incurred liability for any
material excise tax under any of Sections 4971 through 5000 of the Code.

     (b) During the thirty-six (36) month period prior to the Closing Date or the making of any
Loan or the issuance of any Letter of Credit, (i) no steps have been taken to terminate any Pension
Plan and (ii) no contribution failure has occurred with respect to any Pension Plan sufficient to
give rise to a Lien under Section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which could result in the incurrence by

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any Credit Party of any material liability, fine or penalty. No Credit Party has incurred
liability to the PBGC (other than for current premiums) with respect to any employee Pension Plan.
All contributions (if any) have been made on a timely basis to any Multiemployer Plan that are
required to be made by any Credit Party or any other member of the Controlled Group under the terms
of the plan or of any collective bargaining agreement or by applicable Law; no Credit Party nor any
member of the Controlled Group has withdrawn or partially withdrawn from any Multiemployer Plan,
incurred any withdrawal liability with respect to any such plan or received notice of any claim or
demand for withdrawal liability or partial withdrawal liability from any such plan, and no
condition has occurred which, if continued, could result in a withdrawal or partial withdrawal from
any such plan, and no Credit Party nor any member of the Controlled Group has received any notice
that any Multiemployer Plan is in reorganization, that increased contributions may be required to
avoid a reduction in plan benefits or the imposition of any excise tax, that any such plan is or
has been funded at a rate less than that required under Section 412 of the Code, that any such plan
is or may be terminated, or that any such plan is or may become insolvent.

     Section 3.15 Brokers.

     Except as set forth on Schedule 3.15, and except for fees payable to Administrative Agent
and/or Lenders, no broker, finder or other intermediary has brought about the obtaining, making or
closing of the transactions contemplated by the Operative Documents, and no Credit Party has or
will have any obligation to any Person in respect of any finder’s or brokerage fees in connection
herewith or therewith.

     Section 3.16 Material Contracts.

     Except for the Operative Documents and the other agreements set forth on Schedule 3.16
(collectively with the Operative Documents, the “Material Contracts”), as of the Closing Date there
are no (i) employment agreements covering the management of any Credit Party, (ii) collective
bargaining agreements or other labor agreements covering any employees of any Credit Party, (iii)
agreements for managerial, consulting or similar services to which any Credit Party is a party or
by which it is bound, (iv) agreements regarding any Credit Party, its assets or operations or any
investment therein to which any of its equityholders is a party or by which it is bound, (v) real
estate leases, Intellectual Property licenses or other lease or license agreements to which any
Credit Party is a party, either as lessor or lessee, or as licensor or licensee, or (vi) customer,
distribution, marketing or supply agreements to which any Credit Party is a party, in each case
with respect to the preceding clauses (i), (iii), (iv), (v) and (vi) requiring payment of more than
$100,000 in any year, (vii) partnership agreements to which any Credit Party is a general partner
or joint venture agreements to which any Credit Party is a party or (viii) any other agreements or
instruments to which any Credit Party is a party, and the breach, nonperformance or cancellation of
which, or the failure of which to renew, could reasonably be expected to have a Material Adverse
Effect. Schedule 3.16 sets forth, with respect to each real estate lease agreement to which any
Credit Party is a party as of the Closing Date, the address of the subject property and the annual
rental (or, where applicable, a general description of the method of computing the annual rental).
The consummation of the transactions contemplated by the Financing Documents and the other
Operative Documents will not give rise to a right of termination in favor of any party to any
Material Contract (other than any Credit Party).

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     Section 3.17 Compliance with Environmental Requirements; No Hazardous Materials.

     Except in each case as set forth on Schedule 3.17:

     (a) to Borrower’s knowledge, no Hazardous Materials are located on any properties now or
previously owned, leased or operated by any Credit Party or have been released into the
environment, or deposited, discharged, placed or disposed of at, on, under or near any of such
properties in a manner that would require the taking of any action under any Environmental Law and
have given rise to, or could reasonably be expected to give rise to, remediation costs and expenses
on the part of the Credit Parties in excess of $50,000. No portion of any such property is being
used, or, to the knowledge of Borrower, has been used at any previous time, for the disposal,
storage, treatment, processing or other handling of Hazardous Materials in violation of any
Environmental Law nor is any such property affected by any Hazardous Materials Contamination;

     (b) no notice, notification, demand, request for information, citation, summons, complaint or
order has been issued, to Borrower’s knowledge, no complaint has been filed, no penalty has been
assessed and no investigation or review is pending, or to Borrower’s knowledge, threatened by any
Governmental Authority or other Person with respect to any (i) alleged violation by any Credit
Party of any Environmental Law, (ii) alleged failure by any Credit Party to have any Permits
required in connection with the conduct of its business or to comply with the terms and conditions
thereof, (iii) any generation, treatment, storage, recycling, transportation or disposal of any
Hazardous Materials or (iv) release of Hazardous Materials;

     (c) to the knowledge of Borrower, all oral or written notifications of a release of Hazardous
Materials required to be filed by or on behalf of any Credit Party under any applicable
Environmental Law have been filed or are in the process of being timely filed by or on behalf of
the applicable Credit Party;

     (d) no property now owned or leased by any Credit Party and, to the knowledge of Borrower, no
such property previously owned or leased by any Credit Party, to which any Credit Party has,
directly or indirectly, transported or arranged for the transportation of any Hazardous Materials,
is listed or, to Borrower’s knowledge, proposed for listing, on the National Priorities List
promulgated pursuant to CERCLA, or CERCLIS (as defined in CERCLA) or any similar state list or is
the subject of Federal, state or local enforcement actions or, to the knowledge of Borrower, other
investigations which may lead to claims against any Credit Party for clean-up costs, remedial work,
damage to natural resources or personal injury claims, including, but not limited to, claims under
CERCLA;

     (e) there are no underground storage tanks located on any property owned or, to Borrower’s
knowledge, leased by any Credit Party that are not properly registered or permitted under
applicable Environmental Laws or that are leaking or disposing of Hazardous Materials; and

     (f) there are no Liens under or pursuant to any applicable Environmental Laws on any real
property or other assets owned or leased by any Credit Party, and no actions by any

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Governmental Authority have been taken or, to the knowledge of Borrower, are in process which
could subject any of such properties or assets to such Liens.

For purposes of this Section 3.17, each Credit Party shall be deemed to include any business or
business entity (including a corporation) which is, in whole or in part, a predecessor of such
Credit Party.

     Section 3.18 Intellectual Property.

     Each Credit Party owns, is licensed to use or otherwise has the right to use, all Intellectual
Property that is material to the condition (financial or other), business or operations of such
Credit Party. All such Intellectual Property existing as of the Closing Date and registered with
any United States or foreign Governmental Authority is set forth on Schedule 3.18. All
Intellectual Property of each Credit Party is fully protected and/or duly and properly registered,
filed or issued in the appropriate office and jurisdictions for such registrations, filings or
issuances. To Borrower’s knowledge, each Credit Party conducts its business without infringement
or claim of infringement of any Intellectual Property rights of others and there is no infringement
or claim of infringement by others of any Intellectual Property rights of any Credit Party, which
infringement or claim of infringement could reasonably be expected to have a Material Adverse
Effect.

     Section 3.19 Real Property Interests.

     Except for leasehold interests disclosed on Schedule 3.16, and except for the ownership or
other interests set forth on Schedule 3.19, no Credit Party has, as of the Closing Date, any
ownership, leasehold or other interest in real property. Schedule 3.19 sets forth, with respect to
each parcel of real estate owned by any Credit Party as of the Closing Date, the address and legal
description of such parcel.

     Section 3.20 Solvency.

     Borrower and each additional Credit Party is Solvent.

     Section 3.21 Senior Debt.

     The Obligations constitute “Senior Debt” under that certain Indenture dated as of November 26,
2004, as amended to date, between Borrower and The Bank of New York Trust Company, N.A., as
Trustee, and within the meaning of the Convertible Senior Notes.

     Section 3.22 Full Disclosure.

     None of the information (financial or otherwise) furnished by or on behalf of any Credit Party
to Administrative Agent or any Lender in connection with the consummation of the transactions
contemplated by the Operative Documents, contains any untrue statement of a material fact or omits
to state a material fact necessary to make the statements contained herein or therein not
misleading in light of the circumstances under which such statements were made. All financial
projections delivered to Administrative Agent and the Lenders have been prepared

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on the basis of the assumptions stated therein. Such projections represent Borrower’s best
estimate of Borrower’s future financial performance and such assumptions are believed by Borrower
to be fair and reasonable in light of current business conditions; provided that Borrower can give
no assurance that such projections will be attained.

     Section 3.23 Representations and Warranties Incorporated from Other Operative Documents.

     As of the Closing Date, each of the representations and warranties made in the Operative
Documents by each of the parties thereto is true and correct in all material respects, and such
representations and warranties are hereby incorporated herein by reference with the same effect as
though set forth in their entirety herein, as qualified therein, except to the extent that such
representation or warranty relates to a specific date, in which case such representation and
warranty shall be true as of such earlier date.

ARTICLE 4

AFFIRMATIVE COVENANTS

     Borrower agrees that, so long as any Credit Exposure exists:

     Section 4.1 Financial Statements and Other Reports.

     Borrower will maintain a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in accordance with GAAP and
to provide the information required to be delivered to Administrative Agent and the Lenders
hereunder, and will deliver to Administrative Agent, and, in the case of the deliveries required by
paragraphs (a) through (f) and (m) through (t), each Lender:

     (a) as soon as practicable and in any event within forty-five (45) days (fifty (50) days if
Borrower shall obtain an extension of time for the filing of its Quarterly Report on Form 10-Q for
an applicable fiscal quarter pursuant to Rule 12b-25 under the Securities Exchange Act of 1934, as
amended) after the end of each calendar quarter (including the last quarter of Borrower’s Fiscal
Year), a consolidated and consolidating balance sheet of Borrower and its Consolidated Subsidiaries
as at the end of such quarter and the related consolidated and consolidating statements of
operations and cash flows for such quarter, and for the portion of the Fiscal Year ended at the end
of such quarter setting forth in each case in comparative form the figures for the corresponding
periods of the previous Fiscal Year and the figures for such quarter and for such portion of the
Fiscal Year ended at the end of such quarter set forth in the annual operating and capital
expenditure budgets and cash flow forecast delivered pursuant to Section 4.1(m), all in reasonable
detail and certified by a Responsible Officer as fairly presenting the financial condition and
results of operations of Borrower and its Consolidated Subsidiaries and as having been prepared in
accordance with GAAP applied on a basis consistent with the audited financial statements of
Borrower, subject to changes resulting from audit and normal year-end adjustments and the absence
of footnote disclosures;

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     (b) as soon as available and in any event within ninety (90) days (ninety-five (95) days if
Borrower shall obtain an extension of time for the filing of its Annual Report on Form 10-K for an
applicable fiscal year pursuant to Rule 12b-25 under the Securities Exchange Act of 1934, as
amended) after the end of each Fiscal Year, a consolidated and consolidating balance sheet of
Borrower and its Consolidated Subsidiaries as of the end of such Fiscal Year and the related
consolidated and consolidating statements of operations, stockholders’ equity (or the comparable
item, if Borrower is not a corporation) and cash flows for such Fiscal Year, setting forth in each
case in comparative form the figures for the previous Fiscal Year and the figures for such Fiscal
Year set forth in the annual operating and capital expenditure budgets and cash flow forecast
delivered pursuant to Section 4.1(m), certified (solely with respect to such consolidated
statements) without qualification by Grant Thornton, LLP or such other independent registered
public accountants of nationally recognized standing acceptable to Administrative Agent;

     (c) together with each delivery of financial statements pursuant to Sections 4.1(a) and
4.1(b), a Compliance Certificate;

     (d) with each delivery of financial statements pursuant to 4.1(b) above, a written statement
by the independent registered public accountants giving the report thereon stating that their audit
examination has included a review of the terms of this Agreement as it relates to accounting
matters;

     (e) promptly upon receipt thereof, copies of all reports submitted to any Credit Party by
independent registered public accountants in connection with each annual, interim or special audit
of the financial statements of any Credit Party made by such accountants, including the comment
letter submitted by such accountants to management in connection with any audit;

     (f) promptly upon their becoming available, copies of (i) all financial statements, reports,
notices and proxy statements sent or made available generally by any Credit Party to its security
holders, (ii) all regular and periodic reports and all registration statements and prospectuses
filed by any Credit Party with any securities exchange or with the Securities and Exchange
Commission or any successor, (iii) all press releases and other statements made available generally
by any Credit Party concerning material developments in the business of any Credit Party and (iv)
all Swap Contracts entered into by any Credit Party;

     (g) promptly upon such information becoming available, a summary of all purchase price and
other monetary adjustments that are made pursuant to any of the Acquisition Documents;

     (h) promptly upon any officer of any Credit Party obtaining knowledge (i) of the existence of
any Event of Default or Default, or becoming aware that the holder of any Debt of any Credit Party
in excess of $100,000 has given any notice or taken any other action with respect to a claimed
default thereunder, (ii) of any change in any Credit Party’s independent registered public
accountant or any resignation, or decision not to stand for re-election, by any member of any
Credit Party’s board of directors (or comparable body), (iii) that any Person has given any notice
to any Credit Party or taken any other action with respect to a claimed default under any material
agreement or instrument (other than the Financing Documents) to which any Credit Party is a party
or by which any of its assets is bound, (iv) of the institution of any

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Litigation with regard to the Acquisition, or seeking equitable relief, or involving an
alleged liability of any Credit Party equal to or greater than $150,000, or any adverse
determination in any Litigation involving the Acquisition, or equitable relief, or a potential
liability of any Credit Party equal to or greater than $150,000, or (v) any loss, damage or
destruction of any Collateral having a fair market value in excess of $100,000, whether or not
covered by insurance, a certificate of a Responsible Officer specifying the nature and period of
existence of any such condition or event, or specifying the notice given or action taken by such
holder or Person and the nature of such claimed default (including any Event of Default or
Default), event or condition, and what action the applicable Credit Party has taken, is taking or
proposes to take with respect thereto;

     (i) promptly upon any officer of any Credit Party obtaining knowledge of (i) the institution
of any steps by any member of the Controlled Group or any other Person to terminate any Pension
Plan, (ii) the failure of any member of the Controlled Group to make a required contribution on a
timely basis to any ERISA Plan or to any Multiemployer Plan, (iii) the taking of any action with
respect to a Pension Plan which could result in the requirement that Borrower or any Subsidiary
furnish a bond or other security to the PBGC or such Pension Plan, (iv) the occurrence of a
reportable event under Section 4043 of ERISA (for which a reporting requirement is not waived) with
respect to any Pension Plan, (v) the occurrence of any event with respect to any ERISA Plan,
Pension Plan or Multiemployer Plan which could result in the incurrence by any member of the
Controlled Group of any material liability, fine or penalty (including any claim or demand for
withdrawal liability or partial withdrawal from any Multiemployer Plan), (vi) any material increase
in the liability or contingent liability of Borrower or any Subsidiary with respect to any
post-retirement welfare plan benefit or (vii) the receipt by any Credit Party of any notice that
any Multiemployer Plan is in reorganization, that increased contributions may be required to avoid
a reduction in plan benefits or the imposition of an excise tax, that any such plan is or has been
funded at a rate less than that required under Section 412 of the Code, that any such plan is or
may be terminated, or that any such plan is or may become insolvent, a certificate of a Responsible
Officer specifying the nature and period of existence of any such condition or event, or specifying
the notice given or action taken by such holder or Person, and what action the applicable Credit
Party has taken, is taking or proposed to take with respect thereto;

     (j) promptly upon any officer of any Credit Party obtaining knowledge of any complaint, order,
citation, notice or other written communication from any Person delivered to any Credit Party with
respect to, or if any officer of any Credit Party becomes aware of (i) the existence or alleged
existence of a violation of any applicable Environmental Law, (ii) any release of any Hazardous
Materials into the environment, (iii) the commencement of any cleanup of any Hazardous Materials,
(iv) any pending legislative or threatened proceeding for the termination, suspension or
non-renewal of any Permit required under any applicable Environmental Law, or (v) any property of
any Credit Party that is or will be subject to a Lien imposed pursuant to any Environmental Law, a
certificate of a Responsible Officer specifying the nature and period of existence of any such
condition or event, or specifying the notice given or action taken by such holder or Person, and
what action the applicable Credit Party has taken, is taking or proposes to take with respect
thereto;

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     (k) promptly upon any officer of any Credit Party obtaining knowledge that any Credit Party
has either (x) registered or applied to register any Intellectual Property with any Governmental
Authority or (y) acquired any interest in real property (including leasehold interests in real
property), a certificate of a Responsible Officer describing such Intellectual Property and/or such
real property in such detail as Administrative Agent shall reasonably require;

     (l) promptly upon receipt or filing thereof, copies of any reports or notices related to any
material taxes and any other material reports or notices received by any Credit Party from, or
filed by any Credit Party with, any Governmental Authority;

     (m) within ten (10) days prior to the conclusion of each Fiscal Year, Borrower’s annual
consolidated and consolidating operating plans, operating and capital expenditure budgets, and
financial forecasts, including cash flow projections covering proposed fundings, repayments,
additional advances, investments and other cash receipts and disbursements, each for the following
three (3) Fiscal Years presented on a quarterly basis for the next Fiscal Year and annually for the
two (2) subsequent Fiscal Years, all of which shall be in a format reasonably consistent with
projections, budgets and forecasts theretofore provided to the Lenders, and promptly following the
preparation thereof, updates to any of the foregoing from time to time prepared by management of
Borrower;

     (n) as soon as available and in any event no later than noon (Chicago time) within fifteen
(15) days after the end of each month, and from time to time upon the request of Administrative
Agent (which request may be made as frequently as daily), a Borrowing Base Certificate as of the
last day of the week most recently ended (or, in the case of Borrowing Base Certificates requested
more frequently than weekly, as of the second preceding Business Day);

     (o) as soon as available after the end of each month (but in any event within fifteen (15)
Business Days after the end thereof), and from time to time upon the request of Administrative
Agent (which request may be made as frequently as daily) schedules of sales made, credits issued
and cash received for and during such month (or, in the case of such schedules requested more
frequently than monthly, as of the second preceding Business Day);

     (p) as soon as available after the end of each month (but in any event within fifteen (15)
Business Days after the end thereof), on a monthly basis or more frequently as Administrative Agent
may reasonably request, (i) perpetual Inventory reports, (ii) Inventory reports by location and
category (and including the amounts of Inventory and the value thereof at, any leased locations and
at premises of warehouses, consignees, processors or other third parties), (iii) agings of
Accounts, (iv) agings of accounts payable (and including information indicating the amounts owing
to owners and lessors of leased premises, warehouses, consignees, processors and other third
parties from time to time in possession of any Collateral) and (v) such reconciliation reports from
time to time reasonably requested by Administrative Agent with respect to the Borrowing Base
Certificate most recently delivered to Administrative Agent, the financial statements of Borrower
delivered to Administrative Agent, Borrower’s general ledger and/or the reports required pursuant
to this paragraph, each in form and substance, and with such supporting detail and documentation,
as may be reasonably requested by Administrative Agent;

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     (q) upon Administrative Agent’s reasonable request, (i) copies of customer statements and
credit memos, remittance advices and reports and copies of deposit slips and bank statements, (ii)
copies of shipping and delivery documents, and (iii) copies of purchase orders, invoices and
delivery documents for Inventory and Equipment acquired by any Credit Party;

     (r) within two (2) Business Days after any request therefor, such additional information in
such detail concerning the amount, composition and manner of calculation of the Borrowing Base as
Administrative Agent or any Lender may reasonably request;

     (s) upon the request of Administrative Agent, a report of an independent collateral auditor
satisfactory to Administrative Agent (which may be, or be affiliated with, a Lender) with respect
to the components of the Borrowing Base (which Borrower acknowledges will be performed at least
once per calendar quarter), which report shall (i) indicate whether or not the information set
forth in the Borrowing Base Certificate most recently delivered is accurate and complete in all
material respects based upon a review by such auditors of the Accounts of Borrower and its
Subsidiaries (including verification with respect to the amount, aging, identity and credit of the
respective Account Debtors and the billing practices of Borrower and its Subsidiaries) and
Inventory of Borrower and its Subsidiaries (including verification as to the value, location and
respective types) and (ii) be addressed to, or otherwise provide for express reliance by,
Administrative Agent and the Lenders;

     (t) from time to time, appraisal reports in form and substance and from appraisers
satisfactory to Administrative Agent, which reports shall (i) state the then current fair market
values of all or any portion of the real estate owned by Borrower or any Subsidiaries and (ii) be
addressed to, or otherwise provide for express reliance by, Administrative Agent and the Lenders.
In addition to the foregoing, on a quarterly basis with respect of Inventory, and on an annual
basis with respect to all other property (or, in each case, more frequently as considered necessary
by Administrative Agent) Borrower shall obtain and deliver to Administrative Agent appraisal
reports in form and substance and from appraisers satisfactory to Administrative Agent, which
reports shall (i) state the then current market values of all or any portion of the real estate and
personal property owned by Borrower or any Subsidiaries and (ii) be addressed to, or otherwise
provide for express reliance by, Administrative agent and the Lenders; and

     (u) with reasonable promptness, such other information and data with respect to any Credit
Party as from time to time may be reasonably requested by Administrative Agent or any Lender.

     Section 4.2 Payment and Performance of Obligations.

     Borrower (i) will pay and discharge, and cause each Subsidiary to pay and discharge, at or
before maturity, all of their respective obligations and liabilities, including tax liabilities,
except for such obligations and/or liabilities (x) that may be the subject of a Permitted Contest
and (y) the nonpayment or nondischarge of which could not reasonably be expected to have a Material
Adverse Effect, (ii) will maintain, and cause each Subsidiary to maintain, in accordance with GAAP,
appropriate reserves for the accrual of all of their respective obligations and liabilities and
(iii) will not breach or permit any Subsidiary to breach, or permit to exist any default under, the
terms of any lease, commitment, contract, instrument or obligation to which it

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is a party, or by which its properties or assets are bound, except for such breaches or
defaults which could not reasonably be expected to have a Material Adverse Effect.

     Section 4.3 Maintenance of Existence.

     Borrower will preserve, renew and keep in full force and effect, and will cause each
Subsidiary to preserve, renew and keep in full force and effect, their respective existence and
their respective rights, privileges and franchises necessary or desirable in the normal conduct of
business.

     Section 4.4 Maintenance of Property; Insurance.

     (a) Borrower will keep, and will cause each Subsidiary to keep, all property useful and
necessary in its business in good working order and condition, ordinary wear and tear excepted.

     (b) Borrower will maintain, and will cause each Subsidiary to maintain, (i) casualty insurance
on all real and personal property on an all risks basis (including the perils of flood and quake),
covering the repair and replacement cost of all such property and coverage for business
interruption and public liability insurance (including products/completed operations liability
coverage) in each case of the kinds customarily carried or maintained by Persons of established
reputation engaged in similar businesses and in amounts acceptable to Administrative Agent and (ii)
such other insurance coverage in such amounts and with respect to such risks as Administrative
Agent may reasonably request. All such insurance shall be provided by insurers having an A.M. Best
policyholders rating reasonably acceptable to Administrative Agent. Borrower will not, and will
not permit any Subsidiary to, bring or keep any article on any business location of any Credit
Party, or cause or allow any condition to exist, if the presence of such article or the occurrence
of such condition could reasonably cause the invalidation of any insurance required by this Section
4.4(b), or would otherwise be prohibited by the terms thereof.

     (c) On or prior to the Closing Date, and at all times thereafter, Borrower will cause
Administrative Agent to be named as an additional insured, assignee and loss payee (which shall
include, as applicable, identification as mortgagee), as applicable, on each insurance policy
required to be maintained pursuant to this Section 4.4 pursuant to endorsements in form and content
acceptable to Administrative Agent. Borrower will deliver to Administrative Agent and the Lenders
(i) on the Closing Date, a certificate from Borrower’s insurance broker dated such date showing the
amount of coverage as of such date, and that such policies will include effective waivers (whether
under the terms of any such policy or otherwise) by the insurer of all claims for insurance
premiums against all loss payees and additional insureds and all rights of subrogation against all
loss payees and additional insureds, and that if all or any part of such policy is canceled,
terminated or expires, the insurer will forthwith give notice thereof to each additional insured,
assignee and loss payee and that no cancellation, reduction in amount or material change in
coverage thereof shall be effective until at least thirty (30) days after receipt by each
additional insured, assignee and loss payee of written notice thereof, (ii) on an annual basis, and
upon the request of any Lender through Administrative Agent from time to time full information as
to the insurance carried, (iii) within five (5) days of receipt of notice from any insurer, a copy
of any notice of cancellation, nonrenewal or material change in coverage from

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that existing on the date of this Agreement and (iv) forthwith, notice of any cancellation or
nonrenewal of coverage by Borrower.

