Document:

EXHIBIT 10.1

                 INTERNET BUSINESS'S INTERNATIONAL, INC.
                  2002 RETAINER STOCK PLAN FOR CONSULTANTS

     1.  Purpose of the Plan

     The Internet Business's International, Inc. 2002 Retainer
Stock  Plan for Consultants (the "Plan") is intended to attract, retain,
motivate and reward attorneys for and consultants to Internet Business's
International, Inc. (the "Company") and subsidiaries of the Company, who
are and will be contributing to the success of the business of the
Company by paying their retainers or fees in the form of stock in the
Company.  It is the intention of the Company that the Plan comply with
the definition of an employee benefit plan contained in Rule 405 under
the Securities Act of 1933, as amended, (the "Act"), and that issuances
of Shares be made only to employees as defined in Rule 405.
Accordingly, the Company may from time to time, grant to selected
attorneys and consultants ("participants") awards ("awards") of shares
of common stock of the Company, $.001 par value ("Shares"), subject to
the terms and conditions hereinafter provided.

     2.  Administration of the Plan

     This Plan shall be administered by the Board of Directors of
the Company (the "Board").  The Board is authorized to interpret the
Plan and may from time to time adopt such rules and regulations for
carrying out the Plan as it may deem appropriate, including rules and
regulations to comply with the requirements of Rule 16(b)(3) under the
Securities Exchange Act of 1934.  No Director shall be eligible to
receive an award under the Plan.  Decisions of the Board in connection
with the administration of the Plan shall be final, conclusive, and
binding upon all parties, including the Company, shareholders and
participants.

     Subject to the terms, provisions, and conditions of this Plan
as set forth herein, the Board shall have sole discretion and authority:

     (a)  to select the participants to be awarded Shares (it being
          understood that more than one award may be granted to the
          same participant);

     (b)  to determine the number of Shares to be awarded to each
          participant;

     (c)  to determine the time or times when the awards may be
          granted;

     (d)  to prescribe the form of stock legend for the
          certificates of Shares or other instruments, if any,
          evidencing any awards, granted under this Plan, and

     (e)  to cause Shares to be registered on Form S-8 under the
          Act either prior or subsequent to the making of an award.

     3.  Shares Subject to the Plan

     The aggregate number of Shares which may be awarded under the
Plan shall not exceed 10,000,000 Shares of the Company.  Shares to be
awarded under the Plan shall be made available, at the discretion of the
Board, either from the authorized but unissued shares of the Company or
from shares of common stock reacquired by the Company, including shares
purchased in the open market.  Shares shall be issued as constituted
subsequent to the one for ten reverse stock split of the common stock of
the Company effective as of the close of business on May 24, 2002.

     4.  Eligibility

     Shares shall be awarded only to attorneys for and consultants
to the Company it being the intention of the Company that awards shall
be made only to persons who satisfy the definition of employee
contained in Rule 405 under the Act.  Shares shall only be awarded to
natural persons who provide bonafide services to the Company which
services are not in connection with the offer or sale of securities in a
capital-raising transaction and which do not directly or indirectly
promote or maintain a market for the Company's securities.

     5.  Awards and Certificates

     Each participant shall be issued a certificate or certificates
representing Shares awarded under the Plan.  Such certificate shall be
registered in the name of the participant, and shall bear an appropriate
restrictive legend on its face, unless such Shares have been registered
under the Act.  The Company may register on Form S-8 under the Act, on
behalf of the participants, Shares issued or to be issued pursuant to
the Plan.

     6.  Termination and Amendment

     The Board may amend, suspend, or terminate the Plan at any
time provided that no such modification shall impair the rights of any
recipient under any award.

     7.  Miscellaneous

      (a)  Nothing in the Plan shall require the Company to issue or
           transfer any Shares pursuant to an award if such issuance
           or transfer would, in the opinion of the Board, constitute
           or result in a violation of any applicable statute or
           regulation of any jurisdiction relating to the disposition
           of securities.

     (b)  Notwithstanding any other provision of the Plan, the
          Board may at any time make or provide for such adjustment
          to the Plan, to the number of Shares available thereunder,
          or to any awards of Shares as it shall deem appropriate to
          prevent dilution or enlargement of rights, including
          adjustments in the event of changes in the number of
          outstanding Shares by reason of stock dividends or
          distributions, stock splits or other combinations or
          subdivisions of stock, recapitalization, issuances by
          reclassification, mergers, consolidations, combinations or
          exchanges of shares, separations, reorganizations,
          liquidations, or other similar corporate changes.  Any such
          determination by the Board shall be conclusive.

     (c)  No participant or other person shall have any claim or
          right to be granted Shares under the Plan, and neither the
          Plan nor any action taken thereunder shall be construed as
          giving any participant or other person any right to be
          retained in the employ of or by the Company.

     (d)  Income realized as a result of an award of Shares shall
          not be included in the recipient's earnings for the purpose
          of any benefit plan in which the recipient may be enrolled
          or for which the recipient may become eligible unless
          otherwise specifically provided for in such plan.

     (e)  If and when a participant is required to pay the Company
          an amount required to be withheld under any federal, state
          or local income tax laws in connection with an award under
          the Plan, the Board may, in its sole discretion and subject
          to such rules as it may adopt, permit the participant to
          satisfy the obligation, in whole or in part, be electing to
          have the Company withhold Shares having a fair market value
          equal to the amount required to be withheld.  The election
          to have Shares withheld must be made on or before the date
          the amount of tax to be withheld is determined.

     8.  Effective Date and Term of the Plan

     The effective date of the Plan shall be May 25, 2002 and the
Plan shall remain in full force until December 31, 2003 or until all
Shares have been awarded, whichever first occurs.AMENDED AND RESTATED CREDIT AGREEMENT

Exhibit 4.1

 

AMENDED AND

RESTATED CREDIT AGREEMENT

 

AMENDED AND RESTATED CREDIT AGREEMENT

dated as of March 21, 2002 by and between BEST BUY CO., INC. (the “Company”), a

Minnesota corporation, the lenders from time to time party hereto (such lenders

being hereinafter sometimes referred to collectively as the “Banks” and

individually as a “Bank”), and U.S. BANK NATIONAL ASSOCIATION, as agent

for the Banks (in such capacity, the “Agent”).

 

RECITALS

 

A.            The Company, the banks party thereto

and U.S. Bank National Association as agent for such banks are parties to the

Existing Credit Agreement (as defined below).

 

B.            The Company, the Banks and the Agent

have determined to amend and restate the Existing Credit Agreement pursuant to

the terms and conditions of this Agreement.

 

Accordingly, the

parties hereto hereby agree as follows:

 

ARTICLE

I

DEFINITIONS

 

Section 1.1              

Certain Defined Terms.  As

used herein and, unless otherwise defined therein, in each Exhibit and

Schedule, the following terms shall have the following respective meanings

(such meanings to be equally applicable to both the singular and plural form of

the terms defined, as the context may require):

 

“Adjusted

Eurodollar Rate”:  with respect to

each Interest Period applicable to a Eurodollar Advance, the rate (rounded

upward, if necessary, to the next higher one hundredth of one percent)

determined by dividing the Eurodollar Rate for such Interest Period by 1.00

minus the Eurodollar Reserve Percentage.

 

“Advance”:  a Prime Rate Advance or a Eurodollar Advance.

 

“Affiliate”:  when used with respect to a specified

Person, another Person that directly or indirectly through one or more

intermediaries, controls or is controlled by or is under common control with

the Person specified.  For purposes

hereof, “control” shall have the meaning given such term in Rule 12b-2 under

the Securities Exchange Act of 1934, and “controlled” shall have a correlative

meaning.

 

“Aggregate

Commitment Amount”:  as of any date

of determination, the sum of the Commitment Amounts of all of the Banks.

 

“Agreement”:  this Amended and Restated Credit Agreement,

as amended, supplemented, restated or otherwise modified and as in effect from

time to time.

 

“Applicable

Facility Fee Percentage” means, for any period, the percentage set forth

below determined by reference to (x) the rating of the Company’s long-term,

senior unsecured Indebtedness from S&P or (y) the rating of the Company’s

long-term, senior unsecured Indebtedness from Moody’s, in each case, as in

effect from time to time  on the last day of such period:

 

 

	

  Company’s

  Long-Term Senior

  Unsecured Debt Rating

  S&P or Moody’s (“Level”)

  	

   

  	

  Applicable

  Facility Fee

  Percentage

  	

   

  
	

  Level 1

  BBB+ or better, or Baa1 or better

  	

   

  	

  0.175

  	

  %

  
	

  Level 2

  BBB or Baa2

  	

   

  	

  0.250

  	

  %

  
	

  Level 3

  BBB- or Baa3

  	

   

  	

  0.325

  	

  %

  
	

  Level 4

  Worse than BBB- or worse than Baa3

  	

   

  	

  0.400

  	

  %

  

 

provided that if, at any date of determination, no

rating is available from S&P, Moody’s or any other nationally recognized

statistical rating organization designated by the Company and approved in writing

by the Majority Banks, the Applicable Facility Fee Percentage will be based

upon Level 4 and provided  further that (i) upon the

occurrence of a ratings differential between S&P and Moody’s that

corresponds to a differential of one Level, the Applicable Facility Fee

Percentage shall be based upon the Level corresponding to the higher rating and

(ii) upon the occurrence of a ratings differential between S&P and

Moody’s that corresponds to a differential of two or more Levels, the

Applicable Facility Fee Percentage shall be based upon the Level that is one

Level above the Level corresponding to the lower rating.

 

“Applicable

Margin” means, for each Prime Rate Advance and for each Eurodollar Advance

(for the Interest Period applicable to such Eurodollar Advance), a percentage

per annum equal to the percentage set forth below determined by reference to

(x) the rating of the Company’s long-term, senior unsecured Indebtedness from

S&P or (y) the rating of the Company’s long-term, senior unsecured Indebtedness

from Moody’s, in each case, for Eurodollar Advances, as in effect on the first

day of the applicable Interest Period, and for Prime Rate Advances, as in

effect from time to time:

 

	

  Company’s

  Long-Term Senior

  Unsecured Debt Rating

  S&P or Moody’s (“Level”)

  	

   

  	

  Eurodollar

  Advances

  	

   

  	

  Prime Rate

  Advances

  	

   

  
	

  Level 1

  BBB+ or better, or Baa1 or better

  	

   

  	

  0.500

  	

  %

  	

  0.000

  	

  %

  
	

  Level 2

  BBB or Baa2

  	

   

  	

  0.550

  	

  %

  	

  0.000

  	

  %

  
	

  Level 3

  BBB- or Baa3

  	

   

  	

  0.700

  	

  %

  	

  0.000

  	

  %

  
	

  Level 4

  Worse than BBB- or worse than Baa3

  	

   

  	

  0.950

  	

  %

  	

  0.000

  	

  %

  

 

provided that if, at any date of determination, no

rating is available from S&P, Moody’s or any other nationally recognized

statistical rating organization designated by the Company and approved in

writing by the Majority Banks, the Applicable Margin will be based upon Level 4

and provided  further that (i) upon the occurrence of a

ratings differential between S&P and Moody’s that corresponds to a

differential of one Level, the Applicable Margin shall be based upon the Level

corresponding to the higher rating and (ii) upon the occurrence of a

ratings differential between S&P and Moody’s that corresponds to a

differential of two or more Levels, the Applicable Margin shall be based upon

the Level that is one Level above the Level corresponding to the lower rating.

 

Applicable

Utilization Fee Percentage: 

With respect to any calendar quarter, the following percentage as in

effect on the last day of such quarter: (a) with respect to any calendar

quarter during which the average daily Used Amount was less than or equal to

25% of the Aggregate Commitment Amount in effect on the last day of such

quarter, 0.000% per annum, (b) with respect to any calendar quarter during

which the average daily

 

2

 

Used Amount was greater than 25%, but less than or equal to 50%, of the

Aggregate Commitment Amount in effect on the last day of such quarter, 0.125%

per annum, and (c) with respect to any calendar quarter during which the

average daily Used Amount was greater than 50% of the Aggregate Commitment

Amount in effect on the last day of such quarter, 0.250% per annum.

 

“Board”:  the Board of Governors of the Federal

Reserve System of the United States.

 

“Borrowing

Date”:  each Business Day or

Eurodollar Business Day on which the Banks are to make Loans to the Company

pursuant to Section 2.1.

 

“Business Day”:  any day (other than a Saturday, Sunday or

legal holiday) on which banks are permitted to be open for business in all of

the cities where any Bank has its principal office in the United States of

America.

 

“Capital

Expenditures”:  with respect to any

Person for any specified period, the aggregate of all gross expenditures during

such period for any fixed assets, or for improvements, replacements,

substitutions or additions therefor or thereto, which are reflected as

additions to property and equipment on statements of cash flows of such Person

in accordance with GAAP, excluding such expenditures in connection with

acquisitions.

 

“Cash Flow

Leverage Ratio”:  at any date of

determination, the ratio of (a) the Interest-bearing Indebtedness of the

Company and its Subsidiaries, plus eight times Rental and Lease Expense for the

Measurement Period ended on such date, to (b) the sum for the Measurement

Period ending on such date of (i) Earnings Before Interest, Income Taxes and

Depreciation and (ii) Rental and Lease Expense, in all cases determined in

accordance with GAAP and as set forth in the Company’s financial statements

delivered hereunder.

 

“Change of

Control”: The occurrence of, during any period of up to twelve consecutive

months, whether commencing before or after the Signing Date, individuals who at

the beginning of such twelve-month period were directors of the Company,

ceasing for any reason (other than by reason of death, disability or scheduled

retirement) to constitute a majority of the Board of Directors of the Company,

unless such directors were replaced by new directors whose election to the

Board of Directors of the Company, or whose nomination for election by the

stockholders of the Company, was approved by a majority of the directors then

still in office who either were directors at the beginning of such period or

whose election or nomination for election was previously so approved.

 

“Code”:  the Internal Revenue Code of 1986, as amended

or any successor thereto.

 

“Commitment”:  as to any Bank, the obligation of such Bank

to make Loans pursuant to Sections 2.1 and 2.12 and, as to U.S. Bank, its

obligation to issue, extend or renew Letters of Credit pursuant to Section 2.8.

 

“Commitment Amount”:  as to any Bank, the amount set opposite such

Bank’s name as its “Commitment Amount” in Schedule 1.1(a), as the same may

be reduced from time to time pursuant to Section 2.14.

 

“Compliance

Certificate”:  a certificate in the

form of Exhibit A.

 

“Consolidated

Net Worth”:  as of any date of

determination, the sum of the amounts set forth on the consolidated balance

sheet of the Company as the sum of the common stock, preferred stock,

additional paid-in capital and retained earnings of the Company (excluding

treasury stock).

 

“Defaulting

Bank”:  at any time, any Bank that,

at such time (a) has failed to make a Loan or any Advances thereunder required

pursuant to the terms of this Agreement, including the funding of any

participation in accordance with the terms of this Agreement, (b) has failed to

pay to the Agent or any Bank an amount owed by such Bank pursuant to the terms

of this Agreement, or (c) has been deemed insolvent or has become subject to a

bankruptcy, receivership or insolvency proceeding, or to a receiver, trustee or

similar official.

 

“Documentary

Letter of Credit”:  a letter of

credit which requires that the drafts thereunder be accompanied by a document

of title covering or securing title to the goods acquired with the proceeds of

such drafts.

 

3

 

“ERISA”:  the Employee Retirement Income Security Act

of 1974, as amended.

 

“ERISA

Affiliate”:  any trade or business

(whether or not incorporated) that is a member of a group of which the Company is

a member and which is treated as a single employer under Section 414 of the

Code.

 

“Earnings

Before Interest, Income Taxes and Depreciation”:  for any period of determination, the consolidated net income of

the Company and its Subsidiaries before deductions for income taxes, Net

Interest Expense, and provisions for depreciation and amortization of goodwill

and intangibles accounted for in calculating consolidated net income, all as

determined in accordance with GAAP, excluding therefrom (a) nonoperating gains

(including, without limitation, extraordinary or unusual gains, gains from

discontinuance of operations, gains arising from the sale of assets and other

nonrecurring gains) of the Company and its Subsidiaries during the applicable

period and (b) similar nonoperating losses (including, without limitation,

losses arising from the sale of assets and other nonrecurring losses) of the

Company and its Subsidiaries during such period.

 

“Effective

Date”:  the date on or after the

execution and delivery of this Agreement by the Company, the Banks and the

Agent on which all of the conditions precedent set forth in Section 3.1 shall

have been satisfied or waived in writing by the Banks.

 

“Eurodollar

Advance”:  a portion of the Loans,

with respect to which the interest rate is determined by reference to the

Adjusted Eurodollar Rate.

 

“Eurodollar

Business Day”:  a Business Day which

is also a day for trading by and between banks in United States dollar deposits

in the interbank eurodollar market and a day on which banks are open for

business in New York, New York and London.

 

“Eurodollar

Rate”: with respect to each Interest Period applicable to a Eurodollar

Advance, the average offered rate for deposits in United States dollars

(rounded upward, if necessary, to the nearest 1/16 of 1%) for delivery of such

deposits on the first day of such Interest Period, for the number of days in

such Interest Period, which appears on the Telerate page 3750 as of 11:00 a.m.,

London time (or such other time as of which such rate appears) two Eurodollar

Business Days prior to the first day of such Interest Period, or the rate for

such deposits determined by the Agent at such time based on such other

published service of general application as shall be selected by the Agent for

such purpose (including without limitation the Reuters Screen LIBO page);

provided, that in lieu of determining the rate in the foregoing manner, the

Agent may determine the rate based on rates at which United States dollar

deposits are offered to the Agent in the interbank Eurodollar market at such

time for delivery in Immediately Available Funds on the first day of such

Interest Period in an amount approximately equal to the Advance by the Agent to

which such Interest Period is to apply (rounded upward, if necessary, to the

nearest 1/16 of 1%).  “Reuters Screen

LIBO page” means the display designated as page “LIBO” on the Reuters Monitor

Money Rate Screen (or such other page as may replace the LIBO page on such

service for the purpose of displaying London interbank offered rates of major

banks for United States dollar deposits), and “Telerate page 3750” means the

display designated as such on Telerate System Incorporated (or such other page

as may replace page 3750 or that service for the purpose of displaying London

interbank offered rates of major banks for U.S. Dollar deposits).

 

“Eurodollar

Reserve Percentage”:  as of any day,

that percentage (expressed as a decimal) which is in effect on such day, as

prescribed by the Board of Governors of the Federal Reserve System (or any

successor) for determining the maximum reserve requirement for a member bank of

the Federal Reserve System, with deposits comparable in amount to those held by

the Agent, in respect of “Eurocurrency Liabilities” (or in respect of any other

category of liabilities which includes deposits by reference to which the

interest rate of Eurodollar Advances is determined or any category of

extensions of credit or other assets which includes loans by a non-United

States office of a Bank to United States residents). The rate of interest

applicable to any outstanding Eurodollar Advances shall be adjusted

automatically on and as of the effective date of any change in the Eurodollar

Reserve Percentage.

 

“Event of

Default”:  any event described in

Section 6.1.

 

4

 

“Existing

Credit Agreement”:  the Credit

Agreement dated as of August 9, 1999 by and among the Company, the banks party

thereto and U.S. Bank, as agent for such banks, as the same has been amended,

supplemented or otherwise modified and is in effect immediately prior to the

Effective Date.

 

“Facility Fees”:  as defined in Section 2.17.

 

“Federal Funds

Rate”:  for any period of

determination, a fluctuating interest rate per annum (based on a 360 day year)

equal for each day during such period to the weighted average of the rates of

interest charged on overnight federal funds transactions, with member banks of

the Federal Reserve System only, as reasonably determined by the Agent.

 

“Future Shop

Indebtedness”: as defined in Section 5.13(k).

 

“GAAP”:  generally accepted accounting principles set

forth in the opinions and pronouncements of the Accounting Principles Board of

the American Institute of Certified Public Accountants and statements and

pronouncements of the Financial Accounting Standards Board or in such other

statements by such other entity as may be approved by a significant segment of

the accounting profession, which are applicable to the circumstances as of the

Signing Date.

 

“Governmental

Authority”:  any federal, state,

local or foreign court or governmental agency, authority, department, board,

instrumentality or regulatory body.

 

“Guarantee”:  with respect to any Person at the time of

any determination, without duplication, any obligation, contingent or

otherwise, of such Person guaranteeing or having the economic effect of

guaranteeing any Indebtedness of any other Person (the “primary obligor”) in

any manner, whether directly or otherwise: 

(a) to purchase or pay (or advance or supply funds for the purchase

or payment of) such Indebtedness or to purchase (or to advance or supply funds

for the purchase of) any direct or indirect security therefor, (b) to

purchase property, securities, or services for the purpose of assuring the

owner of such Indebtedness of the payment of such Indebtedness, (c) to

maintain working capital, equity capital, or other financial statement

condition of the primary obligor so as to enable the primary obligor to pay

such Indebtedness or otherwise to protect the owner thereof against loss in

respect thereof, or (d) entered into for the purpose of assuring in any

manner the owner of such Indebtedness of the payment of such Indebtedness or to

protect the owner against loss in respect thereof; provided, that the

term “Guarantee” shall not include endorsements for collection or deposit in

the ordinary course of business.

