AMENDMENT NO. 3 TO AMENDED AND RESTATED CREDIT AGREEMENT

AMENDMENT NO. 3 TO AMENDED AND
RESTATED CREDIT AGREEMENT

AMENDMENT NO. 3 (this “Amendment”) dated as of November 26, 2008, to the AMENDED AND RESTATED CREDIT AGREEMENT dated as of October 30, 2007, as amended by Amendment No. 1 to Amended and Restated Credit Agreement dated January 7, 2008 and Amendment No. 2 to Amended and Restated Credit Agreement dated as of July 30, 2008 (as amended by such Amendment No. 1 and Amendment No. 2, the “Credit Agreement”) among SPORT SUPPLY GROUP, INC., a Delaware corporation (“Borrower”), the financial institutions or other entities listed on the signature pages hereto (each, a “Lender”), XXXXXXX XXXXX COMMERCIAL FINANCE CORP., as a Lender (including as the Lender of WCMA Loans), and as Administrative Agent (in such capacity, the “Administrative Agent”).

BACKGROUND

Borrower, Administrative Agent and Lenders are parties to the Credit Agreement pursuant to which Administrative Agent and Lenders provide Borrower with certain financial accommodations.

Borrower has requested that Administrative Agent and Lenders amend the Credit Agreement, and Administrative Agent and Lenders are willing to do so on the terms and conditions hereafter set forth.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Definitions. Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Credit Agreement.

2. Amendments to Credit Agreement. Subject to satisfaction of the conditions precedent set forth in Section 4 below:

(a) The term “Pricing Table” set forth in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

“’Pricing Table’ means the following table:


Revolving Loans, WCMA Loans and all other Obligations
					LIBOR/One-
Tier	Senior Leverage Ratio	Base Rate¹			Month LIBOR

III	Greater than or equal to 2.00 to 1.00		0.25	%		1.75	%
II	Greater than or equal to 1.50 to 1.00,		0.00	%		1.50	%
	but less than 2.00 to 1.00
I	Less than 1.50 to 1.00		-0.25	%		1.25	%
	1 Not applicable to WCMA Loans.

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

(b) Section 2.3(b) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

“(b) Unused Line Fee. From and including November 26, 2008, Borrower shall pay Administrative Agent, for the benefit of all Lenders committed to make Revolving Loans, in accordance with their respective Pro Rata Shares, a fee in an amount equal to (i) (A) the Revolving Loan Commitment less (B) the average daily balance of the Revolving Loan Outstandings during the preceding month, multiplied by (ii) 0.25% per annum. Such fee is to be paid quarterly in arrears on the last day of each calendar quarter.”

“(c) Notwithstanding Section 4.7(b), but subject to the other terms and conditions of this Agreement, Borrower may use up to $25,000,000 of the proceeds of Revolving Loans under this Agreement to refinance existing Debt evidenced by the Senior Notes, subject to the satisfaction of the following conditions precedent, each to the satisfaction of Administrative Agent and the Required Lenders in their reasonable discretion:

(i) No Default or Event of Default shall have occurred and shall be continuing immediately prior to the time of each such use of the proceeds of the Revolving Loans or would result therefrom;

(ii) On a pro forma basis (after giving effect to each such use of the proceeds of the Revolving Loans), the sum of Borrower’s (A) excess Revolving Loan borrowing capacity under this Agreement and (B) aggregate unrestricted and unencumbered cash, free and clear of all Liens, shall be not less than $20,000,000; and

(iii) Borrower shall provide Administrative Agent such information concerning such use of the proceeds of the Revolving Loans as Administrative Agent shall reasonably request.”

“(iii) Investments in Senior Notes not exceeding $25,000,000 (A) with the proceeds of Revolving Loans to the extent permitted by Sections 4.7(b) or (c), or (B) using funds that do not constitute proceeds of Loans under this Agreement; provided, that, on a pro forma basis (after giving effect to each Investment in Senior Notes), the sum of Borrower’s (A) excess Revolving Loan borrowing capacity under this Agreement and (B) aggregate unrestricted and unencumbered cash, free and clear of all Liens, shall be not less than $20,000,000.”

(d) The first two pages of the Compliance Certificate is hereby amended and restated in the form attached to this Amendment as Exhibit A.

(e) Effective on the effective date of this Amendment, until the next Adjustment Date the applicable Base Rate Margin, LIBOR Margin and One-Month LIBOR Margin shall be based on Tier I of the Pricing Table.

4. Condition to Effectiveness. This Amendment shall become effective upon (a) the due execution by each of Borrower, Xxxxx Sporting Goods Co., Inc., Kesslers Team Sports, Inc., Lenders and Administrative Agent of a counterpart of this Amendment and delivery of each such counterpart to Administrative Agent, (b) the payment to Administrative Agent for the benefit of the Lenders in accordance with their respective Revolving Loan Commitment Percentage an amendment fee of $25,000 and (c) the payment of all other costs and expenses of Administrative Agent, including attorneys’ fees and expenses.