     (d) In the event Borrower fails to provide Administrative Agent with evidence of the insurance
coverage required by this Agreement, Administrative Agent may purchase insurance at Borrower’s
expense to protect Administrative Agent’s interests in the Collateral. This insurance may, but
need not, protect Borrower’s interests. The coverage purchased by Administrative Agent may not pay
any claim made by Borrower or any claim that is made against Borrower in connection with the
Collateral. Borrower may later cancel any insurance purchased by Administrative Agent, but only
after providing Administrative Agent with evidence that Borrower has obtained insurance as required
by this Agreement. If Administrative Agent purchases insurance for the Collateral, to the fullest
extent provided by law Borrower will be responsible for the costs of that insurance, including
interest and other charges imposed by Administrative Agent in connection with the placement of the
insurance, until the effective date of the cancellation or expiration of the insurance. The costs
of the insurance may be added to the Obligations. The costs of the insurance may be more than the
cost of insurance Borrower is able to obtain on its own.

     Section 4.5 Compliance with Laws.

     Borrower will comply, and cause each Subsidiary to comply, with the requirements of all
applicable Laws, except to the extent that failure to so comply could not reasonably be expected to
have a Material Adverse Effect or result in any Lien upon a material portion of the assets of any
such Person in favor of any Governmental Authority.

     Section 4.6 Inspection of Property, Books and Records.

     Borrower will keep, and will cause each Subsidiary to keep, proper books of record and account
in accordance with GAAP in which full, true and correct entries shall be made of all dealings and
transactions in relation to its business and activities; and will permit, and will cause each
Subsidiary to permit, at the sole cost of Borrower or any applicable Subsidiary, representatives of
Administrative Agent and of any Lender (but at such Lender’s expense unless such visit or
inspection is made concurrently with Administrative Agent) to visit and inspect any of their
respective properties, to examine and make abstracts or copies from any of their respective books
and records, to conduct a collateral audit and analysis of their respective Inventory and Accounts
and to discuss their respective affairs, finances and accounts with their respective officers,
employees and independent public accountants as often as may reasonably be desired. In the absence
of an Event of Default, Administrative Agent or any Lender exercising any rights pursuant to this
Section 4.6 shall give Borrower or any applicable Subsidiary commercially reasonable prior written
notice of such exercise. No notice shall be required during the existence and continuance of any
Event of Default.

     Section 4.7 Use of Proceeds.

     Borrower will use the proceeds of the Term Loan solely for payment of transaction fees
incurred in connection with the Operative Documents and the refinancing on the Closing Date of
Debt. The proceeds of Revolving Loans shall be used by Borrower solely for the purposes set

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forth in the preceding sentence, for working capital needs of Borrower and its Subsidiaries,
to provide financing to consummate Section 5.8(b) Permitted Acquisitions and Section 5.8(c)
Permitted Acquisitions, and, to the extent permitted by Administrative Agent and solely after the
satisfaction of the Acquisition Revolving Loan Commitment Increase, to repurchase or redeem certain
employee options to purchase shares of the common stock of the acquired Person in connection with a
Section 5.8(c) Permitted Acquisition.

     Section 4.8 Lenders’ Meetings.

     From time to time at the request of Administrative Agent, Borrower will, in each case to the
extent requested by either Administrative Agent or Required Lenders, conduct a meeting of
Administrative Agent and the Lenders to discuss the most recently reported financial results and
the financial condition of Borrower and its Subsidiaries, at which shall be present a Responsible
Officer and such other officers of the Credit Parties as may be reasonably requested to attend by
Administrative Agent or any Lender, such request or requests to be made within a reasonable time
prior to the scheduled date of such meeting. Such meetings shall be held at a time and place
convenient to the Lenders and to Borrower.

     Section 4.9 Intentionally omitted.

     Section 4.10 Hazardous Materials; Remediation.

     (a) If any release or disposal of Hazardous Materials shall occur or shall have occurred on
any real property or any other assets of Borrower or any other Credit Party, Borrower will cause,
or direct the applicable Credit Party to cause, the prompt containment and removal of such
Hazardous Materials and the remediation of such real property or other assets as is necessary to
comply with all Environmental Laws and to preserve the value of such real property or other assets.
Without limiting the generality of the foregoing, Borrower shall, and shall cause each other
Credit Party to, comply with each Environmental Law requiring the performance at any real property
by Borrower or any other Credit Party of activities in response to the release or threatened
release of a Hazardous Material.

     (b) Borrower will provide Administrative Agent within thirty (30) days after demand therefor
with a bond, letter of credit or similar financial assurance evidencing to the satisfaction of
Administrative Agent that sufficient funds are available to pay the cost of removing, treating and
disposing of any Hazardous Materials or Hazardous Materials Contamination and discharging any
assessment which may be established on any property as a result thereof, such demand to be made, if
at all, upon Administrative Agent’s reasonable business determination that the failure to remove,
treat or dispose of any Hazardous Materials or Hazardous Materials Contamination, or the failure to
discharge any such assessment could reasonably be expected to have a Material Adverse Effect.

     Section 4.11 Revolving Loan Commitment Increases and Syndications.

     (a) In the event of a requested increase of the Revolving Loan Commitment, whether as a result
of requests by Borrower for the Optional Revolving Loan Commitment Increase, the
Acquisition Revolving Loan Commitment Increase, or otherwise, and if after giving effect

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thereto, the aggregate principal amount of the Term Loan held by Merrill Lynch plus the dollar
amount of Merrill Lynch’s Pro Rata Share of the Revolving Loan Commitment (after giving effect to
all prior syndications of the Loans and the Loan commitments) would be greater than, $45,000,000,
Borrower agrees, as a condition precedent to the increase in the Revolving Loan Commitment,
Administrative Agent shall successfully syndicate the Loans and the Loan commitments as determined
by Agent in the exercise of its reasonable discretion (it being understood and agreed that
syndication shall be deemed successful when the aggregate principal amount of the Term Loan held by
Merrill Lynch plus the dollar amount of Merrill Lynch’s Pro Rata Share of the Revolving Loan
Commitment is equal to, or less than, $45,000,000).

     (b) If at any time and from time to time, the aggregate principal amount of the Term Loan held
by Merrill Lynch plus the dollar amount of Merrill Lynch’s Pro Rata Share of the Revolving Loan
Commitment (after giving effect to all prior syndications of the Loans and the Loan commitments)
shall be greater than $30,000,000, Borrower agrees that from time to time thereafter,
Administrative Agent may in the exercise of its reasonable discretion determine to successfully
syndicate all or a portion of the Loans and Loan commitments (it being understood and agreed that
syndication shall be deemed successful when the aggregate principal amount of the Term Loan held by
Merrill Lynch plus the dollar amount of Merrill Lynch’s Pro Rata Share of the Revolving Loan
Commitment is equal to, or less than, $30,000,000).

     (c) In connection with any syndication referred to in Sections 4.11(a) and (b), Borrower will
enter into such modifications to the Loans and/or the Financing Documents as Administrative Agent
may reasonably request as necessary for such successful syndication of the Loans and the Loan
commitments. Such modifications shall include, without limitation, a decrease in the aggregate
amount of, or a reallocation of, the Term Loan and the Revolving Loan Commitment, adjustments to
the Base Rate Margin, the LIBOR Margin and/or the Pricing Table, and additional fees payable by
Borrower; provided, that any such modification increasing the Base Rate Margin or the LIBOR Margin
shall be limited to a maximum of 0.25%, and increasing any upfront commitment fee and structuring
fees shall each be limited to a maximum of 0.25%, in each case in the aggregate for all such
syndications. Borrower will cooperate with and assist Merrill Lynch in accomplishing the
successful syndication of the Loans and the Loan commitments, which shall include, without
limitation, participation in meetings and conferences with Merrill Lynch and prospective Lenders,
preparation of financial and marketing materials and projections reasonably requested by Agent,
Merrill Lynch and prospective Lenders, and furnishing such other information as Agent, Merrill
Lynch and prospective Lenders shall reasonably request.

     Section 4.12 Further Assurances.

     (a) Borrower will, and will cause each Subsidiary and each Holding Company to, at its own cost
and expense, cause to be promptly and duly taken, executed, acknowledged and delivered all such
further acts, documents and assurances as may from time to time be necessary or as Administrative
Agent or the Required Lenders may from time to time request in order to carry out the intent and
purposes of the Financing Documents and the transactions contemplated thereby, including all such
actions to establish, create, preserve, protect and perfect a first priority Lien (subject only to
Permitted Liens) in favor of Administrative Agent for the benefit of

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the Lenders on the Collateral (including Collateral acquired after the date hereof), including
on any and all assets of each Credit Party, whether now owned or hereafter acquired.

     (b) Without limiting the generality of the foregoing, in the event that Borrower or any of its
Subsidiaries shall acquire or form any new Subsidiary after the date hereof (including, without
limitation, SSG), or shall form a Holding Company, Borrower or the respective Subsidiary will cause
such new Subsidiary or Holding Company, upon such acquisition and concurrently with such formation,
(i) to execute a Guarantee (in form and content acceptable to Administrative Agent) guaranteeing
payment and performance of all of the Obligations and to take such other action (including, without
limitation, authorizing the filing of such UCC financing statements and delivering certificates in
respect of the equity securities of such Subsidiary) as shall be necessary or appropriate to
establish, create, preserve, protect and perfect a first priority Lien (subject only to Permitted
Liens) in favor of Administrative Agent for the benefit of Administrative Agent and the Lenders on
all assets, both real and personal, in which such new Subsidiary or Holding Company has or may
thereafter acquire any interest, (ii) to execute such other Security Documents, in form and content
acceptable to Administrative Agent, as may be required or requested by Administrative Agent in
connection with the actions contemplated by the preceding clause (i) and (iii) to deliver such
proof of corporate (or comparable) action, incumbency of officers, opinions of counsel and other
documents as Administrative Agent shall have required or requested. Until such time that any
Subsidiary or Holding Company shall have fully complied with the provisions of this paragraph, and
without limitation of any rights and remedies available to Administrative Agent and Lenders as a
result thereof, the operating results of such Subsidiary or Holding Company shall be disregarded in
the calculation of EBITDA for any measurement period, and none of the assets of such Subsidiary or
Holding Company shall constitute “Eligible Accounts” or “Eligible Inventory”.

     (c) Borrower shall take such action from time to time as shall be necessary to ensure that
each of its Subsidiaries is a Wholly-Owned Subsidiary and that Administrative Agent shall have, for
the benefit of Administrative Agent and Lenders, a first priority Lien on all capital stock or
other equity securities of each Subsidiary. In the event that any additional capital stock or
other equity securities shall be issued by any Subsidiary, Borrower shall or shall cause each of
its Subsidiaries to, concurrently with such issuance, deliver to Administrative Agent to the extent
required by the applicable Financing Documents the certificates evidencing such securities,
accompanied by undated powers executed in blank and to take such other action as Administrative
Agent shall request to perfect the security interest created therein pursuant to such Financing
Documents.

     (d) Concurrently with the acquisition by Borrower or any of its Subsidiaries following the
Closing Date of any real estate or real property leasehold interests, Borrower will, within thirty
(30) days following written request by Administrative Agent, deliver or cause to be delivered to
Administrative Agent, with respect to such real estate, (i) a mortgage or deed of trust, as
applicable, in form and substance satisfactory to Administrative Agent, executed by the title
holder thereof, (ii) an ALTA lender’s title insurance policy issued by a title insurer reasonably
satisfactory to Administrative Agent in form and substance and in amounts reasonably satisfactory
to Administrative Agent insuring Administrative Agent’s first priority Lien on such real estate,
free and clear of all defects and encumbrances except Permitted Liens,

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(iii) a current ALTA survey, certified to Administrative Agent by a licensed surveyor, in form
and substance satisfactory to Administrative Agent, (iv) a certificate, in form and substance
acceptable to Administrative Agent, to Administrative Agent from a national certification agency
acceptable to Administrative Agent, certifying that such real estate is not located in a special
flood hazard area and (v) in the case of real estate that consists of a leasehold estate, such
estoppel letters, consents and waivers from the landlords and non-disturbance agreements from any
holders of mortgages or deeds of trust on such real estate as may be requested by Administrative
Agent, all of which shall be in form and substance satisfactory to Administrative Agent.

ARTICLE 5

NEGATIVE COVENANTS

     Borrower agrees that, so long as any Credit Exposure exists:

     Section 5.1 Debt.

     Borrower will not, and will not permit any Subsidiary to, directly or indirectly, create,
incur, assume, guarantee or otherwise become or remain directly or indirectly liable with respect
to, any Debt, except for:

     (a) Debt under the Financing Documents and Letter of Credit Liabilities;

     (b) Debt outstanding on the date of this Agreement and set forth on Schedule 5.1;

     (c) Subordinated Debt;

     (d) Debt incurred or assumed for the purpose of financing all or any part of the cost of
acquiring any fixed asset (including through Capital Leases), in an aggregate principal amount at
any time outstanding not greater than $500,000;

     (e) Debt, if any, arising under Swap Contracts with an Eligible Swap Counterparty; and

     (f) Intercompany Debt arising from loans made by (i) Borrower to its Wholly-Owned Subsidiaries
to fund working capital requirements of such Subsidiaries in the Ordinary Course of Business, or
(ii) any Wholly-Owned Subsidiary of Borrower to Borrower; provided, however, that upon the request
of Administrative Agent at any time, any such Debt shall be evidenced by promissory notes having
terms reasonably satisfactory to Administrative Agent, the sole originally executed counterparts of
which shall be pledged and delivered to Administrative Agent, for the benefit of Administrative
Agent and Lenders, as security for the Obligations.

     Section 5.2 Liens.

     Borrower will not, and will not permit any Subsidiary to, directly or indirectly, create,
assume or suffer to exist any Lien on any asset now owned or hereafter acquired by it (including,
without limitation, any equity interests in and to SSG), except:

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     (a) Liens created by the Security Documents;

     (b) Liens existing on the date of this Agreement and set forth on Schedule 5.2;

     (c) any Lien on any asset securing Debt permitted under Section 5.1(d), provided that such
Lien attaches only to the assets financed by such Debt, and such Lien attaches concurrently with or
within ninety (90) days after the acquisition thereof;

     (d) Liens for taxes or other governmental charges not at the time delinquent or thereafter
payable without penalty or the subject of a Permitted Contest;

     (e) Liens arising in the Ordinary Course of Business (i) in favor of carriers, warehousemen,
mechanics and materialmen, and other similar Liens imposed by law and (ii) in connection with
worker’s compensation, unemployment compensation and other types of social security (excluding
Liens arising under ERISA) or in connection with surety bonds, bids, performance bonds and similar
obligations for sums not overdue or the subject of a Permitted Contest and not involving any
deposits or advances or borrowed money or the deferred purchase price of property or services and,
in each case, for which it maintains adequate reserves;

     (f) attachments, appeal bonds, judgments and other similar Liens, for sums not exceeding
$150,000 in the aggregate arising in connection with court proceedings; provided that the execution
or other enforcement of such Liens is effectively stayed and the claims secured thereby are the
subject of a Permitted Contest; and

     (g) easements, rights of way, restrictions, minor defects or irregularities in title and other
similar Liens not interfering in any material respect with the ordinary conduct of the business of
Borrower or any Subsidiary.

     Section 5.3 Contingent Obligations.

     Borrower will not, and will not permit any Subsidiary to, directly or indirectly, create,
assume, incur or suffer to exist any Contingent Obligations, except for:

     (a) Contingent Obligations arising in respect of the Debt under the Financing Documents and
Letter of Credit Liabilities;

     (b) Contingent Obligations resulting from endorsements for collection or deposit in the
Ordinary Course of Business;

     (c) So long as there exists no Event of Default both immediately before and immediately after
giving effect to any such transaction, Contingent Obligations existing or arising under any Swap
Contract with an Eligible Swap Counterparty, provided that such obligations are (or were) entered
into by Borrower or a Subsidiary in the Ordinary Course of Business for the purpose of directly
mitigating risks associated with liabilities, commitments, investments, assets, or property held or
reasonably anticipated by such Person and not for purposes of speculation;

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     (d) Contingent Obligations outstanding on the date of this Agreement and set forth on Schedule
5.3; and

     (e) Contingent Obligations arising with respect to customary indemnification obligations in
favor of purchasers in connection with dispositions permitted under Section 5.7.

     Section 5.4 Restricted Distributions.

     Borrower will not, and will not permit any Subsidiary to, directly or indirectly, declare,
order, pay, make or set apart any sum for any Restricted Distribution; provided that the foregoing
shall not restrict or prohibit (a) Borrower from making cash dividends to its stockholders in
amounts and otherwise substantially consistent with its past practices, or (b) any Subsidiary from
making dividends or distributions, directly or indirectly, to Borrower, if, in each case, at the
time of the declaration, order, payment, making or setting apart any sum for any such Restricted
Distribution and immediately after giving effect thereto, no Default or Event of Default shall have
occurred and shall be continuing or would result therefrom.

     Section 5.5 Restricted Agreements.

     Borrower will not, and will not permit any Subsidiary to, directly or indirectly (i) enter
into or assume any agreement (other than the Financing Documents and the Subordinated Debt
Documents) prohibiting the creation or assumption of any Lien upon its properties or assets,
whether now owned or hereafter acquired or (ii) create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind (except as provided by the
Subordinated Debt Documents) on the ability of any Subsidiary to: (1) pay or make Restricted
Distributions to Borrower or any Subsidiary; (2) make loans or advances to Borrower or any
Subsidiary; or (3) transfer any of its property or assets to Borrower or any Subsidiary.

     Section 5.6 Payments and Modifications of Subordinated Debt.

     Notwithstanding the provisions of Section 5.4 or any other provision of this Agreement,
Borrower will not, and will not permit any Subsidiary to, directly or indirectly (a) redeem or
otherwise acquire, or declare, pay, make or set aside any amount in respect of the redemption or
other acquisition of, all or any portion of Borrower’s 5.75% Convertible Senior Subordinated Notes
(the “Convertible Senior Notes”); (b) declare, pay, make or set aside any amount for payment in
respect of Subordinated Debt, except for regularly scheduled payments of principal and interest
(but no voluntary prepayments) in respect of such Subordinated Debt made in full compliance with
the Subordination Agreement and, if any, any other subordination provisions applicable to such
Subordinated Debt; or (c) amend or otherwise modify the terms of any Subordinated Debt if the
effect of such amendment or modification is to (i) increase the interest rate or fees on, or change
the manner or timing of payment of, such Debt; (ii) change the dates upon which payments of
principal or interest are due on, or the principal amount of, such Debt; (iii) change any event of
default or add or make more restrictive any covenant with respect to such Debt; (iv) change the
prepayment provisions of such Debt or any of the defined terms related thereto; (v) change the
subordination provisions thereof (or the subordination terms of any guaranty thereof); or (vi)
change or amend any other term if such change or amendment would materially increase the
obligations of the obligor or confer additional material rights on

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the holder of such Debt in a manner adverse to Borrower, any Subsidiaries, Administrative
Agent or Lenders. Borrower shall, prior to entering into any such amendment or modification,
deliver to Administrative Agent reasonably in advance of the execution thereof, any final or
execution form copy thereof and, if approval of Required Lenders is required by the terms of this
Agreement prior to the taking of any such action, Borrower agrees not to take, nor permit any of
its Subsidiaries to take, any such action with respect to any such items without obtaining such
approval from Required Lenders.

     Section 5.7 Consolidations, Mergers and Sales of Assets.

     Borrower will not, and will not permit any Subsidiary to, directly or indirectly (a)
consolidate or merge with or into any other Person other than (i) mergers consummated to effect the
consummation of a Permitted Acquisition and (ii) in each case with not less than twenty (20)
Business Days’ prior written notice to Administrative Agent (or such lesser amount of notice as
Administrative Agent, in its sole discretion, may from time to time permit) mergers of any
Wholly-Owned Subsidiary with and into Borrower (with Borrower as the surviving entity of such
merger) or with and into any other Wholly-Owned Subsidiary of Borrower or (b) consummate any Asset
Dispositions other than dispositions of Equipment for cash and fair value that Borrower determines
in good faith is no longer used or useful in the business of Borrower and its Subsidiaries if all
of the following conditions are met: (i) the market value of assets sold or otherwise disposed of
in any single transaction or series of related transactions does not exceed $100,000 and the
aggregate market value of assets sold or otherwise disposed of in any Fiscal Year of Borrower does
not exceed $200,000; (ii) the Net Cash Proceeds of any such disposition are applied as required by
Section 2.1(c); (iii) after giving effect to any such disposition and the repayment of Debt with
the proceeds thereof, Borrower is in compliance on a pro forma basis with the covenants set forth
in Article 7 recomputed for the most recently ended month for which information is available and is
in compliance with all other terms and conditions of this Agreement; and (iv) no Default or Event
of Default then exists or would result from any such disposition.

     Section 5.8 Purchase of Assets, Investments.

     (a) Borrower will not, and will not permit any Subsidiary to, directly or indirectly (w)
acquire or enter into any agreement to acquire any assets other than in the Ordinary Course of
Business, constituting capital expenditures to the extent permitted hereunder or constituting
replacement assets purchased with proceeds of Property Insurance Policies, awards or other
compensation with respect to any eminent domain, condemnation or similar proceeding; (x) create,
acquire or enter into any agreement to create or acquire any Subsidiary other than Wholly-Owned
Subsidiaries acquired or created in connection with the consummation of Permitted Acquisitions and
for which the requirements set forth in Section 4.12 have been satisfied, (y) engage or enter into
any agreement to engage in any joint venture or partnership with any other Person or (z) acquire or
own or enter into any agreement to acquire or own any Investment in any Person other than:

          (i) Investments existing on the date of this Agreement and set forth on Schedule 5.8;

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          (ii) Cash Equivalents;

          (iii) intentionally omitted;

          (iv) bank deposits established in accordance with Section 5.17;

          (v) Investments in securities of Account Debtors received pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of such Account Debtors;
and

          (vi) Investments in the form of Swap Contracts permitted under Section 5.3(c).

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

     (c) Notwithstanding the provisions of Section 5.8(a), upon and after the effectiveness of the
Acquisition Revolving Loan Commitment Increase, in addition to Section 5.8(b) Permitted
Acquisitions, Borrower may acquire, or may cause a Wholly-Owned Subsidiary to acquire, all or
substantially all of the assets, or all (but not less than all) of the capital stock or other
equity securities, of any Person (the “Target”) (in each case, a “Section 5.8(c) Permitted
Acquisition”) with the prior written approval of Administrative Agent and the Required Lenders

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in their discretion and upon the satisfaction of each of the Acquisition Revolving Loan
Commitment Increase Conditions, including each of the following conditions:

          (i) Administrative Agent shall have received not less than 30 Business Days’ prior notice of
such proposed Section 5.8(c) Permitted Acquisition, which notice shall include a due diligence
package including the following materials if requested by Administrative Agent, each in form and
substance reasonably satisfactory to Administrative Agent:

     (A) copies of the Target’s two most recent annual income statements and balance sheets,
together with the audit opinions thereon, if any, of the Target’s independent accountants,
together with available interim financial statements, (B) if available, any asset or
business appraisals, (C) a general description of the business to be acquired, (D) a general
description of the competitive position of the business to be acquired within its industry,
(E) a summary of pending and known threatened litigation adversely affecting the business or
assets to be acquired, (F) a description of the method of financing such acquisition,
including sources and uses, (G) a listing of locations of all personal and real property to
be acquired, (H) a description of any change in management of Borrower and its Subsidiaries,
after giving effect to such acquisition, (I) all material agreements to be assumed or
acquired, (J) if the Target owns or leases, or if the assets to be acquired includes, any
real property or if otherwise requested by Administrative Agent, environmental reports and
related information regarding any such property owned, leased or otherwise used (other than
leased property used solely as office space), (K) draft copies of all proposed Acquisition
Documents, including all schedules thereto and (L) any other material or reports reasonably
requested by Administrative Agent.