 

“Guaranty”:  an amended and restated guaranty (or, with

respect to any Restricted Subsidiary for which a Guaranty is required to be

executed and delivered to the Agent pursuant to Section 5.25, a guaranty),

substantially in the form of Exhibit B, of the Obligations, executed and

delivered to the Agent in connection with this Agreement.

 

“Guarantors”:

Stores, L.P., Investment Co., Property Co., each other Restricted Subsidiary

set forth on Schedule 4.19(b) as of the Effective Date and each Restricted

Subsidiary for which a Guaranty has been executed and delivered to the Agent

pursuant to Section 5.25.

 

“Holding

Account”:  an interest-bearing

account established by the Agent, which shall be under the Agent’s sole

dominion and control, for the benefit of U.S. Bank, as the issuer of the

Letters of Credit, and the Banks, into which the Company shall, as required

hereunder, deposit funds, and from which the Agent may disburse funds, to pay

the obligations of the Company to reimburse U.S. Bank for any amount drawn on

any Letter of Credit, and to pay any other obligation of the Company to the

Banks arising in connection with any Letter of Credit.

 

“Immediately

Available Funds”:  funds with good

value on the day and in the city in which payment is received.

 

“Indebtedness”:  with respect to any Person at the time of

any determination, without duplication, all obligations, contingent or

otherwise, of such Person which in conformity with GAAP should be classified

upon the balance sheet of such Person as liabilities, but in any event shall

include:  (a) all obligations of

such Person for 

 

5

 

borrowed money, (b) all obligations of such Person evidenced by

bonds, debentures, notes or other similar instruments, (c) all obligations

of such Person upon which interest charges are customarily paid or accrued,

(d) all obligations of such Person under conditional sale or other title

retention agreements relating to property purchased by such Person,

(e) all obligations of such Person issued or assumed as the deferred

purchase price of property or services, (f) all obligations of others

secured by any Lien on property owned or acquired by such Person, whether or

not the obligations secured thereby have been assumed, (g) all capitalized

lease obligations of such Person, (h) all obligations of such Person in

respect of interest rate protection agreements, (i) all obligations of

such Person, actual or contingent, as an account party in respect of letters of

credit or bankers’ acceptances, (j) all obligations of any partnership or

joint venture as to which such Person is or may become personally liable, and

(k) all Guarantees by such Person of Indebtedness of others.

 

“Initial

Convertible Debentures”: $336,703,120 initial aggregate principal amount of

the Company’s Convertible Senior Debentures due June 27, 2021, as issued

pursuant to (a) a Purchase Agreement and a Registration Rights Agreement, each

dated June 27, 2001 and each among the Company, Stores, L.P., Credit Suisse

First Boston Corporation and Merrill, Lynch, Pierce, Fenner & Smith

Incorporated (b) an Indenture dated June 27, 2001 among the Company, Stores,

L.P. and Wells Fargo Bank Minnesota, National Association, as Trustee.

 

“Interest-bearing

Indebtedness”: at the time of any determination, all Indebtedness of the

Company and its Subsidiaries (a) for borrowed money or (b) to third party

financers to finance the purchase of inventory, to the extent not paid before

interest begins to accrue.

 

“Interest

Coverage Ratio”: for any Measurement Period, the ratio of (a) the sum of

the Company’s  (i) net income, plus (ii)

Net Interest Expense, (iii) income tax expense; (iv) depreciation; (v) Rental

and Lease Expense to (b) the sum of (y) Net Interest Expense, plus (z)

Rental and Lease Expense.

 

“Interest

Expense”: for any period of determination, the aggregate consolidated

amount, without duplication, of interest paid, accrued (including without limitation,

payment in kind interest) or scheduled to be paid in respect of any

consolidated Indebtedness of the Company and its Subsidiaries, including (a)

all but the principal component of payments in respect of conditional sale

contracts, capitalized leases and other title retention agreements, and (b) net

costs (income) under interest rate protection agreements, in each case

determined in accordance with GAAP.

 

“Interest

Income”: for any period of determination, the aggregate consolidated

amount, without duplication, of interest received, accrued (including without

limitation, payment in kind interest) or scheduled to be received by the

Company and its Subsidiaries, including (a) all but the principal component of

payments in respect of conditional sale contracts, capitalized leases and other

title retention agreements, and (b) net income (costs) under interest rate

protection agreements, in each case determined in accordance with GAAP.

 

“Interest

Period”:  with respect to each

Eurodollar Advance, the period commencing on the date of such Advance and

ending one, two, three or six months thereafter, as the Company may elect in

the applicable Notice of Borrowing, Continuation or Conversion; provided,

that:

 

(a)           Any

Interest Period which would otherwise end on a day which is not a Eurodollar

Business Day shall be extended to the next succeeding Eurodollar Business Day

unless such Interest Period is one month or longer and such Eurodollar Business

Day falls in another calendar month, in which case such Interest Period shall

end on the next preceding Eurodollar Business Day;

 

(b)           Any

Interest Period of one month or longer which begins on the last Eurodollar

Business Day of a calendar month (or 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 Eurodollar Business Day of a calendar month;

 

(c)           No

Interest Period may end after the date set forth in clause (a) of the

definition of “Termination Date” set forth in this Section 1.1; and

 

6

 

(d)           For

purposes of determining an Interest Period, a month means a period starting on

one day in a calendar month and ending on the numerically corresponding day in

the next calendar month; provided, however, that if there is no numerically

corresponding day in the month in which such an Interest Period is to end or if

such an Interest Period begins on the last Eurodollar Business Day of a

calendar month, then such Interest Period shall end on the last Eurodollar

Business Day of the calendar month in which such Interest Period is to end.

 

“Investment Co.”:  BBC Investment Co., a Nevada Corporation.

 

“Letter of

Credit”:  an irrevocable letter of

credit issued by U.S. Bank for the account of the Company pursuant to Section

2.8, which shall not be a Documentary Letter of Credit and shall not include

letters of credit issued by U.S. Bank pursuant to that certain Letter of Credit

Agreement dated as of February 1, 1989, as heretofore and hereafter amended, and

that certain Covenant Rider dated as of October 30, 1992, as heretofore and

hereafter amended, between U.S. Bank and the Company.

 

“Letter of

Credit Fee”:  as defined in Section

2.18.

 

“Letter of

Credit Loan”:  a Loan made by a Bank

to or for the account of the Company pursuant to Section 2.12.

 

“Letter of

Credit Usage”:  as of any date, the

amount equal to the sum of (a) the amount of all Unpaid Draws plus

(b) the amount available to be drawn under all outstanding Letters of

Credit.

 

“Lien”:  with respect to any Person, any security

interest, mortgage, pledge, lien, charge, encumbrance, title retention

agreement or analogous instrument or device (including but not limited to the

interest of each lessor under any capitalized lease), in, of or on any assets or

properties of such Person, now owned or hereafter acquired, whether arising by

agreement or operation of law.

 

“Loan”:  a loan made by a Bank to or for the account

of the Company pursuant to Section 2.1 or a Letter of Credit Loan.

 

“Loan

Documents”:  this Agreement, the

Notes, the Letters of Credit, the Guaranties and all other agreements,

documents, certificates and instruments delivered pursuant hereto or in

connection herewith, in each case as amended, supplemented, restated or

otherwise modified and in effect from time to time.

 

“Majority

Banks”:  at any time, Banks, other

than Defaulting Banks, whose Pro Rata Shares (determined under clause (b)

of the definition thereof set forth in this Section 1.1 if any Loans are

outstanding, and otherwise under clause (a) of such definition) aggregate

more than 51%.

 

“Material

Adverse Effect”:  with respect to

any Person, (a) a materially adverse effect on the business, assets,

operations, or financial condition of such Person and its Subsidiaries taken as

a whole, (b) material impairment of the ability of such Person to perform

any material obligation under any Loan Document to which such Person is or

becomes a party or (c) material impairment of any of the material rights

of, or benefits available to, the Agent or the Banks under any Loan Document.

 

“Measurement

Period”:  each period of four fiscal

quarters ending on the last day of a fiscal quarter of the Company.

 

“Moody’s”:

Moody’s Investors Service, Inc.

 

“Multiemployer

Plan”:  as such term is defined in

Section 4001(a)(3) of ERISA, which is maintained (on the Signing Date, within

the five years preceding the Signing Date, or at any time after the Signing

Date) for employees of Company or any ERISA Affiliate.

 

“Net Interest Expense”: for any period of determination,

Interest Expense minus Interest Income.

 

7

 

“Notice of Borrowing, Continuation or Conversion”:  the written notice in the form reasonably

satisfactory to the Agent, delivered in accordance with, and within the period

specified in, Section 2.2 or 2.4, as applicable.

 

“Obligations”:  (a) the Company’s obligations in

respect of the due and punctual payment of principal and interest on the Loans

when and as due, whether at maturity, by acceleration, or otherwise,

(b) the Company’s obligations to reimburse U.S. Bank in the amount of each

draw under a Letter of Credit on the date of such draw, and to make deposits

into the Holding Account in respect of Letters of Credit pursuant to Sections

2.6, 2.14 or 6.2, (c) all fees, expenses, indemnities, reimbursements and

other obligations, monetary or otherwise, owed to the Agent and the Banks under

this Agreement or any other Loan Document and (d) all Rate Protection

Obligations.

 

“PBGC”:  the Pension Benefit Guaranty Corporation

created by Section 4002(a) of ERISA or any Governmental Authority succeeding to

the functions thereof.

 

“Person”:  any natural person, corporation,

partnership, limited liability company, joint venture, firm, association,

trust, unincorporated organization, government or governmental agency or

political subdivision or any other entity, whether acting in an individual,

fiduciary or other capacity.

 

“Plan”:  each employee benefit plan (whether in

existence on the Signing Date or thereafter instituted), as such term is

defined in Section 3 of ERISA, maintained for the benefit of employees,

officers or directors of Company or of any ERISA Affiliate.

 

“Prime Rate”:  the greater of (a) the rate of interest from

time to time publicly announced by U.S. Bank as its “prime rate” or (b) the

Federal Funds Rate plus 1.5%.  U.S. Bank

may lend to its customers at rates that are at, above or below the Prime

Rate.  For purposes of determining any

interest rate hereunder or under the Notes which is based on the Prime Rate,

such interest rate shall change as and when the Prime Rate shall change.

 

“Prime Rate

Advance”:  a portion of the Loans

with respect to which the interest rate is determined by reference to the Prime

Rate.

 

“Prohibited

Transaction”:  as such term is

defined in Section 4975 of the Code or Section 406 of ERISA.

 

“Pro Rata

Share”:  with respect to each Bank,

in each case expressed as a percentage:

 

(a)           as

such term pertains to such Bank’s obligation to make Loans, right to receive

Utilization Fees and Letter of Credit Fees, and obligation to reimburse the

Agent pursuant to Section 7.9, the percentage set forth opposite such Bank’s

name as its “Commitment Percentage” in Schedule 1.1(a), and

 

(b)           as

such term pertains to such Bank’s right to receive payment of interest on and

principal of its outstanding Loans and for all other purposes, the fraction

which the amount of the unpaid principal balance of its outstanding Loans is to

the aggregate unpaid principal balance of all outstanding Loans.

 

“Property Co.”:  BBC

Property Co., a Minnesota corporation.

 

“Rate Protection Agreement”: 

Any interest rate swap, cap or option agreement, or any other agreement

pursuant to which the Company hedges interest rate risk with respect to a

portion of the Obligations, entered into by the Company with a Rate Protection

Provider.

 

“Rate Protection Obligations”: 

The liabilities, indebtedness and obligations of the Company, if any, to

any Rate Protection Provider under a Rate Protection Agreement.

 

8

 

“Rate Protection Provider”: 

Any Bank, or any Affiliate of any Bank, that is the Company’s

counterparty under any Rate Protection Agreement.

 

“Regulation D”:  Regulation D of the Board as from time to

time in effect and all official rulings and interpretations thereunder and

thereof.

 

“Regulation U”:  Regulation U of the Board as from time to

time in effect and all official rulings and interpretations thereunder and

thereof.

 

“Regulation X”:  Regulation X of the Board as from time to

time in effect and all official rulings and interpretations thereunder and

thereof.

 

“Regulatory

Change”:  with respect to any Bank,

any change after the Signing Date in federal, state or foreign laws or

regulations or the adoption or making after such date of any interpretations,

directives or requests, in either case applying to a class of banks including

such Bank under any federal, state or foreign laws or regulations (whether or

not having the force of law) by any court or Governmental Authority charged

with the interpretation or administration thereof.

 

“Rental and

Lease Expense”:  for any period of

determination, the aggregate consolidated amount, without duplication of all

amounts paid or accrued by the Company or any Subsidiary under all capital

leases and other leases of real or personal property, including net costs

(income) under interest rate protection agreements with respect to such

amounts, but excluding any portion of such amounts included in calculating Net

Interest Expense of the Company for such period, in each case determined in

accordance with GAAP.

 

“Reportable

Event”:  as such term is defined in

Section 4043 of ERISA and the regulations issued under such Section, with

respect to a Plan, excluding, however, such events as to which the PBGC by

regulation has waived the requirement of Section 4043(a) of ERISA that it be

notified within 30 days of the occurrence of such event, provided, that

a failure to meet the minimum funding standard of Section 412 of the Code and

of Section 302 of ERISA shall be a Reportable Event regardless of the issuance

of any such waivers in accordance with Section 412(d) of the Code.

 

“Restricted

Payments”:  with respect to any

Person, collectively, all dividends or other distributions of any nature (cash,

securities (other than common stock of such Person), assets or otherwise)

declared or paid, and all payments made (including the purchase price of any

equity securities repurchased by such Person), by such Person on any class of

equity securities (including, without limitation, warrants, options or rights

therefor) issued by such Person or any of its Subsidiaries, whether such

securities are authorized or outstanding on the Signing Date or at any time

thereafter.

 

“Restricted

Subsidiary”:  With respect to any fiscal

year of the Company, any Subsidiary which accounted for an amount equal to or

greater than twenty (20%) percent of the consolidated aggregate revenues of the

Company for such fiscal year, provided that, if, in any fiscal year of

the Company, the  Subsidiaries (other

than Stores, L.P.), on a collective basis, accounted for more than fifty (50%)

of the consolidated aggregate revenues of the Company for such fiscal year,

then the percentage amount stated in the clause preceding the proviso clause of

this definition shall be automatically and permanently reduced to five (5%).

 

“Revolving

Notes”:  as defined in Section 2.3.

 

“S&P”

means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.

 

“Signing Date”:  the Business Day on which counterparts of

this Agreement, duly executed by the Company, the Banks and the Agent, have

been delivered to the Agent.

 

“Stores, L.P.”:

Best Buy Stores, L.P., a Delaware limited partnership.

 

9

 

“Subordinated

Convertible Debentures”: $402,500,000 aggregate principal amount of the

Company’s Convertible Subordinated Debentures Due January 15, 2022, as issued

pursuant to: (a) a Purchase Agreement dated January 10, 2002 among the Company,

Stores, L.P. and Credit Suisse First Boston Corporation, (b) a Registration

Rights Agreement dated January 15, 2002 among the Company, Stores, L.P. and

Credit Suisse First Boston Corporation, and (c) an Indenture dated January 15,

2002 among the Company, Stores, L.P., and Wells Fargo Bank Minnesota, National

Association, as Trustee.

 

“Subordinated

Indebtedness”: The Subordinated Convertible Debentures and any other

Indebtedness of the Company incurred after the Signing Date which is

subordinated to the obligations of the Company to the Majority Banks hereunder

and under the Notes in a manner and to an extent which the Banks have

reasonably determined to be satisfactory by a writing sent to the Company.

 

“Subsidiary”:  with respect to any Person, any corporation,

partnership, trust or other Person of which more than 50% of the outstanding

capital stock (or similar interests) 

having ordinary voting power to elect a majority of the board of

directors of such corporation (or similar governing body) (irrespective of

whether or not, at the time, capital stock of or other similar interests shall

or might have voting power upon the occurrence of any contingency) is at the

time directly or indirectly owned by such Person, by such Person and one or

more other Subsidiaries of such Person.

 

“Termination Date”:  the earliest to occur of (a) March 21, 2005,

(b) the date on which the Commitments are terminated pursuant to Section

2.14 or (c) the date on which the Commitments are terminated pursuant to

Section 6.2.

 

“Total

Outstandings”:  as of any date of

determination, the sum of (a) the aggregate unpaid principal balance of

Loans outstanding on such date, plus (b) the Letter of Credit

Usage.

 

“Unfunded

Liabilities”:  (a) in the case

of Plans subject to Title IV of ERISA (other than Multiemployer Plans), the amount

(if any) by which the present value of all vested nonforfeitable benefits under

such Plan exceeds the fair market value of all Plan assets allocable to such

benefits, all determined as of the then most recent valuation report prepared

by the actuary for such Plan, and (b) in the case of Multiemployer Plans,

the withdrawal liability of the Company and the ERISA Affiliates.

 

“Unmatured

Event of Default”:  any event which,

with the giving of notice (whether such notice is required under Section 6.1,

or under some other provision of this Agreement, or otherwise) or lapse of

time, or both, would constitute an Event of Default.

 

“Unpaid Draw”:  the obligation of the Company to reimburse

U.S. Bank for a draw under a Letter of Credit, to the extent not reimbursed by

the Company in accordance with Section 2.11.

 

“Unused

Commitment Amount”:  at the time of

any determination, the Aggregate Commitment Amount less the Used Amount.

 

“U.S. Bank”:  U.S. Bank National Association, a national

banking association, in its individual capacity.

 

“Used Amount”:  at any time of determination, Total

Outstandings outstanding on such date.

 

“Utilization

Fees”:  as defined in Section 2.16.

 

Section 1.2             Accounting Terms and

Calculations.  Except as may be

expressly provided to the contrary herein, all accounting terms used herein

shall be interpreted and all accounting determinations hereunder shall be made

in conformity with GAAP.  To the extent

any change in GAAP after the Signing Date affects any computation or

determination required to be made pursuant to this Agreement, such computation

or determination shall be made as if such change in GAAP had not occurred

unless the Company and the Banks agree in writing on an adjustment to such

computation or determination to account for such change in GAAP.

 

10

 

Section 1.3             Computation of Time Periods.  In this Agreement, in the computation of a

period of time from a specified date to a later specified date, unless

otherwise stated the word “from” means “from and including” and the word “to”

or “until” each means “to but excluding”.

 

Section 1.4             Principles of Construction.  In this Agreement, the singular includes the

plural and the plural the singular; words imparting any gender include the other

genders; references to “Section”, “Exhibit”, “Schedule” and like references

shall be to sections of, and exhibits and schedules to, this Agreement unless

otherwise specifically provided; the words “hereof”, “herein” and “hereunder”

and words of similar import when used in this Agreement shall refer to this

Agreement as a whole and not to any particular provision of this Agreement;

references to “writing” include printing, typing, lithography and other means

of reproducing words in a visible form; references to agreements and other

contractual instruments shall be deemed to include all subsequent amendments

thereto or changes therein entered into in accordance with their respective

terms; and references to Persons include their permitted successors and assigns.  Unless the context in which used herein

otherwise clearly requires, “or” has the inclusive meaning represented by the

phrase “and/or.”

 

ARTICLE

II

TERMS

OF THE CREDIT FACILITY

 

Part

A — Terms of Lending

 

Section 2.1             The Commitments.  On the terms and subject to the conditions

hereof, each Bank severally agrees to make Loans to the Company on a revolving

basis at any time and from time to time from the Effective Date to the

Termination Date, during which period the Company may borrow, repay and reborrow

in accordance with the provisions hereof, provided, that no Loan will be

made in any amount which after giving effect thereto, would cause the Total

Outstandings to exceed the Aggregate Commitment Amount, provided, further,

that no Bank shall be required to make any Loan if, after giving effect

thereto, the sum of the outstanding principal balance of such Bank’s Revolving

Note plus such Bank’s Pro Rata Share of the sum of the Letter of Credit

Usage would exceed such Bank’s Commitment Amount.  Loans hereunder shall be made by the Banks ratably based on their

respective Pro Rata Shares.  Loans may

be obtained and maintained, at the election of the Company but subject to the

limitations hereof, as Prime Rate Advances or as Eurodollar Advances.Section

2.5

 

Section 2.2             Procedure

for Loans.  Any request by the

Company to borrow hereunder shall be made to the Agent by telephone, promptly

confirmed by giving the Agent a Notice of Borrowing, Continuation or

Conversion, and must be received by the Agent not later than 12:00 noon

(Minneapolis time) three Eurodollar Business Days prior to the requested

Borrowing Date if the Loans are requested as Eurodollar Advances and not later

than 12:00 noon (Minneapolis time) on the requested Borrowing Date if the Loans

are requested as Prime Rate Advances. 