5. Representations and Warranties. Borrower hereby represents and warrants that: (a) this Amendment and the Credit Agreement, as amended hereby, constitute legal, valid and binding obligations of Borrower and are enforceable against Borrower in accordance with their respective terms; (b) upon the effectiveness of this Amendment, Borrower and the guarantors each hereby reaffirms all covenants, representations and warranties made in the Credit Agreement and the other Financing Documents to the extent the same are not amended hereby and agree that all such covenants, representations and warranties shall be deemed to have been remade as of the effective date of this Amendment, except to the extent that any such representation or warranty relates to a specific date, in which case such representation or warranty shall be true and correct as of such earlier date; and (c) no Default or Event of Default has occurred and is continuing or would exist after giving effect to this Amendment. In addition, to induce Administrative Agent and Lenders to agree to the terms of this Amendment, Borrower and the guarantors each represents and warrants that as of the date of its execution of this Amendment, there are no claims or offsets against, or rights of recoupment with respect to, or defenses or counterclaims to its obligations under, the Financing Documents and, in accordance therewith, Borrower and the guarantors each hereby waives any and all such claims, offsets, rights of recoupment, defenses or counterclaims, whether known or unknown, arising prior to the date of this Amendment, and releases and discharges Administrative Agent, Lenders, and their respective officers, directors, employees, agents, stockholders, affiliates and attorneys (collectively, the “Released Parties”) from any and all obligations, indebtedness, liabilities, claims, rights, causes of action or demands whatsoever, whether known or unknown, suspected or unsuspected, in law or equity, which Borrower or any guarantor ever had or now has against the Released Parties, or any of them, arising prior to the date hereof and from, arising out of, or relating to the Credit Agreement, the other Financing Documents, and the transactions contemplated thereby.

6. Effect on the Credit Agreement. Except as specifically amended herein, the Credit Agreement, and all other Financing Documents shall remain in full force and effect, and are hereby ratified and confirmed. Upon the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import shall mean and be a reference to the Credit Agreement as amended hereby. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of Administrative Agent or Lenders, nor constitute a waiver of any provision of the Credit Agreement, or any other documents, instruments or agreements executed and/or delivered under or in connection therewith.

7. Governing Law. This Amendment 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.

8. Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

9. Counterparts; Facsimile. This Amendment may be executed by the parties hereto in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same agreement. Any signature delivered by a party by facsimile or email (pdf file) transmission shall be deemed to be an original signature hereto.

10. Severability. In case any provision of or obligation under this Amendment shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

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IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first written above.

SPORT SUPPLY GROUP, INC.

By: /s/ Xxxx Xxxxx
Xxxx Xxxxx, Chief Financial Officer

XXXXXXX XXXXX COMMERCIAL FINANCE CORP., as Administrative Agent and a Lender (including as WCMA Lender)

By: /s/ Xxxxx Xxxxx
Xxxxx Xxxxx, Vice President

BANK OF AMERICA, N.A., as a Lender

By: /s/ Xxx Xxxxxxx
Xxx Xxxxxxx, Senior Vice President

Consented to and Agreed:

XXXXX SPORTING GOODS CO., INC.

By: /s/ Xxxx Pitts_
Xxxx Xxxxx, Chief Financial Officer

KESSLERS TEAM SPORTS, INC.

By: /s/ Xxxx Xxxxx
Xxxx Xxxxx, Chief Financial Officer

[SIGNATURE PAGE TO AMENDMENT NO. 3
TO AMENDED AND RESTATED CREDIT AGREEMENT]

Exhibit A to Amendment No. 3 to SSG
Amended and Restated Credit Agreement

Exhibit B to Amended and Restated Credit Agreement (Compliance Certificate)

COMPLIANCE CERTIFICATE

[BORROWER]

DATE: __________, _____

This certificate is given by , a Responsible Officer of (“Borrower”), pursuant to Section 4.1(c) of that certain Amended and Restated Credit Agreement dated as of October 30, 2007 among Borrower, the Lenders from time to time party thereto and Xxxxxxx Xxxxx Commercial Finance Corp., 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;

(f) the Senior Leverage Ratio for the period covered by this certificate, as demonstrated by the calculations required by Section 7.2 attached hereto, is to 1.00; and

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


Revolving Loans, WCMA Loans and all other Obligations
					LIBOR/One-
Tier	Senior Leverage Ratio	Base Rate¹			Month LIBOR

III	Greater than or equal to 2.00 to 1.00		0.25	%		1.75	%
II	Greater than or equal to 1.50 to 1.00,		0.00	%		1.50	%
	but less than 2.00 to 1.00
I	Less than 1.50 to 1.00		-0.25	%		1.25	%
	1 Not applicable to WCMA Loans.

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

By
Name
Title      of Borrower

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AMENDMENT NO. 3 TO AMENDED AND RESTATED CREDIT AGREEMENT

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