          (ii) Concurrently with delivery of the notice and due diligence materials referred to in
clause (i) above, if requested by Administrative Agent, Borrower shall have delivered to
Administrative Agent, in form and substance reasonably satisfactory to Administrative Agent:

     (A) a pro forma consolidated and consolidating balance sheet, income statement and cash
flow statement of Borrower and its Subsidiaries (the “Acquisition Pro Forma”), based on most
recently available financial statements, which shall be complete and shall fairly present in
all material respects the assets, liabilities, financial condition and results of operations
of Borrower and its Subsidiaries in accordance with GAAP consistently applied, but taking
into account such Section 5.8(c) Permitted Acquisition, the funding of all Loans and the
incurrence or assumption of all other Debt and repayment of Debt in connection therewith,
and such Acquisition Pro Forma shall reflect that (x) on a pro forma basis, Borrower and its
Subsidiaries would have had a Senior Leverage Ratio not in excess of 2.50 to 1.0 for the
four quarter period reflected in the Compliance Certificate most recently delivered to
Administrative Agent pursuant to Section 4.1(c) prior to the consummation of such Section
5.8(c) Permitted Acquisition (after giving effect to such Section 5.8(c) Permitted
Acquisition and all Loans funded in connection therewith as if made on the first day of such
period) and (y) on a pro forma basis, no Default or Event of Default has occurred and is
continuing or would result after giving effect to such Section 5.8(c) Permitted Acquisition,
the funding of all Loans and

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the incurrence or assumption of all other Debt and repayment of Debt in connection
therewith;

     (B) updated versions of the operating plans, budgets and forecasts most recently
delivered to Administrative Agent pursuant to Section 4.1(m) covering the three (3) year
period commencing on the date of such Section 5.8(c) Permitted Acquisition and otherwise
prepared in accordance with the requirements of Section 4.1(m) (the “Acquisition
Projections”) and based upon historical financial data of a recent date reasonably
satisfactory to Administrative Agent, taking into account such Section 5.8(c) Permitted
Acquisition, the funding of all Loans and the incurrence or assumption of all other Debt and
repayment of Debt in connection therewith; and

     (C) a certificate of a Responsible Officer of Borrower to the effect that: (w) Borrower
and each Subsidiary will be Solvent upon the consummation of the Section 5.8(c) Permitted
Acquisition; (x) the Acquisition Pro Forma fairly presents the financial condition of
Borrower and its Subsidiaries (on a consolidated basis) as of the date thereof and the
periods covered thereby, in each case after giving effect to the Section 5.8(c) Permitted
Acquisition and related transactions; (y) the Acquisition Projections represent Borrower’s
best estimate of Borrower’s consolidated future financial performance as of the date thereof
and after giving effect to the Section 5.8(c) Permitted Acquisition, the assumptions
contained therein are believed by Borrower to be fair and reasonable in light of current
business conditions and the Acquisition Projections demonstrate Borrower’s projected
compliance with the covenants set forth in Article 7 for the one-year period immediately
following the consummation of such Section 5.8(c) Permitted Acquisition; provided, that
Borrower can give no assurance that the results reflected in the Acquisition Projections
will be attained; and (z) Borrower and its Subsidiaries have completed their due diligence
investigation with respect to the Target and such Section 5.8(c) Permitted Acquisition,
which investigation was conducted in a manner similar to that which would have been
conducted by a prudent purchaser of a comparable business and the results of which
investigation, to the extent requested, were delivered to Administrative Agent;

          (iii) such Section 5.8(c) Permitted Acquisition shall only involve assets located in the
United States (and, in connection with the acquisition of the capital stock or other equity
securities of a Target, such Target shall be formed, incorporated or otherwise organized under the
laws of a State within the United States) and comprising a business, or those assets of a business,
of the type engaged in by Borrower as of the Closing Date and businesses reasonably related
thereto, and which business would not subject Administrative Agent or any Lender to regulatory or
third party approvals in connection with the exercise of its rights and remedies under this
Agreement or any other Financing Documents other than approvals applicable to the exercise of such
rights and remedies with respect to Borrower prior to such Section 5.8(c) Permitted Acquisition;

          (iv) such Section 5.8(c) Permitted Acquisition shall be consensual, shall have been approved
by the Target’s board of directors (or comparable governing board) and shall be consummated in
accordance with the terms of the Acquisition Documents, and in compliance with all applicable Laws;

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          (v) no assets or liabilities (including, without limitation, Investments, Debt and Contingent
Obligations) shall be acquired, incurred, assumed or otherwise be reflected on a consolidated
balance sheet of Borrower and its Subsidiaries after giving effect to such Section 5.8(c) Permitted
Acquisition, except (A) Loans made hereunder and (B) those assets and liabilities which may be
acquired, incurred or assumed in accordance with the provisions of this Agreement;

          (vi) the business and assets acquired in such Section 5.8(c) Permitted Acquisition shall be
free and clear of all Liens (other than Permitted Liens);

          (vii) at or prior to the closing of any Section 5.8(c) Permitted Acquisition, Administrative
Agent will be granted a first priority perfected Lien (subject to Permitted Liens) in all assets
acquired pursuant thereto or, as contemplated by Section 4.12, in the assets and capital stock or
other equity interests of the Target, and Borrower, its Subsidiaries and the Target shall have
executed such documents and taken such actions as may be required by Administrative Agent in
connection therewith (including the delivery of (A) certified copies of the resolutions of the
board of directors (or comparable governing board) of Borrower, its Subsidiaries and the Target
authorizing such Section 5.8(c) Permitted Acquisition and the granting of Liens described herein,
(B) legal opinions, in form and content reasonably acceptable to Administrative Agent, with respect
to the transactions described herein and (C) evidence of insurance of the business to be acquired
consistent with the requirements of Section 4.4);

          (viii) the Target shall not have incurred an operating loss for the trailing twelve-month
period preceding the date of the Section 5.8(c) Permitted Acquisition, as determined based upon the
Target’s financial statements for its most recently completed fiscal year;

          (ix) on or prior to the date of such Section 5.8(c) Permitted Acquisition, Administrative
Agent shall have received, in form and substance reasonably satisfactory to Administrative Agent,
(a) copies of the Acquisition Documents and all other documents reasonably requested by
Administrative Agent and (c) amendments to the Schedules, to the extent necessary to make the
representations and warranties in this Agreement true and correct after giving effect to the
consummation of such Section 5.8(c) Permitted Acquisition; and

          (x) notwithstanding anything in this Section 5.8(c), no Inventory acquired by Borrower or a
Subsidiary of Borrower shall be deemed to be Eligible Inventory, and no Account acquired by
Borrower or a Subsidiary of Borrower shall be deemed to be an Eligible Account, except to the
extent Administrative Agent has given its prior written approval with respect thereto.

     Section 5.9 Transactions with Affiliates.

     Except (i) as disclosed on Schedule 5.9, and (ii) for transactions that are disclosed to
Administrative Agent in advance of being entered into and which contain terms that are no less
favorable to Borrower or any Subsidiary, as the case may be, than those which might be obtained
from a third party not an Affiliate of any Credit Party, Borrower will not, and will not permit any
Subsidiary to, directly or indirectly, enter into or permit to exist any transaction (including the

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purchase, sale, lease or exchange of any property or the rendering of any service) with any
Affiliate of Borrower.

     Section 5.10 Modification of Organizational Documents.

     Borrower will not, and will not permit any Subsidiary to, directly or indirectly, amend or
otherwise modify any Organizational Documents of such Person, except for such amendments or other
modifications required by Law and fully disclosed to Administrative Agent.

     Section 5.11 Intentionally Omitted.

     Section 5.12 Fiscal Year.

     Borrower will not, and will not permit any Subsidiary to, change its Fiscal Year.

     Section 5.13 Conduct of Business.

     Borrower will not, and will not permit any Subsidiary to, directly or indirectly, engage in
any line of business other than those businesses engaged in on the Closing Date and described on
Schedule 5.13 and businesses reasonably related thereto.

     Section 5.14 Intentionally Omitted.

     Section 5.15 Lease Payments.

     Borrower will not, and will not permit any Subsidiary to, directly or indirectly, incur or
assume (whether pursuant to a Guarantee or otherwise) any liability for rental payments under a
lease with a lease term of one year or more if, after giving effect thereto, the aggregate amount
of minimum lease payments that Borrower and its Consolidated Subsidiaries have so incurred or
assumed will exceed, on a consolidated basis, $2,000,000 for any calendar year under all such
leases (excluding Capital Leases).

     Section 5.16 Limitation on Sale and Leaseback Transactions.

     Borrower will not, and will not permit any Subsidiary to, directly or indirectly, enter into
any arrangement with any Person whereby in a substantially contemporaneous transaction Borrower or
any of its Subsidiaries sells or transfers all or substantially all of its right, title and
interest in an asset and, in connection therewith, acquires or leases back the right to use such
asset.

     Section 5.17 Bank Accounts.

     Without limiting the provisions of Section 6.1(d), Borrower will not, and will not permit any
Subsidiary to, directly or indirectly, establish any new bank account without prior written notice
to Administrative Agent and unless Administrative Agent, Borrower or such Subsidiary and the bank
at which the account is to be opened enter into a control agreement regarding such bank account
pursuant to which such bank acknowledges the security interest of Administrative Agent in such bank
account, agrees to comply with instructions originated by Administrative

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Agent directing disposition of the funds in such bank account without further consent from
Borrower, and agrees to subordinate and limit any security interest such bank may have in such bank
account on terms satisfactory to Administrative Agent.

     Section 5.18 Compliance with Anti-Terrorism Laws.

     (a) Borrower will not, and will not permit any Subsidiary to, directly or indirectly,
knowingly enter into any Operative Documents or Material Contracts with any Person listed on the
OFAC Lists. Borrower shall immediately notify Administrative Agent if Borrower has knowledge that
Borrower, any additional Credit Party or any of their respective Affiliates or agents acting or
benefiting in any capacity in connection with the transactions contemplated by this Agreement is or
becomes a Blocked Person or (i) is convicted on, (ii) pleads nolo contendere to, (iii) is indicted
on or (iv) is arraigned and held over on charges involving money laundering or predicate crimes to
money laundering. Borrower will not, and will not permit any Subsidiary to, directly or
indirectly, (i) conduct any business or engage in any transaction or dealing with any Blocked
Person, including, without limitation, the making or receiving of any contribution of funds, goods
or services to or for the benefit of any Blocked Person, (ii) deal in, or otherwise engage in any
transaction relating to, any property or interests in property blocked pursuant to Executive Order
No. 13224, any similar executive order or other Anti-Terrorism Law, or (iii) engage in or conspire
to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in Executive Order No. 13224 or other
Anti-Terrorism Law.

     (b) Administrative Agent hereby notifies Borrower that pursuant to the requirements of the USA
PATRIOT Act, and the Administrative Agent’s policies and procedures, the Administrative Agent is
required to obtain, verify and record certain information and documentation that identifies
Borrower, which information includes the name and address of Borrower and such other information
that will allow the Administrative Agent to identify Borrower in accordance with the USA PATRIOT
Act.

ARTICLE 6

ACCOUNTS AND INVENTORY REPRESENTATIONS,

WARRANTIES, COVENANTS AND AGREEMENTS

     To induce Administrative Agent and Lenders to enter into this Agreement and to make the Loans
and other credit accommodations contemplated hereby, Borrower hereby represents and warrants to
Administrative Agent and each Lender, and further agrees with Administrative Agent and each Lender,
that:

     Section 6.1 Accounts and Account Collections.

     (a) Borrower shall notify Administrative Agent promptly of: (i) any material delay in the
performance by Borrower or any of its Subsidiaries of any of their material obligations to any
Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any
Account Debtor, or any material disputes with Account Debtors, or any settlement, adjustment or
compromise thereof, (ii) all material adverse information known to any Credit Party relating to the
financial condition of any Account Debtor and (iii) any event or circumstance which, to any

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Credit Party’s knowledge, would result in any Account no longer constituting an Eligible
Account. Borrower hereby agrees not to grant to any Account Debtor, and to cause each of its
Subsidiaries not to grant to any Account Debtor, any credit, discount, allowance or extension, or
to enter into any agreement for any of the foregoing, without Administrative Agent’s consent,
except in the Ordinary Course of Business. So long as no Event of Default exists or has occurred
and is continuing, Borrower may settle, adjust or compromise, and may permit each of its
Subsidiaries to settle, adjust or compromise, any claim, offset, counterclaim or dispute with any
Account Debtor. At any time that an Event of Default exists or has occurred and is continuing,
Administrative Agent shall, at its option, have the exclusive right to settle, adjust or compromise
any claim, offset, counterclaim or dispute with Account Debtors of any Credit Party or grant any
credits, discounts or allowances.

     (b) With respect to each Account: (i) the amounts shown on any invoice delivered to
Administrative Agent or schedule thereof delivered to Administrative Agent shall be true and
complete in all material respects, (ii) no payments shall be made thereon except payments
immediately delivered to Administrative Agent pursuant to the terms of this Agreement or any
applicable Security Document (to the extent so required), (iii) there shall be no setoffs,
deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto
except as reported to Administrative Agent in accordance with the terms of this Agreement, and (iv)
none of the transactions giving rise thereto will violate any applicable laws or regulations, all
documentation relating thereto will be legally sufficient under such laws and regulations and all
such documentation will be legally enforceable in accordance with its terms.

     (c) Administrative Agent shall have the right at any time or times in Administrative Agent’s
name or in the name of a nominee of Administrative Agent, to verify the validity, amount or any
other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile
transmission or otherwise. To facilitate the exercise of the right described in the immediately
preceding sentence, Borrower hereby agrees to provide Administrative Agent upon request the name
and address of each Account Debtor of Borrower or any of its Subsidiaries.

     (d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower
Security Agreement, (i) (A) Borrower shall establish and maintain, at its sole expense, and shall
cause each Subsidiary to establish and maintain, at its sole expense blocked accounts or lockboxes
and related blocked accounts (in either case, “Blocked Accounts”), as Administrative Agent may
specify, with such banks as are acceptable to Administrative Agent into which Borrower and its
Subsidiaries shall promptly deposit and direct their respective Account Debtors to directly remit
all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral in
the identical form in which such payments are made, whether by cash, check or other manner, (B)
Borrower shall deliver, or cause to be delivered, to Administrative Agent a Deposit Account Control
Agreement duly authorized, executed and delivered by each bank where a Blocked Account for the
benefit of Borrower or any of its Subsidiaries is maintained, and by each bank where any other
Deposit Account is from time to time maintained. Borrower shall further execute and deliver, and
shall cause each of its Subsidiaries to execute and deliver, such agreements and documents as
Administrative Agent may require in connection with such Blocked Accounts, Deposit Accounts and
such Deposit Account Control Agreements, and (C) without limiting the provisions of Section 5.17,
Borrower shall not establish, and shall

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cause each of its Subsidiaries not to establish, any Deposit Accounts not existing as of the
Closing Date, unless Borrower or its Subsidiaries (as applicable) have complied in full with the
provisions of this Section 6.1 with respect to such Deposit Accounts. Borrower agrees that all
payments made to such Blocked Accounts or other funds received and collected by Administrative
Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other
Collateral or otherwise shall be treated as payments to Administrative Agent and Lenders in respect
of the Obligations and therefore shall constitute the property of Administrative Agent and Lenders
to the extent of the then outstanding Obligations.

     (e) For purposes of calculating the amount of the Loans available to Borrower, payments made
to a Blocked Account will be applied (conditional upon final collection) to the Obligations on the
Business Day of receipt by Administrative Agent of immediately available funds in the Payment
Account provided such payments and notice thereof are received in accordance with Administrative
Agent’s usual and customary practices as in effect from time to time and with sufficient time to
credit the Loan Account on such day, and if not, then on the next Business Day. For the purposes
of calculating interest on the Obligations, such payments or other funds received shall be deemed
applied (conditional upon final collection) to the Obligations one (1) Business Day following the
date of receipt of immediately available funds by Administrative Agent in the Payment Account
provided such payments or other funds and notice thereof are received in accordance with
Administrative Agent’s usual and customary practices as in effect from time to time and with
sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day.

     (f) Borrower and its directors, employees, agents, Subsidiaries and other Affiliates shall,
acting as trustee for Administrative Agent, receive, as the property of Administrative Agent, any
monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts,
Inventory or other Collateral which come into their possession or under their control and
immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked
Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Agent. In
no event shall the same be commingled with Borrower’s own funds. Borrower agrees to pay or to
reimburse Administrative Agent on demand for any amounts owed or paid to or demanded by any bank at
which a Blocked Account is established or any other bank or Person involved in the transfer of
funds to or from the Blocked Accounts arising out of Administrative Agent’s payments to or
indemnification of such bank or Person.

     Section 6.2 Inventory.

     With respect to the Inventory: (i) Borrower shall at all times maintain, and cause each of
its Subsidiaries to maintain, records of Inventory reasonably satisfactory to Administrative Agent,
keeping correct and accurate records itemizing and describing the kind, type, quality and quantity
of Inventory, the cost therefor and daily withdrawals therefrom and additions thereto; (ii)
Borrower shall conduct, and cause each of its Subsidiaries to conduct, a physical count of the
Inventory at least once each year but at any time or times as Administrative Agent may request on
or after an Event of Default, and promptly following such physical inventory shall supply
Administrative Agent with a report in the form and with such specificity as may be satisfactory to
Administrative Agent concerning such physical count; (iii) Borrower shall not sell, and shall not
permit any of its Subsidiaries to sell, Inventory to any customer on approval, or any other

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basis which entitles the customer to return (except for the right of customers for Inventory
which is defective or non-conforming) or may obligate any Credit Party to repurchase such
Inventory; (iv) Borrower shall keep, and shall cause each of its Subsidiaries to keep, the
Inventory in good and marketable condition; and (v) Borrower shall not acquire or accept for sale,
and shall not permit any of its Subsidiaries to acquire or accept for sale, without prior written
notice to Administrative Agent, any Inventory on consignment or approval.

ARTICLE 7

FINANCIAL COVENANTS

     Borrower agrees that, so long as any Credit Exposure exists:

     Section 7.1 Fixed Charge Coverage Ratio.

     Borrower will not permit the Fixed Charge Coverage Ratio for the 12-month period ending on the
last day of each calendar quarter to be less than (a) prior to the effectiveness of the Acquisition
Revolving Loan Commitment Increase, 1.10 to 1.00, and (b) after the effectiveness of the
Acquisition Revolving Loan Commitment Increase, 1.20 to 1.00.

     Section 7.2 Senior Leverage Ratio.

     Borrower will not permit the Senior Leverage Ratio for the twelve (12) month period ending the
last day of any calendar quarter (or, if any portion of such period precedes the Closing Date, for
the period commencing on the Closing Date and ending on such date, expressed on an annualized
basis) to exceed 2.50 to 1.00.

ARTICLE 8

CONDITIONS

     Section 8.1 Conditions to Initial Closing.

     The obligation of each Lender to make the initial Loans, of Administrative Agent to issue any
Support Agreements on the Closing Date and of any LC Issuer to issue any Lender Letter of Credit on
the Closing Date shall be subject to the receipt by Administrative Agent of each agreement,
document and instrument set forth on the Closing Checklist, each in form and substance reasonably
satisfactory to Administrative Agent, and to the satisfaction of the following conditions
precedent, each to the satisfaction of Administrative Agent and Lenders in their reasonable
discretion:

     (a) the payment of all fees, expenses and other amounts due and payable under each Financing
Document, including, without limitation, the Administrative Agent Fee Letter;

     (b) the satisfaction of Agent as to the absence, since March 31, 2006, of any Material Adverse
Effect or any event or condition which could reasonably be expected to result in a Material Adverse
Effect;

     (c) the receipt of the initial Borrowing Base Certificate, prepared as of the Closing Date,
which certificate shall evidence immediately available excess borrowing capacity of

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Revolving Loans of not less than $5,000,000 after giving effect to the initial funding of
Loans on the Closing Date and the consummation of the transactions contemplated by the Operative
Documents;

     (d) Merrill Lynch shall be satisfied with the results of its legal and business due diligence,
which, in the case of business due diligence, shall include audits, appraisals, reports (including,
without limitation, environmental reports) and other documentation (including, without limitation,
title and survey documentation) with respect to any owned or leased property, communications with
management regarding financial performance and financial condition and a field exam (in scope
acceptable to Merrill Lynch) of Borrower and Subsidiaries, and Borrower’s and Subsidiaries’
respective operations;

     (e) Administrative Agent and the Lenders shall have received and approved all requested
financial statements and projections;

     (f) intentionally omitted;

     (g) all other transactions contemplated to occur in connection with the closing of this loan
and letter of credit facility shall have been consummated in accordance with applicable Law and the
documentation relating thereto, which shall be satisfactory to Agent and the Lenders in form and
substance;

     (h) Intentionally omitted;

     (i) Merrill Lynch shall be satisfied that there has been no material adverse change in the
capital markets which could impair Merrill Lynch’s ability to successfully syndicate this loan and
letter of credit facility;

     (j) all governmental and third party approvals necessary in connection with the closing of
this loan and letter of credit facility and the transactions contemplated to occur in connection
therewith shall have been obtained and shall be in full force and effect, and final and
non-appealable;

     (k) Agent shall be satisfied with Borrower’s and its Subsidiaries’ and SSG’s respective
capital, legal and organizational structure;

     (l) Intentionally omitted;

     (m) Agent shall have received copies of (or binders for) insurance policies (including without
limitation casualty, property, liability and business interruption insurance) that satisfy the
insurance requirements included in the Financing Documents, with certificates and endorsements
satisfactory to Agent naming Agent as lender loss payee and additional insured, and Agent shall
have received the satisfactory results of the review by a third party consultant engaged by Agent
to review the adequacy of Borrowers’ and its Subsidiaries’ respective insurance coverage; and

     (n) receipt by Agent of such other documents, instruments and/or agreements as Agent may
reasonably request.

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     Section 8.2 Conditions to Acquisition Revolving Loan Commitment Increase.

     The effectiveness of the Acquisition Revolving Loan Commitment Increase shall be subject to
the satisfaction of the following conditions precedent (the “Acquisition Revolving Loan Commitment
Increase Conditions”), each to the satisfaction of Administrative Agent and Lenders in their sole
discretion:

     (a) Borrower shall have complied with the conditions set forth in Section 5.8(c);

     (b) the payment of all fees, expenses and other amounts due and payable under each Financing
Document, including, without limitation, the Administrative Agent Fee Letter;

     (c) all other transactions contemplated to occur in connection with the closing of this loan
and letter of credit facility shall have been consummated in accordance with applicable Law and the
documentation relating thereto, which shall be satisfactory to Agent and the Lenders in form and
substance;

     (d) consummation of a Section 5.8(c) Permitted Acquisition pursuant to Acquisition Documents,
each of which shall be in form and substance satisfactory to the Administrative Agent and Lenders
in their sole discretion, and otherwise on terms and conditions satisfactory to the Administrative
Agent and Lenders in their sole discretion;

     (e) no Default or Event of Default shall have occurred and shall be continuing;

     (f) Merrill Lynch shall be satisfied with the results of its legal and business due diligence
with regard to the Target and the Credit Parties, which, in the case of business due diligence, may
include audits, appraisals, reports (including, without limitation, environmental reports) and
other documentation (including, without limitation, title and survey documentation) with respect to
any owned or leased property, communications with management regarding financial performance and
financial condition and a field exam (in scope acceptable to Merrill Lynch) of Borrower, its
Subsidiaries, and Target and their respective businesses and operations;

     (g) Administrative Agent shall have received copies of (or binders for) insurance policies
(including without limitation casualty, property, liability and business interruption insurance)
that satisfy the insurance requirements included in the Financing Documents, with certificates and
endorsements satisfactory to Administrative Agent naming Administrative Agent as lender loss payee
and additional insured, and Administrative Agent shall have received the satisfactory results of
the review by a third party consultant engaged by Administrative Agent to review the adequacy of
the Target’s insurance coverage;

     (h) Borrower, the Target, the other Credit Parties and such other Persons reasonably requested
by Administrative Agent shall have entered into such new Financing Documents and/or modifications
to the Financing Documents, and shall have delivered such other documents, instruments, and
agreements in respect of the Loans and the Financing Documents, as Administrative Agent may
reasonably request;

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     (i) (i) There is no pending or threatened Litigation with respect to the Acquisition, the
Target or otherwise, and (ii) there shall not have occurred any act, condition or occurrence of any
other nature whatsoever, which, in any such case, whether singly or in the aggregate, and whether
or not related, has had or could reasonably expected to have a material adverse change in, or a
material adverse effect upon, any of (A) the condition (financial or otherwise), operations,
business, properties or prospects of any of the Credit Parties or the Target, (B) the rights and
remedies of Administrative Agent or Lenders under any Financing Document, or the ability of any
Credit Party to perform any of its obligations under any Financing Document to which it is a party,
whether prior or subsequent to the Acquisition, (C) the legality, validity or enforceability of any
Financing Document, whether prior or subsequent to the Acquisition, or (D) the existence,
perfection or priority of any security interest granted in any Financing Document or the value of
any material Collateral, whether prior or subsequent to the Acquisition; and

     (j) Receipt by Administrative Agent of such other information (financial or otherwise),
documents, instruments and/or agreements as Administrative Agent may reasonably request.

     Section 8.3 Conditions to Each Loan, Support Agreement and Lender Letter of Credit.