Each request to borrow hereunder shall be irrevocable and shall be

deemed a representation by the Company that on the requested Borrowing Date and

after giving effect to the requested Loans the applicable conditions specified

in Section 2.1 and Article III have been and will be satisfied.  Each request to borrow hereunder shall

specify (a) the requested Borrowing Date, (b) the aggregate amount of

Loans to be made on such date, which shall be in a minimum amount of $5,000,000

or an integral multiple of $1,000,000 in excess thereof, to the extent such

Loans are to be funded as Eurodollar Advances, or $2,000,000 or an integral

multiple of $500,000 in excess thereof to the extent such Loans are to be

funded as Prime Rate Advances,  (c) whether such Loans are to be made as Prime Rate Advances

or as Eurodollar Advances, and (d) in the case of Eurodollar Advances, the

duration of the initial Interest Period applicable thereto. Without in any way

limiting the Company’s obligation to confirm in writing any telephone request

to borrow hereunder, the Agent may rely on any such request which it believes

in good faith to be genuine; and the Company hereby waives any claim against

the Agent or the Banks based on a dispute with the Agent’s record of the terms

of such telephone request.  The Agent

shall promptly notify each other Bank of the receipt of such request, the

matters specified therein, and of such Bank’s Pro Rata Share of the requested

Loans.  On the requested Borrowing Date,

each Bank shall provide its share of any requested Loans at the principal

office of the Agent in Minneapolis, Minnesota not later than 2:30 P.M.

(Minneapolis time).  Unless the Agent

determines that any applicable condition specified in Article III has not been

satisfied, the Agent will make available to the Company at the Agent’s

principal office in Minneapolis, Minnesota in Immediately Available Funds not

later than 4:00 P.M. (Minneapolis time) on the requested Borrowing Date the

amount of the requested Loans.  If 

 

11

 

the Agent has made

a Loan on behalf of a Bank but has not received the amount of such Loan (or a

Federal Reserve Bank reference number for the wire transfer of the amount of

such Loan) from such Bank by 4:00 P.M. (Minneapolis time) on the requested

Borrowing Date, such Bank shall pay interest to the Agent on the amount so

advanced at the Federal Funds Rate from the date of such Loan to the date funds

are received by the Agent from such Bank, such interest to be payable with such

remittance from such Bank of the principal amount of such Loan (provided,

however, that the Agent shall not make any Loans on behalf of a Bank if the

Agent has received prior notice from such Bank that it will not make such Loan).  If the Agent does not receive payment from

such Bank by the next Business Day after the date of any Loan, the Agent shall

be entitled to recover such Loan, with interest thereon at the rate then

applicable to the such Loan, on demand, from the Company, without prejudice to

the Agent’s and the Company’s rights against such Bank.  If such Bank pays the Agent the amount

herein required with interest at the Federal Funds Rate before the Agent has

recovered from the Company, such Bank shall be entitled to the interest payable

by the Company with respect to the Loan in question accruing from the date the

Agent made such Loan.

 

Section 2.3             Notes.  The Loans made by each Bank shall be

evidenced by a single promissory note of the Company payable to the order of such

Bank in the form of Exhibit C, in a principal amount equal to the amount

of such Bank’s Commitment originally in effect (each, together with any such

promissory note hereafter executed and delivered to a Bank to evidence the

Loans, a “Revolving Note” and, collectively, the “Revolving Notes”).  Each Bank shall enter in its ledgers and

records the amount of each Loan, the various Advances made, converted or

continued and the payments made thereon, and each Bank is authorized by the

Company to enter on a schedule attached to its Revolving Note(s) a record of

such Loans, Advances and payments; provided, however that the

failure by any Bank to make any such entry or any error in making such entry

shall not limit or otherwise affect the obligation of the Company hereunder and

on the Revolving Notes, and, in all events, the principal amount owing by the

Company in respect of each Revolving Note shall be the aggregate amount of all

Loans made by the Bank to which such Revolving Note is payable less all

payments of principal thereof made by the Company.

 

Section 2.4             Conversions and Continuations.  On the terms and subject to the limitations

hereof, the Company shall have the option at any time and from time to time to

convert all or any portion of the Loans into Prime Rate Advances or Eurodollar

Advances, or to continue a Eurodollar Advance as such (in a minimum amount of

$5,000,000 or an integral multiple of $1,000,000 in excess thereof, with

respect to any conversion into or continuation as Eurodollar Advances, or

$2,000,000 or an integral multiple of $500,000 in excess thereof, with respect

to any conversion into Prime Rate Advances); provided, however

that (i) a Eurodollar Advance may be converted or continued only on the

last day of the Interest Period applicable thereto, and (ii) at the option

of the Majority Banks, no Advance may be converted into or continued as a

Eurodollar Advance if an Unmatured Event of Default or Event of Default has

occurred and is continuing on the proposed date of continuation or conversion.

The Company shall give the Agent a Notice of Borrowing, Continuation or

Conversion with respect to the continuation or conversion of any Advance so as

to be received by the Agent not later than 12:00 noon (Minneapolis time) three

Eurodollar Business Days prior to requested date of conversion or continuation

in the case of the continuation of, or conversion to, Eurodollar Advances and

not later than 12:00 noon (Minneapolis time) on the date of any requested

conversion to Prime Rate Advances.  Each

such notice shall specify (a) the amount to be continued or converted,

(b) the date for the continuation or conversion (which must be

(i) the last day of the preceding Interest Period and a Eurodollar

Business Day in the case of conversions to or continuations of Eurodollar

Advances, and (ii) a Business Day in the case of conversions to Prime Rate

Advances), and (c) in the case of conversions to or continuations of

Eurodollar Advances, the Interest Period applicable thereto.  Any notice given by the Company under this

Section 2.4 shall be irrevocable.  If

the Company shall fail to notify the Agent of the continuation of any

Eurodollar Advances or of the conversion of Eurodollar Advances within the time

required by this Section 2.4, such Advances shall, on the last day of the

Interest Period applicable thereto, at the option of the Agent (a) be

automatically be converted into Prime Rate Advances of the same principal

amount or (b) be automatically be converted into Eurodollar Advances having an

Interest Period of one month.  All

conversions to and continuations of Advances shall be made uniformly and

ratably among the Banks.

 

Section 2.5             Interest Rates, Interest

Payments and Default Interest. 

Interest shall accrue and be payable as follows:

 

12

 

(a)           Subject

to paragraph (c) below, each Eurodollar Advance shall bear interest on the

unpaid principal amount thereof during the Interest Period applicable thereto

at a rate per annum equal to the sum of (i) the Adjusted Eurodollar Rate

for such Interest Period plus (ii) the Applicable Margin.

 

(b)           Subject

to paragraph (c) below, each Prime Rate Advance shall bear interest on the

unpaid principal amount thereof at a floating rate per annum equal to the sum

of (i) the Prime Rate plus (ii) the Applicable Margin.

 

(c)           Upon

and during the continuation of any Event of Default, each Advance shall, at the

option of the Majority Banks (or, in the case of any Event of Default under

Sections 6.1(a), (e), (f) or (g), automatically upon and during the

continuation of any such Event of Default), bear interest until paid in full

(or until the corresponding Event of Default is waived in writing by the

Majority Banks), whether at the date scheduled therefor or earlier upon

acceleration, shall bear interest as follows: (i) during the balance of

any Interest Period applicable to such Advance, at a rate per annum equal to

the sum of the rate applicable to such Advance during such Interest Period plus

2.0%, and (ii) otherwise, at a rate per annum equal to the sum of the

Prime Rate plus the Applicable Margin plus 2.00%.

 

(d)           Interest

accrued to the day of payment shall be payable (A) with respect to each

Eurodollar Advance having an Interest Period of three months or less, on the

last day of the Interest Period applicable thereto; (B) with respect to any

Eurodollar Advance having an Interest Period greater than three months, on the

last day of the Interest Period applicable thereto and on each day that would

have been the last day of the Interest Period for such Advance had successive

Interest Periods of three months duration been applicable to such Advance; (C)

with respect to any Prime Rate Advance, on the first day of each month; and (D)

with respect to all Loans, on the Termination Date; provided that interest

under Section 2.5(c) shall be payable on demand.

 

(e)           Interest

payments received by the Agent shall be applied to accrued, unpaid interest on

the Revolving Notes, as applicable, as may then be due and payable.

 

Section 2.6             Repayment; Mandatory

Prepayments; Deposits Into Holding Account.

 

(a)           Principal

of all Loans, together with all accrued, unpaid interest thereon, shall be due

and payable on the Termination Date. 

Upon issuance of any Letters of Credit having an expiration date after

the Termination Date, the Company shall deposit into the Holding Account an

amount sufficient to cause the amount deposited in the Holding Account to equal

the aggregate undrawn face amount of all outstanding Letters of Credit.  At any time after such deposit is made and

all outstanding Obligations, other than Obligations with respect to outstanding

Letters of Credit, have been paid in full, if an outstanding Letter of Credit

expires or is reduced without the full amount thereof having been drawn, the

Agent shall withdraw from the Holding Account and deliver to the Company an

amount equal to the amount by which the amount on deposit in the Holding

Account exceeds the aggregate undrawn face amount of outstanding Letters of

Credit (after giving effect to such expiration or reduction).

 

(b)           Between

December 1 of each year and March 31 of the following year, the Company shall

reduce the outstanding principal balance of the Loans for a period of not less

than 30 consecutive days to $0.00.

 

(c)           If

at any time the Total Outstandings exceed the Aggregate Commitment Amount, the

Company shall prepay the Loans in the amount of such excess.

 

Section 2.7             Optional Prepayments.   The Company may prepay Prime Rate Advances,

in whole or in part, at any time, without premium or penalty.  Each partial prepayment shall be in an

aggregate amount for all the Banks of $2,000,000 or an integral multiple of

$500,000 in excess thereof, and shall be distributed to the Banks in accordance

with their respective Pro Rata Shares. 

Except upon an acceleration following an Event of Default or upon

termination of the Commitments in whole under Section 2.14, the Company may pay

Eurodollar Advances only on the last day of the Interest Period applicable

thereto. Amounts paid (unless following an 

 

13

 

acceleration or

upon termination of the Commitments in whole) or prepaid under this Section 2.7

may be reborrowed upon the terms and subject to the conditions and limitations

of this Agreement.  All principal paid

or prepaid under Section 2.6, this Section 2.7 or Section 2.14 shall be applied

to the outstanding principal balance of each Bank’s Revolving Note (in

accordance with such Bank’s Pro Rata Share).

 

Part

B —  Terms of the Letter of Credit Facility

 

Section 2.8             Letters of Credit.  The letters of credit issued by the Agent

for the account of the Company pursuant to the Existing Credit Agreement shall

be “Letters of Credit” hereunder from and after the Effective Date, and the

rights and obligations of the Agent, the Banks and the Company with respect to

such letters of credit shall be those set forth therein and, to the extent not

inconsistent therewith, those set forth herein with respect to Letters of

Credit.  Upon the terms and subject to

the conditions of this Agreement, the Agent agrees to issue, extend or renew

Letters of Credit for the account of the Company from time to time between the

Effective Date and the Termination Date in such amounts as the Company shall

request; provided that no Letter of Credit will be issued, extended or

renewed in any amount which, after giving effect to such issuance, extension or

renewal would cause (i) Total Outstandings to exceed the Aggregate

Commitment Amount, or (ii) the Letter of Credit Usage to exceed $50,000,000.

 

Section 2.9             Procedures for Letters of Credit.  Each request for the issuance, extension or

renewal of a Letter of Credit shall be made by the Company in writing and

received by U.S. Bank by 1:00 p.m. (Minneapolis time) (a) not later than one

Business Day preceding the requested date of issuance, extension or renewal in

the case of the issuance of new Letters of Credit (which shall also be a

Business Day) or the extension or renewal of previously-issued Letters of

Credit which are not automatically renewable and (b) not later than five

Business Days preceding the last day to give a notice of non-renewal in the

case of the renewal of Letters of Credit that are automatically renewable

unless a notice of non-renewal is given. 

Each request for the issuance, extension or renewal of a Letter of

Credit shall be deemed a representation by the Company that on the date of

issuance, extension or renewal of such Letter of Credit and after giving effect

thereto the conditions specified in Article III have been and will be

satisfied.  The Agent may require that

such request be made on such letter of credit application and reimbursement

agreement form as the Agent may from time to time specify.  The Agent shall notify the other Banks by

1:00 P.M. (Minneapolis time) on the date the Agent issues, extends or renews

any Letter of Credit, of the issuance, extension or renewal of each Letter of

Credit, and each Bank’s Pro Rata Share thereof, and the Agent will promptly

provide to the other Banks a copy of each Letter of Credit issued, extended or

renewed hereunder.

 

Section 2.10           Terms of Letters of Credit.  Letters of Credit shall be issued in support

of obligations of the Company incurred in the ordinary course of its

business.  No Letter of Credit may have

an expiration date more than one year after the date of its issuance.

 

Section 2.11           Agreement to Repay Letter of

Credit Draws.  If the Agent has

decided that it will a pay a draw made on any Letter of Credit, it will notify

the Company of that fact.  The Company

shall reimburse the Agent in an amount equal to the amount of such draw by

11:00 A.M. (Minneapolis time) on the day on which such draw is to be paid in

Immediately Available Funds.  To the

extent funds are available in the Holding Account, the Agent may, in its

discretion (but subject to the next sentence), withdraw the amount of such draw

from the Holding Account and apply such amount to the Company’s reimbursement

obligations in respect of such draw.  To

the extent the amount of funds available in the Holding Account equals or

exceeds the Letter of Credit Usage as of the date of such draw, the Agent shall

withdraw the amount of such draw from the Holding Account and apply such amount

to the Company’s reimbursement obligations in respect of such draw.

 

Section 2.12           Loans to Cover Unpaid Draws.  Whenever there is an Unpaid Draw pursuant to

Section 2.11, the Agent shall promptly give the other Banks notice to that

effect, specifying the amount thereof, in which event each Bank is authorized

(and the Company does here so authorize each Bank) to, and shall, make a Loan

(as a Prime Rate Advance) to the Company in an amount equal to  such Bank’s Pro Rata Share of the amount of

the Unpaid Draw.  Each Bank shall make

such Loan, regardless of noncompliance with the applicable conditions precedent

specified in Article III hereof and regardless of whether an Event of Default

then exists or the 

 

14

 

Commitments have

been terminated, and provide the Agent with the proceeds of such Loan in Immediately

Available Funds, at the office of the Agent, not later than 4:00 P.M.

(Minneapolis time) on the day on which such Bank received such notice.  The Agent shall apply the proceeds of such

Loans directly to reimburse itself for such Unpaid Draw.  If any portion of any such amount paid to

the Agent should be recovered by or on behalf of the Company from the Agent in

bankruptcy, by assignment for the benefit of creditors or otherwise, the loss

of the amount so recovered shall be ratably shared between and among the Banks

in the manner contemplated by Section 7.10. 

If at the time the Banks make funds available to the Agent pursuant to

the provisions of this Section 2.12 the applicable conditions precedent specified

in Article III shall not have been satisfied, the Company shall pay to the

Agent for the account of the Banks interest on the funds so advanced at a

floating rate per annum equal to the Prime Rate plus the Applicable Margin plus

two percent (2.00%).  If for any reason

any Bank is unable to make a Loan to the Company to reimburse the Agent for an

Unpaid Draw, then such Bank shall immediately purchase from the Agent a risk

participation in such Unpaid Draw, at par, in an amount equal to such Bank’s

Pro Rata Share of the Unpaid Draw, which risk participation shall, for all

purposes hereunder except Sections 2.1 and 2.2, be deemed a Loan made by such

Bank hereunder.

 

Section 2.13           Obligations Absolute.  The obligations of the Company to repay the

Agent for the amount of any draw on a Letter of Credit pursuant to Section 2.11

and to repay any Letter of Credit Loans shall be absolute, unconditional and

irrevocable, shall continue for so long as any Letter of Credit, Unpaid Draw or

Letter of Credit Loan is outstanding notwithstanding any termination of this

Agreement, and shall be paid strictly in accordance with the terms of this

Agreement, under all circumstances whatsoever, including without limitation the

following circumstances:

 

(a)           any

lack of validity or enforceability of any Letter of Credit;

 

(b)           the

existence of any claim, setoff, defense or other right which the Company may

have or claim at any time against any beneficiary, transferee or holder of any

Letter of Credit (or any Person for whom any such beneficiary, transferee or

holder may be acting), the Agent, U.S. Bank or any Bank or any other Person,

whether in connection with a Letter of Credit, this Agreement, the transactions

contemplated hereby, or any unrelated transaction; or

 

(c)           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.

 

Neither the Agent,

U.S. Bank, any other Bank nor the officers, directors, agents or employees of

any thereof shall be liable or responsible for, and the obligations of the

Company to U.S. Bank and the Banks shall not be impaired by:

 

(i)            the

use which may be made of any Letter of Credit or for any acts or omissions of

any beneficiary, transferee or holder thereof in connection therewith;

 

(ii)           the

validity, sufficiency or genuineness of documents, or of any endorsements

thereon, even if such documents or endorsements should, in fact, prove to be in

any or all respects invalid, insufficient, fraudulent or forged;

 

(iii)          the

acceptance by U.S. Bank of documents that appear on their face to be in order,

without responsibility for further investigation, regardless of any notice or

information to the contrary; or

 

(iv)          any

other circumstances whatsoever in making or failing to make payment under any

Letter of Credit.

 

Notwithstanding

the foregoing, the Company shall have a claim against U.S. Bank, and U.S. Bank

shall be liable to the Company, to the extent, but only to the extent, of any

direct, as opposed to consequential, damages 

 

15

 

suffered

by the Company which the Company proves were caused by U.S. Bank’s willful

misconduct or gross negligence in determining whether documents presented under

any Letter of Credit comply with the terms thereof.

 

Part

C  —  General

 

Section 2.14           Optional Reduction or Termination

of Commitments.  The Company may, at

any time, upon not less than five Business Days’ prior written notice to the

Agent, reduce the Commitments, ratably, with any such reduction in a minimum

aggregate amount for all the Banks of $5,000,000, or an integral multiple

thereof, or terminate the Commitments in their entirety; provided, however,

that (a) the Company may not at any time reduce the Aggregate Commitment Amount

below the Letter of Credit Usage as of the date of such reduction unless the

Company reduces the Aggregate Commitment Amount to zero and deposits with U.S.

Bank in the Holding Account an amount equal to the Letter of Credit Usage as of

such date; and (b) the Company may not reduce the Commitments if the payment

required by the next sentence as a result of such reduction would result in any

outstanding Eurodollar Advances being repaid, in whole or in part, prior to the

last day of the Interest Period applicable to such Advances.  Upon any reduction in the Commitments

pursuant to this Section 2.14, the Company shall pay to the Agent for the

account of the Banks the amount, if any, by which the Total Outstandings exceed

the Aggregate Commitment Amount after giving effect to such reduction.  Upon termination of the Commitments pursuant

to this Section, the Company shall pay to the Agent for the account of the

Banks the full amount of all outstanding Loans, all accrued and unpaid interest

thereon, all unpaid Utilization Fees accrued to the date of such termination,

any indemnities payable pursuant to Section 2.26 and all other unpaid

obligations of the Company to the Banks and the Agent hereunder, and shall

deposit with U.S. Bank in the Holding Account an amount equal to the Letter of

Credit Usage as of such date.

 

Section 2.15           Agent’s Fees.  The Company shall pay to the Agent fees in

accordance with the terms of a letter agreement between the Company and the

Agent concerning such fees.  The Agent

may separately agree with any Bank to pay a portion of such fees to such Bank,

but shall not be obligated to pay such portion to such Bank unless and until

the same is received from the Company.

 

Section 2.16           Utilization Fees.  The Company shall pay to the Agent, for the

ratable account of the Banks, for the period from the Effective Date to and

including the Termination Date, fees (the “Utilization Fees”) in an amount

equal to the Applicable Utilization Fee Percentage per annum of the Aggregate Commitment

Amount, in each case as in effect on the last day of each calendar quarter or

the Termination Date (without giving effect to the termination of the

Commitments on such date), as applicable. 

Such Utilization Fees are payable calendar quarterly in arrears on the

first day of the following calendar quarter and on the Termination Date.

 

Section 2.17           Facility Fees.  The Company shall pay to the Agent, for the

account of each Bank, for the period from the Effective Date to and including

the Termination Date, a facility fee (the “Facility Fee”) in an amount equal to

the Applicable Facility Fee Percentage per annum of such Bank’s Commitment

Amount (whether used or unused), in each case as in effect on the last day of

each calendar quarter or the Termination Date (without giving effect to the

termination of the Commitments on such date).  

Such Facility Fees are payable calendar quarterly in arrears on the

first day of the following calendar quarter and on the Termination Date.

 

Section 2.18           Letter of Credit Fees.  For each Letter of Credit issued, extended

or renewed, the Company shall pay to the Agent for the ratable account of the

Banks, in advance on the date of issuance, extension or renewal, a fee (a

“Letter of Credit Fee”) in an amount equal to the Applicable Margin for

Eurodollar Rate Advances, as in effect on the date of issuance, extension or

renewal, of the original face amount of the Letter of Credit for the period

from the date of issuance, extension or renewal to the scheduled expiration

date of such Letter of Credit. The Company shall also pay to U.S. Bank, for its

own account, on demand (a) a “fronting fee” upon issuance of each Letter of

Credit issued in the amount of 0.125% times the amount available to be drawn

upon such Letter of Credit and (b) all issuance, amendment, drawing and other

fees regularly charged by U.S. Bank to its letter of credit customers and all

out–of–pocket expenses incurred by U.S. Bank in connection with the

issuance, amendment, administration or payment of any Letter of Credit.

 

16

 

Section 2.19           Computation.  Utilization Fees, Facility Fees, Letter of

Credit Fees and interest on Eurodollar Advances shall be computed on the basis

of actual days elapsed (or, in the case of Letter of Credit Fees which are paid

in advance, actual days to elapse) and a year of 360 days, or in the case of

interest on Prime Rate Advances, a year of 365 or 366 days, as applicable.

 

Section 2.20           Payments.  Payments and prepayments of principal of, and

interest on, the Notes and all fees, expenses and other obligations under this

Agreement payable to the Agent or the Banks shall be made without setoff or

counterclaim in Immediately Available Funds not later than 12:00 noon

(Minneapolis time) (except as otherwise provided herein) on the dates called

for under this Agreement to the Agent at its main office in Minneapolis,

Minnesota.  Payments payable to U.S.

Bank for its own account in respect of Letters of Credit under this Agreement

shall be made without setoff or counterclaim in Immediately Available Funds not

later than 12:00 noon (Minneapolis time) (except as otherwise provided herein)

on the dates called for in this Agreement to U.S. Bank at its main office in

Minneapolis, Minnesota.  Funds received after

such time shall be deemed to have been received on the next Business Day.  The Agent will promptly distribute in like

funds to each Bank its Pro Rata Share of each payment of principal or interest

applied to the Revolving Notes, and each payment of Utilization Fees, Facility

Fees, Letter of Credit Fees or other amounts received by the Agent for the

account of the Banks.  If the Agent does

not make any such distribution (or provide Federal Reserve Bank reference

numbers for the wire transfer of the amount thereof) by 3:00 P.M. (Minneapolis

time) on the date such payment of principal, interest or other amounts is

received or deemed received under this Section 2.20, the Agent will pay

interest to each Bank entitled to receive a portion of such distribution on the

amount distributable to it at the Federal Funds Rate from the date such payment

was received or deemed received until the date such distribution is made, such

interest to be payable with such distribution. 

Whenever any payment to be made hereunder or on the Notes shall be

stated to be due on a day which is not a Business Day, such payment shall be

made on the next succeeding Business Day and such extension of time, in the

case of a payment of principal, shall be included in the computation of any interest

on such principal.

 

Section 2.21           Use of Loan Proceeds.  The proceeds of the Loans shall be used for

the general corporate purposes of the Company and its Subsidiaries in a manner

not in conflict with any of the covenants in this Agreement.

 

Section 2.22           Interest Rate Not Ascertainable,

Etc.  If, on or prior to the date

for determining the Adjusted Eurodollar Rate in respect of the Interest Period,

any Bank reasonably determines (which determination shall be conclusive and

binding, absent error) that:

 

(a)           deposits

in dollars (in the applicable amount) are not being made available to such Bank

in the relevant market for such Interest Period, or

 

(b)           the

Adjusted Eurodollar Rate will not adequately and fairly reflect the cost to

such Bank of funding or maintaining Eurodollar Advances for such Interest

Period,

 

such

Bank shall forthwith give notice to the Agent and the Company and the other

Banks of such determination, whereupon the obligation of such Bank to make or

continue, or to convert any Advances to, Eurodollar Advances shall be suspended

until such Bank notifies the Company and the Agent that the circumstances

giving rise to such suspension no longer exist.  While any such suspension continues, all further Advances by such

Bank shall be made as Prime Rate Advances. 

No such suspension shall affect the interest rate then in effect during

the applicable Interest Period for any Eurodollar Advance outstanding at the

time such suspension is imposed.

 

Section 2.23           Increased Cost.  If, after the date hereof, any Regulatory

Change:

 

(a)           shall

subject any Bank (or its applicable lending office) to any tax, duty or other

charge with respect to its Eurodollar Advances, its Note(s), its obligation to

make Eurodollar Advances, its issuance of Letters of Credit or its obligation

to make Letter of Credit Loans, or shall change the basis of taxation of

payment to any Bank (or its applicable lending office) of the principal of or

interest on its Eurodollar Advances, or any other amounts due under this

Agreement in respect of its Eurodollar Advances, its obligation to make

Eurodollar Advances, its obligation to issue Letters of Credit or its

obligation to make Letter of Credit Loans (except for changes in the rate of

tax on the overall net income of 

 

17

 

such Bank or its applicable lending office imposed by

the jurisdiction in which such Bank’s principal office or applicable lending

office is located); or

 

(b)           shall

impose, modify or deem applicable any reserve, special deposit, capital

requirement or similar requirement (including, without limitation, any such

requirement imposed by the Board of Governors of the Federal Reserve System,

but excluding with respect to any Eurodollar Advance any such requirement to

the extent included in calculating the applicable Adjusted Eurodollar Rate)

against assets of, deposits with or for the account of, or credit extended by,

any Bank’s applicable lending office or shall impose on any Bank (or its

applicable lending office) or on the interbank eurodollar market any other

condition affecting its Eurodollar Advances, its Note(s), its obligation to

make Eurodollar Advances, its obligation to issue Letters of Credit or its

obligations to make Letter of Credit Loans;

 

and the

result of any of the foregoing is to increase the cost to such Bank (or its

applicable lending office) of making or maintaining any Eurodollar Advance,

issuing or maintaining Letters of Credit or making Letter of Credit Loans, or

to reduce the amount of any sum received or receivable by such Bank (or its

applicable lending office) under this Agreement or under its Note(s), then,

within 30 days after demand by such Bank (with a copy to the Agent), the

Company shall pay to such Bank such additional amount or amounts as will

compensate such Bank for such increased cost or reduction.  Each Bank will promptly notify the Company

and the Agent of any Regulatory Change of which it has knowledge, occurring

after the date hereof, which will entitle such Bank to compensation pursuant to

this Section 2.23 and will designate a different applicable lending office if

such designation will avoid the need for, or reduce the amount of, such

compensation and will not, in the judgment of such Bank, be otherwise

disadvantageous to such Bank.  A

certificate of any Bank claiming compensation under this Section 2.23, setting

forth the additional amount or amounts to be paid to it hereunder and stating

in reasonable detail the basis for the charge and the method of computation,

shall be conclusive in the absence of error. 

In determining such amount, any Bank may use any reasonable averaging

and attribution methods.  The Company

shall not be obligated to pay any such amount that is attributable to the

period ending 91 days prior to the date of the first notice delivered by any

Bank under the third preceding sentence 

with respect to any Regulatory Change (the “Section 2.23 Excluded

Period”), except to the extent any amount is attributable to the Section 2.23 Excluded

Period as a result of the retroactive application of the applicable Regulatory

Change.  Failure on the part of any Bank

to demand compensation for any increased costs or reduction in amounts received

or receivable with respect to any Interest Period or other applicable period

shall not constitute a waiver of such Bank’s rights to demand compensation for

any increased costs or reduction in amounts received or receivable in any

subsequent Interest Period or other applicable period.

 

Section 2.24           Illegality.  If, after the date of this Agreement, any

Regulatory Change shall make it unlawful or impossible for such Bank to make,

maintain or fund any Eurodollar Advances, such Bank shall notify the Company

and the Agent, whereupon the obligation of such Bank to make or continue, or to

convert any Advances to, Eurodollar Advances shall be suspended until such Bank

notifies the Company and the Agent that the circumstances giving rise to such

suspension no longer exist.  Before

giving any such notice, such Bank shall designate a different applicable lending

office if such designation will avoid the need for giving such notice and will

not, in the  judgment of such Bank, be

otherwise disadvantageous to such Bank. 

If such Bank determines that it may not lawfully continue to maintain

any Eurodollar Advances to the end of the applicable Interest Periods, all of

the affected Advances shall be automatically converted to Prime Rate Advances

as of the date of such Bank’s notice, and upon such conversion the Company

shall indemnify such Bank in accordance with Section 2.26.

 

Section 2.25           Capital Adequacy.  In the event that any Bank shall have

reasonably determined that any Regulatory Change has or shall have the effect

of reducing the rate of return on such Bank’s capital or the capital of its

parent corporation as a consequence of its Commitment, the Advances and/or the

Letters of Credit or its obligations to make Loans to cover Unpaid Draws to a

level below that which such Bank or its parent corporation could have achieved

but for such Regulatory Change (taking into account such Bank’s policies and

the policies of its parent corporation with respect to capital adequacy), then

the Company shall, within ten days after written notice and demand from such

Bank (with a copy to the Agent), pay to such Bank additional amounts sufficient

to compensate such Bank or its parent corporation for such reduction; provided,

that the Company shall not be obligated to pay any such additional amount

(i) unless such Bank shall first have notified the Company in writing that

it intends to seek such compensation pursuant to this Section 2.25 and

(ii) that is attributable to the period ending 91 days prior to the date

of such notice with respect to any Regulatory Change (the “Section 2.25

Excluded 

 

18

 

Period”), except

to the extent any amount is attributable to the Section 2.25 Excluded Period as

a result of the retroactive application of the applicable Regulatory

Change.  Any determination by such Bank

under this Section and any certificate as to the amount of such reduction given

to the Company by such Bank shall be final, conclusive and binding for all

purposes, absent error.

 

Section 2.26           Funding Losses.  The Company shall compensate each Bank, upon

its written request, for all losses, expenses and liabilities (including,

without limitation, any interest paid by such Bank to lenders of funds borrowed

by it to make or carry Eurodollar Advances to the extent not recovered by such

Bank in connection with the re-employment of such funds and including loss of

anticipated profits) which such Bank may sustain:  (a) if for any reason, other than a default by such Bank, a

funding of a Eurodollar Advance does not occur on the date specified therefor

in the Company’s request or notice as to such Advance under Section 2.2 or 2.4,

or (b) if, for whatever reason (including, but not limited to,

acceleration of the maturity of Advances following an Event of Default), any

repayment or prepayment of a Eurodollar Advance, or a conversion pursuant to

Section 2.24, occurs on any day other than the last day of the Interest Period

applicable thereto.  A Bank’s request

for compensation shall set forth the basis for the amount requested and shall

be final, conclusive and binding, absent error.

 

Section 2.27           Discretion of Banks as to Manner

of Funding.  Each Bank shall be

entitled to fund and maintain its funding of Eurodollar Advances in any manner

it may elect, it being understood, however, that for the purposes of this

Agreement all determinations hereunder (including, but not limited to,

determinations under Section 2.26, but excluding determinations of the

Eurodollar Rate that the Agent may elect to make from the Telerate or Reuters

screen) shall be made as if such Bank had actually funded and maintained each

Eurodollar Advance during the Interest Period for such Advance through the

purchase of deposits having a maturity corresponding to the last day of the

applicable Interest Period and an interest rate equal to the Eurodollar Rate.

 

Section 2.28           Setoff.  Whenever an Event of Default shall have

occurred and be continuing, the Company hereby irrevocably authorizes each Bank

to set off the Obligations owed to it (including, without limitation, any

participation in the Obligations of other Banks purchased pursuant to Section

7.10 or 7.11) against all deposits and credits of the Company with, and any and

all claims of the Company against, such Bank. 

Such right shall exist whether or not the Agent shall have made any

demand hereunder or under any other Loan Document, whether or not such

indebtedness, or any part thereof, or deposits and credits held for the account

of the Company is or are matured or unmatured, and regardless of the existence

or adequacy of any collateral, guaranty or any other security, right or remedy

available to the Banks.  Each Bank

agrees that, as promptly as is reasonably possible after the exercise of any

such setoff right, it shall notify the Agent and the Company of its exercise of

such setoff right; provided, however, that the failure of any

Bank to provide such notice shall not effect the validity of the exercise of

such setoff rights.  Nothing in this

Agreement shall be deemed a waiver or prohibition of or restriction on any

rights of banker’s lien, setoff and counterclaim available to any Bank pursuant

to law.

 

Section 2.29           Taxes.

 

(a)   Any and all payments by the Company hereunder

or under the Notes shall be made free and clear of and without deduction for

any and all present or future taxes, levies, imposts, deductions, charges of

withholdings, and all liabilities with respect thereto, excluding, in

the case of each Bank and the Agent, taxes imposed on its overall net income,

and franchise taxes imposed on it in lieu of net income taxes (all such

non-excluded taxes, levies, imposts, deductions, charges, withholdings and

liabilities in respect of payments hereunder or under the Notes being

hereinafter referred to as “Taxes”).

 

(b)   The Company shall indemnify each Bank and the

Agent for the full amount of Taxes imposed on or paid by such Bank or the Agent

and any penalties, interest and expenses with respect thereto. Payments on this

indemnification shall be made within 30 days from the date such Bank or the

Agent makes written demand therefor.

 

(c)   Within 30 days after the date of any payment

of Taxes, the Company shall furnish to the Agent, at its address referred to on

the signature page hereof a certified copy of a receipt evidencing payment

thereof.  In the case of any payment

hereunder or under the Revolving Notes by or on behalf of the Company through

an account or branch outside the United States or by or on behalf of the

Company by 

 

19

 

a payor that is not a United States person, if the

Company determines that no Taxes are payable in respect thereof, the Company

shall furnish or shall cause such payor to furnish, to the Agent, at such

address, an opinion of counsel acceptable to the Agent stating that such

payment is exempt from Taxes. For purposes of this subsection (d) and

subsection (e), the terms “United States” and “United States person”

shall have the meanings specified in Section 7701 of the Internal Revenue Code.

 

(d)   Banks to Submit Forms.  Each Bank, as of the date it becomes a party

hereto, represents to the Company and the Agent that it is either (i) a

corporation organized under the laws of the United States or any State thereof

or (ii) is entitled to complete exemption from United States withholding tax

imposed on or with respect to any payments, including fees, to be made pursuant

to this Agreement (x) under an applicable provision of a tax convention to

which the United States is a party or (y) because it is acting through a

branch, agency or office in the United States and any payment to be received by

it hereunder is effectively connected with a trade or business in the United

States.  Each Bank that is not a United

States person (as such term is defined in Section 7701(a)(30) of the Code)

shall submit to the Company and the Agent, on or before the day on which such

Bank becomes a Bank, a duly completed and signed copy of either Form W-8BEN or

Form W-8ECI of the United States Internal Revenue Service.  Form W-8BEN shall include the Foreign Bank’s

United States taxpayer identification number if required under the current regulations

to claim exemption from withholding pursuant to a tax convention.  Thereafter and from time to time, each such

Bank shall submit to the Company and the Agent such additional duly completed

and signed copies of one or the other of such Forms (or such successor Forms as

shall be adopted from time to time by the relevant United States taxing

authorities) as may be (i) reasonably requested by the Company or the Agent and

(ii) required and permitted under then-current United States law or regulations

to avoid United States withholding taxes on payments in respect of all payments

to be received by such Bank hereunder. 

Upon the request of the Company or the Agent, each Bank that is a United

States person (as such term is defined in Section 7701(a)(30) of the Code)

shall submit to the Company and the Agent a certificate on Internal Revenue

Service Form W-9 or such substitute form as is reasonably satisfactory to the

Company and the Agent to the effect that it is such a United States person.

 

(e)   Inability of a Bank.  If the Company shall be required by law or

regulation to make any deduction, withholding or backup withholding of any

taxes, levies, imposts, duties, fees, liabilities or similar charges of the

United States of America, any possession or territory of the United States of

America (including the Commonwealth of Puerto Rico) or any area subject to the

jurisdiction of the United States of America (“U.S. Taxes”) from any

payments to a Bank pursuant to any Loan Document in respect of the Obligations

payable to such Bank then or thereafter outstanding, the Company shall make

such withholdings or deductions and pay the full amount withheld or deducted to

the relevant taxation authority or other authority in accordance with

applicable law.

 

(f)            Substitution

of Bank.  In the event the Company

is required pursuant to this Section 2.29 to pay any additional amount to any

Bank, such Bank shall, if no Event of Default or Unmatured Event of Default has

occurred and is continuing, upon the request of the Company to such Bank and

the Agent, assign, pursuant to and in accordance with the provisions of Section

8.5(c), all of its rights and obligations under this Agreement and under the

Loan Documents to another Bank or an assignee selected by the Company and

reasonably satisfactory to the Agent, in consideration for (i) the payment by

such assignee to the assigning Bank of the principal of, and interest accrued

and unpaid to the date of such assignment on, the Revolving Note of such Bank,

(ii) the payment by the Company to the assigning Bank of any and all other

amounts owing to such Bank under any provision of this Agreement accrued and

unpaid to the date of such assignment and (iii) the Company’s release of the

assigning Bank from any further obligation or liability under this

Agreement.  Notwithstanding anything to

the contrary in this Section 2.29(f), in no event shall the replacement of any

Bank result in a decrease in the aggregate Commitment Amounts without the

written consent of the Majority Banks.

 

Section 2.30           Release of Existing Guaranties.  Upon the Effective Date, the Agent will

execute and deliver to the Company a written release of each guarantor (other

than the Guarantors) of the Company’s obligations under the Existing Credit

Agreement, in the form prescribed by the Agent.  Each Bank which is party to the Existing Credit Agreement hereby

consents to such execution and delivery by the Agent. 

 

20

 

ARTICLE

III

CONDITIONS

PRECEDENT

 

Section 3.1             Conditions Precedent to Initial

Loan.  The obligation of the Banks

to make the initial Loans hereunder, and the obligation of U.S. Bank to issue

the initial Letter of Credit hereunder, shall be subject to the prior or

simultaneous fulfillment of each of the following conditions:

 

(a)           the

Agent shall have received the following:

 

(i)            Revolving

Notes payable to the Banks, duly executed by the Company, complying with the

requirements of Section 2.3;

 

(ii)           Amended

and Restated Guaranties of the initial Guarantors, duly executed by such

Guarantor;

 

(iii)          copies

of the articles or certificate of incorporation or organization, including all

amendments thereto, of the Company and the initial Guarantors, certified as of

a date acceptable to the Agent by the appropriate governmental official of the

jurisdiction of its incorporation or organization;

 

(iv)          long-form

certificates of good standing of the Company and the initial Guarantors, as of

a date acceptable to the Agent, from such governmental official;

 

(v)           certificates

of the Secretary or an Assistant Secretary of the Company and the initial

Guarantors, dated the Effective Date, certifying (A) that attached thereto

is a true and complete copy of the organizational documents of the Company or

such Guarantor as in effect on such date, (B) that attached thereto is a

true and complete copy of resolutions duly adopted by the Board of Directors,

sole shareholder or other governing body of the Company or such Guarantor,

authorizing the execution, delivery and performance of the Loan Documents to

which it is a party and, in the case of the Company, the borrowings thereunder,

and certifying that such resolutions have not been modified, rescinded or

amended and are in full force and effect, (C) that the articles or

certificate of incorporation or organization of the Company or such Guarantor

have not been amended since the date of the last amendment thereto shown on the

certificate of good standing furnished pursuant to Section 3.1(a)(iv), and

(D) as to the authority, incumbency and specimen signature of each officer

executing any Loan Document or any other document delivered in connection

herewith or therewith on behalf of the Company or such Guarantor;

 

(vi)          the

favorable written opinion of Robins, Kaplan, Miller & Ciresi, counsel

for the Company and its Subsidiaries, addressed to the Banks, as to the matters

and to the effect set forth in Exhibit D;

 

(vii)         a

copy of a letter from the Company to the accounting firm that audited the

financial statements referred to in Section 4.5, informing such accounting firm

that the Banks are extending credit in reliance on such statements; and

 

(viii)        a

certificate of the appropriate financial officer of the Company to the effect

that, as of the Effective Date, the representations and warranties of the

Company set forth herein and of each initial Guarantor set forth in its

Guaranty are true and correct, and that no Event of Default or Unmatured Event

of Default has occurred or will exist.