     The obligation of the Lenders to make a Loan (other than Revolving Loans made pursuant to
either of Section 2.2(e)(ii) and/or Section 2.5(c)), of Administrative Agent to issue any Support
Agreement or of any LC Issuer to issue any Lender Letter of Credit (including, in each case, on the
Closing Date) is subject to the satisfaction of the following additional conditions:

          (i) in the case of a Revolving Loan Borrowing, receipt by Administrative Agent of a Notice of
Borrowing (or telephonic or electronic notice, as permitted by Section 2.2(b)(ii)) in accordance
with Section 2.2(b) and, in the case of any Support Agreement or Lender Letter of Credit, receipt
by Administrative Agent of a Notice of LC Credit Event in accordance with Section 2.5(a);

          (ii) the fact that, immediately after such borrowing and after application of the proceeds
thereof or after such issuance, the Revolving Loan Outstandings will not exceed the Revolving Loan
Limit;

          (iii) the fact that, immediately before and after such borrowing or issuance, no Default or
Event of Default shall have occurred and be continuing; and

          (iv) the fact that the representations and warranties of each Credit Party contained in the
Financing Documents shall be true, correct and complete on and as of the date of such borrowing or
issuance, except to the extent that any such representation or warranty relates to a specific date
in which case such representation or warranty shall be true and correct as of such earlier date.

     Each giving of a Notice of LC Credit Event hereunder, each giving of a Notice of Borrowing
hereunder and each acceptance by Borrower of the proceeds of any Loan made

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hereunder shall be
deemed to be a representation and warranty by Borrower on the date of such notice or acceptance as
to the facts specified in Sections 8.3(ii), 8.3(iii) and 8.3(iv).

ARTICLE 9

EVENTS OF DEFAULT

     Section 9.1 Events of Default.

     For purposes of the Financing Documents, the occurrence of any of the following conditions
and/or events, whether voluntary or involuntary, by operation of law or otherwise, shall constitute
an “Event of Default”:

     (a) Borrower shall fail to pay when due (i) any principal under any Financing Document, or
(ii) any interest, premium or fee under any Financing Document or any other amount payable under
any Financing Document and such interest, premium, fee or other amount shall remain unpaid for
three (3) Business Days after the respective due dates thereof;

     (b) Borrower shall fail to observe or perform any covenant contained in Article 4, Article 5,
Article 6 or Article 7;

     (c) any Credit Party defaults in the performance of or compliance with any term contained in
this Agreement or in any other Financing Document (other than occurrences described in other
provisions of this Section 9.1 for which a different grace or cure period is specified or for which
no grace or cure period is specified and thereby constitute immediate Events of Default) and such
default is not remedied or waived within thirty (30) days after the earlier of (1) receipt by
Borrower of notice from Administrative Agent or Required Lenders of such default or (2) actual
knowledge of Borrower or any other Credit Party of such default;

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

     (e) (1) failure of any Credit Party to pay when due or within any applicable grace period any
principal, interest or other amount on Debt (other than the Loans) or in respect of any Swap
Contract, or the occurrence of any other breach, default, condition or event with respect to any
Debt (other than the Loans) or in respect of any Swap Contract, if (i) such failure or occurrence
occurs upon the scheduled maturity of such Debt or liabilities in respect of such Swap Contract, or
upon automatic acceleration of such Debt or liabilities in respect of such Swap Contract, or (ii)
the effect of such failure or occurrence is to cause or to permit the holder or holders of any such
Debt, or the counterparty under any such Swap Contract, to cause, such Debt or other liabilities to
become or be declared due prior to its stated maturity, and, in each case, such Debt or liabilities
have an individual principal amount (or, in the case of a Swap Contract, a notional amount) in
excess of $250,000; or (2) the occurrence of any breach or default under any terms or provisions of any Subordinated Debt Document or under any agreement subordinating

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the
Subordinated Debt to all or any portion of the Obligations or the occurrence of any event requiring
the prepayment of any Subordinated Debt;

     (f) any Credit Party shall commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against it, or shall make a general assignment
for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall
take any corporate action to authorize any of the foregoing;

     (g) an involuntary case or other proceeding shall be commenced against any Credit Party
seeking liquidation, reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial
part of its property, and such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of sixty (60) days; or an order for relief shall be entered against any
Credit Party under the federal bankruptcy laws as now or hereafter in effect;

     (h) (1) institution of any steps by any Person to terminate a Pension Plan if as a result of
such termination any Credit Party or any member of the Controlled Group could be required to make a
contribution to such Pension Plan, or could incur a liability or obligation to such Pension Plan,
in excess of $250,000, (2) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA, or (3) there shall occur any
withdrawal or partial withdrawal from a Multiemployer Plan and the withdrawal liability (without
unaccrued interest) to Multiemployer Plans as a result of such withdrawal (including any
outstanding withdrawal liability that any Credit Party or any member of the Controlled Group have
incurred on the date of such withdrawal) exceeds $250,000;

     (i) one or more judgments or orders for the payment of money (not paid or fully covered by
insurance maintained in accordance with the requirements of this Agreement and as to which the
relevant insurance company has acknowledged coverage) aggregating in excess of $250,000 shall be
rendered against any or all Credit Parties and either (a) enforcement proceedings shall have been
commenced by any creditor upon any such judgments or orders or (b) there shall be any period of
twenty (20) consecutive days during which a stay of enforcement of any such judgments or orders, by
reason of a pending appeal, bond or otherwise, shall not be in effect;

     (j) a Change of Control of Borrower shall occur;

     (k) any Lien created by any of the Security Documents shall at any time fail to constitute a
valid and perfected Lien on all of the Collateral purported to be secured thereby, subject to no
prior or equal Lien except Permitted Liens, or any Credit Party shall so assert;

     (l) any Credit Party shall be prohibited or otherwise materially restrained from conducting
the business theretofore conducted by it by virtue of any casualty, any labor strike,

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any determination, ruling, decision, decree or order of any court or regulatory authority of competent
jurisdiction or any other event and such casualty, labor strike, determination, ruling, decision,
decree, order or other event remains unstayed and in effect for any period of thirty (30) days; or

     (m) any of the Operative Documents shall for any reason fail to constitute the valid and
binding agreement of any party thereto, or any such party shall so assert.

     Section 9.2 Acceleration and Suspension or Termination of Revolving Loan Commitment.

     Upon the occurrence and during the continuance of an Event of Default, Administrative Agent
may, and shall, if so requested by Required Lenders, (i) by notice to Borrower suspend or terminate
the Revolving Loan Commitment and the obligations of Administrative Agent and the Lenders with
respect thereto, in whole or in part (and, if in part, such reduction shall be pro rata among the
Lenders having a Revolving Loan Commitment Percentage) and/or (ii) by notice to Borrower declare
all or any portion of the Obligations to be, and such Obligations shall thereupon become,
immediately due and payable, with accrued interest thereon, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by Borrower and Borrower will pay the
same; provided that in the case of any of the Events of Default specified in Section 9.1(f) or
9.1(g) above, without any notice to Borrower or any other act by Administrative Agent or the
Lenders, the Revolving Loan Commitment and the obligations of Administrative Agent and the Lenders
with respect thereto shall thereupon terminate and all of the Obligations shall become immediately
due and payable without presentment, demand, protest or other notice of any kind, all of which are
hereby waived by Borrower and Borrower will pay the same.

     Section 9.3 Cash Collateral.

     If an Acceleration Event shall have occurred, and so long as it continues, then without any
request or the taking of any other action by Administrative Agent or the Lenders, Borrower shall
immediately comply with the provisions of Section 2.5(e) with respect to the deposit of cash
collateral to secure the existing Letter of Credit Liabilities and future payment of related fees.

     Section 9.4 Default Rate of Interest and Suspension of LIBOR Rate Options.

     At the election of Administrative Agent or Required Lenders, after the occurrence of an Event
of Default and for so long as it continues, (i) the Loans and other Obligations shall bear interest
at rates that are two percent (2.0%) in excess of the rates otherwise payable under this Agreement
and (ii) the fee described in Section 2.5(b) shall increase by a rate that is two percent (2.0%) in
excess of the rate otherwise payable under such Section. Furthermore, at the election of
Administrative Agent or Required Lenders during any period in which any Event of Default is
continuing (x) as the Interest Periods for LIBOR Loans then in effect expire, such Loans shall
be converted into Base Rate Loans and (y) the LIBOR election will not be available to Borrower.

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     Section 9.5 Setoff Rights.

     During the continuance of any Event of Default, each Lender is hereby authorized by Borrower
at any time or from time to time, with reasonably prompt subsequent notice to Borrower (any prior
or contemporaneous notice being hereby expressly waived) to set off and to appropriate and to apply
any and all (A) balances held by such Lender or any of such Lender’s Affiliates at any of its
offices for the account of Borrower or any of its Subsidiaries (regardless of whether such balances
are then due to Borrower or its Subsidiaries), and (B) other property at any time held or owing by
such Lender to or for the credit or for the account of Borrower or any of its Subsidiaries, against
and on account of any of the Obligations; except that no Lender shall exercise any such right
without the prior written consent of Administrative Agent. Any Lender exercising a right to set
off shall purchase for cash (and the other Lenders shall sell) interests in each of such other
Lender’s Pro Rata Share of the Obligations as would be necessary to cause all Lenders to share the
amount so set off with each other Lender in accordance with their respective Pro Rata Share of the
Obligations. Borrower agrees, to the fullest extent permitted by law, that any Lender or any of
such Lender’s Affiliates may exercise its right to set off with respect to the Obligations as
provided in this Section 9.5.

     Section 9.6 Application of Proceeds.

     (a) Notwithstanding anything to the contrary contained in this Agreement, upon the occurrence
and during the continuance of an Event of Default, Borrower irrevocably waives the right to direct
the application of any and all payments at any time or times thereafter received by Administrative
Agent from or on behalf of Borrower or any guarantor of all or any part of the Obligations, and, as
between Borrower on the one hand and Administrative Agent and Lenders on the other, Administrative
Agent shall have the continuing and exclusive right to apply and to reapply any and all payments
received against the Obligations in such manner as Administrative Agent may deem advisable
notwithstanding any previous application by Administrative Agent.

     (b) Notwithstanding anything to the contrary contained in this Agreement, if an Acceleration
Event shall have occurred, and so long as it continues, Administrative Agent shall apply any and
all payments received by Administrative Agent in respect of the Obligations, and any and all
proceeds of Collateral received by Administrative Agent, in the following order: first, to
all fees, costs, indemnities, liabilities, obligations and expenses incurred by or owing to
Administrative Agent with respect to this Agreement, the other Financing Documents or the
Collateral; second, to all fees, costs, indemnities, liabilities, obligations and expenses
incurred by or owing to any Lender with respect to this Agreement, the other Financing Documents or
the Collateral; third, to accrued and unpaid interest on the Obligations (including any
interest which, but for the provisions of the Bankruptcy Code, would have accrued on such amounts);
fourth, to the principal amount of the Obligations outstanding and to provide cash
collateral to secure any and all Letter of Credit Liability and future payment of related fees, as
provided for in Section 2.5(e); fifth to Obligations owing to any Eligible Swap
Counterparty in respect of any Swap Contracts permitted by the terms of this Agreement; and
sixth to any other indebtedness or
obligations of Borrower owing to Administrative Agent or any Lender under the Financing
Documents.

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     (c) Absent the occurrence and continuance of an Acceleration Event, Administrative Agent shall
apply any and all payments received by Administrative Agent in respect of the Obligations, and any
and all proceeds of Collateral received by Administrative Agent, in such order as Administrative
Agent may from time to time elect. In the absence of any specific election made by Administrative
Agent pursuant to this clause (c), payments and proceeds received by Administrative Agent pursuant
to this clause (c) shall be applied in the following order: first, to all fees, costs,
indemnities, liabilities, obligations and expenses incurred by or owing to Administrative Agent
with respect to this Agreement, the other Financing Documents or the Collateral; second, to
all fees, costs, indemnities, liabilities, obligations and expenses incurred by or owing to any
Lender with respect to this Agreement, the other Financing Documents or the Collateral;
third, to accrued and unpaid interest on the Obligations; fourth, to the principal
amount of the Obligations outstanding; fifth to Obligations owing to any Eligible Swap
Counterparty in respect of any Swap Contracts permitted by the terms of this Agreement;
sixth to provide cash collateral to secure any then outstanding Loans, Letter of Credit
Liability and payment of related fees; seventh to provide cash collateral to secure any
other then outstanding Obligations, other than in respect of Swap Contracts permitted, but not
required, by the terms of this Agreement, eighth to provide cash collateral to secure
Obligations in respect of Swap Contracts permitted, but not required, by the terms of this
Agreement; and ninth to any other indebtedness or obligations of Borrower owing to
Administrative Agent or any Lender under the Financing Documents.

     (d) Any balance remaining after giving effect to the applications set forth in this Section
9.6 shall be delivered to Borrower or to whoever may be lawfully entitled to receive such balance
or as a court of competent jurisdiction may direct. In carrying out any of the applications set
forth in this Section 9.6, (x) amounts received shall be applied in the numerical order provided
until exhausted prior to the application to the next succeeding category and (y) each of the
Persons entitled to receive a payment in any particular category shall receive an amount equal to
its pro rata share of amounts available to be applied pursuant thereto for such category.

ARTICLE 10

EXPENSES AND INDEMNITY

     Section 10.1 Expenses.

     Borrower hereby agrees to promptly pay (i) all costs and expenses of Administrative Agent
(including without limitation the reasonable fees, costs and expenses of counsel to, and
independent appraisers and consultants retained by Administrative Agent) in connection with the
examination, review, due diligence investigation, documentation, negotiation, closing and
syndication of the transactions contemplated by the Financing Documents, in connection with the
performance by Administrative Agent of its rights and remedies under the Financing Documents and in
connection with the continued administration of the Financing Documents including (x) any
amendments, modifications, consents and waivers to and/or under any and all Financing Documents and
(y) any periodic public record searches conducted by or at the request
of Administrative Agent (including, without limitation, title investigations, UCC searches,
fixture filing searches, judgment, pending litigation and tax lien searches and searches of
applicable corporate, limited liability, partnership and related records concerning the continued

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existence, organization and good standing of certain Persons), (ii) without limitation of the
preceding clause (i), all costs and expenses of Administrative Agent in connection with the
creation, perfection and maintenance of Liens pursuant to the Financing Documents, (iii) without
limitation of the preceding clause (i), all costs and expenses of Administrative Agent in
connection with (x) protecting, storing, insuring, handling, maintaining or selling any Collateral;
(y) any litigation, dispute, suit or proceeding relating to any Financing Document; and (z) any
workout, collection, bankruptcy, insolvency and other enforcement proceedings under any and all of
the Financing Documents, and (iv) all costs and expenses incurred by Lenders in connection with any
litigation, dispute, suit or proceeding relating to any Financing Document and in connection with
any workout, collection, bankruptcy, insolvency and other enforcement proceedings under any and all
Financing Documents, provided, that to the extent that the costs and expenses referred to in this
clause (iv) consist of fees, costs and expenses of counsel, Borrower shall be obligated to pay such
reasonable fees, costs and expenses for counsel to Administrative Agent and for only one counsel
acting for all Lenders (other than Administrative Agent).

     Section 10.2 Indemnity.

     Borrower hereby agrees to indemnify, pay and hold harmless Administrative Agent and Lenders
and the officers, directors, employees, trustees, agents, investment advisors, collateral managers,
servicers, and counsel of Administrative Agent and Lenders (collectively called the “Indemnitees”)
from and against any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever
(including the fees and disbursements of counsel for such Indemnitee) in connection with any
investigative, response, remedial, administrative or judicial matter or proceeding, whether or not
such Indemnitee shall be designated a party thereto and including any such proceeding initiated by
or on behalf of a Credit Party, and the reasonable expenses of investigation by engineers,
environmental consultants and similar technical personnel and any commission, fee or compensation
claimed by any broker (other than any broker retained by Administrative Agent or Lenders) asserting
any right to payment for the transactions contemplated hereby, which may be imposed on, incurred by
or asserted against such Indemnitee as a result of or in connection with the transactions
contemplated hereby or by the other Operative Documents (including (i)(A) as a direct or indirect
result of the presence on or under, or escape, seepage, leakage, spillage, discharge, emission or
release from, any property now or previously owned, leased or operated by Borrower, any Subsidiary
or any other Person of any Hazardous Materials or any Hazardous Materials Contamination, (B)
arising out of or relating to the offsite disposal of any materials generated or present on any
such property or (C) arising out of or resulting from the environmental condition of any such
property or the applicability of any governmental requirements relating to Hazardous Materials,
whether or not occasioned wholly or in part by any condition, accident or event caused by any act
or omission of Borrower or any Subsidiary, and (ii) proposed and actual extensions of credit under
this Agreement) and the use or intended use of the proceeds of the Loans and Letters of Credit,
except that Borrower shall have no obligation hereunder to an Indemnitee with respect to any
liability resulting from the
gross negligence or willful misconduct of such Indemnitee, as determined by a final
non-appealable judgment of a court of competent jurisdiction. To the extent that the undertaking
set forth in the immediately preceding sentence may be unenforceable, Borrower shall contribute the

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maximum portion which it is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all such indemnified liabilities incurred by the Indemnitees or any of them.

ARTICLE 11

ADMINISTRATIVE AGENT

     Section 11.1 Appointment and Authorization.

     Each Lender hereby irrevocably appoints and authorizes Administrative Agent to enter into each
of the Financing Documents to which it is a party (other than this Agreement) on its behalf and to
take such actions as Administrative Agent on its behalf and to exercise such powers under the
Financing Documents as are delegated to Administrative Agent by the terms thereof, together with
all such powers as are reasonably incidental thereto. Subject to the terms of Section 12.5 and to
the terms of the other Financing Documents, Administrative Agent is authorized and empowered to
amend, modify, or waive any provisions of this Agreement or the other Financing Documents on behalf
of Lenders. The provisions of this Article 11 are solely for the benefit of Administrative Agent
and Lenders and neither Borrower nor any other Credit Party shall have any rights as a third party
beneficiary of any of the provisions hereof. In performing its functions and duties under this
Agreement, Administrative Agent shall act solely as agent of Lenders and does not assume and shall
not be deemed to have assumed any obligation toward or relationship of agency or trust with or for
Borrower or any other Credit Party. Administrative Agent may perform any of its duties hereunder,
or under the Financing Documents, by or through its own agents or employees.

     Section 11.2 Administrative Agent and Affiliates.

     Administrative Agent shall have the same rights and powers under the Financing Documents as
any other Lender and may exercise or refrain from exercising the same as though it were not
Administrative Agent, and Administrative Agent and its Affiliates may lend money to, invest in and
generally engage in any kind of business with each Credit Party or Affiliate of any Credit Party as
if it were not Administrative Agent hereunder.

     Section 11.3 Action by Administrative Agent.

     The duties of Administrative Agent shall be mechanical and administrative in nature.
Administrative Agent shall not have by reason of this Agreement a fiduciary relationship in respect
of any Lender. Nothing in this Agreement or any of the Financing Documents is intended to or shall
be construed to impose upon Administrative Agent any obligations in respect of this Agreement or
any of the Financing Documents except as expressly set forth herein or therein.

     Section 11.4 Consultation with Experts.

     Administrative Agent may consult with legal counsel, independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or experts.

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     Section 11.5 Liability of Administrative Agent.

     Neither Administrative Agent nor any of its directors, officers, agents or employees shall be
liable to any Lender for any action taken or not taken by it in connection with the Financing
Documents, except that Administrative Agent shall be liable with respect to its specific duties set
forth hereunder, but only to the extent of its own gross negligence or willful misconduct in the
discharge thereof as determined by a final non-appealable judgment of a court of competent
jurisdiction. Neither Administrative Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with any Financing Document or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or agreements specified in
any Financing Document; (iii) the satisfaction of any condition specified in any Financing
Document; (iv) the validity, effectiveness, sufficiency or genuineness of any Financing Document,
any Lien purported to be created or perfected thereby or any other instrument or writing furnished
in connection therewith; (v) the existence or non-existence of any Default or Event of Default; or
(vi) the financial condition of any Credit Party. Administrative Agent shall not incur any
liability by acting in reliance upon any notice, consent, certificate, statement, or other writing
(which may be a bank wire, telex, facsimile or electronic transmission or similar writing) believed
by it to be genuine or to be signed by the proper party or parties. Administrative Agent shall not
be liable for any apportionment or distribution of payments made by it in good faith and if any
such apportionment or distribution is subsequently determined to have been made in error the sole
recourse of any Lender to whom payment was due but not made, shall be to recover from other Lenders
any payment in excess of the amount to which they are determined to be entitled (and such other
Lenders hereby agree to return to such Lender any such erroneous payments received by them).

     Section 11.6 Indemnification.

     Each Lender shall, in accordance with its Pro Rata Share, indemnify Administrative Agent (to
the extent not reimbursed by Borrower) upon demand against any cost, expense (including counsel
fees and disbursements), claim, demand, action, loss or liability (except such as result from
Administrative Agent’s gross negligence or willful misconduct as determined by a final
non-appealable judgment of a court of competent jurisdiction) that Administrative Agent may suffer
or incur in connection with the Financing Documents or any action taken or omitted by
Administrative Agent hereunder or thereunder. If any indemnity furnished to Administrative Agent
for any purpose shall, in the opinion of Administrative Agent, be insufficient or become impaired,
Administrative Agent may call for additional indemnity and cease, or not commence, to do the acts
indemnified against even if so directed by Required Lenders until such additional indemnity is
furnished.

     Section 11.7 Right to Request and Act on Instructions.

     Administrative Agent may at any time request instructions from Lenders with respect to any
actions or approvals which by the terms of this Agreement or of any of the Financing Documents
Administrative Agent is permitted or desires to take or to grant, and if such instructions are
promptly requested, Administrative Agent shall be absolutely entitled to refrain from taking any
action or to withhold any approval and shall not be under any liability

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whatsoever to any Person
for refraining from any action or withholding any approval under any of the Financing Documents
until it shall have received such instructions from Required Lenders or all or such other portion
of the Lenders as shall be prescribed by this Agreement. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against Administrative Agent as a result of
Administrative Agent acting or refraining from acting under this Agreement or any of the other
Financing Documents in accordance with the instructions of Required Lenders or Required Revolving
Lenders (or all or such other portion of the Lenders as shall be prescribed by this Agreement) and,
notwithstanding the instructions of Required Lenders or Required Revolving Lenders (or such other
applicable portion of the Lenders), Administrative Agent shall have no obligation to take any
action if it believes, in good faith, that such action would violate applicable Law or exposes
Administrative Agent to any liability for which it has not received satisfactory indemnification in
accordance with the provisions of Section 11.6.

     Section 11.8 Credit Decision.

     Each Lender acknowledges that it has, independently and without reliance upon Administrative
Agent or any other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without reliance upon Administrative Agent or any
other Lender, and based on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking any action under the Financing
Documents.

     Section 11.9 Collateral Matters.

     Lenders irrevocably authorize Administrative Agent, at its option and in its discretion, to
(x) release any Lien granted to or held by Administrative Agent under any Security Document (i)
upon termination of the Revolving Loan Commitment and payment in full of all Obligations, the
expiration, termination or cash collateralization (to the satisfaction of Administrative Agent) of
all Letters of Credit and, to the extent required by Administrative Agent in its sole discretion,
the expiration, termination or cash collateralization (to the satisfaction of Administrative Agent)
of all Swap Contracts secured, in whole or in part, by any Collateral; or (ii) constituting
property sold or disposed of as part of or in connection with any disposition permitted under any
Financing Document (it being understood and agreed that Administrative Agent may conclusively rely
without further inquiry on a certificate of a Responsible Officer as to the sale or other
disposition of property being made in full compliance with the provisions of the Financing
Documents) and (y) release or subordinate any Lien granted to or held by Administrative Agent under
any Security Document constituting property described in Section 5.2(c) (it being understood and
agreed that Administrative Agent may conclusively rely without further inquiry on a certificate of
a Responsible Officer as to the identification of any property described in
Section 5.2(c)). Upon request by Administrative Agent at any time, Lenders will confirm
Administrative Agent’s authority to release and/or subordinate particular types or items of
Collateral pursuant to this Section 11.9.

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     Section 11.10 Agency for Perfection.

     Administrative Agent and each Lender hereby appoint Administrative Agent as agent for the
purpose of perfecting Administrative Agent’s security interest (for the benefit of Administrative
Agent and Lenders) in the Collateral. Administrative Agent and each Lender hereby appoint each
other Lender as agent for the purpose of perfecting Administrative Agent’s security interest (for
the benefit of Administrative Agent and Lenders) in assets which, in accordance with the Uniform
Commercial Code in any applicable jurisdiction, can be perfected by possession or control. Should
any Lender (other than Administrative Agent) obtain possession or control of any such assets, such
Lender shall notify Administrative Agent thereof, and, promptly upon Administrative Agent’s request
therefor, shall deliver such assets to Administrative Agent or in accordance with Administrative
Agent’s instructions or transfer control to Administrative Agent in accordance with Administrative
Agent’s instructions. Each Lender agrees that it will not have any right individually to enforce
or seek to enforce any Security Document or to realize upon any Collateral for the Loans unless
instructed to do so by Administrative Agent (or consented to by Administrative Agent, as provided
in Section 9.5), it being understood and agreed that such rights and remedies may be exercised only
by Administrative Agent.

     Section 11.11 Notice of Default.

     Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default except with respect to defaults in the payment of principal, interest
and fees required to be paid to Administrative Agent for the account of Lenders, unless
Administrative Agent shall have received written notice from a Lender or Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such notice is a “notice of
default”. Administrative Agent will notify each Lender of its receipt of any such notice.
Administrative Agent shall take such action with respect to such Default or Event of Default as may
be requested by Required Lenders, Required Revolving Lenders (or all or such other portion of the
Lenders as shall be prescribed by this Agreement) in accordance with the terms hereof. Unless and
until Administrative Agent has received any such request, Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with respect to such Default
or Event of Default as it shall deem advisable or in the best interests of Lenders.

     Section 11.12 Successor Administrative Agent.

     Administrative Agent may at any time give notice of its resignation to the Lenders, Swingline
Lender and Borrower. Upon receipt of any such notice of resignation, Required Lenders shall have
the right, in consultation with Borrower, to appoint a successor Administrative Agent. Upon the
acceptance of a successor’s appointment as Administrative Agent hereunder and notice of such
acceptance to the retiring Administrative Agent, such successor shall succeed to and become vested
with all of the rights, powers, privileges and duties
of the retiring (or retired) Administrative Agent, the retiring Administrative Agent’s
resignation shall become immediately effective and the retiring Administrative Agent shall be
discharged from all of its duties and obligations hereunder and under the other Financing Documents
(if such resignation was not already effective and such duties and obligations not already

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discharged, as provided below in this paragraph). The fees payable by Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed
between Borrower and such successor. If no such successor shall have been so appointed by Required
Lenders and shall have accepted such appointment within thirty (30) days after the retiring
Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on
behalf of the Lenders and Swingline Lender (but without any obligation) appoint a successor
Administrative Agent. From and following the expiration of such thirty (30) day period,
Administrative Agent shall have the exclusive right, upon one (1) Business Days’ notice to Borrower
and the Lenders, to make its resignation effective immediately. From and following the
effectiveness of such notice, (i) the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder and under the other Financing Documents and (ii) all payments,
communications and determinations provided to be made by, to or through Administrative Agent shall
instead be made by or to each Lender and Swingline Lender directly, until such time as Required
Lenders appoint a successor Administrative Agent as provided for above in this paragraph. The
provisions of this Agreement shall continue in effect for the benefit of any retiring
Administrative Agent and its sub-agents after the effectiveness of its resignation hereunder and
under the other Financing Documents in respect of any actions taken or omitted to be taken by any
of them while the retiring Administrative Agent was acting or was continuing to act as
Administrative Agent.

     Section 11.13 Disbursements of Revolving Loans; Payment and Sharing of Payment.

     (a) Revolving Loan Advances, Payments and Settlements; Interest and Fee Payments.

          (i) Administrative Agent shall have the right, on behalf of Revolving Lenders (other than
Non-Funding Revolving Lenders) to disburse funds to Borrower for all Revolving Loans requested or
deemed requested by Borrower pursuant to the terms of this Agreement regardless of whether the
conditions precedent set forth in Section 8.3 are then satisfied, including the existence of any
Default or Event of Default either before or after giving effect to the making of such Revolving
Loans; provided, that Administrative Agent shall not advance any Revolving Loan pursuant to this
clause (i) if the Revolving Loan Outstandings exceed the Revolving Loan Limit, either before or
after giving effect to the making of any proposed Revolving Loan. Administrative Agent shall be
conclusively entitled to assume, for purposes of the preceding sentence, that each Revolving
Lender, other than any Non-Funding Revolving Lenders, will fund its Pro Rata Share of all Revolving
Loans requested by Borrower. Each Revolving Lender (other than any Non-Funding Revolving Lender)
shall reimburse Administrative Agent on demand, in accordance with the provisions of the
immediately following paragraph, for all funds disbursed on its behalf by Administrative Agent
pursuant to the first sentence of this clause (i), or if Administrative Agent so requests, each
Revolving Lender will remit to Administrative Agent its Pro Rata Share of any Revolving Loan before
Administrative Agent disburses the same to Borrower. If Administrative Agent elects to require
that each Revolving Lender make funds available to Administrative Agent, prior to a
disbursement by Administrative Agent to Borrower, Administrative Agent shall advise each Revolving
Lender by telephone, facsimile or e-mail of the amount of such Revolving Lender’s Pro Rata Share of
the Revolving Loan requested by Borrower no later than noon (Chicago time) on the date of funding
of such Revolving Loan, and each such Revolving Lender shall, subject to

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the provisions of Article
8, pay Administrative Agent on such date such Revolving Lender’s Pro Rata Share of such requested
Revolving Loan, in same day funds, by wire transfer to the Payment Account, or such other account
as may be identified by Administrative Agent to Revolving Lenders from time to time. If any Lender
fails to pay the amount of its Pro Rata Share within one (1) Business Day after Administrative
Agent’s demand, Administrative Agent shall promptly notify Borrower, and Borrower shall immediately
repay such amount to Administrative Agent. Any repayment required by Borrower pursuant to this
Section 11.13 shall be accompanied by accrued interest thereon from and including the date such
amount is made available to Borrower to but excluding the date of payment at the rate of interest
then applicable to Revolving Loans which are Base Rate Loans. Nothing in this Section 11.13 or
elsewhere in this Agreement or the other Financing Documents shall be deemed to require
Administrative Agent to advance funds on behalf of any Lender or to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights that Administrative
Agent or Borrower may have against any Lender as a result of any default by such Lender hereunder.

          (ii) On a Business Day of each week as selected from time to time by Administrative Agent, or
more frequently (including daily), if Administrative Agent so elects (each such day being a
“Settlement Date”), Administrative Agent will advise each Revolving Lender by telephone, facsimile
or e-mail of the amount of each such Revolving Lender’s Pro Rata Share of the Revolving Loan
balance as of the close of business of the Business Day immediately preceding the Settlement Date.
In the event that payments are necessary to adjust the amount of such Revolving Lender’s actual Pro
Rata Share of the Revolving Loan balance to such Lender’s required Pro Rata Share of the Revolving
Loan balance as of any Settlement Date, the party from which such payment is due shall pay
Administrative Agent, without setoff or discount, to the Payment Account not later than noon
(Chicago time) on the Business Day following the Settlement Date the full amount necessary to make
such adjustment. Any obligation arising pursuant to the immediately preceding sentence shall be
absolute and unconditional and shall not be affected by any circumstance whatsoever. In the event
settlement shall not have occurred by the date and time specified in the second preceding sentence,
interest shall accrue on the unsettled amount at the Federal Funds Rate, for the first three (3)
days following the scheduled date of settlement, and thereafter at the Base Rate plus the Base Rate
Margin applicable to Revolving Loans.

          (iii) On each Settlement Date, Administrative Agent shall advise each Revolving Lender by
telephone, facsimile or e-mail of the amount of such Revolving Lender’s Pro Rata Share of
principal, interest and fees paid for the benefit of Revolving Lenders with respect to each
applicable Revolving Loan, to the extent of such Revolving Lender’s credit exposure with respect
thereto, and shall make payment to such Revolving Lender not later than noon (Chicago time) on the
Business Day following the Settlement Date of such amounts in accordance with wire instructions
delivered by such Revolving Lender to Administrative Agent, as the same may be modified from time
to time by written notice to Administrative Agent;
provided, that, in the case such Revolving Lender is a Defaulted Lender, Administrative Agent
shall be entitled to set off the funding short-fall against that Defaulted Lender’s respective
share of all payments received from Borrower.

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          (iv) The provisions of this Section 11.13(a) shall be deemed to be binding upon Administrative
Agent and Lenders notwithstanding the occurrence of any Default or Event of Default, or any
insolvency or bankruptcy proceeding pertaining to Borrower or any other Credit Party.

     (b) Term Loan Payments. Payments of principal, interest and fees in respect of the
Term Loan will be settled on the date of receipt if received by Administrative Agent on the last
Business Day of a month or on the Business Day immediately following the date of receipt if
received on any day other than the last Business Day of a month.

     (c) Return of Payments.

          (i) If Administrative Agent pays an amount to a Lender under this Agreement in the belief or
expectation that a related payment has been or will be received by Administrative Agent from
Borrower and such related payment is not received by Administrative Agent, then Administrative
Agent will be entitled to recover such amount from such Lender on demand without setoff,
counterclaim or deduction of any kind, together with interest accruing on a daily basis at the
Federal Funds Rate.

          (ii) If Administrative Agent determines at any time that any amount received by Administrative
Agent under this Agreement must be returned to Borrower or paid to any other Person pursuant to any
insolvency law or otherwise, then, notwithstanding any other term or condition of this Agreement or
any other Financing Document, Administrative Agent will not be required to distribute any portion
thereof to any Lender. In addition, each Lender will repay to Administrative Agent on demand any
portion of such amount that Administrative Agent has distributed to such Lender, together with
interest at such rate, if any, as Administrative Agent is required to pay to Borrower or such other
Person, without setoff, counterclaim or deduction of any kind.

     (d) Defaulted Lenders. The failure of any Defaulted Lender to make any Revolving Loan
or any payment required by it hereunder shall not relieve any other Lender of its obligations to
make such Revolving Loan or payment, but neither any other Lender nor Administrative Agent shall be
responsible for the failure of any Defaulted Lender to make a Revolving Loan or make any other
payment required hereunder. Notwithstanding anything set forth herein to the contrary, a Defaulted
Lender shall not have any voting or consent rights under or with respect to any Financing Document
or constitute a “Lender” (or be included in the calculation of “Required Lenders” or “Required
Revolving Lenders” hereunder) for any voting or consent rights under or with respect to any
Financing Document.

     (e) Sharing of Payments. If any Lender shall obtain any payment or other recovery
(whether voluntary, involuntary, by application of setoff or otherwise) on account of any Loan
(other than pursuant to the terms of Sections 2.3(e)(v) or Section 2.9) in excess of its Pro Rata
Share of payments entitled pursuant to the other provisions of this Section 11.13, such
Lender shall purchase from the other Lenders such participations in extensions of credit made
by such other Lenders (without recourse, representation or warranty) as shall be necessary to cause
such purchasing Lender to share the excess payment or other recovery ratably with each of them;
provided, however, that if all or any portion of the excess payment or other recovery is thereafter

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required to be returned or otherwise recovered from such purchasing Lender, such portion of such
purchase shall be rescinded and each Lender which has sold a participation to the purchasing Lender
shall repay to the purchasing Lender the purchase price to the ratable extent of such return or
recovery, without interest. Borrower agrees that any Lender so purchasing a participation from
another Lender pursuant to this clause (e) may, to the fullest extent permitted by law, exercise
all its rights of payment (including pursuant to Section 9.5) with respect to such participation as
fully as if such Lender were the direct creditor of Borrower in the amount of such participation.
If under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured
claim in lieu of a setoff to which this clause (e) applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner consistent with the
rights of the Lenders entitled under this clause (e) to share in the benefits of any recovery on
such secured claim. Notwithstanding the foregoing, Administrative Agent may retain for its own
account any and all payments made and to be made under the Administrative Agent Fee Letter.

     Section 11.14 Right to Perform, Preserve and Protect.

     If any Credit Party fails to perform any obligation hereunder or under any other Financing
Document, Administrative Agent itself may, but shall not be obligated to, cause such obligation to
be performed at Borrower’s expense. Administrative Agent is further authorized by Borrower and the
Lenders to make expenditures from time to time which Administrative Agent, in its reasonable
business judgment, deems necessary or desirable to (i) preserve or protect the business conducted
by Borrower, the Collateral, or any portion thereof and/or (ii) enhance the likelihood of, or
maximize the amount of, repayment of the Loans and other Obligations. Borrower hereby agrees to
reimburse Administrative Agent on demand for any and all costs, liabilities and obligations
incurred by Administrative Agent pursuant to this Section 11.14. Each Lender hereby agrees to
indemnify Administrative Agent upon demand for any and all costs, liabilities and obligations
incurred by Administrative Agent pursuant to this Section 11.14, in accordance with the provisions
of Section 11.6.

     Section 11.15 Additional Titled Agents.

     Except for rights and powers, if any, expressly reserved under this Agreement to any
bookrunner, arranger or to any titled agent named on the cover page of this Agreement, other than
Administrative Agent (collectively, the “Additional Titled Agents”), and except for obligations,
liabilities, duties and responsibilities, if any, expressly assumed under this Agreement by any
Additional Titled Agent, no Additional Titled Agent, in such capacity, has any rights, powers,
liabilities, duties or responsibilities hereunder or under any of the other Financing Documents.
Without limiting the foregoing, no Additional Titled Agent shall have nor be deemed to have a
fiduciary relationship with any Lender. At any time that any Lender serving as an Additional
Titled Agent shall have transferred to any other Person (other than any Affiliates) all of its
interests in the Loans and in the Revolving Loan Commitment, such Lender shall be deemed to have
concurrently resigned as such Additional Titled Agent.

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ARTICLE 12

MISCELLANEOUS

     Section 12.1 Survival.

     All agreements, representations and warranties made herein and in every other Financing
Document shall survive the execution and delivery of this Agreement and the other Financing
Documents and the other Operative Documents. The provisions of Sections 2.8 and 2.9 and Articles
10, 11 and 12 shall survive the payment of the Obligations (both with respect to any Lender and all
Lenders collectively) and any termination of this Agreement.

     Section 12.2 No Waivers.

     No failure or delay by Administrative Agent or any Lender in exercising any right, power or
privilege under any Financing Document shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein and therein provided shall be
cumulative and not exclusive of any rights or remedies provided by law. Any reference in any
Financing Document to the “continuing” nature of any Event of Default shall not be construed as
establishing or otherwise indicating that Borrower or any other Credit Party has the independent
right to cure any such Event of Default, but is rather presented merely for convenience should such
Event of Default be waived in accordance with the terms of the applicable Financing Documents.

     Section 12.3 Notices.

     (a) All notices, requests and other communications to any party hereunder shall be in writing
(including prepaid overnight courier, facsimile transmission, e-mail, electronic submissions or
similar writing) and shall be given to such party at its address, facsimile number or e-mail
address set forth on the signature pages hereof (or, in the case of any such Lender who becomes a
Lender after the date hereof, in an Assignment Agreement or in a notice delivered to Borrower and
Administrative Agent by the assignee Lender forthwith upon such assignment) or at such other
address, facsimile number or e-mail address as such party may hereafter specify for the purpose by
notice to Administrative Agent and Borrower; provided, that notices, requests or other
communications shall be permitted by e-mail or other electronic submissions only in accordance with
the provisions of Section 12.3(b). Each such notice, request or other communication shall be
effective (i) if given by facsimile, when such notice is transmitted to the facsimile number
specified by this Section and the sender receives a confirmation of transmission from the sending
facsimile machine, (ii) if given by e-mail or other electronic submissions, as set forth in Section
12.3(c) or (iii) if given by mail, prepaid overnight courier or any other means, when received at
the applicable address specified by this Section.

     (b) Notices and other communications to the parties hereto may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites) provided, that (i)
the foregoing shall not apply to notices sent directly to any party hereto if such party has
notified the Administrative Agent that it has elected not to receive notices by electronic
communication (which election may be limited to particular notices) and (ii) no Notices of

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Borrowing, Notices of LC Credit Event or any notices regarding request for advances
hereunder shall be permitted to be delivered or furnished by electronic communication unless made
in accordance with specific procedures approved from time to time by Administrative Agent.

     (c) Unless the Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgment
from the intended recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgment), and (ii) notices or communications posted to an
Internet or intranet website shall be deemed received upon the deemed receipt by the intended
recipient at its e-mail address as described in the foregoing clause (i) of notification that such
notice or communication is available and identifying the website address therefor, provided, that
if any such notice or other communication is not sent or posted during normal business hours, such
notice or communication shall be deemed to have been sent at the opening of business on the next
Business Day.

     Section 12.4 Severability.

     In case any provision of or obligation under this Agreement or any other Financing Document
shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.

     Section 12.5 Amendments and Waivers.

     (a) No provision of this Agreement or any other Financing Document may be amended, waived or
otherwise modified unless such amendment, waiver or other modification is in writing and is signed
or otherwise approved by Borrower and the Required Lenders (and, if (x) any amendment, waiver or
other modification would either increase a Lender’s Revolving Loan Commitment Amount or increase a
Lender’s funding obligations in respect of any Term Loan, by such Lender and (y) the rights or
duties of Administrative Agent, LC Issuer and/or Swingline Lender are affected thereby, by
Administrative Agent, LC Issuer and/or Swingline Lender, as the case may be); provided that no such
amendment, waiver or other modification shall, unless signed by all the Lenders directly affected
thereby, (i) reduce the principal of, rate of interest on or any fees with respect to any Loan or
Reimbursement Obligation or forgive any principal, interest or fees with respect to any Loan or
Reimbursement Obligation; (ii) postpone the date fixed for, or waive, any payment (other than a
payment pursuant to Section 2.1(c)) of principal of any Loan, or of any Reimbursement Obligation or
of interest on any Loan or any Reimbursement Obligation or any fees hereunder or for any
termination of any commitment; (iii) change the definition of the term Required Lenders or the
percentage of Lenders which shall be required for Lenders to take any action hereunder; (iv)
release all or substantially all of the Collateral, authorize Borrower to sell or otherwise dispose
of all or substantially all of the Collateral or release any guarantor of all or any portion of the
Obligations of its Guarantee obligations with respect thereto, except, in each case with respect to
this clause (iv), as otherwise may be provided in this Agreement or the other Financing Documents
(including in connection with any disposition permitted hereunder); (v) amend, waive or otherwise
modify this Section 12.5(a) or the definitions of the terms used in this Section 12.5(a) insofar as
the definitions affect the substance of this Section 12.5(a); or (vi) consent to the assignment,

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delegation or other transfer by any Credit Party of any of its rights and obligations under any
Financing Document or release Borrower of its payment obligations under any Financing Document,
except, in each case with respect to this clause (vi), pursuant to a merger or consolidation
permitted pursuant to this Agreement. It is hereby understood and agreed that all Lenders shall be
deemed directly affected by an amendment, waiver or other modification of the type described in the
preceding clauses (iii), (iv), (v) and (vi) of the preceding sentence.

     (b) Without limitation of the provisions of the preceding clause (a), no amendment, waiver or
other modification to this Agreement shall, unless signed by Required Revolving Lenders, (i)
increase any of the advance rates set forth in the Borrowing Base Certificate, (ii) make less
restrictive the calculation of the Borrowing Base; (iii) amend, waive or otherwise modify Section
2.2(a) or the definitions of the terms used in Section 2.2(a) insofar as the definitions affect the
substance of such Section; (iv) change the definition of the term Required Revolving Lenders or the
percentage of Lenders which shall be required for Required Revolving Lenders to take any action
hereunder or (v) amend, waive or otherwise modify this Section 12.5(b) or the definitions of the
terms used in this Section 12.5(b) insofar as the definitions affect the substance of this Section
12.5(b).

     Section 12.6 Assignments; Participations; Replacement of Lenders.

     (a) Assignments.

          (i) Any Lender may at any time assign to one or more Eligible Assignees all or any portion of
such Lender’s Loans and interest in the Revolving Loan Commitment, together with all related
obligations of such Lender hereunder. Except as Administrative Agent may otherwise agree, the
amount of any such assignment (determined as of the date of the applicable Assignment Agreement or,
if a “Trade Date” is specified in such Assignment Agreement, as of such Trade Date) shall be in a
minimum aggregate amount equal to $1,000,000 or, if less, the assignor’s entire interests in the
Revolving Loan Commitment and outstanding Loans; provided, that, in connection with simultaneous
assignments to two or more related Approved Funds, such Approved Funds shall be treated as one
assignee for purposes of determining compliance with the minimum assignment size referred to above.
Borrower and Administrative Agent shall be entitled to continue to deal solely and directly with
such Lender in connection with the interests so assigned to an Eligible Assignee until
Administrative Agent shall have received and accepted an effective Assignment Agreement executed,
delivered and fully completed by the applicable parties thereto and a processing fee of $3,500;
provided, only one processing fee shall be payable in connection with simultaneous assignments to
two or more related Approved Funds.

          (ii) From and after the date on which the conditions described above have been met, (i) such
Eligible Assignee shall be deemed automatically to have become a party hereto and, to the extent of
the interests assigned to such Eligible Assignee pursuant to such Assignment Agreement, shall have
the rights and obligations of a Lender hereunder and (ii) the assigning Lender, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such Assignment Agreement,
shall be released from its rights and obligations hereunder (other than those that survive
termination pursuant to Section 12.1). Upon the request
of the Eligible Assignee (and, as applicable, the assigning Lender) pursuant to an effective
Assignment Agreement, Borrower shall execute and deliver to Administrative Agent for delivery

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to the Eligible Assignee (and, as applicable, the assigning Lender) Notes in the aggregate principal
amount of the Eligible Assignee’s percentage interest in the Revolving Loan Commitment plus the
principal amount of the Eligible Assignee’s Term Loan (and, as applicable, Notes in the principal
amount of that portion of the Revolving Loan Commitment retained by the assigning Lender plus the
principal amount of the Term Loan retained by the assigning Lender). Upon receipt by the assigning
Lender of such Note, the assigning Lender shall return to Borrower any prior Note held by it.

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

          (iv) Notwithstanding the foregoing provisions of this Section 12.6(a) or any other provision
of this Agreement, any Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge
or assignment shall release such Lender from any of its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto.

          (v) Notwithstanding the foregoing provisions of this Section 12.6(a) or any other provision of
this Agreement, Administrative Agent has the right, but not the obligation, to effectuate
assignments of Loans and Revolving Loan Commitments via an electronic settlement system acceptable
to Administrative Agent as designated in writing from time to time to the Lenders by Administrative
Agent (the “Settlement Service”). At any time when the Administrative Agent elects, in its sole
discretion, to implement such Settlement Service, each such assignment shall be effected by the
assigning Lender and proposed assignee pursuant to the procedures then in effect under the
Settlement Service, which procedures shall be consistent with the other provisions of this Section
12.6(a). Each assigning Lender and proposed Eligible Assignee shall comply with the requirements
of the Settlement Service in connection with effecting any assignment of Loans and Revolving Loan
Commitments pursuant to the Settlement Service. If so elected by each of Administrative Agent and
the Borrower, Administrative Agent’s and the Borrower’s approval of such Eligible Assignee shall be
deemed to have been automatically granted with respect to any transfer effected through the
Settlement Service. Assignments and assumptions of the Loans and Revolving Loan Commitments shall
be effected by the provisions otherwise set forth herein until Administrative Agent notifies
Lenders of the Settlement Service as set forth herein.

     (b) Participations.

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     Any Lender may at any time, without the consent of, or notice to, Borrower or Administrative
Agent, sell to one or more Persons participating interests in its Loans, commitments or other
interests hereunder (any such Person, a “Participant”). In the event of a sale by a Lender of a
participating interest to a Participant, (a) such Lender’s obligations hereunder shall remain
unchanged for all purposes, (b) Borrower and Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and obligations hereunder and (c)
all amounts payable by Borrower shall be determined as if such Lender had not sold such
participation and shall be paid directly to such Lender. No Participant shall have any direct or
indirect voting rights hereunder except with respect to any event described in Section 12.5
expressly requiring the unanimous vote of all Lenders or, as applicable, all affected Lenders.
Except as otherwise consented to by Administrative Agent, each Lender agrees to incorporate the
requirements of the preceding sentence into each participation agreement which such Lender enters
into with any Participant. Borrower agrees that if amounts outstanding under this Agreement are
due and payable (as a result of acceleration or otherwise), each Participant shall be deemed to
have the right of set-off in respect of its participating interest in amounts owing under this
Agreement and with respect to any Letter of Credit to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this Agreement; provided that
such right of set-off shall be subject to the obligation of each Participant to share with Lenders,
and Lenders agree to share with each Participant, as provided in Section 9.5.

     (c) Replacement of Lenders.