 

(b)           the

Agent and the Banks shall have received all fees and other amounts due and

payable by the Company to the Agent and the Banks under, or as contemplated by,

this Agreement or any other Loan Document on or prior to the Effective Date,

including, but not limited to, the reasonable fees and expenses of counsel to

the Agent payable pursuant to Section 8.3; and

 

21

 

(c)           the

Company shall have performed and complied with all agreements, terms and

conditions contained in this Agreement required to be performed or complied

with by the Company prior to or simultaneously with the Effective Date.

 

Section 3.2             Conditions Precedent to Each

Loan.  The obligation of the Banks

to make all Loans (including the initial Loan) other than Letter of Credit

Loans, to continue any Eurodollar Advances as such or to convert any

outstanding Advances to Eurodollar Advances, and the obligation of U.S. Bank to

issue, extend or renew Letters of Credit, shall be subject to the fulfillment

of the following conditions:

 

(a)           the

representations and warranties of the Company contained in Article IV and of

each Guarantor contained in its Guaranty shall be true and correct on and as of

the date on which each Loan is requested to be made, on which each Advance is

requested to be continued or converted or on which each Letter of Credit is

requested to be issued, extended or renewed with the same force and effect as

if made on and as of such date, and the giving of the relevant Notice of

Borrowing, Continuation or Conversion or the making of the relevant request for

the issuance, extension or renewal of a Letter of Credit shall constitute a

representation and warranty to such effect;

 

(b)           no

Event of Default or Unmatured Event of Default shall have occurred and be

continuing on the Borrowing Date or would exist after giving effect to the

making of the requested Loan, the requested continuation or conversion of an

Advance or the issuance, extension or renewal of the requested Letter of

Credit; and

 

(c)           the

Agent shall have received a timely and properly completed Notice of Borrowing,

Continuation or Conversion, as required under Section 2.2 or Section 2.5, or

U.S. Bank shall have received a timely and properly completed written request

for the issuance, extension or renewal of a Letter of Credit, as required under

Section 2.9.

 

ARTICLE

IV

REPRESENTATIONS

AND WARRANTIES

 

To induce the

Banks to enter into this Agreement, to grant their respective Commitments and

to make Loans thereunder, and to induce U.S. Bank to issue Letters of Credit

hereunder, the Company hereby represents and warrants to the Banks that:

 

Section 4.1             Organization, Standing, Etc.  The Company is a corporation duly

incorporated, validly existing and in good standing under the laws of the

jurisdiction of its incorporation and has all requisite corporate power and

authority to carry on its business as now conducted, to enter into this

Agreement and to perform its obligations under each Loan Document to which it

is a party.  Each Subsidiary of the

Company is duly organized, validly existing and in good standing under the laws

of its jurisdiction of organization and has all requisite power and authority

to carry on its business as now conducted. 

The Company and each Subsidiary (a) holds all certificates of

authority, licenses and permits necessary to carry on its business as presently

conducted in each jurisdiction in which it is carrying on such business, except

where the failure to hold such certificates, licenses or permits would not have

a Material Adverse Effect, and (b) is duly qualified and in good standing

as a foreign corporation in each jurisdiction in which the character of the

properties owned, leased or operated by it or the business conducted by it

makes such qualification necessary and the failure so to qualify would

permanently preclude it from enforcing its rights with respect to any assets or

expose it to any liability, which in either case could have a Material Adverse

Effect.

 

Section 4.2             Authorization and Validity.  The execution, delivery and performance by

the Company of each Loan Document to which it is a party have been duly

authorized by all necessary corporate action, and this Agreement and each other

Loan Document to which the Company is a party constitutes the legal, valid and

binding obligations of the Company, enforceable against the Company in

accordance with its respective terms, subject to limitations as to

enforceability which might result from bankruptcy, insolvency, moratorium and

other similar laws affecting creditors’ rights generally and general principles

of equity.  The execution, delivery and

performance by each Guarantor of its Guaranty have been duly authorized by all

necessary organizational action, and each Guaranty constitutes the legal, valid

and binding obligations of the Guarantor party to it, enforceable 

 

22

 

against such

Guarantor in accordance with its respective terms, subject to limitations as to

enforceability which might result from bankruptcy, insolvency, moratorium and

other similar laws affecting creditors’ rights generally and general principles

of equity.

 

Section 4.3             Compliance With Law and Other

Agreements.  The execution, delivery

and performance by the Company and each Guarantor of each Loan Document to

which it is a party will not (a) violate any provision of any law,

statute, rule or regulation or any order, writ, judgment, injunction, decree,

determination or award of any Governmental Authority applicable to the Company

or any Subsidiary, (b) violate or contravene any provision of the

organizational documents of the Company or any Subsidiary, or (c) result

in a breach of or constitute a default under any indenture, loan or credit

agreement or any other agreement, lease or instrument to which the Company or

any Subsidiary is a party or by which the Company, any Subsidiary or any of

their properties may be bound, or result in the creation of any Lien

thereunder.  Neither the Company nor any

Subsidiary is in default under or in violation of any law, statute, rule or

regulation, order, writ, judgment, injunction, decree, determination or award

of any Governmental Authority applicable to it or any indenture, loan or credit

agreement or other agreement, lease or instrument to which it is a party or by

which it or any of its properties may be bound in any case in which the

consequences of such default or violation would have a Material Adverse Effect.

 

Section 4.4             Governmental Consent.  No order, consent, approval, license,

authorization or validation of, or filing, recording or registration with, or

exemption by, any Governmental Authority is required on the part of the Company

or any Subsidiary to authorize, or is required in connection with, the

execution, delivery and performance of, or the legality, validity, binding

effect or enforceability of, the Loan Documents.

 

Section 4.5             Financial Statements and No

Material Adverse Change.  The

Company’s audited financial statements as of March 3, 2001, and its

consolidated unaudited financial statements as of December 1, 2001, as

heretofore furnished to the Banks, have been prepared in conformity with GAAP

on a consistent basis (except for year-end audit adjustments as to the

unaudited statements) and fairly present the consolidated financial condition

of the Company as at such dates and the results of its operations and cash flow

for the respective periods then ended. 

As of the dates of such financial statements, neither the Company nor

any Subsidiary had any material obligation, contingent liability, liability for

taxes or long-term lease obligations or unusual forward or long-term commitment

which is not either reflected in such financial statements or in the notes

thereto.  Since the date of the

Company’s most recent audited financial statements delivered to the Banks, no

Material Adverse Effect has occurred with respect to the Company or any

Subsidiary.

 

Section 4.6             Litigation.  There are no actions, suits or proceedings

pending or, to the knowledge of the Company, threatened against or affecting

the Company, any Subsidiary or any of their properties before any arbitrator or

any Governmental Authority which has had, or, if determined adversely to the

Company or such Subsidiary, would likely have, a Material Adverse Effect.

 

Section 4.7             ERISA.  Each Plan complies with all material

applicable requirements of ERISA and the Code and with all material applicable

rulings and regulations issued under the provisions of ERISA and the Code

setting forth those requirements.  No

Reportable Event has occurred and is continuing with respect to any Plan.  All of the minimum funding standards

applicable to such Plans have been satisfied and there exists no event or

condition which would permit the institution of proceedings to terminate any

Plan under Section 4042 of ERISA.  The

current value of the Plans’ benefits guaranteed under Title IV of ERISA does

not exceed the current value of the Plans’ assets allocable to such

benefits.  As of the Signing Date,

neither the Company nor any ERISA Affiliate is a party to or has any liability

to any Multiemployer Plan.

 

Section 4.8             Environmental, Health and Safety

Laws.  There does not exist any

violation by the Company or any Subsidiary of any applicable federal, state or

local law, rule or regulation or order of any government, governmental

department, board, agency or other instrumentality relating to environmental,

pollution, health or safety matters which could have a Material Adverse

Effect.  Neither the Company nor any

Subsidiary has received any notice to the effect that any part of its

operations or properties is not in material compliance with any such law, rule,

regulation or order or notice that it or its property is the subject of any

governmental investigation evaluating whether any remedial action is needed to

respond to any release of any toxic or hazardous waste or substance into the

environment, which non-compliance or remedial action could reasonably be

expected to have a Material Adverse Effect on 

the Company.

 

23

 

Section 4.9             Federal Reserve Regulations.  Neither the Company nor any Subsidiary is

engaged principally or as one of its important activities in the business of

extending credit for the purpose of purchasing or carrying margin stock and no

part of the proceeds of any Loan will be used, whether directly or indirectly,

and whether immediately, incidentally or ultimately, (a) to purchase or

carry margin stock or to extend credit to others for the purpose of purchasing

or carrying margin stock or to refund indebtedness originally incurred for such

purpose or (b) for any purpose which entails a violation of, or which is

inconsistent with, the provisions of Regulations U or X.  The value of all margin stock owned by the

Company and its Subsidiaries does not constitute more than 25% of the value of

the consolidated assets of the Company.

 

Section 4.10           Title to Property; Possession

Under Leases.  Each of the Company

and its Subsidiaries has good title, free of all Liens other than those

permitted by Section 5.12 hereof, to all of the properties and assets reflected

in the most recent financial statements delivered to the Banks hereunder as

being owned by it and all assets acquired subsequent to the date of such

financial statements, except for assets disposed of in the ordinary course of

business.  To the knowledge of the

Company, there are no actual, threatened or alleged defaults with respect to

any leases of any real or personal property under which the Company or any of

its Subsidiaries is lessor, in each case which actual, threatened or alleged

defaults could have a Material Adverse Effect.

 

Section 4.11           Taxes.  The Company and its Subsidiaries have filed

all federal, state, local and foreign tax returns required to be filed by them

and have paid or made provision for the payment of all taxes due and payable

pursuant to such returns and pursuant to any assessments made against them or

any of their property and all other taxes, fees and other charges imposed on

them or any of their property by any Governmental Authority (other than taxes,

fees or charges the amount or validity of which is currently being contested in

good faith by appropriate proceedings and with respect to which adequate

reserves have been set aside on the books of the Company or such Subsidiary in

conformity with GAAP).  No tax Liens

have been filed and no material claims are being asserted with respect to any

such taxes, fees or charges.  The

charges, accruals and reserves on the books of the Company and each Subsidiary

in respect of taxes and other governmental charges are adequate and the Company

knows of no proposed material tax assessment against it or any Subsidiary or

any basis therefor.  The United States

income tax returns of the Company and its Subsidiaries have been audited by the

Internal Revenue Service, or the period for audit thereof has expired, for all

fiscal years of the Company ending on or before March 31, 1996.

 

Section 4.12           Trademarks, Patents.  Each of the Company and its Subsidiaries

possesses or has the right to use all of the patents, trademarks, trade names,

service marks and copyrights, and applications therefor, and all technology,

know-how, processes, methods and designs used in or necessary for the conduct

of its business, without known conflict with the rights of others except

conflicts that would not be likely to have a Material Adverse Effect on the

Company.

 

Section 4.13           Business and Properties of Company

and its Subsidiaries.  Since the

date of the most recent financial statements delivered to the Banks hereunder,

the business, properties and other assets of the Company and its Subsidiaries

have not been materially and adversely affected in any way as the result of any

fire or other casualty, strike, lockout, or other labor trouble, embargo,

sabotage, confiscation, condemnation, riot, civil disturbance, activity of

armed forces or act of God.

 

Section 4.14           Securities Laws.  Neither the Company nor any Subsidiary has

issued any unregistered securities in violation of the registration

requirements of Section 5 of the Securities Act of 1933, as amended, or any

other federal, state or foreign law, nor is the Company or any Subsidiary

violating any rule, regulation or requirement under the Securities Act of 1933,

as amended, or the Securities Exchange Act of 1934, as amended, or other

federal, state or foreign law in any material respect.

 

Section 4.15           Investment Company Act.  The Company is not an “investment company”

or a company “controlled” by an investment company within the meaning of the

Investment Company Act of 1940, as amended.

 

Section 4.16           Public Utility Holding Company Act.  The Company is not a “holding company” or a

“subsidiary company” of a holding company or an “affiliate” of a holding

company or of a subsidiary company of a holding company within the meaning of

the Public Utility Holding Company Act of 1940, as amended.

 

24

 

Section 4.17           Retirement Benefits.  Except as required under Section 4980B of

the Code, Section 601 of ERISA or applicable state law, neither the Company nor

any Subsidiary is obligated to provide post-retirement medical or insurance

benefits with respect to employees or former employees.

 

Section 4.18           Indebtedness.  The Company and its Subsidiaries have no

outstanding Indebtedness except Indebtedness permitted pursuant to

Section 5.13.

 

Section 4.19           Subsidiaries.  Schedule 4.19(a) sets forth the Company’s

organizational chart as of the Effective Date, including the legal name and the

jurisdiction of incorporation of each of the Company’s Subsidiaries as of the

Signing Date.  Schedule 4.19(b)

identifies all Restricted Subsidiaries as of the Company’s fiscal year ended

March 3, 2001 and, with respect to each such Restricted Subsidiary sets forth

(i) the jurisdiction of incorporation of such Restricted Subsidiary, (ii) the

authorized and outstanding capital stock of such Restricted Subsidiary by class

and number and (iii) the name of each Person owning the capital stock of such

Restricted Subsidiary.  There are no

warrants, options or other rights to purchase any capital stock in any

Restricted Subsidiary.

 

Section 4.20           Full Disclosure.  Subject to the following sentence, neither

the financial statements delivered to the Banks hereunder nor any other

certificate, written statement, exhibit or report furnished by or on behalf of

the Company in connection with or pursuant to this Agreement contains any

untrue statement of a material fact or omits to state any material fact

necessary in order to make the statements contained therein not

misleading.  Certificates or statements

furnished by or on behalf of the Company to the Agent or any Bank consisting of

projections or forecasts of future results or events have been prepared in good

faith and are based on good faith estimates and assumptions of the management

of the Company, and the Company has no reason to believe that such projections

or forecasts are not reasonable.

 

ARTICLE

V

COVENANTS

 

Until the

Commitments shall have expired or been terminated and all of the Obligations

shall have been paid in full, unless the Majority Banks shall otherwise consent

in writing, the Company will:

 

Section 5.1             Financial Statements.  Furnish to the Agent, with a copy for each

Bank:

 

(a)           as

soon as available and in any event within 90 days after the end of each fiscal

year of the Company, a copy of the consolidated financial statements of the

Company consisting of at least statements of income, a reconciliation of

changes in equity accounts and cash flow statements for such fiscal year and

balance sheets as at the end of such fiscal year, setting forth in each case in

comparative form corresponding figures from the preceding year audit, certified

without qualification as to scope, as to the going concern nature of the

Company or as to any other matter deemed material by the Majority Banks, by

Ernst & Young or other independent certified public accountants of

recognized national standing selected by the Company and acceptable to the

Agent, together with (i) to the extent not previously delivered to such

accounting firm under the terms hereof, a letter from the Company to such

accounting firm advising such accounting firm that the Banks are extending

credit in reliance on such financial statements and (ii) a statement of

the accounting firm performing such audit to the effect that in the course of

performing its examination nothing came to its attention that caused it to

believe that the Company was not in compliance with Sections 5.21, 5.22 and

5.23;

 

(b)           as

soon as available and in any event within (i) in the case of the last fiscal

quarter of each year, 60 days and (ii) in all other cases, 45 days, after the

end of each fiscal quarter, a copy of the unaudited consolidated financial

statements of the Company consisting of at least statements of income for said

fiscal quarter and for the period from the beginning of the fiscal year to the

end of such fiscal quarter, cash flow statements for such fiscal quarter and

for the period from the beginning of the fiscal year to the end of such fiscal

quarter and balance sheets as at the end of such fiscal quarter, setting forth,

in each case, comparative figures for the corresponding period of the preceding

fiscal year and forecasted figures for such period, certified by the chief

financial officer of the Company or his designee as being true and prepared in

accordance with GAAP, except for year-end audit adjustments and the absence of

footnotes;

 

25

 

(c)           promptly

after the sending or filing thereof, copies of all regular and periodic

financial reports which the Company or any Subsidiary shall file with the Securities

and Exchange Commission or any national securities exchange;

 

(d)           as

soon as practicable and in any event on or before the last  Business Day of the second month of each

fiscal year of the Company, projections, in reasonable detail, on a quarterly

basis for such fiscal year, including projected earnings statements and cash

flow statements for each month during such fiscal year and the period from the

beginning of such fiscal year through the end of such month, and accompanying

balance sheets as of the end of such month, signed by the chief financial

officer of the Company or his designee;

 

(e)           together

with the financial statements delivered for each fiscal quarter pursuant to

Section 5.1(b), the Company’s quarterly sales release for such quarter; and

 

(f)            such

other information respecting the financial condition and results of operations

of the Company as the Agent or any Bank may from time to time reasonably

request.

 

(g)           as

soon as available and in any event within (i) in the case of the last fiscal

quarter of each year, 60 days and (ii) in all other cases, 45 days after the

end of each fiscal quarter, and together with the financial statements required

pursuant to Section 5.1(b), a properly completed Compliance Certificate, signed

by an appropriate financial officer of the Company.

 

Section 5.2             Corporate Existence.  Except as permitted by Section 5.11,

maintain, and cause each Subsidiary to maintain, its corporate existence in

good standing under the laws of its jurisdiction of incorporation and its

qualification to transact business in each jurisdiction where failure so to

qualify would permanently preclude the Company or such Subsidiary from

enforcing its rights with respect to any material asset or would expose the

Company or such Subsidiary to any material liability, and do or cause to be

done, and cause each Subsidiary to do or cause to be done, all things necessary

to obtain, preserve, renew, extend and keep in full force and effect the

rights, licenses, permits, franchises and authorizations material to the

conduct of its business.

 

Section 5.3             Compliance with Laws, etc.  Comply, and cause each Subsidiary to comply,

in all material respects with all applicable laws, rules, regulations and

orders of any Governmental Authority applicable to the Company or such

Subsidiary, whether now in effect or hereafter enacted, the failure to comply

with which has had or would likely have a Material Adverse Effect on the

Company.

 

Section 5.4             Insurance.  Keep, and cause each Subsidiary to keep, its

insurable properties adequately insured at all times by financially sound and

reputable insurers; maintain, and cause each Subsidiary to maintain, such other

insurance, in such amounts and against such risks, as is customary with

companies in the same or similar businesses, including (i) public

liability insurance against such tort claims which may be asserted against it,

and (ii) fire and other risks insured against by extended coverage; and

maintain, and cause each Subsidiary to maintain, such other insurance as may be

required by law or agreement.

 

Section 5.5             Payment of Indebtedness, Taxes

and Claims.  Pay, and cause each of

its Subsidiaries to pay, its Indebtedness and other obligations promptly and in

accordance with their terms; file, and cause each of its Subsidiaries to file,

all tax returns and reports which are required by law to be filed by it; pay,

and cause each of its Subsidiaries to pay, before they become delinquent, all

taxes, assessments and governmental charges and levies imposed upon it or its

property and all claims or demands of any kind (including but not limited to

those of suppliers, mechanics, carriers, warehousemen, landlords and other like

Persons) which, if unpaid, might result in the creation of a Lien upon its

property; provided that the foregoing items need not be paid if they are

being contested in good faith by appropriate proceedings, and as long as the

Company’s or such Subsidiary’s title to its property is not materially

adversely affected, its use of such property in the ordinary course of its

business is not materially interfered with and adequate reserves with respect

thereto have been set aside on the Company’s or such Subsidiary’s books in

conformity with GAAP.

 

26

 

Section 5.6             Books and Records; Inspections;

Audits.  Keep, and cause each

Subsidiary to keep, proper books and records of account in which full, true and

correct entries will be made of all its dealings, business and affairs in

accordance with GAAP consistently applied and consistent with the principles

applied in the preparation of the financial statements referred to in Section

4.5; permit, and cause each Subsidiary to permit, any Person designated by any

Bank to visit and inspect any of its properties, corporate books and financial

records and to copy and make extracts therefrom and to discuss its affairs and

finances with its officers and independent certified public accountants, all at

such times as such Bank shall reasonably request.

 

Section 5.7             Maintenance of Properties.  Maintain, and cause each Subsidiary to

maintain, its properties used or useful in the conduct of its business in good

condition, repair and working order, and supplied with all necessary equipment,

and make all necessary repairs, renewals, replacements, betterments and

improvements thereto, all as may be necessary so that the business carried on

in connection therewith may be properly and advantageously conducted at all

times.

 

Section 5.8             ERISA.  Establish, maintain and operate each Plan in

compliance with all material applicable requirements of ERISA and of the Code

and with all material applicable rulings and regulations issued under the

provisions of ERISA and of the Code, and will not, and will not permit any

ERISA Affiliate to, (a) engage in any transaction in connection with which

the Company or any ERISA Affiliate would be subject to either a civil penalty

assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975

of the Code, in either case in an amount exceeding $100,000, (b) fail to

make full payment when due of all amounts which, under the provisions of any

Plan, the Company or any ERISA Affiliate is required to pay as contributions

thereto, or permit to exist any accumulated funding deficiency (as such term is

defined in Section 302 of ERISA and Section 412 of the Code), whether or not

waived, with respect to any Plan in an aggregate amount exceeding $1,000,000 or

(c) fail to make any payments in an aggregate amount exceeding $1,000,000

to any Multiemployer Plan that the Company or any ERISA Affiliate may be

required to make under any agreement relating to such Multiemployer Plan or any

law pertaining thereto.

 

Section 5.8             Litigation and Other Notices.  Furnish to the Agent, with a copy for each

Bank, written notice of the following promptly after any officer of the Company

or any Subsidiary becomes aware of the same:

 

(a)           any

Event of Default or Unmatured Event of Default, specifying the nature and

extent thereof and the corrective action (if any) proposed to be taken with

respect thereto;

 

(b)           the

filing or commencement of, or receipt of notice of intention of any person to

file or commence, any action, suit or proceeding, whether at law or in equity

or by or before any Governmental Authority, against the Company or any Subsidiary

which has had or would likely have a Material Adverse Effect on the Company;

 

(c)           any

development affecting or relating to the Company or any Subsidiary, including

without limitation any development in litigation, that in the reasonable

judgment of the Company has had, or would likely have, a Material Adverse

Effect on the Company;

 

(d)           the

issuance by any Governmental Authority of any injunction, order, decision or

other restraint prohibiting, or having the effect of prohibiting, the Loans or

Letters of Credit, or the initiation of any litigation or similar proceeding

seeking any such injunction, order or other restraint;

 

(e)           the

occurrence of any Reportable Event with respect to any Plan and the action

which is proposed to be taken with respect thereto, together with a copy of the

notice of such Reportable Event to the PBGC;

 

(f)            any

violation as to any environmental matter by the Company or any Subsidiary or

the commencement of any judicial or administrative proceeding relating to

health, safety or environmental matters (i) in which an adverse determination

or result could result in the revocation of or have a material adverse effect

on any operating permits, air emission permits, water discharge permits, 

 

27

 

hazardous waste permits or other permits held by the

Company or any Subsidiary which are material to the operations of the Company

or such Subsidiary, or (ii) which will or threatens to impose a material

liability on the Company or such Subsidiary to any Person or which will require

a material expenditure by the Company or such Subsidiary to cure any alleged

problem or violation; or

 

(g)           the

issuance by any Governmental Authority of any injunction, order or decision, or

the entry by the Company or any Subsidiary into an agreement with any

Governmental Agency, materially restricting the business of the Company or any

Subsidiary or concerning any material business practice of the Company or any

Subsidiary.

 

Section 5.10           Supplemental Disclosure.  From time to time as may be necessary (in

the event that such information is not otherwise delivered by the Company to

the Banks pursuant to this Agreement), as promptly as is reasonable under the

circumstances after any executive officer of the Company or any Subsidiary has

knowledge with respect thereto, and at least quarterly, supplement or amend and

deliver to the Agent, with a copy for each Bank, each Schedule or

representation herein with respect to any matter hereafter arising which, if

existing or occurring at the Signing Date, would have been required to be set

forth or described in such Schedule or as an exception to such representation

or which is necessary to correct any information in such Schedule or

representation which has been rendered inaccurate thereby.  No supplement to any Schedule or

representation provided by the Company hereunder shall amend this Agreement

(including, without limitation, the applicable Schedule) unless such amendment

is agreed to by the requisite Banks as provided in Section 8.1(a).

 

Section 5.11           Restrictions on Fundamental

Changes.  Not, and not permit any

Subsidiary to engage in any business activities or operations if, as a result

thereof, the general nature of the business of the Company or the Company and

its Subsidiaries taken as a whole would be substantially changed from that

conducted on the Signing Date.  So long

as no Unmatured Event of Default or Event of Default is continuing the Company

is and continues to be in compliance with the requirements of Sections 5.21,

5.22 and 5.23  before and after any of the transactions hereinafter

described, the Company or any Subsidiary may (i) upon not less than 10 Business

Days’ prior written notice to the Agent and the Banks, merge or consolidate

with any other Person, so long as the Company or such Subsidiary is the

survivor; (ii) sell, lease or otherwise dispose of (or enter into any

commitment to convey, sell, lease, transfer or otherwise dispose of) all or any

part of its business or assets; (iii) acquire by purchase or otherwise all of

the business or property of, or stock or other evidence of beneficial ownership

of, any Person or (iv) create or acquire any new Subsidiaries.

 

Section 5.12           Liens.  Not, and not permit any Subsidiary to,

create, incur, assume or suffer to be created, incurred or exist any Lien, or

enter into or make any commitment to enter into any arrangement for the

acquisition of any property through conditional sale, lease-purchase, or other

title retention agreements with respect to property now owned or hereafter

acquired by the Company or any Subsidiary, except:

 

(a)           Liens

existing on the Signing Date and described in Schedule 5.12(a), and Liens

on the same property securing any Indebtedness the proceeds of which are used

solely to refinance the Indebtedness secured by such existing Liens;

 

(b)           deposits

or pledges to secure payment of workers’ compensation, unemployment insurance,

old age pensions or other social security obligations, incurred in the ordinary

course of business of the Company;

 

(c)           Liens

for taxes, fees, assessments and governmental charges not delinquent or which

are being contested in good faith by appropriate proceedings and for which

whatever reserves required by GAAP have been established;

 

(d)           Liens

consisting of easements, rights-of-way, zoning restrictions, restrictions on

the use of real property, and defects and irregularities in the title thereto,

landlords’ liens and other similar liens and encumbrances none of which

interfere materially with the use of the property covered thereby in the

ordinary course of the business of the Company or such Subsidiary and which do

not materially detract from the value of such properties;

 

28

 

(e)           Liens

created or assumed in connection with the acquisition of real or personal

property by the Company or any Subsidiary, provided that such Liens attach only

to the property acquired and secure only Indebtedness incurred solely to

finance the acquisition of such property, and Liens on the same property

securing any Indebtedness the proceeds of which are used solely to refinance

such Indebtedness;

 

(f)            subject

to the limitation set forth in Section 5.13(e), Liens on inventory of the

Company or any Subsidiary and proceeds thereof pursuant to agreements with the

suppliers of inventory or inventory lenders to the Company or such Subsidiary,

provided that such Liens attach only to inventory financed pursuant to such

agreements and secure only Indebtedness incurred solely to finance the

acquisition of such inventory by the Company or such Subsidiary;

 

(g)           Liens

on real property (but not any equipment other than building fixtures), provided

that such Liens secure only Indebtedness incurred solely to finance, or

reimburse the Company for the cost of, Capital Expenditures for the acquisition

or construction of such real property; and;

 

(h)           Liens

existing on the Effective Date and securing the Future Shop Indebtedness,

provided that such Liens have been terminated and released on or prior June 30,

2002.

 

Section 5.13           Indebtedness.  Not, and not permit any Subsidiary to,

incur, create, issue, assume or remain liable for any Indebtedness, except:

 

(a)           the

Obligations;

 

(b)           other

Indebtedness existing on the Signing Date and described in Schedule 5.13, and

Indebtedness the proceeds of which are used solely to refinance such

Indebtedness;

 

(c)           Subordinated

Indebtedness, including the Subordinated Convertible Debentures;

 

(d)           Indebtedness

secured by Liens permitted under Section 5.12(e) or Section 5.12(g);

 

(e)           Indebtedness

secured by Liens permitted under Section 5.12(f), provided the amount of such

Indebtedness at any time outstanding does not exceed thirty-five percent of the

lower of cost (determined on an average cost basis) or market value of the

Company’s inventory;

 

(f)            Indebtedness

in respect of Documentary Letters of Credit incurred in the ordinary course of

business;

 

(g)           Indebtedness

of the Company in an amount not to exceed $200,000,000;

 

(h)           current

liabilities, other than for borrowed money, incurred in the ordinary course of

business;

 

(i)            Indebtedness

incurred after the date hereof in order to finance the acquisition of new

corporate headquarters facilities; provided that (i) such Indebtedness shall

not exceed a loan-to-value ratio (ie, the original principal balance of such

Indebtedness over the appraised fair market value of such new corporate

headquarters facilities) of 80% and (ii) any documents evidencing such

Indebtedness (A) shall have terms and covenants less restrictive than those set

forth herein, and (B) the documents shall be otherwise reasonably acceptable to

the Agent.

 

(j)            The

Initial Convertible Debentures.

 

(k)           The

Indebtedness described on Schedule 5.13(k) (the “Future Shop Indebtedness”).

 

29

 

Section 5.14           [INTENTIONALLY OMITTED]

 

Section 5.15           Guarantees.  Not, and not permit any Subsidiary to, be or

become liable  on any Guarantee, except

Guarantees of the Indebtedness permitted by Section 5.13; provided,

that, in each of the forgoing cases (a) to the extent that the Indebtedness so

guaranteed is subordinated to the Obligations, such Guarantee shall be

similarly subordinated to the Obligations, and any Guarantees thereof, and (b)

the Company may not amend or cancel, or permit or consent to the amendment or

cancellation of, the subordination provisions thereof.

 

Section 5.16           Restricted Payments.  Not make Restricted Payments unless  both before and after giving effect thereto,

no Event of Default or Unmatured Event of Default will have occurred or be

continuing.

 

Section 5.17           [INTENTIONALLY OMITTED]

 

Section 5.18           Federal Reserve Regulations.  Not use any part of the proceeds of any Loan

directly or indirectly (a) to purchase or carry margin stock or to extend

credit to others for the purpose of purchasing or carrying margin stock or to

refund Indebtedness originally incurred for such purpose or (b) for any

purpose which entails a violation of, or which is inconsistent with, the

provisions of Regulations U or X.

 

Section 5.19           Environmental Matters.  Observe and comply with, and cause each

Subsidiary to observe and comply with, all laws, rules, regulations and orders

of any government or government agency relating to health, safety, pollution,

hazardous materials or other environmental matters to the extent non-compliance

could result in a Material Adverse Effect on the Company.

 

Section 5.20           Payment of Subordinated

Indebtedness.  Not, and not permit

any Subsidiary to:  make any prepayment

of principal of, or acquire, redeem or otherwise retire any Subordinated

Indebtedness, if an Event of Default or Unmatured Event of Default has occurred

and is continuing or will exist as a result of such prepayment or if such

prepayment, acquisition, redemption or retirement would be inconsistent with

the subordination provisions thereof; make any payment of principal or interest

on any Subordinated Indebtedness if an Event of Default or Unmatured Event of

Default exists or otherwise in any manner inconsistent with the subordination

provisions thereof; amend or cancel or consent to or permit the amendment or

cancellation of, or the subordination provisions thereof; take or omit to take

any action whereby the subordination of such Indebtedness or any part thereof

to the Notes might be terminated, impaired or adversely affected; or omit to

give the Banks prompt written notice of any notice received from any holder of

Subordinated Indebtedness of any default under any agreement or instrument

relating to any Subordinated Indebtedness by reason whereof such Subordinated

Indebtedness might become or be declared to be due or payable.

 

Section 5.21           Minimum Consolidated Net Worth.  Not at any time permit Consolidated Net

Worth to be less than $2,000,000,000 minus the aggregate amount

(not to exceed $1,000,000,000) paid by the Company in cash after the Effective

Date to repurchase shares of its common stock pursuant to the Company’s stock

repurchase programs.

 

Section 5.22           Cash Flow Leverage Ratio.  Not permit the Cash Flow Leverage Ratio (a)

at the end of any fiscal year of the Company to exceed 3.00 to 1.00 and (b) at

the end of each fiscal quarter (other than the last fiscal quarter) during any

such fiscal year to exceed 3.25 to 1.00.

 

Section 5.23           Interest Coverage Ratio.  Not permit the Interest Coverage Ratio, as

at the end of any fiscal quarter for the Measurement Period ending on that

date, to be less than 3.00 to 1.00.

 

Section 5.24           Negative Pledges.  Not, and not permit any Subsidiary to, enter

into any agreement, bond, note or other instrument for the benefit of any

Person other than the Agent and the Banks that would (a) prohibit the Company

or such Subsidiary from granting, or otherwise limit the ability of the Company

or such Subsidiary to grant, any Lien on any of its property to the Agent, for

the benefit of the Banks, or to lenders providing credit facilities to replace

the Commitments or refinance the Obligations, except limitations created in

agreements creating Liens on, and applicable only to, property on which a Lien

is granted by the Company as permitted in Sections 5.12(e), (f) or (g), or (b)

require the Company or such Subsidiary to grant a Lien to any other 

 

30

 

Person if the

Company or such Subsidiary grants Liens to the Agent, for the benefit of the

Banks, or to lenders providing credit facilities to replace the Commitments or

refinance the Obligations.

 

Section 5.25           Guaranties of Restricted

Subsidiaries.  With respect to each

Subsidiary that becomes a Restricted Subsidiary after the Effective Date: (a)

the Company will furnish to the Banks written notice within 10 Business Days

after such Subsidiary becomes a Restricted Subsidiary and (b) the Company will,

within 10 Business Days of any written request therefor by the Agent at the

direction of the Majority Banks (i) cause such Subsidiary to duly execute and

deliver to the Agent a Guaranty properly completed for such Subsidiary and in

sufficient counterparts for the Agent and the Banks and (ii) furnish to the

Agent documents of the type specified in Sections 3.1(a)(iii), (iv) and (v)

properly completed for such Subsidiary and dated a date reasonably acceptable

to the Agent.  Nothing in this Agreement

shall obligate the Agent or the Banks to release or terminate a Guaranty of any

Guarantor which ceases to be a Restricted Subsidiary.

 

ARTICLE

VI

EVENTS

OF DEFAULT AND REMEDIES

 

Section 6.1             Events of Default.  The occurrence of any one or more of the

following events shall constitute an Event of Default:

 

(a)           the

Company shall fail to make when due, whether by acceleration of maturity,

required prepayment or otherwise, any payment of principal of or interest on

the Notes, any reimbursement obligation in respect of a draw under a Letter of

Credit or any other Obligation required to be paid to the Agent or any Bank

pursuant to this Agreement or any other Loan Document, or fails to make, when

due, any deposit into the Holding Account required hereunder; or

 

(b)           any

representation or warranty made by or on behalf of the Company or any

Subsidiary in this Agreement or any other Loan Document or in any certificate,

statement, report or document herewith or hereafter furnished to the Agent or

any Bank pursuant to this Agreement or any other Loan Document shall prove to

have been false or misleading in any material respect on the date as of which

the facts set forth are stated or certified; or

 

(c)           the

Company shall fail to preserve its corporate existence under the laws of the

jurisdiction of its incorporation or shall fail to comply with any term,

covenant or agreement contained in Sections 5.11, 5.12, 5.13, 5.15, 5.16, 5.17,

5.18, 5.20, 5.21, 5.22, 5.23, 5.24, or 5.25; or

 

(d)           the

Company shall fail to comply with any other agreement, covenant, condition,

provision or term contained in this Agreement (other than those herein above

set forth in this Section 6.1) or any other Loan Document and such failure to

comply shall continue for 30 days after whichever of the following dates is the

earliest:  (i) the date the Company

gives notice of such failure to the Agent, (ii) the date the Company

should have given notice of such failure to the Agent pursuant to Section 5.9,

or (iii) the date the Agent gives notice of such failure to the Company;

or

 

(e)           the

Company or any Subsidiary shall become insolvent or shall generally not pay its

debts as they mature or shall apply for, shall consent to, or shall acquiesce

in the appointment of a custodian, trustee or receiver of the Company or any

Subsidiary or for a substantial part of the property of any of them or, in the

absence of such application, consent or acquiescence, a custodian, trustee or

receiver shall be appointed for the Company or any Subsidiary or for a

substantial part of the property of any of them or the Company or any

Subsidiary shall make an assignment for the benefit of creditors; or

 

(f)            any

bankruptcy, receivership, custodianship, reorganization, debt arrangement or

other proceedings under any bankruptcy or insolvency law shall be instituted by

or against the Company or any Subsidiary, and, if instituted against the

Company or any Subsidiary, shall have been consented to or acquiesced in by the

Company or such Subsidiary, as applicable, or shall not have been dismissed

within 60 days, or an order for relief shall have been entered against the

Company or such Subsidiary, as applicable; or

 

31

 

(g)           any

dissolution or liquidation proceeding shall be instituted by or against the

Company or any Subsidiary and, if instituted against the Company or any

Subsidiary, shall be consented to or acquiesced in by the Company or such

Subsidiary or shall not have been dismissed within 60 days; or

 

(h)           one

or more judgments for the payment of money in an aggregate amount in excess of

$20,000,000 shall be rendered against the Company or any Subsidiary (unless

such judgment is covered by insurance and the insurer has offered to defend

such judgment or acknowledged, in writing, its liability with respect thereto)

and the same shall remain undischarged for a period of 60 consecutive days

during which execution shall not be effectively stayed, or any action shall be

legally taken by a judgment creditor to levy upon assets or properties of the

Company or any Subsidiary to enforce any such judgment; or

 

(i)            the

Company or any Subsidiary shall (i) fail to pay any principal or interest,

regardless of amount, due in respect of Indebtedness in a principal amount

aggregating in excess of $10,000,000, when and as the same shall become due and

payable (after giving effect to any applicable grace period specified in the

instrument evidencing or governing such Indebtedness), or (ii) fail to

observe or perform any other term, covenant or provision contained in any

instrument evidencing or governing such Indebtedness in a principal amount

aggregating in excess of $10,000,000 (after giving effect to any applicable

grace period specified in the instrument evidencing or governing such

Indebtedness) if the effect of any such failure is to cause, or to permit the

holder or holders of such Indebtedness or a trustee or other Person acting on

behalf of such holder or holders to cause, such Indebtedness to become due

prior to its stated maturity or to realize on any collateral given as security

for such Indebtedness; provided, however, that any of the

foregoing occurrences with respect to any Indebtedness arising from the

purchase of goods or services by the Company that is being contested in good

faith by appropriate proceedings shall not constitute an Event of Default as

long as the Company’s or such Subsidiary’s title to any substantial part of its

property is not materially adversely affected, its use of such property in the

ordinary course of its business is not materially interfered with and adequate

reserves with respect thereto have been set aside on its books in conformity with

GAAP; or

 

(j)            any

execution or attachment shall be issued whereby any substantial part of the

property of the Company or any Subsidiary shall be taken or attempted to be

taken and the same shall not have been vacated or stayed within 60 days after

the issuance thereof; or

 

(k)           any

of the following shall have occurred:

 

(i)            a

Reportable Event as defined in Section 4043(b), subdivision (5), of ERISA shall

have occurred with respect to any Plan subject to Title IV of ERISA (other than

any Multiemployer Plan) unless a waiver of the failure to meet minimum funding

standards under Section 412 of the Code shall have been timely applied for and

shall not have been denied; or

 

(ii)           a

Reportable Event as defined in Section 4043(b), subdivision (6), of ERISA shall

have occurred with respect to any Plan subject to Title IV of ERISA (other than

any Multiemployer Plan); or

 

(iii)          the

Company or any ERISA Affiliate shall have engaged in any Prohibited Transaction

and either (1) the Prohibited Transaction shall not have been corrected

within the correction period applicable to it under Section 502(i) of ERISA or

Section 4975(b) of the Code, or (2) an exemption shall not be applicable

or have been obtained under Section 408 of ERISA or Section 4975 of the Code;

or

 

(iv)          the

PBGC shall have terminated any Plan other than any Multiemployer Plan under

Title IV of ERISA or the Company or any ERISA Affiliate shall have received

notice from the PBGC of the intention of the PBGC to terminate any such Plan or

to appoint a Trustee to administer any such Plan, which notice shall not have

been withdrawn within 14 days of the date thereof; or

 

32

 

(v)           the

Company or any ERISA Affiliate shall have voluntarily terminated any Plan

subject to Title IV of ERISA (other than a Multiemployer Plan), pursuant to a

distress termination under Title IV of ERISA; or

 

(vi)          the

Company or any ERISA Affiliate, as an employer under a Multiemployer Plan,

shall have made a complete or partial withdrawal from such Multiemployer Plan;

 

and, upon the occurrence of any of the foregoing, the

aggregate amount of the Unfunded Liabilities of all Plans subject to Title IV

of ERISA shall exceed in the aggregate $2,000,000 or the Company shall incur

liability in excess of $2,000,000 in the aggregate;

 

(l)            lessors

under leases of real property with an aggregate fair market value (determined

under the most recent available appraisals thereof) in excess of $20,000,000 to

which the Company or any Subsidiary is a party, any lender to any such

lessor(s), or any trustee, agent or other representatives of any lender to, or

the holders of any securities issued by, any such lessor(s), shall exercise,

give any required formal written notice of intent to exercise, or otherwise

express in writing any present or unconditional intent to exercise, any remedy

they may have against the Company, any Subsidiary or any leased property that

involves (i) payment by the Company or any Subsidiary of an amount in excess of

$10,000,000 or (ii) any material interference with the Company’s or any

Subsidiary’s operations at any leased property;

 

(m)          a

Change of Control shall occur; or

 

(n)           The

Company or any Subsidiary shall  fail to pay any amount payable in respect

of any Rate Protection Agreement when the same becomes due and payable (whether

by scheduled payment, termination or likewise), and such failure shall continue

after the applicable grace period, if any, specified in such agreement.