     Within thirty (30) days after: (i) receipt by Administrative Agent of notice and demand from
any Lender for payment of additional costs as provided in Sections 2.3(e)(v) or Section 2.9, which
demand shall not have been revoked, (ii) Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.8, (iii)
any Lender is a Defaulted Lender, and the circumstances causing such status shall not have been
cured or waived; or (iv) any failure by any Lender to consent to a requested amendment, waiver or
modification to any Financing Document in which Required Lenders have already consented to such
amendment, waiver or modification but the consent of each Lender, or each Lender affected thereby,
is required with respect thereto, (each relevant Lender in the foregoing clauses (i) through (iv)
being an “Affected Lender”) each of Borrower and Administrative Agent may, at its option, notify
such Affected Lender and, in the case of Borrower election, the Administrative Agent, of such
Person’s intention to obtain, at Borrower’s expense, a replacement Lender (“Replacement Lender”)
for such Lender, which Replacement Lender shall be an Eligible Assignee and, in the event the
Replacement Lender is to replace an Affected Lender described in the preceding clause (iv), such
Replacement Lender consents to the requested amendment, waiver or modification making the replaced
Lender an Affected Lender. In the event Borrower or Administrative Agent, as applicable, obtains a
Replacement Lender within ninety (90) days following notice of its intention to do so, the Affected
Lender shall sell, at par, and assign all of its Loans and funding commitments hereunder to such
Replacement Lender in accordance with the procedures set forth in Section 12.6(a); provided, that
(i) Borrower shall have reimbursed such Lender for its increased costs and additional payments for
which it is entitled to reimbursement under any of Sections 2.3(e)(v), 2.8 or Section 2.9, as
applicable, of this Agreement through the date of such sale and assignment and (ii) Borrower

-98-

 

shall pay to Administrative Agent the $3,500 processing fee in respect of such assignment. In
the event that a replaced Lender does not execute an Assignment Agreement pursuant to Section
12.6(a) within five (5) Business Days after receipt by such replaced Lender of notice of
replacement pursuant to this Section 12.6(c) and presentation to such replaced Lender of an
Assignment Agreement evidencing an assignment pursuant to this Section 12.6(c), such replaced
Lender shall be deemed to have consented to the terms of such Assignment Agreement, and any such
Assignment Agreement executed by Administrative Agent, the Replacement Lender and, to the extent
required pursuant to Section 12.6(a), Borrower, shall be effective for purposes of this Section
12.6(c) and Section 12.6(a). Upon any such assignment and payment, such replaced Lender shall no
longer constitute a “Lender” for purposes hereof, other than with respect to such rights and
obligations that survive termination as set forth in Section 12.1.

     (d) Credit Party Assignments.

     No Credit Party may assign, delegate or otherwise transfer any of its rights or other
obligations hereunder or under any other Financing Document without the prior written consent of
Administrative Agent and each Lender.

     Section 12.7 Headings.

     Headings and captions used in the Financing Documents (including the Exhibits, Schedules and
Annexes hereto and thereto) are included for convenience of reference only and shall not be given
any substantive effect.

     Section 12.8 Confidentiality.

     Administrative Agent and each Lender shall hold all non-public information regarding the
Credit Parties and their respective businesses identified as such by Borrower and obtained by
Administrative Agent or any Lender pursuant to the requirements hereof in accordance with such
Person’s customary procedures for handling information of such nature, except that disclosure of
such information may be made (i) to their respective agents, employees, Subsidiaries, Affiliates,
attorneys, auditors, professional consultants, rating agencies, insurance industry associations and
portfolio management services, (ii) to prospective transferees or purchasers of any interest in the
Loans, and to prospective contractual counterparties (or the professional advisors thereto) in Swap
Contracts permitted hereby, provided that any such Persons shall have agreed to be bound by the
provisions of this Section 12.8, (iii) as required by Law, subpoena, judicial order or similar
order and in connection with any litigation; provided, that to the extent practicable, the
Administrative Agent or any Lender, as the case may be, shall provide the affected Credit Party
written notice prior to disclosure so that such Credit Party may seek appropriate protective orders
prior to disclosure, (iv) as may be required in connection with the examination, audit or similar
investigation of such Person and (v) to a Person that is a trustee, investment advisor, collateral
manager, servicer, noteholder or secured party in a Securitization (as hereinafter defined) in
connection with the administration, servicing and reporting on the assets serving as collateral for
such Securitization. For the purposes of this Section, “Securitization” shall mean a public or
private offering by a Lender or any of its Affiliates or their respective successors and assigns,
of securities which represent an interest in, or which are collateralized, in whole or in party, by
the Loans. Confidential information shall include only such information identified as such at the

-99-

 

time provided to Administrative Agent and shall not include information that either: (i) is in
the public domain, or becomes part of the public domain after disclosure to such Person through no
fault of such Person, or (ii) is disclosed to such Person by a Person other than a Credit Party,
provided Administrative Agent or the disclosing Lender, if applicable, does not have actual
knowledge that such Person is prohibited from disclosing such information. The obligations of
Administrative Agent and Lenders under this Section 12.8 shall supersede and replace the
obligations of Administrative Agent and Lenders under any confidentiality agreement in respect of
this financing executed and delivered by Administrative Agent or any Lender prior to the date
hereof.

     Section 12.9 Waiver of Consequential and Other Damages.

     To the fullest extent permitted by applicable law, Borrower shall not assert, and hereby
waives, any claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of this Agreement, any other Financing Document or any agreement or
instrument contemplated hereby or thereby, the transactions contemplated hereby or thereby, any
Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee shall be liable for any
damages arising from the use by unintended recipients of any information or other materials
distributed by it through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Financing Documents or the transactions contemplated
hereby or thereby.

     Section 12.10 Marshaling; Payments Set Aside.

     Neither Administrative Agent nor any Lender shall be under any obligation to marshal any
assets in payment of any or all of the Obligations. To the extent that Borrower makes any payment
or Administrative Agent enforces its Liens or Administrative Agent or any Lender exercises its
right of set-off, and such payment or the proceeds of such enforcement or set-off is subsequently
invalidated, declared to be fraudulent or preferential, set aside, or required to be repaid by
anyone, then to the extent of such recovery, the Obligations or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefore, shall be revived and continued in full
force and effect as if such payment had not been made or such enforcement or set-off had not
occurred.

     Section 12.11 GOVERNING LAW; SUBMISSION TO JURISDICTION.

     THIS AGREEMENT, EACH NOTE AND EACH OTHER FINANCING DOCUMENT, AND ALL MATTERS RELATING HERETO
OR THERETO OR ARISING THEREFROM (WHETHER SOUNDING IN CONTRACT LAW, TORT LAW OR OTHERWISE), SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. BORROWER HEREBY CONSENTS TO THE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF COOK, STATE OF ILLINOIS AND
IRREVOCABLY AGREES THAT, SUBJECT TO ADMINISTRATIVE AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS
ARISING OUT OF OR RELATING

-100-

 

TO THIS AGREEMENT OR THE OTHER FINANCING DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS.
BORROWER EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY
DEFENSE OF FORUM NON CONVENIENS. BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON BORROWER BY CERTIFIED OR REGISTERED
MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH IN THIS AGREEMENT
AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.

     Section 12.12 WAIVER OF JURY TRIAL.

     EACH OF BORROWER, ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE
FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH OF BORROWER, ADMINISTRATIVE
AGENT AND EACH LENDER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THE
OTHER FINANCING DOCUMENTS, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED
FUTURE DEALINGS. EACH OF BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER WARRANTS AND REPRESENTS
THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

     Section 12.13 Publication; Advertisement.

     (a) Publication. No Credit Party will directly or indirectly publish, disclose or otherwise
use in any public disclosure, advertising material, promotional material, press release or
interview, any reference to the name, logo or any trademark of Merrill Lynch or any of its
Affiliates or any reference to this Agreement or the financing evidenced hereby, in any case except
(i) as required by Law, subpoena or judicial or similar order, in which case the applicable Credit
Party shall give Administrative Agent prior written notice of such publication or other disclosure
or (ii) with Merrill Lynch’s prior written consent.

     (b) Advertisement. Each Lender and each Credit Party hereby authorizes Merrill Lynch to
publish the name of such Lender and Credit Party, the existence of the financing arrangements
referenced under this Agreement, the primary purpose and/or structure of those arrangements, the
amount of credit extended under each facility, the title and role of each party to this Agreement,
and the total amount of the financing evidenced hereby in any “tombstone”, comparable advertisement
or press release which Merrill Lynch elects to submit for publication. In addition, each Lender
and each Credit Party agrees that Merrill Lynch may provide lending

-101-

 

industry trade organizations with information necessary and customary for inclusion in league
table measurements after the Closing Date. With respect to any of the foregoing, Merrill Lynch
shall provide Borrower with an opportunity to review and confer with Merrill Lynch regarding the
contents of any such tombstone, advertisement or information, as applicable, prior to its
submission for publication and, following such review period, Merrill Lynch may, from time to time,
publish such information in any media form desired by Merrill Lynch, until such time that Borrower
shall have requested Merrill Lynch cease any such further publication.

     Section 12.14 Senior Debt.

     The Obligations shall constitute “Senior Debt” under that certain Indenture dated as of
November 26, 2004, as amended to date, between Borrower and The Bank of New York Trust Company,
N.A., as Trustee, and within the meaning of the Convertible Senior Notes.

     Section 12.15 Counterparts; Integration.

     This Agreement and the other Financing Documents may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. Signatures by facsimile shall bind the parties hereto. This
Agreement and the other Financing Documents constitute the entire agreement and understanding among
the parties hereto and supersede any and all prior agreements and understandings, oral or written,
relating to the subject matter hereof.

     Section 12.16 No Strict Construction.

     The parties hereto have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Agreement.

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

	 	 	 	 	 	 	 
	 	 	COLLEGIATE PACIFIC INC.
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ William R. Estill
	 	 	 	 	 
	 	 	 	 	Name: William R. Estill
	 	 	 	 	Title: Chief Financial Officer
	 
	 	 	 	 	 	 
	 

	 	 	 	Address:
	 	13950 Senlac Drive, Suite 100
	 

	 	 	 	 	 	Dallas, TX 75234
	 
	 	 	 	 	 	 
	 	 	 	 	Facsimile number: (214) 484-1377
	 	 	 	 	E-Mail Address: bill@colpac.com
	 	 	 	 	Taxpayer Identification Number: 2980248

	 	 	 	 	 	 	 
	 	 	   Payment Account Designation:
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	ABA No.:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Account No.:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Account Name:	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 
	 	 	With a copy to:
	 
	 	 	 	 
	 	 	LIDJI & DOREY
	 
	 	 	 	 
	 

	 	Address:
	 	500 N. Akard St., Suite 3500
	 

	 	 	 	Dallas, TX 75201
	 

	 	 	 	Attention: Michael R. Dorey Esq.
	 	 	Facsimile number: (214) 774–1230
	 	 	E-Mail Address: mdorey@lidjidorey.com

 

 

	 	 	 	 	 	 	 	 	 
	 	 	MERRILL LYNCH CAPITAL, a division of Merrill Lynch Business Financial Services
Inc., as Administrative Agent and a Lender
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Brian Talty	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: Brian Talty	 	 
	 	 	 	 	Title: Senior Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Address:
	 	15 Exchange Place, 4th Floor

Jersey City, New Jersey 07302-3914

Attn: Account Manager for

          Collegiate Pacific Inc. Transaction	 	 
	 
	 	 	 	 	Facsimile number: (201) 593 - 7870

E-Mail Address: brian_talty@ml.com	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	With a copy to:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Merrill Lynch Capital

222 N. LaSalle Street, 16th Floor

Chicago, Illinois 60601	 	 
	 	 	Attn:	 	Group Senior Transaction Attorney,

Corporate Finance, for Collegiate Pacific Inc. transaction	 	 
	 	 	Facsimile number: (312) 499-3126	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	And with an additional copy to:	 	 

	 	 	 	 	 
	 	 	TROUTMAN SANDERS LLP
	 
	 	 	 	 
	 

	 	Address:
	 	The Chrysler Building

405 Lexington Avenue

New York, New York 10174

Attention: William D. Freedman, Esq.
	 	 	Facsimile number: (212) 704–5935

E-Mail Address: william.freedman@troutmansanders.com

 

 

 

 

 

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

	 	-
	 	Closing Checklist

 

 

Annex A

Commitment Annex

(as of the Closing Date)

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

(After Effectiveness of Acquisition Revolving Loan Commitment Increase)

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

(After Effectiveness of Optional Revolving Loan Commitment Increase)

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

 

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

 

 

	 	 	 
	

	 	Exhibit A to Credit Agreement (Assignment Agreement)

     This Assignment Agreement (this “Assignment Agreement”) is entered into as of                      by
and between the Assignor named on the signature page hereto (“Assignor”) and the Assignee named on
the signature page hereto (“Assignee”). Reference is made to the Credit Agreement dated as of
                     (as amended or otherwise modified from time to time, the “Credit Agreement”) among
Collegiate Pacific Inc. (“Borrower”), the financial institutions party thereto from time to time,
as Lenders, and Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services
Inc., as Administrative Agent. Capitalized terms used herein and not otherwise defined shall have
the meanings assigned to them in the Credit Agreement.

     Assignor and Assignee hereby agree as follows:

     Assignor hereby sells and assigns to Assignee, and Assignee hereby purchases and assumes from
Assignor the interests set forth on the schedule attached hereto (the “Schedule”), in and to
Assignor’s rights and obligations under the Credit Agreement as of the effective date set forth on
the Schedule (the “Effective Date”). Such purchase and sale is made without recourse,
representation or warranty except as expressly set forth herein. On the Effective Date, Assignee
shall pay to Assignor an amount equal to the aggregate amounts assigned pursuant to the Schedule
(exclusive of unfunded portions of the Revolving Loan Commitment) and Assignor shall pay to
Assignee a closing fee in respect of the transactions contemplated hereby in the amount specified
on the Schedule.

     Assignor (i) represents that as of the Effective Date, that it is the legal and beneficial
owner of the interests assigned hereunder free and clear of any adverse claim, (ii) makes no other
representation or warranty and assumes no responsibility with respect to any statement, warranties
or representations made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit Agreement, any other
Financing Documents or any other instrument or document furnished pursuant thereto; and (iii) makes
no representation or warranty and assumes no responsibility with respect to the financial condition
of any other Credit Party or any other Person or the performance or observance by any Credit Party
of its Obligations under the Credit Agreement or any other Financing Documents or any other
instrument or document furnished pursuant thereto.

     Assignee (i) confirms that it has received a copy of the Credit Agreement and the other
Financing Documents, together with copies of the most recent financial statements delivered
pursuant thereto and such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment Agreement; (ii) agrees that it will,
independently and without reliance upon Administrative Agent, Assignor or any other Lender and
based on such documents and information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under the Credit Agreement; (iii) appoints
and authorizes Administrative Agent to take such action as Administrative Agent on its behalf and
to exercise such powers under the Credit Agreement and the other Financing Documents as are
delegated to Administrative Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; (iv) agrees that it will perform in

Exhibit A – Page 1

 

accordance with their terms all obligations which by the terms of the Credit Agreement are
required to be performed by it as a Lender; (v) represents that on the date of this Assignment
Agreement it is not presently aware of any facts that would cause it to make a claim under the
Credit Agreement; (vi) represents and warrants that Assignee is not a Foreign Lender or, if it is a
Foreign Lender, (A) that it has delivered to Administrative Agent the documentation required to be
delivered to Administrative Agent by Section 13 below and (B) that if it is claiming exemption from
U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of
“portfolio interest”, (w) it is not a “bank” within the meaning of Section 881(c)(3)(A) of the
Code, (x) it is not a 10-percent shareholder of any Credit Party within the meaning of Section
881(c)(3)(B) or Section 871(h)(3)(B) of the Code, (y) it is not a controlled foreign corporation
related to any Credit Party within the meaning of Section 881(c)(3)(C) of the Code and (z) it is
not a conduit entity participating in a conduit financing arrangement (as defined in Section
1.881-3 of the Code Treasury Regulations); (vii) represents and warrants that Assignee is (or, upon
receipt of the required consents hereto by Administrative Agent, Swingline Lender and Borrower will
become) an Eligible Assignee and (viii) represents and warrants that it has experience and
expertise in the making or the purchasing of loans such as the Loans, and that it has acquired the
interests described herein for its own account and without any present intention of selling all or
any portion of such interests.

     Each of Assignor and Assignee represents and warrants to the other party hereto that it has
full power and authority to enter into this Assignment Agreement and to perform its obligations
hereunder in accordance with the provisions hereof, that this Assignment Agreement has been duly
authorized, executed and delivered by such party and that this Assignment Agreement constitutes a
legal, valid and binding obligation of such party, enforceable against such party in accordance
with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors’ rights generally and by
general principles of equity.

     Upon the effectiveness of this Assignment Agreement as provided below, (i) Administrative
Agent shall register Assignee as a Lender, pursuant to the terms of the Credit Agreement, (ii)
Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment
Agreement, have the rights and obligations of a Lender thereunder, (iii) Assignor shall, to the
extent provided in this Assignment Agreement, relinquish its rights and be released from its
obligations under the Credit Agreement and (iv) Administrative Agent shall thereafter make all
payments in respect of the interest assigned hereby (including payments of principal, interest,
fees and other amounts) to Assignee. Assignor and Assignee shall make all appropriate adjustments
in payments for periods prior to the Effective Date by Administrative Agent or with respect to the
making of this assignment directly between themselves.

     Each of Assignor and Assignee hereby agrees from time to time, upon request of the other such
party hereto, to take such additional actions and to execute and deliver such additional documents
and instruments as such other party may reasonably request to effect the transactions contemplated
by, and to carry out the intent of, this Assignment Agreement.

     Neither this Assignment Agreement nor any term hereof may be changed, waived, discharged or
terminated, except by an instrument in writing signed by the party (including, if applicable, any
party required to evidence its consent to or acceptance of this Assignment

Exhibit A – Page 2

 

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 Capital, a division of Merrill Lynch Business Financial Services
Inc., as Administrative Agent and Swingline Lender
	 
	 	 	 	 
	 

	 	By: 	 	 
	 

	 	 	 
	 

	 	Title:	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	Collegiate Pacific Inc.
	 
	 	 	 	 
	 

	 	By: 	 	 
	 

	 	 	 
	 

	 	Title:	 
	 

	 	 	 	 

Exhibit A – Page 4

 

Schedule to Assignment Agreement

	 	 	 	 	 
	Assignor:
	 	 	 	 
	 

	 	 

	 	 
	Assignee:
	 	 	 	 
	 

	 	 

	 	 
	Effective
Date: 
	 	 	 
	 

	 	 

	 	 

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

Interests Assigned:

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

Closing Fee: $                 

Assignee Information:

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Address for Notices:	 	 	 	Address for Payments:
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Bank:	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	Attention:
	 	 	 	 	 	ABA #:	 	 
	 

	 	 	 	 
	 	 	 	 	 	 
	 

	 	Telephone:
	 	 	 	 	 	Account #	 	 
	 

	 	 	 	 
	 	 	 	 	 	 
	 

	 	Facsimile:
	 	 	 	 	 	Reference:	 	 
	 

	 	 	 	 
	 	 	 	 	 	 

Exhibit A – Page 5

 

	 	 	 
	

	 	Exhibit B to Credit Agreement (Compliance Certificate)

COMPLIANCE CERTIFICATE

[BORROWER]

Date:                     ,      

     This certificate is given by                                         , a Responsible Officer of                     
(“Borrower”), pursuant to Section 4.1(c) of that certain Credit Agreement dated as of                     ,
                     among Borrower, the Lenders from time to time party thereto and Merrill Lynch Capital, a
division of Merrill Lynch Business Financial Services Inc., as Administrative Agent for Lenders (as
such agreement may have been amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”). Capitalized terms used herein without definition shall have the
meanings set forth in the Credit Agreement.

     The undersigned Responsible Officer hereby certifies to Administrative Agent and Lenders that:

     (a) the financial statements delivered with this certificate in accordance with Section 4.1(a)
and/or 4.1(b) of the Credit Agreement fairly present in all material respects the results of
operations and financial condition of Borrower and the Subsidiaries as of the dates and the
accounting period covered by such financial statements;

     (b) I have reviewed the terms of the Credit Agreement and have made, or caused to be made
under my supervision, a review in reasonable detail of the transactions and conditions of Borrower
and the Subsidiaries during the accounting period covered by such financial statements;

     (c) such review has not disclosed the existence during or at the end of such accounting
period, and I have no knowledge of the existence as of the date hereof, of any condition or event
that constitutes a Default or an Event of Default, except as set forth in Schedule 1 hereto, which
includes a description of the nature and period of existence of such Default or an Event of Default
and what action Borrower has taken, is undertaking and proposes to take with respect thereto;

     (d) Borrower is in compliance with the covenants contained in Article 7 of the Credit
Agreement, as demonstrated by the calculation of such covenants below, except as set forth below;

     (e) the Fixed Charge Coverage Ratio for the period covered by this certificate, as
demonstrated by the calculations required by Section 7.1
attached hereto, is ___ to 1.00; and

Exhibit B – Page 1

 

     (f) the Senior Leverage Ratio for the period covered by this certificate, as demonstrated by
the calculations required by Section 7.2 attached hereto, is            to 1.00.

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

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

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

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

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

	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 	 	 	 
	 

	 	Name 	 	 	 
	 	 	 	 	 
	 

	 	Title
	 	 	 of Borrower
	 

	 	 	 	 	 	 

Exhibit B – Page 2

 

FIXED CHARGE COVERAGE RATIO3

(Section 7.1)

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

 

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

Exhibit B – Page 3

 

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

 

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

Exhibit B – Page 4

 

SENIOR LEVERAGE RATIO5

(Section 7.2)

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

 

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

Exhibit B – Page 5

 

“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

 

ANNEX 1 TO COMPLIANCE CERTIFICATE6

EBITDA

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

 

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

Exhibit B – Page 7

 

Schedule 1 to

Compliance Certificate

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

Exhibit B – Page 8

 

	 	 	 
	

	 	Exhibit C to Credit Agreement (Borrowing Base Certificate)

Merrill Lynch Capital

Borrowing Base Report Summary

	 	 	 
	Date:                                                 

	 	Report #:                     
	 
	 	 
	Name:                                               

	 	Period Covered:                      to                     
	 
	Customer
#

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

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

	 	 	 	 	 
	 

	 	 	 	(Borrower)
	 

	 	 	 	 
	 

	 	 	 	(Title)
	 

	 	 	 	 

Exhibit C – Page 1

 

Merrill Lynch Capital

Accounts Receivable Borrowing Base Report

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Report #:
	 	 	 	Period Covered:
	 	 	 	To	 	 
	 

	 
	 	 	 	 	 
	 	 	 	 
	 	 	 	 
	 
	Name:

	 	 	 	 	 	 	 	Customer # 
	 	 	 	 	 	 	 
	 

	 
	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Accounts Receivable
	 	 	 	 
	 	 	 	 	 
	 	 	A/R	 	 	 	 	 
	 	 	 	 	1.   Balance Brought Forward
	 	$	 	 	 	$	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	2.   Additions
	 	$	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	3.   Deductions
	 	$	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	4.   Gross Balance this Report
	 	$	 	 	 	$	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Ineligibles

	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	5.   Total Ineligibles
	 	$	 	 	 	$	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	6.   Subtotal Eligible Receivables
	 	$	 	 	 	$	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Advance Rates
	 	 	%	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	7.   Eligible Receivable Collateral
	 	$	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	$	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	8.   A/R Caps (If Applicable)
	 	$	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	9.   Gross Eligible Receivables
	 	$	 	 	 	$	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	10. Reserves (-)
	 	$	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	11. Net Availability
	 	$	 	 	 	$	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	12. Overall A/R Limit
	 	 	 	 	 	$	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	13. Total A/R Availability
	 	 	 	 	 	$	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 

Exhibit C – Page 2

 

Accounts Receivable Ineligibles

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

Exhibit C – Page 3

 

Merrill Lynch Capital

Inventory Borrowing Base Report

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Report #:
	 	 	 	Period Covered:
	 	 	 	to 	 	 
	 

	 	 
	 	 	 	 	 	 
	 	 	 	 
	 	 	 	 
	 
	Name:

	 	 	 	 	 	 	 	Customer # 
	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 	 	 	 	 

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

Exhibit C – Page 4

 

Inventory Ineligibles

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

Exhibit C – Page 5

 

Merrill
Lynch Capital

Borrowing Base Report — Collection Detail

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	Report #:
	 	 	 	Period Covered:
	 	 	 	to
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Customer #
	 	 	 	Facility #	 	 

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

Collections	 	$	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	To:
	 	 	 	 	 	 	 	 	Total A/R Collections	 	$	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Exhibit C - Page 6

 

	 	 	 
	

	 	Exhibit D to Credit Agreement (Notice of Borrowing)

COLLEGIATE PACIFIC INC.

Date:                                         ,                     

          This certificate is given by                                         , a Responsible Officer of Collegiate
Pacific Inc. (“Borrower”), pursuant to Section [2.2(b)/2.3(e)] of that certain Credit Agreement
dated as of                                         ,            among Borrower, the Lenders from time to time party thereto and
Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services Inc., as
Administrative Agent for Lenders (as such agreement may have been amended, restated, supplemented
or otherwise modified from time to time the “Credit Agreement”). Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement.

          The undersigned Responsible Officer hereby gives notice to Administrative Agent of Borrower’s
request to: [complete as appropriate]

     (a) on [  date  ] borrow $[                    ] of Revolving Loans, which Revolving
Loans shall be [Base Rate Loans/LIBOR Loans having an Interest Period of                      month(s)];

     (b) on [  date  ] convert $[                    ]of the aggregate outstanding principal
amount of the [                    ] Loan, bearing interest at the [                    ] Rate, into a(n) [                    ]
Loan [and, in the case of a LIBOR Loan, having an Interest Period of [                    ] month(s)];

     (c) on [  date  ] continue $[                    ]of the aggregate outstanding
principal amount of the [                    ] Loan, bearing interest at the LIBOR, as a LIBOR Loan
having an Interest Period of [                    ] month(s).