 

Section 6.2             Remedies.  If (x) any Event of Default described in

Section 6.1(e), (f) or (g) shall occur, the Commitments shall automatically

terminate, the Obligations shall automatically become immediately due and

payable, the Company shall automatically become obligated to pay to U.S. Bank,

for deposit in the Holding Account, an amount equal to the outstanding Letter

of Credit Usage as of such date and the Agent, at the direction of the Majority

Banks, may enforce all rights and exercise all remedies of the Agent or the

Banks under the Loan Documents and under applicable law, or (y) any other

Event of Default shall occur and be continuing, then, the Agent, at the

direction of the Majority Banks, may at any time and from time to time do any

or all of the following:  (i) declare

the Commitments terminated, whereupon the Commitments shall be terminated,

(ii) declare the Obligations to be forthwith due and payable, whereupon

the Obligations shall immediately become due and payable, in each case without

presentment, demand, protest or other notice of any kind, all of which are

hereby expressly waived, anything in this Agreement or the other Loan Documents

to the contrary notwithstanding, (iii) demand that the Company pay to U.S.

Bank for deposit in the Holding Account an amount equal to the outstanding

Letter of Credit Usage as of the date of such demand, whereupon the Company

shall pay such amount to U.S. Bank, and (iv) enforce all rights and

exercise all remedies of the Agent or the Banks under the Loan Documents and

under applicable law.

 

ARTICLE

VII

THE

AGENT

 

The following

provisions shall govern the relationship of the Agent with the Banks.

 

Section 7.1             Appointment and Authorization.  Each Bank appoints and authorizes the Agent

to take such action as agent on its behalf and to exercise such respective

powers under the Loan Documents as are delegated to the Agent by the terms

thereof, together with such powers as are reasonably incidental thereto.  Neither the Agent nor any of its directors,

officers or employees shall be liable for any action taken or omitted to be

taken by it under or in connection with the Loan Documents, except for its own

gross negligence or willful misconduct. 

The Agent shall act as an independent contractor in performing its

obligations as Agent hereunder.  The

duties of the 

 

33

 

Agent shall be

mechanical and administrative in nature and nothing herein contained shall be

deemed to create any fiduciary relationship among or between the Agent, the

Company or the Banks.

 

Section 7.2             Note Holders.  The Agent may treat the payee of any Note as

the holder of the Obligations evidenced thereby until written notice of

transfer shall have been filed with it, signed by such payee and in form

satisfactory to the Agent.

 

Section 7.3             Consultation With Counsel.  The Agent may consult with legal counsel

selected by it and shall not be liable for any action taken or suffered in good

faith by it in accordance with the advice of such counsel.

 

Section 7.4             Loan Documents.  The Agent shall not be responsible to any

Bank for any recitals, statements, representations or warranties in any Loan

Document and shall not be under a duty to examine or pass upon the validity,

effectiveness, genuineness or value of any of the Loan Documents or any other

instrument or document furnished pursuant thereto, and the Agent shall be

entitled to assume that the same are valid, effective and genuine and what they

purport to be.

 

Section 7.5             U.S. Bank and Affiliates.  With respect to its Commitment and the Loans

made by it, U.S. Bank shall have the same rights and powers under the Loan

Documents as any other Bank and may exercise the same as though it were not the

Agent consistent with the terms thereof, and U.S. Bank and its affiliates may

accept deposits from, lend money to, issue Documentary Letters of Credit for

the account of and generally engage in any kind of business with the Company as

if it were not the Agent.

 

Section 7.6             Action by Agent.  Except as may otherwise be expressly stated

in this Agreement, the Agent shall be entitled to use its discretion with

respect to exercising or refraining from exercising any rights which may be

vested in it by, or with respect to taking or refraining from taking any action

or actions which it may be able to take under or in respect of, the Loan Documents.  The Agent shall be required to act or to

refrain from acting (and shall be fully protected in so acting or refraining

from acting) upon the instructions of the Majority Banks, and such instructions

shall be binding upon all holders of Notes; provided, however,

that the Agent shall not be required to take any action which exposes the Agent

to personal liability or which is contrary to the Loan Documents or applicable

law.  The Agent shall incur no liability

under or in respect of any of the Loan Documents by acting upon any notice,

consent, certificate, warranty or other paper or instrument believed by it to

be genuine or authentic or to be signed by the proper party or parties and to

be consistent with the terms of this Agreement.

 

Section 7.7             Credit Analysis.  Each Bank has made, and shall continue to

make, its own independent investigation or evaluation of the operations,

business, property and condition, financial and otherwise, of the Company in

connection with entering into this Agreement and has made its own appraisal of

the creditworthiness of the Company. 

Except as explicitly provided herein, the Agent has no duty or

responsibility, either initially or on a continuing basis, to provide any Bank

with any credit or other information with respect to such operations, business,

property, condition or creditworthiness, whether such information comes into

its possession on or before the first Event of Default or at any time

thereafter.

 

Section 7.8             Notices of Event of Default,

Etc.  In the event that any Bank

shall have acquired actual knowledge of any Event of Default or Unmatured Event

of Default, other than as a result of its receipt of financial statements

delivered to it pursuant to Section 5.1, such Bank shall promptly give notice

thereof to the Agent.  The Agent shall,

promptly upon receipt of any such notice provide a copy thereof to the other

Banks.  Upon receipt from any Bank of a

request that the Agent give notice to the Company of the occurrence of an Event

of Default or Unmatured Event of Default, the Agent shall promptly forward such

request to the other Banks and will take such action and assert such rights

under this Agreement and the other Loan Documents as the Majority Banks shall

direct in writing.

 

Section 7.9             Indemnification.  Each Bank agrees to indemnify the Agent, as

Agent (to the extent not reimbursed by the Company), according to such Bank’s

Pro Rata Share, from and against any and all liabilities, obligations, losses,

damages, penalties, actions, judgments, suits, costs, expenses or disbursements

of any kind or nature whatsoever which may be imposed on or incurred by the

Agent in any way relating to or arising out 

 

34

 

of the Loan Documents or

any action taken or omitted by the Agent under the Loan Documents, provided

that no Bank shall be liable for any portion of such liabilities, obligations,

losses, damages, penalties, actions, judgments, suits, costs, expenses or

disbursements resulting from the Agent’s gross negligence or willful

misconduct.  No payment by any Bank

under this Section 7.9 shall relieve the Company of any of its obligations

under this Agreement.

 

Section 7.10           Payments and Collections.  All funds received by the Agent in respect

of any payments made by the Company on the Revolving Notes, Facility Fees,

Utilization Fees or Letter of Credit Fees shall be distributed by the Agent

among the Banks on the date received or deemed received pursuant to Section

2.20, in like currency and funds as received, ratably according to each Bank’s

Pro Rata Share.  If the Agent does not

make any distribution on the date any such payment is received or deemed

received pursuant to Section 2.20, the Agent will pay interest to each Bank

entitled to receive a portion of such distribution on the amount distributable

to it at the Federal Funds Rate from such date until the date distribution is

made, such interest to be payable with such distribution.  After any Event of Default has occurred, all

funds received by the Agent, whether as payments by the Company or as

realization on collateral or on any guaranties, shall (except as may otherwise

be required by law) be distributed by the Agent in the following order:  (a) first to the Agent or any Bank who

has incurred unreimbursed costs of collection with respect to any Indebtedness

of the Company hereunder, ratably to the Agent and each Bank in the proportion

that the costs incurred by the Agent or such Bank bear to the total of all such

costs incurred by the Agent and all Banks; (b) next to U.S. Bank in

payment of any Unpaid Draws outstanding, to satisfy any requirement that the

Company make payments to U.S. Bank for deposit in the Holding Account to cover

any outstanding Letters of Credit; (c) next to the Banks (in accordance

with their respective Pro Rata Shares) for application on the Revolving Notes

and any Rate Protection Obligations; and (d) last to the Banks (in

accordance with their respective Pro Rata Shares) for any unpaid Utilization

Fees, Facility Fees or Letter of Credit Fees owing by the Company

hereunder.  To the extent the Agent or

any Bank receives any payment on the Obligations, whether from the Company or

otherwise, that is subsequently invalidated, declared to be fraudulent or

preferential, set aside or required to be repaid to a trustee, receiver or any

other party under any bankruptcy law, state or federal law, common law or

equitable cause, then, to the extent of such recovery, the Obligations

originally intended to be satisfied by such payment shall be revived and

continued in full force and effect as if such payment had not been received,

and each Bank shall purchase from the Agent or such Bank, for cash, at face

value and without recourse, such participations in the revived Obligations as

shall be necessary to cause such revived Obligations to be shared ratably among

all of the Banks.  The Agent or such

Bank, as the case may be, shall promptly notify the other Banks and, if

applicable, the Agent, of any such recovery.

 

Section 7.11           Sharing of Payments.  If any Bank shall receive and retain any

payment, voluntary or involuntary, whether by setoff, application of deposit

balance or security, or otherwise, in respect of Indebtedness under this

Agreement or the Notes in excess of such Bank’s share thereof as determined

under this Agreement, then such Bank shall purchase from the other Banks for

cash and at face value and without recourse, such participation in the Notes

held by such other Banks as shall be necessary to cause such excess payment to

be shared ratably as aforesaid with such other Banks; provided, that if

such excess payment or part thereof is thereafter recovered from such

purchasing Bank, the related purchases from the other Banks shall be rescinded

ratably and the purchase price restored as to the portion of such excess payment

so recovered, but without interest.

 

Section 7.12           Advice to Banks.  The Agent shall forward to the Banks copies

of all notices, financial reports and other communications received hereunder

from the Company by it as Agent, excluding, however, notices, reports and

communications which by the terms hereof are to be furnished by the Company

directly to each Bank.

 

Section 7.13           Successor Agent.  The Agent may resign at any time by giving

ten days written notice thereof to the Banks and the Company.  The Majority Banks may remove the Agent at

any time with or without cause by giving the Agent and the Company ten days

written notice thereof.  Upon any such

resignation or removal, the Majority Banks shall have the right to appoint a

successor Agent, which successor Agent shall (unless an Event of Default has

occurred and is continuing) be reasonably acceptable to the Company.  If no successor Agent shall have been so

appointed and shall have accepted such appointment within 30 days after the

retiring Agent’s giving of notice of its resignation or the removal of the

retiring Agent, then the retiring Agent may, on behalf of the Banks, appoint an

Agent which shall be a Bank or a 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, 

 

35

 

which successor

Agent shall (unless an Event of Default has occurred and is continuing) be

reasonably acceptable to the Company. 

Any such resignation or removal shall be effective upon the appointment

of a successor Agent.  Upon the

acceptance of any appointment as the Agent hereunder by a successor Agent, such

successor Agent shall thereupon succeed to and become vested with all rights,

powers, privileges and duties of the retiring Agent, and the retiring Agent

shall be discharged from its duties and obligations, under this Agreement and

the other Loan Documents.  After the

retiring Agent’s resignation or removal hereunder as the Agent, the provisions

of this Article VII shall inure to its benefit as to any actions taken or

omitted to be taken by it while it was acting as the Agent under this Agreement

and any other Loan Document.

 

Section 7.14           Defaulting

Bank.

 

(a)   Remedies Against a Defaulting Bank.  In addition to the rights and remedies that

may be available to the Agent or the Company under this Agreement or applicable

law, if at any time a Bank is a Defaulting Bank such Defaulting Bank’s right to

participate in the administration of the Loans, this Agreement and the other

Loan Documents, including without limitation, any right to vote in respect of,

to consent to or to direct any action or inaction of the Agent or to be taken

into account in the calculation of the Majority Banks, shall be suspended while

such Bank remains a Defaulting Bank.  If

a Bank is a Defaulting Bank because it has failed to make timely payment to the

Agent of any amount required to be paid to the Agent hereunder (without giving

effect to any notice or cure periods), in addition to other rights and remedies

which the Agent or the Company may have under the immediately preceding

provisions or otherwise, the Agent shall be entitled (i) to collect interest

from such Defaulting Bank on such delinquent payment for the period from the

date on which the payment was due until the date on which the payment is made

at the Federal Funds Rate, (ii) to withhold or setoff and to apply in

satisfaction of the defaulted payment and any related interest, any amounts otherwise

payable to such Defaulting Bank under this Agreement or any other Loan Document

until such defaulted payment and related interest has been paid in full and

such default no longer exists and (iii) to bring an action or suit against such

Defaulting Bank in a court of competent jurisdiction to recover the defaulted

amount and any related interest.  Any

amounts received by the Agent in respect of a Defaulting Bank’s Loans shall not

be paid to such Defaulting Bank and shall be held uninvested by the Agent and

either applied against the purchase price of such Loans under the following

subsection (b) or paid to such Defaulting Bank upon the default of such

Defaulting Bank being cured.

 

(b)   Purchase from Defaulting Bank.  Any Bank that is not a Defaulting Bank shall

have the right, but not the obligation, in its sole discretion, to acquire all

of a Defaulting Bank’s Commitment.  If

more than one Bank exercises such right, each such Bank shall have the right to

acquire such proportion of such Defaulting Bank’s Commitment on a pro rata

basis.  Upon any such purchase, the

Defaulting Bank’s interest in its Loans and its rights hereunder (but not its

liability in respect thereof or under the Loan Documents or this Agreement to

the extent the same relate to the period prior to the effective date of the

purchase) shall terminate on the date of purchase, and the Defaulting Bank

shall promptly execute all documents reasonably requested to surrender and

transfer such interest to the purchaser thereof subject to and in accordance

with the requirements set forth in Section 8.5(c) including an Assignment in

form acceptable to the Agent.  The

purchase price for the Commitment of a Defaulting Bank shall be equal to the

amount of the principal balance of the Loans outstanding and owed by the

Company to the Defaulting Bank. The purchaser shall pay to the Defaulting Bank

in Immediately Available Funds on the date of such purchase the principal of

and accrued and unpaid interest and fees on the Loans made by such Defaulting

Bank hereunder (it being understood that such accrued and unpaid interest and

fees may be paid pro rata to the purchasing Bank and the Defaulting  Bank by the Agent at a subsequent date upon

receipt of payment of such amounts from the Company).  Prior to payment of such purchase price to a Defaulting Bank, the

Agent shall apply against such purchase price any amounts retained by the Agent

pursuant to the last sentence of the immediately preceding subsection (a).  The Defaulting Bank shall be entitled to

receive amounts owed to it by the Company under the Loan Documents which

accrued prior to the date of the default by the Defaulting Bank, to the extent

the same are received by the Agent from or on behalf of the Company.  There shall be no recourse against any Bank or

the Agent for the payment of such sums except to the extent of the receipt of

payments from any other party or in respect of the Loans.

 

36

 

ARTICLE

VIII

MISCELLANEOUS

 

Section 8.1             Amendments and Waivers; No

Waiver of Rights and Remedies.

 

(a)           None

of this Agreement, any Loan Document or any provision hereof or thereof may be

amended, modified or waived unless the same shall be in writing signed by the

Company and the Majority Banks; provided, that (i) no amendment, waiver

or consent shall, unless in writing and signed by all the Banks, do any of the

following: (A) reduce the amount of the principal of, or the amount of or

rate of interest on, any Note or any Loan or any fees or other amount payable hereunder,

(B) postpone any date fixed for any payment of principal of, or interest

on, the Loans or any fees or other amounts payable hereunder, (C) amend

the definitions of  “Pro Rata Share” or

“Majority Banks”, (D) amend Section 3.1 or Section 3.2, (E) amend this

Section 8.1(a), or (F) release any Guaranty; (ii) no amendment, waiver or

consent shall, unless in writing and signed by Banks, other than Defaulting

Banks, whose Pro Rata Shares (determined under clause (b) of the definition

thereof if any Loans are outstanding and otherwise under clause (a) of such

definition) aggregate 66 2/3% or more, amend Section 5.12(f) or Section 5.13(e)

(except in a manner that would be more restrictive as to the Company or its

Subsidiaries); (iii) no amendment, waiver or consent shall, unless in

writing and signed by the Agent in addition to the requisite Banks indicated

above to take such action, affect the rights or duties of the Agent under this

Agreement; (iv) no amendment may increase any Bank’s Commitment Amount unless

it is in writing and signed by each Bank; and (v) no amendment, waiver or

consent shall reduce the amount payable with respect to, or postpone any date

fixed for any payment with respect to, any draw under any Letter of Credit,

amend or modify Section 2.1, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12 or 2.13, unless it

is in writing and signed by U.S. Bank. 

Any such amendment, modification or waiver or any other consent to any

departure from any such provision by the Company shall in any event be

effective only in the specific instance or for the specific purpose for which

given.  No notice to, or demand on, the

Company in any case shall entitle the Company to any other or further notice or

demand in similar or other circumstances.

 

(b)           No

failure or delay on the part of the Agent or any Bank in exercising, and no

course of dealing with respect to, any right, power or privilege hereunder or

under any other Loan Document shall operate as a waiver thereof; nor shall any

single or partial exercise of any such right, power or privilege, or any

abandonment or discontinuance of the enforcement thereof, preclude any other or

further exercise thereof or the exercise of any other right, power or

privilege.  The rights and remedies of

the Agent and the Banks hereunder and under any other Loan Document are

cumulative and not exclusive of any right or remedy which the Agent or any Bank

otherwise has.

 

Section 8.2             Notices.  Except as otherwise specifically provided

for herein, all notices, requests, demands, instructions, consents, directions

and other communications provided for herein shall be in writing (including

teletransmission communication) and (unless otherwise required by applicable

law) shall be teletransmitted, mailed or delivered to the intended recipient at

the “Address for Notices” specified below its name on the signature page(s)

hereof or on a separate page immediately following such signature page(s); or

at such other address as shall be designated by such party in a notice to the

other parties.  All notices and other

communications shall be effective when transmitted by telecopier, delivered to

the telegraph or cable office or personally delivered or, in the case of a

mailed notice or notice sent by overnight courier, upon receipt thereof as

conclusively evidenced by the signed receipt therefor, in each case given or

addressed as aforesaid, except that notices to the Agent, U.S. Bank or any Bank

under the provisions of Article II shall not be effective until received by the

Agent, U.S. Bank or such Bank.

 

Section 8.3             Costs and Expenses.  The Company agrees to pay on demand:  (a) all out-of-pocket costs, expenses

and fees incurred by the Agent in connection with the negotiation, preparation,

approval and execution and delivery of the Loan Documents, including, without

limitation, the reasonable fees and expenses of Dorsey & Whitney LLP,

special counsel to the Agent, in connection with the negotiation, preparation,

execution and delivery of this Agreement and the other Loan Documents, the

commitments relating thereto, the transactions contemplated hereby and thereby

and the satisfaction and attempted satisfaction of conditions precedent

hereunder, (b) the reasonable fees and expenses of counsel for the Agent

in connection with any amendment, modification or waiver or proposed amendment,

modification or waiver of any of the terms of this Agreement or any of the

other 

 

37

 

Loan Documents and

(c) all reasonable costs and expenses of the Agent and the Banks

(including reasonable counsels’ fees) in connection with the enforcement

(whether through negotiations, legal proceedings or otherwise) of this

Agreement and the other Loan Documents.

 

Section 8.4             Survival of Agreement.  All representations, warranties, covenants

and agreements made by the Company or any of its Subsidiaries herein, in the

other Loan Documents or in any certificates or other instruments prepared or

delivered in connection with or pursuant to this Agreement or any other Loan

Document shall be deemed to have been relied upon by the Banks and shall

survive the making of the Loans by the Banks and the execution and delivery to

the Banks by the Company of the Notes, regardless of any investigation made by

or on behalf of the Banks, and shall continue in full force and effect as long

as any Letter of Credit or Obligation is outstanding and undrawn or unpaid and

so long as the Commitments have not expired or been terminated; provided,

that the obligations and agreements of the Company under Sections 2.11, 2.13,

2.23, 2.25, 2.26, 2.29, 8.3, 8.6 and 8.15 shall survive payment in full of the

Obligations, the expiration of or other discharge of U.S. Bank’s liability with

respect to the Letters of Credit and the expiration or termination of the

Commitments.  The obligations of the Banks

under Section 2.12 shall remain in effect, notwithstanding the termination of

the Commitments and the payment in full of the Obligations (other than

contingent Obligations with respect to outstanding Letters of Credit), until

the Letters of Credit have expired or U.S. Bank’s liability with respect

thereto has otherwise been discharged; provided, that if the amount on

deposit in the Holding Account at any time equals the aggregate undrawn face

amount of all outstanding Letters of Credit, the obligations of the Banks under

Section 2.12 shall terminate; provided, further, that the

obligations of the Banks under Section 2.12 shall be reinstated if, and to the

extent, U.S. Bank is required to return or repay any payment received by it in

respect of any draw under a Letter of Credit, or U.S. Bank’s Lien on or right

of setoff with respect to any amount on deposit into the Holding Account is

avoided or enjoined, by reason of (i) any judgment, decree or order of any

court or administrative body or (ii) any settlement or compromise of any claim

for such return, avoidance or injunction effected by U.S. Bank.

 

Section 8.5             Binding Effect; Assignments and

Participations.

 

(a)   This Agreement shall be binding upon and

inure to the benefit of the Company, the Agent, the Banks, all future holders

of the Notes, and their respective successors and assigns, except that the

Company may not assign or transfer any of its rights or obligations under this

Agreement without the prior written consent of each Bank.

 

(b)   Any Bank may, in the ordinary course of its

commercial banking business and in accordance with applicable law, at any time

sell to one or more banks or other entities (“Participants”)

participating interests in a minimum aggregate amount of $5,000,000 in any Loan

or other Obligation owing to such Bank, any Revolving Note held by such Bank,

and any Commitment of such Bank, or any other interest of such Bank

hereunder.  In the event of any such

sale by a Bank of participating interests to a Participant, (i) such Bank’s obligations

under this Agreement to the other parties to this Agreement shall remain

unchanged, (ii) such Bank shall remain solely responsible for the performance

thereof, (iii) such Bank shall remain the holder of any such Revolving Note for

all purposes under this Agreement, (iv) the Company and the Agent shall

continue to deal solely and directly with such Bank in connection with such

Bank’s rights and obligations under this Agreement and (v) the agreement

pursuant to which such Participant acquires its participating interest herein

shall provide that such Bank shall retain the sole right and responsibility to

enforce the Obligations, including, without limitation the right to consent or

agree to any amendment, modification, consent or waiver with respect to this

Agreement or any other Loan Document, provided that such agreement may provide

that such Bank will not consent or agree to any such amendment, modification,

consent or waiver with respect to the matters set forth in Sections

8.1(a)(i)(A) or (B) without the prior consent of such Participant.  The Company agrees that if amounts

outstanding under this Agreement, the Revolving Notes and the Loan Documents

are due and unpaid, or shall have been declared or shall have become due and

payable upon the occurrence of an Event of Default, each Participant shall be

deemed to have, to the extent permitted by applicable law, the right of setoff

in respect of its participating interest in amounts owing under this Agreement

and any Revolving Note or other Loan Document to the same extent as if the

amount of its participating interest were owing directly to it as a Bank under

this Agreement or any Revolving Note or other Loan Document; provided,

that such right of setoff shall be subject to the obligation of such Participant

to share with the Banks, and the Banks agree to 

 

38

 

share with such Participant, as provided in Section

2.23.  The Company also agrees that each

Participant shall be entitled to the benefits of subsections 2.23, 2.24, 2.25,

2.26 and 8.3 with respect to its participation in the Commitments and Loans provided,

that no Participant shall be entitled to receive any greater amount pursuant to

such subsections than the transferor Bank would have been entitled to receive

in respect of the amount of the participation transferred by such transferor

Bank to such Participant had no such transfer occurred.

 

(c)   Each Bank may, from time to time, with the

consent of the Agent, U.S. Bank and the Company (none of which consents

shall be unreasonably withheld; and if an Event of Default shall have occurred

and be continuing, then the consent of the Company shall not be required),

assign to other lenders (“Assignees”) all or part of its rights or

obligations hereunder or under any Loan Document in a minimum aggregate amount

of $5,000,000 evidenced by any Revolving Note then held by that Bank (or, if

less, the entire amount evidenced by the Revolving Notes then held by that

Bank) together with equivalent proportions of its Commitment pursuant to

written agreements executed by such assigning Bank, such Assignee(s), the

Company, U.S. Bank and the Agent in substantially the form of Exhibit E, which

agreements shall specify in each instance the portion of the Obligations evidenced

by the Revolving Notes which is to be assigned to each Assignee and the portion

of the Pro Rata Share and Commitment of such Bank to be assumed by each

Assignee (each, an “Assignment Agreement”); provided, however,

that the assigning Bank must pay to the Agent a processing and recordation fee

of $3,500.  Upon the execution of each Assignment

Agreement by the assigning Bank, the relevant Assignee, the Company, U.S. Bank

and the Agent, payment to the assigning Bank by such Assignee of the purchase

price for the portion of the Obligations being acquired by it and receipt by

the Company of a copy of the relevant Assignment Agreement, (x) such Assignee

lender shall thereupon become a “Bank” for all purposes of this Agreement with

a Pro Rata Share and a Commitment in the amount set forth in such Assignment

Agreement and with all the rights, powers and obligations afforded a Bank under

this Agreement, (y) such assigning Bank shall have no further liability for

funding the portion of its Commitment assumed by such Assignee and (z) the

address for notices to such Assignee shall be as specified in the Assignment

Agreement executed by it.  Concurrently

with the execution and delivery of each Assignment Agreement, the assigning

Bank shall surrender to the Agent the Revolving Note portion of which is being

assigned, and the Company shall execute and deliver a Revolving Note to the

Assignee in the amount of its Commitment, and a new Revolving Note to the

assigning Bank in the amount of  its

Commitment, after giving effect to the reduction occasioned by such assignment,

such Revolving Notes to constitute “Revolving Notes” for all purposes of this

Agreement and of the other Loan Documents.

 

(d)   Notwithstanding any other provision in this

Agreement, any Bank may at any time create a security interest in, or pledge,

all or any portion of its rights under and interest in this Agreement and any

note held by it in favor of any federal reserve bank in accordance with

Regulation A of the Board or U. S. Treasury Regulation 31 CFR § 203.14, and

such Federal Reserve Bank may enforce such pledge or security interest in any

manner permitted under applicable law.

 

Section 8.6             Taxes.  The Company agrees to pay, and save the

Agent and the Banks harmless from all liability for, any stamp or other taxes

which may be payable with respect to the execution or delivery of this

Agreement or the issuance of the Notes.

 

Section 8.7             Severability of Provisions.  Whenever possible, each provision of this

Agreement and the other Loan Documents and any other statement, instrument or

transaction contemplated hereby or thereby or relating hereto or thereto shall

be interpreted in such manner as to be effective and valid under applicable

law, but, if any provision of this Agreement or any other Loan Document or any

other statement, instrument or transaction contemplated hereby or thereby or

relating hereto or thereto shall be held to be prohibited or invalid in any

jurisdiction under such applicable law, such provision shall be ineffective

only to the extent of such prohibition or invalidity, without invalidating the

remainder of such provision or the remaining provisions of this Agreement or

the other Loan Documents and any other statement, instrument or transaction

contemplated hereby or thereby or relating hereto or thereto and shall not be

effective to affect the enforceability of such provision in any other

jurisdiction.

 

39

 

Section 8.8             Governing Law and Construction.  THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS

AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY THE INTERNAL LAWS

OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES

THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED STATES APPLICABLE TO

NATIONAL BANKS.

 

Section 8.9             Consent to Jurisdiction.  THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE

JURISDICTION OF ANY MINNESOTA STATE OR FEDERAL COURT SITTING IN MINNEAPOLIS,

MINNESOTA OR ST. PAUL, MINNESOTA OVER ANY ACTION OR PROCEEDING COMMENCED BY THE

AGENT OR ANY BANK ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER

LOAN DOCUMENT AND THE COMPANY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN

RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH

MINNESOTA STATE OR FEDERAL COURT.  THE

COMPANY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO

SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR

PROCEEDING.  THE COMPANY AGREES THAT A

JUDGMENT, FINAL BY APPEAL OR EXPIRATION OF TIME TO APPEAL WITHOUT AN APPEAL

BEING TAKEN, IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE

ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER

PROVIDED BY LAW.  NOTHING IN THIS SECTION

8.9 SHALL AFFECT THE RIGHT OF THE AGENT OR ANY BANK TO BRING ANY ACTION OR

PROCEEDING AGAINST THE COMPANY OR ITS PROPERTY IN THE COURTS OF ANY OTHER

JURISDICTIONS.

 

Section 8.10           Captions.  The captions or headings herein and any

table of contents hereto are for convenience only and in no way define, limit

or describe the scope or intent of any provision of this Agreement.

 

Section 8.11           Entire Agreement; No Third Party

Beneficiaries.  This Agreement and

the other Loan Documents embody the entire agreement and understanding between

the Company, the Agent and the Banks with respect to the subject matter hereof

and thereof. This Agreement supersedes all prior agreements and understandings

relating to the subject matter hereof. 

Nothing contained in this Agreement or in any other Loan Document, expressed

or implied is intended to confer upon any Person other than the parties hereto

and thereto any rights, remedies, obligations or liabilities hereunder or

thereunder.

 

Section 8.12           Counterparts.  This Agreement may be executed in any number

of counterparts, each of which shall constitute an original but all of which

when taken together shall constitute but one contract which shall become

effective when the Agent shall have received counterparts hereof signed on

behalf of the Company, the Agent and each Bank.

 

Section 8.13           Company Acknowledgments.  The Company hereby acknowledges that

(a) it has been advised by counsel in the negotiation, execution and

delivery of this Agreement and the other Loan Documents, (b) neither the

Agent nor any Bank has any fiduciary relationship to the Company, the

relationship being solely that of borrower and lender, (c) no joint

venture exists among or between the Company and the Agent or any Bank, and

(d) the Agent and the Banks undertake no responsibility to the Company to

review or inform the Company of any matter in connection with any phase of the

business or operations of the Company and the Company shall rely entirely upon

its own judgment with respect to its business, and any review, inspection or

supervision of, or information supplied to the Company by the Agent or any Bank

is for the protection of the Agent and the Banks and neither the Company nor

any third party is entitled to rely thereon.

 

Section 8.14           Highest Lawful Rate.  Anything herein to the contrary notwithstanding,

the Obligations shall be subject to the limitation that payments of interest

thereon shall not be required, for any period for which interest is computed

hereunder, to the extent that contracting for or receipt thereof would be

contrary to provisions of any law applicable to any Bank limiting the highest

rate of interest which may be lawfully contracted for, charged or received by

such Bank.

 

Section 8.15           Indemnification.  The Company hereby agrees to defend,

protect, indemnify and hold harmless the Agent, the Banks, their respective

Affiliates, and their respective directors, officers, employees, 

 

40

 

attorneys and

agents (each of the foregoing being an “Indemnitee” and all of the foregoing

being collectively the “Indemnitees”) from and against any and all claims,

actions, damages, liabilities, judgments, costs and expenses (including all

reasonable fees and disbursements of counsel which may be incurred in the

investigation or defense of any matter) imposed upon, incurred by or asserted

against any Indemnitee, whether direct, indirect or consequential and whether

based on any federal, state, local or foreign laws or regulations (including

securities laws, environmental laws, commercial laws and regulations), under

common law or on equitable cause, or on contract or otherwise:

 

(a)           by

reason of, relating to or in connection with the issuance, extension, amendment

or payment of any Letter of Credit, or any failure to do any of the foregoing;

 

(b)           by

reason of, relating to or in connection with any action taken or not taken by

the Company, its Subsidiaries and Affiliates, and their respective directors,

officers, employees, attorneys or agents in connection with any Loan Document,

including, without limitation, any use of any credit extended under the Loan

Documents;

 

provided,

however, that the Company shall not be liable to any Indemnitee for any portion

of such claims, damages, liabilities and expenses resulting from such

Indemnitee’s gross negligence or willful misconduct, or arising from claims

made by the Agent or any Bank against the Agent or any other Bank, unless

resulting from the Company’s negligence or willful misconduct.  In the event this indemnity is unenforceable

as a matter of law as to a particular matter or consequence referred to herein,

it shall be enforceable to the full extent permitted by law.  This indemnification applies, without

limitation, to any act, omission, event or circumstance existing or occurring

on or prior to the later of the Termination Date or the date of payment in full

of the Obligations, including specifically Obligations arising under clause (b)

of this Section.  The indemnification

provisions set forth above shall be in addition to any liability the Company

may otherwise have.  Without prejudice

to the survival of any other obligation of the Company hereunder the

indemnities and obligations of the Company contained in this Section shall

survive the payment in full of the other Obligations.

 

Section 8.16           Waiver of Jury Trial.  EACH OF THE COMPANY , THE AGENT AND THE

BANKS IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL

PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN

DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

Section 8.17           Effect

of Existing Credit Agreement and Existing Revolving Notes.  This Agreement amends and replaces in its

entirety and restates the Existing Credit Agreement and the Revolving Notes

amend and replace in their entireties and restate the “Revolving Notes” issued

under the Existing Credit Agreement (the “Existing Revolving Notes”) provided,

however, that the obligations of the Company incurred under the Existing Credit

Agreement and the Existing Revolving Notes shall continue under this Agreement

and the Revolving Notes, respectively, and shall not in any circumstance be

terminated, extinguished or discharged hereby but shall hereafter be governed

by the terms of this Agreement and the Revolving Notes, respectively.

 

41

 

IN WITNESS

WHEREOF, the parties hereto have caused this Agreement to be executed as of the

day and year first above written.

 

	

   

  	

  BEST BUY CO., INC.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

   /s/ Marc Gordon

  	

   

  	

   

  	

   

  
	

   

  	

    Its

  	

   VP — Finance

  	

   

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  U.S. BANK NATIONAL

  ASSOCIATION

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

   /s/ Sam Pepper

  	

   

  	

   

  	

   

  
	

   

  	

    Its

  	

   Vice President

  	

   

  	

   

  	

   

  
							

 

 

 

Signature Page to Amended

and Restated Credit Agreement

 

S-1

 

	

   

  	

  FIRST UNION NATIONAL

  BANK

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

   /s/ Mark S. Supple

  	

   

  
	

   

  	

    Its

  	

   Vice President

  	

   

  
					

 

 

 

Signature Page to Amended

and Restated Credit Agreement

 

S-2

 

	

   

  	

  BANK ONE, NA (MAIN

  CHICAGO OFFICE)

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

   /s/ Vincent Henchek

  	

   

  
	

   

  	

    Its

  	

   Director

  	

   

  
					

 

 

 

Signature Page to Amended

and Restated Credit Agreement

 

S-3

 

	

   

  	

  WELLS FARGO BANK,

  NATIONAL 

  
	

   

  	

  ASSOCIATION

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

   /s/ Scott Bjelde

  	

   

  
	

   

  	

    Its

  	

   Vice President & Senior Banker

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

   /s/ Molly S. Van Metre

  	

   

  
	

   

  	

    Its

  	

   Vice President & Senior Banker

  	

   

  
						

 

 

 

Signature Page to Amended

and Restated Credit Agreement

 

S-4

 

	

   

  	

  THE BANK OF

  TOKYO-MITSUBISHI, LTD., CHICAGO BRANCH

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

   /s/ Patrick McCue

  	

   

  
	

   

  	

    Its

  	

   Vice President & Manager

  	

   

  
					

 

 

 

Signature Page to Amended

and Restated Credit Agreement

 

S-5

 

	

   

  	

  CREDIT SUISSE FIRST

  BOSTON,

  
	

   

  	

  CAYMAN ISLANDS BRANCH

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

   /s/ William S. Lutkins

  	

   

  
	

   

  	

    Its

  	

   Director

  	

   

  
	

   

  	

   

  
					

 

 

 

Signature Page to Amended

and Restated Credit Agreement

 

S-6

 

	

   

  	

  FLEET NATIONAL BANK

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

   /s/ Kathleen Dimock

  	

   

  
	

   

  	

    Its

  	

   Director

  	

   

  
	

   

  	

   

  
					

 

 

 

Signature Page to Amended

and Restated Credit Agreement

 

S-7

 

	

   

  	

  THE BANK OF NOVA SCOTIA

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

   /s/ M. D. Smith

  	

   

  
	

   

  	

    Its

  	

   Agent Operations

  	

   

  
	

   

  	

   

  
					

 

 

 

Signature Page to Amended

and Restated Credit Agreement

 

S-8

 

	

   

  	

  MERRILL LYNCH CAPITAL

  CORPORATION

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

   /s/ Carol J. E. Feeley

  	

   

  
	

   

  	

    Its

  	

   Vice President Merrill Lynch Capital Corp.

  	

   

  
					

 

 

 

Signature Page to Amended

and Restated Credit Agreement

 

S-9

 

ADDRESS FOR

NOTICES

 

	

  BEST BUY CO., INC.

  
	

  7075 Flying Cloud Drive

  
	

  Eden Prairie, MN 55344

  
	

  Attn: Ms. Judy A.

  Weigel

  
	

  Attn: Mr. Mark Gordon

  
	

   

  
	

  U.S. BANK NATIONAL ASSOCIATION

  
	

  601 Second Avenue South

  
	

  Minneapolis, MN 55402

  
	

  Attn: Sam Pepper

  
	

   

  
	

  FIRST UNION NATIONAL

  BANK

  
	

  1339 Chestnut Street

  
	

  Philadelphia, PA 19107

  
	

  Attn: Mark S. Supple

  
	

   

  
	

  BANK ONE, NA (MAIN CHICAGO OFFICE)

  
	

  One Bank One Plaza

  
	

  Chicago, IL  60670

  
	

  Attention:  John D. Runger

  
	

   

  
	

  WELLS FARGO BANK,

  NATIONAL ASSOCIATION

  
	

  Wells Fargo

  Center-MAC:N9305-031

  
	

  Sixth and Marquette

  
	

  Minneapolis, MN 55479

  
	

  Attn: Scott D. Bjelde

  
	

   

  
	

  THE BANK OF

  TOKYO-MITSUBISHI,

  
	

  LTD., CHICAGO BRANCH

  
	

  601 Carlson Parkway,

  Suite 370

  
	

  Minnetonka, MN 55305

  
	

  Attn: Patrick McCue

  
	

   

  
	

  CREDIT SUISSE FIRST BOSTON,

  
	

  CAYMAN ISLANDS BRANCH

  
	

  11 Madison Avenue

  
	

  New York, NY 

  10010-3629

  
	

  Attn:  Vitaly

  Butenko

  
	

   

  
	

  MERRILL LYNCH CAPITAL CORPORATION

  
	

  4 World Financial Center

  
	

  New York, NY 

  10080

  
	

  Attn:  Paul

  Fox

  
	

   

  
	

  FLEET NATIONAL BANK

  
	

  100 Federal Street, 8th Floor

  
	

  Boston, MA 

  02110

  
	

  Attn: 

  Kathleen A. Dimock

  
	

   

  
	

  THE BANK OF NOVA SCOTIA

  
	

  181 West Madison Street, Suite 3700

  
	

  Chicago, Illinois 

  60602

  
	

  Attn:  Keith

  Rauschenerger

  

 

 

SCHEDULE 1.1(a)

BEST

BUY CO., INC.

REVOLVING

COMMITMENTS OF THE

BANK

GROUP

 

	

  Banks 

  	

   

  	

  Commitment

  Percentages

  	

   

  	

  Commitment

  Amount

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  U.S. Bank National Association

  	

   

  	

  20.00

  	

  %

  	

  $

  	

  40,000,000

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Credit Suisse

  First Boston, Cayman Islands Branch

  	

   

  	

  17.50

  	

  %

  	

  $

  	

  35,000,000

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Bank One, NA

  (Main Chicago Office)

  	

   

  	

  12.50

  	

  %

  	

  $

  	

  25,000,000

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Wells Fargo

  Bank, National Association

  	

   

  	

  12.50

  	

  %

  	

  $

  	

  25,000,000

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  First Union National

  Bank

  	

   

  	

  12.50

  	

  %

  	

  $

  	

  25,000,000

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Merrill Lynch

  Capital Corporation

  	

   

  	

  7.50

  	

  %

  	

  $

  	

  15,000,000

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  The Bank of

  Tokyo-Mitsubishi, Ltd., Chicago Branch

  	

   

  	

  7.50

  	

  %

  	

  $

  	

  15,000,000

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Fleet National

  Bank

  	

   

  	

  7.50

  	

  %

  	

  $

  	

  15,000,000

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  The Bank of Nova

  Scotia

  	

   

  	

  2.50

  	

  %

  	

  $

  	

  5,000,000

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Total

  	

   

  	

   

  	

   

  	

  $

  	

  200,000,000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}]]