          The undersigned officer hereby certifies that, both before and after giving effect to the
request above (i) each of the conditions precedent set forth in Section 8.3(b), 8.3(c) and 8.3(d)
have been satisfied, (ii) all of the representations and warranties contained in the Credit
Agreement and the other Financing Documents are true, correct and complete as of the date hereof,
except to the extent such representation or warranty relates to a specific date, in which case such
representation or warranty is true, correct and complete as of such earlier date, and (iii) no
Default or Event of Default has occurred and is continuing on the date hereof.

Exhibit D – Page 1

 

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

	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 	 	 	 	 
	 

	 	Name	 	 	 	 
	 	 	 	 	 
	 

	 	Title
	 	 	 	of Borrower
	 

	 	 	 	 	 	 

Exhibit D – Page 2

 

	 	 	 
	

	 	Exhibit E to Credit Agreement (Payment Notification)

COLLEGIATE PACIFIC INC.

Date:                     , ______

Reference
is hereby made to the Credit Agreement dated                     , 20___ among the undersigned,
Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services Inc., as
Administrative Agent and the financial institutions party thereto. Capitalized terms used here
have the meanings ascribed thereto in the Credit Agreement.

Please be advised that funds in the amount of $                     will be wire transferred to
Administrative Agent on                     , 200_.

Such funds shall constitute [an optional] [a mandatory] prepayment of the Term Loan, with such
prepayments to be applied in the manner specified in Section 2.1(e)(i).

Such mandatory prepayment is being made pursuant to Section 2.1(c) (i), (ii), (iii) or (iv) of the
Credit Agreement.

Fax to MLC Operations 312-499-3336 no later than noon Chicago time

Note: Funds must be received no later than noon Chicago time for same day application

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

Exhibit E – Page 1

 

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

	 	 	 	 	 	 	 	 	 
	 

	 	By 	 	 	 	 	 	 
	 	 	 	 	 	 
	 

	 	Name 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Title 
	 
	 	of Borrower	 	 
	 

	 	 	 	 	 	 	 	 

Exhibit E – Page 2

 

FINAL DISCLOSURE SCHEDULES

SCHEDULES

TO THE

CREDIT AGREEMENT

AMONG

COLLEGIATE PACIFIC INC.,

MERRILL LYNCH CAPITAL,

A Division of Merrill Lynch Business Financial Services Inc.,

as Administrative Agent, as a Lender and

as Sole Bookrunner and Sole Lead Arranger

AND

THE ADDITIONAL LENDERS

FROM TIME TO TIME PARTY HERETO

Dated as of June 29, 2006

Capitalized terms not defined in the attached schedules have the meaning given to them in the
Agreement. The attached schedules may contain more information than specifically required by the
Agreement, in which case, such information has been included solely for informational purposes.
For the avoidance of doubt, if any section of the attached schedules discloses an item or
information in such a way as to make its relevance to the disclosure required by another section of
the attached schedules clearly apparent based solely on the substance and particularity of such
disclosure in the attached schedules, the matter shall be deemed to have been disclosed in such
other section of the attached schedules, notwithstanding the omission of an appropriate
cross-reference to such other section. Headings have been inserted for convenience of
reference and do not augment, amend or alter the express descriptions of matters contained in the
attached schedules.

 

 

FINAL DISCLOSURE SCHEDULES

SCHEDULE 3.1

to

CREDIT AGREEMENT

AMONG

COLLEGIATE PACIFIC INC.,

MERRILL LYNCH CAPITAL,

A Division of Merrill Lynch Business Financial Services Inc.,

as Administrative Agent, as a Lender and

as Sole Bookrunner and Sole Lead Arranger

AND

THE ADDITIONAL LENDERS

FROM TIME TO TIME PARTY HERETO

Existence, Organizational Identification Numbers, Foreign Qualification, Prior Names

	 	 	 	 	 	 	 	 	 
	 	 	ORIGINAL	 	 	 	 	 	 
	 	 	IDENTIFIC-	 	JURISDICTIONS	 	JURISDICTIONS	 	 
	CREDIT	 	ATION	 	OF	 	OF	 	ADDITIONAL
	PARTY	 	NUMBERS	 	ORGANIZATION	 	QUALIFICATION	 	NAMES
	Collegiate
Pacific, Inc.

	 	2980248
	 	Delaware
	 	Texas
	 	The Discounter,
Vantage Products,
Kesmil
Manufacturing, Inc.
	Tomark Sports, Inc.

	 	3738477
	 	Delaware
	 	California
	 	BOO Acquisition
Corp.
	Kesslers Team
Sports, Inc.

	 	3761437
	 	Delaware
	 	Arkansas, Georgia,

Illinois, Indiana,

Louisiana,

Mississippi, Ohio,

Oklahoma, Tennessee
	 	N/A
	Dixie Sporting
Goods Co., Inc.

	 	0104782-8
	 	Virginia
	 	North Carolina,

Ohio, West Virginia
	 	N/A
	CMS of Central
Florida, Inc.

	 	P94000013004
	 	Florida
	 	N/A
	 	Orlando Team Sports
	Salkeld & Sons, Inc.

	 	0627319
	 	Delaware
	 	Illinois
	 	N/A

 

 

FINAL DISCLOSURE SCHEDULES

SCHEDULE 3.4

to

CREDIT AGREEMENT

AMONG

COLLEGIATE PACIFIC INC.,

MERRILL LYNCH CAPITAL,

A Division of Merrill Lynch Business Financial Services Inc.,

as Administrative Agent, as a Lender and

as Sole Bookrunner and Sole Lead Arranger

AND

THE ADDITIONAL LENDERS

FROM TIME TO TIME PARTY HERETO

Capitalization

	 	 	 
	Credit Party	 	Authorized Shares
	Collegiate Pacific Inc.

	 	51,000,000 shares (50,000,000 common and
1,000,000 preferred)
	Tomark Sports, Inc.*

	 	100 common shares
	Kesslers Team Sports, Inc.*

	 	100 common shares
	Dixie Sporting Goods Co.,
Inc.*

	 	Class A Voting – 50 common shares
Class B Non-Voting – 450 common shares**
	CMS of Central Florida, Inc.*

	 	7,500 common shares
	Salkeld & Sons, Inc.*

	 	5,000 common shares

 

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

 

 

FINAL DISCLOSURE SCHEDULES

SCHEDULE 3.6

to

CREDIT AGREEMENT

AMONG

COLLEGIATE PACIFIC INC.,

MERRILL LYNCH CAPITAL,

A Division of Merrill Lynch Business Financial Services Inc.,

as Administrative Agent, as a Lender and

as Sole Bookrunner and Sole Lead Arranger

AND

THE ADDITIONAL LENDERS

FROM TIME TO TIME PARTY HERETO

Litigation

     On October 5, 2005, two stockholders of Sport Supply Group, Inc. (“SSG”), Martin
Kleinbart and William Stahl, each filed a separate lawsuit in the Court of Chancery of the State of
Delaware in and for New Castle County against Collegiate Pacific Inc., including Collegiate Pacific
Inc.’s (the “Company”) Chairman and Chief Executive Officer, Michael J. Blumenfeld, SSG and certain
former members of SSG’s board of directors. The plaintiffs filed the lawsuits as a class action on
behalf of the public stockholders of SSG in connection with the now terminated Agreement and Plan
of Merger pursuant to which the Company was to have acquired the remaining outstanding capital
stock of SSG that it did not already own at that time. On November 22, 2005, for reasons unrelated
to the pending lawsuit, the Company and SSG entered into a Termination Agreement, dated November
22, 2005, which terminated the Agreement and Plan of Merger. The lawsuit alleged the consideration
to be paid to the public shareholders of SSG was inadequate and that the defendants breached
certain fiduciary duties owed to the SSG public stockholders. The Company believes the claims
asserted by the plaintiff are without merit.

     On December 15, 2005, a stockholder of SSG, Jeffrey S. Abraham, as Trustee of the Law Offices
of Jeffrey S. Abraham Money Purchase Plan, dated December 31, 1999, f/b/o Jeffrey S. Abraham, filed
a lawsuit in the Court of Chancery of the State of Delaware in and for New Castle County against
Emerson Radio Corp., Geoffrey P. Jurick, Arthur J. Coerver, Harvey Rothenberg, the Company and
Michael J. Blumenfeld. The plaintiff filed the lawsuits on behalf of plaintiff and as a class
action on behalf of the public stockholders of SSG in connection with the now terminated Agreement
and Plan of Merger pursuant to which the Company was to have acquired the remaining shares of the
outstanding capital stock of SSG that it does not already own and the Company’s subsequent
acquisition of an additional 1.66 million shares of SSG for approximately $9.2 million cash from an
institutional stockholder. The lawsuit alleges the defendants breached certain fiduciary duties
owed to SSG’s stockholders and the Company was unjustly enriched from its use of certain SSG
assets. The Company believes the claims asserted by the plaintiff are without merit

 

 

FINAL DISCLOSURE SCHEDULES

and the purported derivative lawsuit is defective.

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

 

 

FINAL DISCLOSURE SCHEDULES

SCHEDULE 3.15

to

CREDIT AGREEMENT

AMONG

COLLEGIATE PACIFIC INC.,

MERRILL LYNCH CAPITAL,

A Division of Merrill Lynch Business Financial Services Inc.,

as Administrative Agent, as a Lender and

as Sole Bookrunner and Sole Lead Arranger

AND

THE ADDITIONAL LENDERS

FROM TIME TO TIME PARTY HERETO

Brokers

None.

 

 

FINAL DISCLOSURE SCHEDULES

SCHEDULE 3.16

to

CREDIT AGREEMENT

AMONG

COLLEGIATE PACIFIC INC.,

MERRILL LYNCH CAPITAL,

A Division of Merrill Lynch Business Financial Services Inc.,

as Administrative Agent, as a Lender and

as Sole Bookrunner and Sole Lead Arranger

AND

THE ADDITIONAL LENDERS

FROM TIME TO TIME PARTY HERETO

Material Contracts

Indenture, dated as of November 26, 2004, by and between Collegiate Pacific
Inc. and The Bank of New York Trust Company N.A., as Trustee.

Registration Rights Agreement, dated as of November 26, 2004, by and between
Collegiate Pacific Inc. and Thomas Weisel Partners LLC.

Loan and Security Agreement, dated November 5, 2003, as amended on April 28,
2004, August 26, 2004, November 18, 2004, November 23, 2004, May 9, 2005 and
September 19, 2005, by and between Collegiate Pacific Inc. and Merrill Lynch
Business Financial Services Inc.

Amended and Restated 1998 Collegiate Pacific Inc. Stock Option Plan and form of
Stock Option Agreements.

ABF Warehousing Agreement, dated January 24, 2006, by and between Collegiate
Pacific Inc. and ABF

Warehousing Agreement, dated February 8, 2006, by and between Collegiate
Pacific Inc. and Network Logistics, Inc.

Collegiate Pacific Inc.’s 401(k) Plan, dated as of April 15, 2005.

Employment Agreement, dated January 9, 2004, by and between Collegiate Pacific
Inc. and Thomas C. White.

Employment Agreement, dated January 9, 2004, by and between Collegiate Pacific
Inc. and Mark S. Harpin.

Employment Agreement, dated April 1, 2004, by and between Kesslers Team Sports,
Inc. and Robert Dickman.

Employment Agreement, dated April 1, 2004, by and between Kesslers Team Sports,
Inc. and Daniel Dickman.

Employment Agreement, dated April 1, 2004, by and between Kesslers Team Sports,
Inc. and Phil Dickman.

 

 

FINAL DISCLOSURE SCHEDULES

Employment Agreement, dated April 1, 2004, by and between Kesslers Team Sports,
Inc. and Steve Carloni.

Employment Agreement, dated July 23, 2004, by and between Dixie Sporting Goods
Co., Inc. and Keneth L. Caravati.

Employment Agreement, dated July 23, 2004, by and between Dixie Sporting Goods
Co., Inc. and C. Michael Caravati.

Employment Agreement, dated July 23, 2004, by and between Dixie Sporting Goods
Co., Inc. and Kenneth L. Caravati.

Promissory Note, dated July 26, 2004, executed by Collegiate Pacific Inc.
payable to Kenneth L. Caravati in the stated principal amount of $250,000.

Promissory Note, dated July 26, 2004, executed by Collegiate Pacific Inc.
payable to C. Michael Caravati in the stated principal amount of $250,000.

Employment Agreement, dated December 10, 2004, by and between CMS of Central
Florida Inc. and Michael McWeeney.

Promissory Note, dated May 11, 2005, executed by Collegiate Pacific Inc.
payable to Albert A. Messier in the stated principal amount of $100,000.

Promissory Note, dated May 11, 2005, executed by Collegiate Pacific Inc.
payable to Daniel F. Salkeld in the stated principal amount of $130,000.

Employment Agreement, dated May 11, 2005, by and between Salkeld & Sons Inc.
and Albert A. Messier.

Employment Agreement, dated May 11, 2005, by and between Salkeld & Sons Inc.
and Daniel F. Salkeld.

Agreement and Plan of Merger, dated as of December 30, 2003, by and among
Tomark, Inc., Collegiate Pacific Inc., BOO Merger Corp., Thomas C. White and
Mark S. Harpin.

Asset Purchase Agreement, dated as of February 9, 2004, by and among Kesslers
Team Sports, Inc., Collegiate Pacific Inc., BOO Acquisition Corp., Bob Dickman,
Dan Dickman, Phil Dickman and Floyd Dickman.

Stock Purchase Agreement, dated as of July 23, 2004, by and among Collegiate
Pacific Inc., Kenneth L. Caravati and C. Michael Caravati.

Stock Purchase Agreement, dated as of December 10, 2004, by and among
Collegiate Pacific Inc., Barbara L. Smith, Carmine McWeeney and Michael
McWeeney.

Stock Purchase Agreement, dated as of May 11, 2005, by and among Collegiate
Pacific Inc., Albert A. Messier and Daniel F. Salkeld.

Stock Purchase Agreement, dated as of July 1, 2005, by and among Collegiate
Pacific Inc., Emerson Radio Corp. and Emerson Radio (Hong Kong) Limited.

Asset Purchase Agreement, dated as of August 3, 2005, by and among Collegiate
Pacific Inc., Salkeld & Sons, Inc. and Albert A. Messier.

Agreement and Plan of Merger, dated as of September 7, 2005, by and among
Collegiate Pacific Inc., CP Merger Sub, Inc. and Sport Supply Group, Inc.

Exclusive Licensing Agreement, dated February 7, 2000, as amended on March 16,
2001, by and between Edwards Sports Products Limited and Collegiate Pacific
Inc.

 

 

FINAL DISCLOSURE SCHEDULES

Change in Control Agreement, dated June 20, 2006, by and between
Collegiate Pacific Inc. and Michael J. Blumenfeld.

Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Adam Blumenfeld.

Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and William R. Estill.

Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Arthur J. Coerver.

Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Harvey Rothenberg.

Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Tevis Martin.

Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Kurt Hagan.

Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Bob Dickman.

Real Property Leases

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Name and Address of
	 	 	 	 	 	 	 	 	 	 	 	 	Owner (if leased) or
	 	 	 	 	 	 	Owned/Leased	 	 	 	 	 	Third-Party Operator (if
	Credit	 	 	 	 	 	/Operated by	 	Annualized	 	operated by a third
	Party	 	Address	 	Size	 	Third Party	 	Rent	 	party)
	Collegiate Pacific
Inc.

	 	13950 Senlac
Drive,
Suite 100-
200
Dallas, TX
 75234
	 	88,000 sq. ft.
	 	Lease; expires in
2007
	 	$	347,364	 	 	The Realty
Associates
 Fund VI,
L.P.; c/o TA

Associates Realty,
28 State
 St.,
10th
Floor, Boston, MA

02109
	Collegiate Pacific
Inc.

	 	4640 North

Oketo, Harwood

Heights, IL
60706
	 	5,000 sq. ft.
	 	Month/month
	 	$	24,000	 	 	Diamond Tool
Company, 
Inc.;
4238-40 N. Sayre,

Norridge, IL 60706
	Collegiate Pacific
Inc.

	 	1200 North
28th

Avenue, P.O. 
Box
612506,
 DFW
Airport,
 TX 75261
	 	sq. ft. based on
need
	 	Month/month
	 	$	5	/pallet	 	Network Logistics,
Inc.; 
1200 North
28th
Avenue, 
P.O. Box
612506, DFW

Airport, TX 75261
	Collegiate Pacific
Inc.

	 	Offsite
Warehouse #2,

850 West

Freeway, #003,

Grand Prairie,

TX 75051
	 	sq. ft. based on
need
	 	Month/month
	 	$	6,600 	 minimum
	 	ABF Supply Chain

Services, 850 West

Freeway, Grand
Prairie, 
TX 75051
	Collegiate Pacific
Inc.

	 	8410 Wolf Lake

Drive, Bartlett,

TN 38133
	 	2,340 sq. ft.
	 	Month/month
	 	$	24,275	 	 	64 Investment
Partnership; 7700
Wolf River

Boulevard,
Germantown, 
TN
38138

 

 

FINAL DISCLOSURE SCHEDULES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Name and Address of
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Owner (if leased) or
	 	 	 	 	 	 	 	 	Owned/Leased	 	 	 	 	 	Third-Party Operator (if
	Credit	 	 	 	 	 	 	 	/Operated by	 	Annualized	 	operated by a third
	Party	 	Address	 	Size	 	Third Party	 	Rent	 	party)
	Tomark Sports, Inc.

	 	1180 A California

Avenue, Corona, 
CA
92881
	 	27,700 sq. ft.
	 	Lease; expires in
2009
	 	Months
1-12—$136,260
13-24—$140,352
25-36—$144,552
37-48—$148,896
49-60—$153,360
	 	Edward A. Money and

Marilyn J. Money,

Trustees of the Money

Family Trust; 1180

California St, Suite B, 

Corona, CA 92878
	Kesslers Team
Sports, Inc.

	 	930 East Main St,

Richmond, IN
 47374
	 	76,000 sq. ft.
	 	Lease; expires in
2009
	 	$136,800 (base)
Base Rent + real estate
taxes + insurance +
utilities
	 	RPD Services, Inc.; 920

and 930 E. Main St.,

Richmond, IN 47374

22 N. 11th
Street,
 Richmond, IN
47374
	Kesslers Team
Sports, Inc.

	 	192 West Joliet 

Street, Ste. C

Crown Point, IN 

46307
	 	2,000 sq. ft.
	 	Month/month
	 	Beginning Base Rent
$800/mo. $825 first
renewal; $850 ($10,200)
second renewal
$800 deposit
	 	Struebig Development, Inc.

1110 Merrillville Road 

Crown Point, IN 46307
	Kesslers Team
Sports, Inc.

	 	2802
 Congressional

Pkwy, #B, Fort

Wayne, IN
 46808
	 	1,500 sq. ft.
	 	Lease expires in
2008
	 	$9,150 (base)
$1,000 deposit
5% late fee after 15
days
	 	The Fleming Group, LLC 

Attn: A. V. Fleming

2014 Lakewood Drive

Fort Wayne, IN 46819
	Kesslers Team
Sports, Inc.

	 	7215 East
21st

Street, Suite G,

Indianapolis, IN

46219
	 	3,200 sq.ft.
	 	Month/month
	 	$24,804 till May 2007
$25,608 till May 2009
Renewal at FMV, not to
exceed 10%
	 	Justus Home Builders, Inc.

1398 North Shadeland
 Ave.

Post Office Box 19409

Indianapolis, IN 46219

 

 

FINAL DISCLOSURE SCHEDULES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Name and Address of
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Owner (if leased) or
	 	 	 	 	 	 	 	 	Owned/Leased	 	 	 	 	 	Third-Party Operator (if
	Credit	 	 	 	 	 	 	 	/Operated by	 	Annualized	 	operated by a third
	Party	 	Address	 	Size	 	Third Party	 	Rent	 	party)
	Kesslers Team
Sports, Inc.

	 	117 East
 Markland

Avenue,
 Kokomo, IN

46901
	 	4,700 sq. ft.
	 	Month/month
	 	$27,000
Renewals @ base + CPI
with $28,800 max for
1st and
$30,000 for
2nd &
3rd
5% late fee after 5 days
	 	Eva Hutto Estate 

Phillip Hutto-Personal Rep.

1001 East Walnut Street

Kokomo, IN 46901
	Kesslers Team
Sports, Inc.

	 	1112 Ohio Street,

Terre Haute, IN

47807
	 	950 sq. ft.
	 	Month/month
	 	$8,076 + $673 deposit
$10/day late fee after
10 days
	 	Dix Real Estate

1540 South 3rd
Street, Suite 
B 

Terre Haute, IN 47802
	Kesslers Team
Sports, Inc.

	 	6442 Metro Court,

Unit E, Bedford

Heights, OH 44146
	 	2,200 sq, ft.
	 	Month/month
	 	$8,796 for initial term;
$9,360 1st
renewal
$9,900 2nd
renewal
	 	Metro Industrial Park, Inc.

24733 Aurora Road

Bedford Heights, OH
 44146
	Kesslers Team
Sports, Inc.

	 	801 Busch Court,

Columbus, OH
 43229
	 	3,580 sq. ft.
	 	Month/month
	 	$21,486 Base +
$4,476.24 exp.
estimated @
$1.25/sq.ft./yr.
$1,939.70 dep.
	 	Shale Partners, Ltd.

Post Office Box 365

Dublin, OH 43017
	Kesslers Team
Sports, Inc.

	 	10138

Transportation Way

Cincinnati, OH

45246
	 	1,000 sq. ft.
	 	Month/month
	 	Unknown
	 	TBG Baseball Investors

10135 Transportation Way

Cincinnati, OH 45246

 

 

FINAL DISCLOSURE SCHEDULES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Name and Address of
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Owner (if leased) or
	 	 	 	 	 	 	 	 	Owned/Leased	 	 	 	 	 	Third-Party Operator (if
	Credit	 	 	 	 	 	 	 	/Operated by	 	Annualized	 	operated by a third
	Party	 	Address	 	Size	 	Third Party	 	Rent	 	party)
	Kesslers Team
Sports, Inc.

	 	7103 Chancellor

Drive, Suite 200

Cedar Falls, IA

50613
	 	2,775 sq. ft.
	 	Lease expires in
2008
	 	$22,176 1st
yr
$24,948 2nd
yr
$27,720 3rd
yr
1st renewal
@ $30,492
2nd renewal
@same increase as
1st + CPI
adjustment
All rent + CAM est. of
$758/mo
	 	Crestwood, Ltd.

26301 Siena Drive

Bonita Springs, FL 34134
	Kesslers Team
Sports, Inc.

	 	605 North Logan,

Danville, IL 61832
	 	600 sq. ft.
	 	Month/month
	 	$2,880
$240 deposit
	 	George Weller &
 Associates

605 North Logan Avenue

Post Office Box 1102

Danville, IL 61834-1102
	Kesslers Team
Sports, Inc.

	 	110 East Sangamon

Rantoul, IL 61866
	 	1,800 sq. ft.
	 	Month/month
	 	Unknown
	 	Team Screenprinting

Post Office Box 940

Rantoul, IL 61866
	Kesslers Team
Sports, Inc.

	 	3501 Winchester
 Road

Springfield, IL

62707
	 	1,200 sq. ft.
	 	Lease expires 11/07
	 	$8,400 to 11/30/03
$8,700 next 24 mo to
11/30/05
$9,000 next 24 mo to
11/30/07
	 	Steve Wells

2601 Colt Road

Springfield, IL 62707
	Kesslers Team
Sports, Inc.

	 	1611
24th
Avenue

Gulfport, MS
 39501
	 	3,200 sq. ft.
	 	Lease expires 7/07
	 	$19,800
$1,650 deposit
	 	Hancock Bank Trust Dept.

Denise Parker, Trust

Officer

Post Office Box 4019

Gulfport, MS 39502
	Kesslers Team
Sports, Inc.

	 	10010 Highway
 92,
Suite 160

Woodstock, GA
 30188
	 	2,000 sq. ft.
	 	Lease expires 5/08
	 	$24,756 beginning
5/30/03 with 2% yearly
increase
	 	Ackerman & Co. 

1040 Crown Pointe
 Parkway,

Suite 200

Atlanta, GA 30338

 

 

FINAL DISCLOSURE SCHEDULES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Name and Address of
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Owner (if leased) or
	 	 	 	 	 	 	 	 	Owned/Leased	 	 	 	 	 	Third-Party Operator (if
	Credit	 	 	 	 	 	 	 	/Operated by	 	Annualized	 	operated by a third
	Party	 	Address	 	Size	 	Third Party	 	Rent	 	party)
	Kesslers Team
Sports, Inc.

	 	201C Central
 Park
Dr., Suite 
1190,

Knoxville, TN
 37922
	 	4,000 sq. ft.
	 	Lease expires 8/06
	 	$27,000 + $5,640 =
$32,640 for 05-06 term
	 	All Eleven

f/k/a Centre Park Trade

Centre, Ltd.

c/o Wood Properties, Inc.

1600 Riverview Tower

900 South Gay Street

Knoxville, TN 37902
	Kesslers Team
Sports, Inc.

	 	#7 Clearwater

Drive, Suite A,

Little Rock, AR

72204
	 	5,000 sq. ft.
	 	Lease expires 3/08
	 	$20,760 Base rent +
7.75% of Operating
Expenses
21/2 % increase/yr
	 	Little Rock Investments
 LLC 

c/o Dickson Flake Partners

Inc.
400 W. Capitol Ave Ste
 1200

Little Rock, AR 72201
	Kesslers Team
Sports, Inc.

	 	9433 East 51st

Street, Tulsa, OK

74145
	 	4,500 sq. ft.
	 	Lease expires 8/07
	 	$21,300–1st
year
$22,956–2nd
& 3rd
$23,844 4th
year
$23,844 for
5th &
6th year renewals
+ $675 estimate for OE
+ $2,400 deposit

	 	SK Properties, LP

150 N. Market

Wichita, KS 67202

Rent paid to:
 CB Richardson Ellis, Okla.

Dept. 1518

Tulsa, OK 74143
	Kesslers Team
Sports, Inc.

	 	5202 A
 Brookhollow

Parkway,
 Norcross,
GA
 30071
	 	10,000 sq. ft.
	 	Lease expires 2/08
	 	$51,000 1st
& 2nd
$53,040 3rd
yr.
$55,162 4th
yr
$57,360 5th
yr.
	 	Brookhollow Associates

c/o Perdue Management
 Co.

340 E. Paces Ferry Road

Atlanta, GA 30305
	Kesslers Team
Sports, Inc.

	 	216 North
 Meridian
St.

Portland, IN
 47371
	 	2,000 sq. ft.
	 	Lease expires 11/06
	 	$ 4800	 	 	 	Sandy Bubp

121 North Meridian

Portland, IN 47371

 

 

FINAL DISCLOSURE SCHEDULES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Name and Address of
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Owner (if leased) or
	 	 	 	 	 	 	 	 	Owned/Leased	 	 	 	 	 	Third-Party Operator (if
	Credit	 	 	 	 	 	 	 	/Operated by	 	Annualized	 	operated by a third
	Party	 	Address	 	Size	 	Third Party	 	Rent	 	party)
	Dixie Sporting
Goods Co., Inc.

	 	2400 Westwood

Avenue,
 Richmond,
VA 
23230
	 	37,300 sq ft.
	 	Lease Expires in
2008
	 	$74,376 Base for first
year in 1995
$101,364 for
10th
$127,200 base effective
3/1/05 with 3% increase
each year for `06 and
`07
	 	The Wilton Companies;

10625 Patterson Avenue,

Richmond, VA 23233

c/o Hunter Cockrell

4901 Dickens Road, Suite

100

P.O. Box 6895

Richmond, VA 23230-
6895
	Dixie Sporting
Goods Co., Inc.

	 	1244B Executive

Boulevard, Suite

103, Chesapeake,
 VA
23320-2807
	 	2,360 sq. ft.
	 	Lease expires

12/31/05
	 	$13,216–1998
$14,042-1999

Per 3rd
Amendment:
$16,284-2004
$16,780-2005
	 	1985 Associates

c/o Advantis Real Estate

Services Company

900 World Trade Centre

101 West Main Street

Norfolk, VA 23510-1687
	Dixie Sporting
Goods Co., Inc.

	 	4515 Daly Drive,

Suite J, Chantilly,

VA 20151
	 	1,925 sq. ft.
	 	Lease expires

12/31/05
	 	$22,619 – 1st
$23,523 – 2nd
$24,464 – 3rd
$25,443 – 4th

$26,461 – 5th
	 	Wilbur L. McBay, Trustee

c/o Transwestern Carey

Winston, LLC

P.O. Box 64925

Baltimore, MD 21264-
4925
	Dixie Sporting
Goods Co., Inc.

	 	7841-D Rolling
 Road,

Springfield, VA

22153
	 	1,765 sq. ft.
	 	Lease expires in

2008
	 	$28,240 Base
1st year
3% increase each year
Renewals:
$39,514 – 1st
$41,489 – 2nd
$43,564 – 3rd
	 	SV Enterprises, LLC, c/o 

Pointe Real Estate, P.O.

Box 222912, Chantilly, VA

22153
	Dixie Sporting
Goods Co., Inc.

	 	619 Florida St.,

Salem, VA 
24153
	 	1,650 sq. ft.
	 	Month/month
	 	$9,750 for
1st yr
3% annual increase
	 	Vickey Shavely

P.O. Box 20809

Roanoke, VA 24018

 

 

FINAL DISCLOSURE SCHEDULES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Name and Address of
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Owner (if leased) or
	 	 	 	 	 	 	 	 	Owned/Leased	 	 	 	 	 	Third-Party Operator (if
	Credit	 	 	 	 	 	 	 	/Operated by	 	Annualized	 	operated by a third
	Party	 	Address	 	Size	 	Third Party	 	Rent	 	party)
	Dixie Sporting
Goods Co., Inc.

	 	15 Glen Bridge

Road, Suite C,

Arden, NC

28704-8481
	 	1,670 sq. ft.
	 	Month/month
	 	$13,200 for
1st yr
$13,560 2nd
year
$14,046 beginning 1/1/05
	 	RC Warehousing

5 Taylor Street

Asheville, NC 28804
	Dixie Sporting
Goods Co., Inc.

	 	501 Deacon
 Blvd. 

Winstom-Salem,
 NC
27105
	 	3,000 sq. ft.
	 	Month/month
	 	$33,000 for
1st yr
2 1/2 % increase per year
	 	Wake Forest University

P.O. Box 7477

Winston-Salem, NC 27109
	Dixie Sporting
Goods Co., Inc.

	 	2040-J South
 Park
Drive,

Winterville, NC

28590
	 	2,500 sq. ft.
	 	Lease expires in
2010
	 	$18,372 first 5 years
$20,362 for renewal
	 	Soddy & Soddy Properties

5351 Reedy Branch Road

Winterville, NC 28590
	Dixie Sporting
Goods Co., Inc.

	 	4221 Garrett
 Road,
Suite 8

Durham, NC
 27707
	 	2,500 sq. ft
	 	Lease expires in 2010
	 	Free rent & fees
4/24/05 to 6/30/05
$23,258 Base beginning
7/1/05
5/1/08 rent increases 3%
	 	Gold Centre Limited

Partnership

P.O. Box 2734

Chapel Hill, NC 27515-
2734

cc: John A. Northen

Post Office Box 2208

Chapel Hill, NC 27515-
2208
	Dixie Sporting
Goods Co., Inc.

	 	150 Front Street,

Suite B

Marietta, OH
 45750
	 	1,400 Sq. Ft.
	 	Lease expires in 2008
	 	$12,000 1st
year
$13,200 2nd
year
$14,400 3rd
year
$18,000 for 3-year
renewal
	 	H & H Rentals

154 Front Street

P.O. Box 447

Marietta, OH 45750
	Dixie Sporting
Goods Co., Inc.

	 	309 Hwy. 64/264

Manteo, NC
 27954
	 	350 sq. ft
	 	Month/month
	 	$6,300 1st
year
Renewal at comparable
rent as determined by
Landlord
	 	Ray E. Hollowell, Jr.

c/o Bruce Miller, CPA

137 Owens Beach Road

Extended 

Harbinger, NC 27941

 

 

FINAL DISCLOSURE SCHEDULES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Name and Address of
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Owner (if leased) or
	 	 	 	 	 	 	 	 	Owned/Leased	 	 	 	 	 	Third-Party Operator (if
	Credit	 	 	 	 	 	 	 	/Operated by	 	Annualized	 	operated by a third
	Party	 	Address	 	Size	 	Third Party	 	Rent	 	party)
	Dixie Sporting
Goods Co., Inc.

	 	42 Euclid
 Avenue

Bristol, VA 
24201
	 	1,200 sq. ft.
	 	Lease Expires

12/31/06
	 	$7,260 + $5/month for
trash
3% increase for each
renewal
	 	John Ed Fuller, President

Stone & Stone, Inc.

50 Euclid Avenue

Bristol, VA 24201
	Dixie Sporting
Goods Co., Inc.

	 	2400 Westwood

Avenue, Suites
 H&I,
Richmond,
 VA 23230
	 	4,960 sq. ft.
	 	Lease Expires 2011
	 	Base Rent + pro rated
tax & ins.
Year 1 $35,712
Year 2 $35,160
Year 3 $38,256
Year 4 $39,594
Year 5 $40,980
$3,286 deposit
	 	9301 Monroe, LLC

c/o Levine Properties, Inc.

Post Office Box 2439

Matthews, NC 28106
	Dixie Sporting
Goods Co., Inc.

	 	One Holland
 Place,
Suite 210

2235 Staples Mill

Road 

Richmond, VA
	 	 	3,482	 	 	Lease expires
December 2008
	 	Base Rent + pro-rata
share of operating
expenses
Year1 — $53,134;
Year 2 — $55,573;
Year 3 — $57,244
	 	Lar Don Realty LC 

301 Yamato Road, Suite 
3101

Boca Raton, FL 33431
	CMS of Central
Florida, Inc.

	 	751 Central Park

Drive, Sanford,
 FL
32771
	 	12,000 sq. ft.
	 	Lease; expires in
2010
	 	05-06 = $76,500
06-07 = $80,340
07-08 = $84,348
08-09 = $88,560
09-10 = $93,000

All rent + CAM and taxes
	 	McWeeney Smith 

Partnership; 8600 Venezia 

Drive, #2235, Orlando, FL

32810

 

 

FINAL DISCLOSURE SCHEDULES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Name and Address of
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Owner (if leased) or
	 	 	 	 	 	 	 	 	Owned/Leased	 	 	 	 	 	Third-Party Operator (if
	Credit	 	 	 	 	 	 	 	/Operated by	 	Annualized	 	operated by a third
	Party	 	Address	 	Size	 	Third Party	 	Rent	 	party)
	CMS of Central
Florida, Inc.

	 	900 Central Park

Drive, Sanford, FL

32771
	 	6,250 sq. ft.
	 	Lease; expires in
2006
	 	Base rent of $31,250
+sales tax of $2,187=
$33,438
$2,604.17 deposit; 5%
late fee after 7 days
	 	Avatar Institute, LLC, 900

Central Park Drive,

Sanford, FL 32771
	CMS of Central
Florida, Inc.

	 	7029-5
 Commonwealth

Ave.,
 Jacksonville,
FL 
32220
	 	1,800 sq. ft.
	 	Lease; expires in
2006
	 	 Months: 1-12 = $18,900
13-24=$19,269
25-36=$19,649
+CAM (inc. capital
improvements) & taxes
	 	Easton, Sanderson & Co.,

300 East State Street, 

Jacksonville, FL 32202
	CMS of Central
Florida, Inc.

	 	21113 Johnson

Street, Suite 130, 

Pembroke Pines, 
FL
33029
	 	2,700 sq. ft.
	 	Lease; expires in
2007
	 	$30,000 Base Rent +
sales tax
$5,000 deposit ($2,300
prior dep + $2,700)
	 	Chapel Trail Associates,

Ltd.; 21011 Johnson, St.,

Suite 101, Pembroke Pines,

FL 33029
	Salkeld & Sons, Inc.

	 	575 William
 Latham
Drive,
 Bourbonnais,
IL
 60914
	 	10,000 sq. ft.
	 	Lease; expires in
2009
	 	$96,000
Rent increases 2%/mo
for each 2yr renewal
$8,000 deposit & $400
late fee after
10th
	 	First American Bank,

Trustee

 

 

FINAL DISCLOSURE SCHEDULES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Name and Address of
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Owner (if leased) or
	 	 	 	 	 	 	 	 	Owned/Leased	 	 	 	 	 	Third-Party Operator (if
	Credit	 	 	 	 	 	 	 	/Operated by	 	Annualized	 	operated by a third
	Party	 	Address	 	Size	 	Third Party	 	Rent	 	party)
	Salkeld & Sons, Inc.

	 	1605 Commerce

Drive,
 Bourbonnais,
IL
 60914
	 	16,000 sq. ft.
	 	Lease; expires in
2010
	 	$72,000 until new space
is completed then
$126,000 with 12% late
fee after 5 days
2% rent increase for
each renewal term
	 	Albert A. Messier; 1605

Commerce Drive, 

Bourbonnais, 

IL 60914

 

 

 FINAL DISCLOSURE SCHEDULES

SCHEDULE 3.17

to

CREDIT AGREEMENT

AMONG

COLLEGIATE PACIFIC INC.,

MERRILL LYNCH CAPITAL,

A Division of Merrill Lynch Business Financial Services Inc.,

as Administrative Agent, as a Lender and

as Sole Bookrunner and Sole Lead Arranger

AND

THE ADDITIONAL LENDERS

FROM TIME TO TIME PARTY HERETO

Environmental Compliance

None.

 

 

FINAL DISCLOSURE SCHEDULES

SCHEDULE 3.18

to

CREDIT AGREEMENT

AMONG

COLLEGIATE PACIFIC INC.,

MERRILL LYNCH CAPITAL,

A Division of Merrill Lynch Business Financial Services Inc.,

as Administrative Agent, as a Lender and

as Sole Bookrunner and Sole Lead Arranger

AND

THE ADDITIONAL LENDERS

FROM TIME TO TIME PARTY HERETO

Intellectual Property

	 	 	 	 	 	 	 
	 	 	Patents /	 	 	 	Copyrights /
	 	 	Registration	 	 	 	Registration or
	 	 	or Application	 	Trademarks / Registration or	 	Application
	Credit Party	 	Numbers	 	Application Numbers	 	Numbers
	Collegiate Pacific
Inc.

	 	 	 	Mark 1/2261716
	 	SEC Footbal/VA-26-010
	 
	 	 	 	 	 	 
	Collegiate Pacific
Inc.

	 	 	 	Mark 1 (with logo)/2447836
	 	The Fleece beast/VA-210-638
	 
	 	 	 	 	 	 
	Collegiate Pacific
Inc.

	 	 	 	Collegiate Pacific/2278787	 	 
	 
	 	 	 	 	 	 
	Collegiate Pacific
Inc.

	 	 	 	CP Collegiate Pacific/2262148	 	 
	 
	 	 	 	 	 	 
	Collegiate Pacific
Inc.

	 	 	 	Funnets/2425244	 	 

 

 

FINAL DISCLOSURE SCHEDULES

SCHEDULE 3.19

to

CREDIT AGREEMENT

AMONG

COLLEGIATE PACIFIC INC.,

MERRILL LYNCH CAPITAL,

A Division of Merrill Lynch Business Financial Services Inc.,

as Administrative Agent, as a Lender and

as Sole Bookrunner and Sole Lead Arranger

AND

THE ADDITIONAL LENDERS

FROM TIME TO TIME PARTY HERETO

Owned Real Estate

None.

 

 

FINAL DISCLOSURE SCHEDULES

SCHEDULE 5.1

to

CREDIT AGREEMENT

AMONG

COLLEGIATE PACIFIC INC.,

MERRILL LYNCH CAPITAL,

A Division of Merrill Lynch Business Financial Services Inc.,

as Administrative Agent, as a Lender and

as Sole Bookrunner and Sole Lead Arranger

AND

THE ADDITIONAL LENDERS

FROM TIME TO TIME PARTY HERETO

Debt

	 	 	 	 	 
	Descriptions	 	Amounts
	Indenture, dated as of November 26, 2004, by and between
Collegiate Pacific Inc. and The Bank of New York Trust Company
N.A., as Trustee.

	 	$	40,000,000	 
	 
	 	 	 	 
	Promissory Note, dated July 26, 2004, executed by Collegiate
Pacific Inc. payable to Kenneth L. Caravati in the stated
principal amount of:

	 	$	250,000	 
	 
	 	 	 	 
	Promissory Note, dated July 26, 2004, executed by Collegiate
Pacific Inc. payable to C. Michael Caravati in the stated
principal amount of:

	 	$	250,000	 
	 
	 	 	 	 
	Promissory Note, dated May 11, 2005, executed by Collegiate
Pacific Inc. payable to Albert A. Messier in the stated
principal amount of:

	 	$	100,000	 
	 
	 	 	 	 
	Promissory Note, dated May 11, 2005, executed by Collegiate
Pacific Inc. payable to Daniel F. Salkeld in the stated
principal amount of:

	 	$	130,000	 

 

 

FINAL DISCLOSURE SCHEDULES

SCHEDULE 5.2

to

CREDIT AGREEMENT

AMONG

COLLEGIATE PACIFIC INC.,

MERRILL LYNCH CAPITAL,

A Division of Merrill Lynch Business Financial Services Inc.,

as Administrative Agent, as a Lender and

as Sole Bookrunner and Sole Lead Arranger

AND

THE ADDITIONAL LENDERS

FROM TIME TO TIME PARTY HERETO

Liens

Other than liens in favor of Merrill Lynch Business Financial Services Inc., no other liens
have been granted by any Credit Party, except for protective filings by equipment lessors under the
terms of outstanding equipment leases, each of which will survive the closing, and those filings in
existence for which termination statements under the Uniform Commercial Code have been furnished to
the Administrative Agent for filing

 

 

FINAL DISCLOSURE SCHEDULES

SCHEDULE 5.3

to

CREDIT AGREEMENT

AMONG

COLLEGIATE PACIFIC INC.,

MERRILL LYNCH CAPITAL,

A Division of Merrill Lynch Business Financial Services Inc.,

as Administrative Agent, as a Lender and

as Sole Bookrunner and Sole Lead Arranger

AND

THE ADDITIONAL LENDERS

FROM TIME TO TIME PARTY HERETO

Contingent Obligations

None.

 

 

FINAL DISCLOSURE SCHEDULES

SCHEDULE 5.8

to

CREDIT AGREEMENT

AMONG

COLLEGIATE PACIFIC INC.,

MERRILL LYNCH CAPITAL,

A Division of Merrill Lynch Business Financial Services Inc.,

as Administrative Agent, as a Lender and

as Sole Bookrunner and Sole Lead Arranger

AND

THE ADDITIONAL LENDERS

FROM TIME TO TIME PARTY HERETO

Investments

Collegiate Pacific Inc. currently owns approximately 73% of Sport Supply Group, Inc.

 

 

FINAL DISCLOSURE SCHEDULES

SCHEDULE 5.9

to

CREDIT AGREEMENT

AMONG

COLLEGIATE PACIFIC INC.,

MERRILL LYNCH CAPITAL,

A Division of Merrill Lynch Business Financial Services Inc.,

as Administrative Agent, as a Lender and

as Sole Bookrunner and Sole Lead Arranger

AND

THE ADDITIONAL LENDERS

FROM TIME TO TIME PARTY HERETO

Affiliate Transactions

	 
	Description
	Indemnification Agreement, dated as of January 31, 2006, by and between
Collegiate Pacific Inc. and Adam Blumenfeld.

	 

	Indemnification Agreement, dated as of January 31, 2006, by and between
Collegiate Pacific Inc. and Michael J. Blumenfeld.

	 

	Indemnification Agreement, dated as of January 31, 2006, by and between
Collegiate Pacific Inc. and Arthur J. Coerver.

	 

	Indemnification Agreement, dated as of January 31, 2006, by and between
Collegiate Pacific Inc. and Jeff Davidowitz.

	 

	Indemnification Agreement, dated as of January 31, 2006, by and between
Collegiate Pacific Inc. and William R. Estill.

	 

	Indemnification Agreement, dated as of January 31, 2006, by and between
Collegiate Pacific Inc. and Kurt Hagan.

	 

	Indemnification Agreement, dated as of January 31, 2006, by and between
Collegiate Pacific Inc. and Robert W. Hampton.

	 

	Indemnification Agreement, dated as of January 31, 2006, by and between
Collegiate Pacific Inc. and Harvey Rothenberg.

	 

	Indemnification Agreement, dated as of January 31, 2006, by and between
Collegiate Pacific Inc. and Tevis Martin.

	 

	Indemnification Agreement, dated as of January 31, 2006, by and between
Collegiate Pacific Inc. and William H. Watkins, Jr.

 

 

FINAL DISCLOSURE SCHEDULES

	 
	Description
	Employment Agreement, dated January 9, 2004, by and between Collegiate Pacific
Inc. and Thomas C. White.

	 

	Employment Agreement, dated January 9, 2004, by and between Collegiate Pacific
Inc. and Mark S. Harpin.

	 

	Employment Agreement, dated April 1, 2004, by and between Kesslers Team Sports,
Inc. and Robert Dickman.

	 

	Employment Agreement, dated April 1, 2004, by and between Kesslers Team Sports,
Inc. and Daniel Dickman.

	 

	Employment Agreement, dated April 1, 2004, by and between Kesslers Team Sports,
Inc. and Phil Dickman.

	 

	Employment Agreement, dated April 1, 2004, by and between Kesslers Team Sports,
Inc. and Steve Carloni.

	 

	Employment Agreement, dated July 23, 2004, by and between Dixie Sporting Goods
Co., Inc. and Keneth L. Caravati.

	 

	Employment Agreement, dated July 23, 2004, by and between Dixie Sporting Goods
Co., Inc. and C. Michael Caravati.

	 

	Employment Agreement, dated July 23, 2004, by and between Dixie Sporting Goods
Co., Inc. and Kenneth L. Caravati.

	 

	Employment Agreement, dated December 10, 2004, by and between CMS of Central
Florida Inc. and Michael McWeeney.

	 

	Employment Agreement, dated May 11, 2005, by and between Salkeld & Sons Inc.
and Albert A. Messier.

	 

	Employment Agreement, dated May 11, 2005, by and between Salkeld & Sons Inc.
and Daniel F. Salkeld.

	 

	Lease Agreement, dated April 1, 2004, by and between Collegiate Pacific Inc.
and RPD Services, Inc.

	 

	Lease Agreement, dated December 10, 2005, by and between McWeeney Smith
Partnership and CMS of Central Florida, Inc d/b/a Orlando Team Sports.

	 

	Lease Agreement, dated as of August 1, 2005, by and among Salkeld & Sons,
Inc. and Albert A. Messier.

	 

	Lease Agreement, dated as of October 1, 2004 by and between Salkeld & Sons,
Inc. and First American Bank.

	 

	Promissory Note, dated July 26, 2004, executed by Collegiate Pacific Inc.
payable to Kenneth L. Caravati in the stated principal amount of $250,000.

	 

	Promissory Note, dated July 26, 2004, executed by Collegiate Pacific Inc.
payable to C. Michael Caravati in the stated principal amount of $250,000.

	 

	Promissory Note, dated May 11, 2005, executed by Collegiate Pacific Inc.
payable to Albert A. Messier in the stated principal amount of:

 

 

FINAL DISCLOSURE SCHEDULES

	 
	Description
	Promissory Note, dated May 11, 2005, executed by Collegiate Pacific Inc.
payable to Daniel F. Salkeld in the stated principal amount of:

	 

	Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Michael J. Blumenfeld.

	 

	Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Adam Blumenfeld.

	 

	Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and William R. Estill.

	 

	Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Arthur J. Coerver.

	 

	Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Harvey Rothenberg.

	 

	Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Tevis Martin.

	 

	Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Kurt Hagan.

	 

	Change in Control Agreement, dated June 20, 2006, by and between Collegiate
Pacific Inc. and Bob Dickman.

	 

	As requested by Collegiate Pacific Inc. from time to time, Sport Supply Group,
Inc. will (a) render various payroll processing and human resource services to
Collegiate Pacific Inc. and its subsidiaries and (b) make office space
available to Collegiate Pacific Inc. at its corporate office and warehouse
facility located at 1901 Diplomat Drive, Dallas, Texas. Collegiate Pacific
Inc. and Sport Supply Group, Inc. engaged in arms-length negotiations of the
fees to be charged and paid for the services and office space, and believe in
each instance that the fees are consistent with comparable market rates. The
aggregate monthly fees to be paid by Collegiate Pacific Inc. under this
arrangement are approximately $20,000.

 

 

FINAL DISCLOSURE SCHEDULES

SCHEDULE 5.13

to

CREDIT AGREEMENT

AMONG

COLLEGIATE PACIFIC INC.,

MERRILL LYNCH CAPITAL,

A Division of Merrill Lynch Business Financial Services Inc.,

as Administrative Agent, as a Lender and

as Sole Bookrunner and Sole Lead Arranger

AND

THE ADDITIONAL LENDERS

FROM TIME TO TIME PARTY HERETO

Business Description

Each Credit Party is engaged in the business of marketing, manufacturing and distributing
sporting goods and equipment, soft good athletic apparel and footwear products, physical education,
recreational and leisure products primarily to the non-retail institutional market in the United
States.

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