Document:

Exhibit
4.1

 

5-YEAR REVOLVING CREDIT
AGREEMENT

 

5-YEAR
REVOLVING CREDIT AGREEMENT dated as of December 22,
2004 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 “Lenders” and individually as a “Lender”), and U.S. BANK NATIONAL ASSOCIATION, one of the Lenders, as
administrative agent for the Lenders (in such capacity, the “Agent”) and as
Lead Arranger for the Lenders, WACHOVIA BANK,
NATIONAL ASSOCIATION, one of the Lenders, as Co-Syndication Agent
for the Lenders and JPMORGAN CHASE BANK, N.A.,
one of the Lenders, as Co-Syndication Agent for the Lenders.

 

ARTICLE
I

DEFINITIONS

 

Section 1.1                                      Certain
Defined Terms.  As used herein and,
unless otherwise defined therein, or in any Exhibit or Schedule hereto, 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):

 

“Absolute Rate”: has the meaning specified in
Section 2.6(b)(iv)(D).

 

“Absolute Rate Auction”: means a solicitation
of Competitive Bids setting forth Absolute Rates pursuant to Section 2.6.

 

“Absolute Rate Bid Loan”: means a Bid Loan that
bears interest at a rate determined with reference to the Absolute Rate.

 

“Adjusted Eurocurrency
Rate”:  with respect to each Interest
Period applicable to a Eurocurrency Rate Advance, the rate (rounded upward, if
necessary, to the next higher one hundredth of one percent) determined by
dividing the Eurocurrency Rate for such Interest Period by 1.00 minus the
Eurocurrency Reserve Percentage.

 

“Advance”:  a Prime Rate Advance or a Eurocurrency Rate
Advance or a Bid Loan.

 

“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.

 

“Agent”  as defined in the preamble.

 

“Aggregate Commitment
Amount”:  as of any date of
determination, the sum of the Commitment Amounts of all of the Lenders.

 

 

“Agreement”:  this 5-Year Revolving Credit Agreement, as
amended, supplemented, restated or otherwise modified and as in effect from
time to time.

 

“Alternate Currencies”: shall mean the lawful
currency of each of Canada, the United Kingdom, Japan and the member states of
the European Union and any other currency (i) that is freely traded, (ii) in
which deposits are customarily offered to banks in the London interbank market,
(iii) which is convertible into U.S. Dollars in the international interbank
market, (iv) as to which a U.S. Dollar Amount may be readily calculated and (v)
which is consented to in advance in writing by the Agent and all of the
Lenders.

 

“Applicable Margin”: for each Prime Rate
Advance, for each Eurocurrency Rate Advance (for the Interest Period applicable
to such Eurocurrency Rate Advance) and for each Facility Fee, 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 debt from S&P or
(y) the rating of the Company’s long-term, senior unsecured debt from Moody’s,
in each case, for Eurocurrency Rate Advances, as in effect on the first day of
the applicable Interest Period, and for Prime Rate Advances and for Facility
Fees, as in effect from time to time:

 

 

	
  Company’s

  Long-Term Senior

  Unsecured Debt

  Rating

  S&P or Moody’s

  (“Level”)

  	
   

  	
  Eurocurrency Rate

  Advances

  	
   

  	
  Prime Rate

  Advances

  	
   

  	
  Facility

  Fees

  	
   

  
	
  Level 1

  BBB+ or higher, or

  Baa1 or higher

  	
   

  	
  0.400

  	
  %

  	
  0.000

  	
  %

  	
  0.100

  	
  %

  
	
  Level 2

  BBB or Baa2

  	
   

  	
  0.525

  	
  %

  	
  0.000

  	
  %

  	
  0.125

  	
  %

  
	
  Level 3

  BBB- or Baa3

  	
   

  	
  0.600

  	
  %

  	
  0.000

  	
  %

  	
  0.150

  	
  %

  
	
  Level 4

  Lower than BBB- or

  lower than Baa3

  	
   

  	
  0.800

  	
  %

  	
  0.000

  	
  %

  	
  0.200

  	
  %

  

 

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 Lenders, 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 and provided  further that, for purposes of
this definition, any change in the Applicable Margin due to any change in the
rating of the Company’s long-term

 

2

 

unsecured debt shall be effective 10 Business Days
after the earliest of (a) the date on which the Company gives notice of such
change to the Agent pursuant to Section 5.9(h) or (b) the date on which the
Agent gives notice of such change to the Company.

 

“Auto-Renewal Letter of Credit”:  has the meaning specified in Section 2.12(b).

 

“Bid Loan”: a Loan by a Lender to the Company
under Section 2.6, which may be a Eurocurrency Bid Loan or an Absolute
Rate Bid Loan.

 

“Bid Loan Lender”: in respect of any Bid Loan,
the Lender making such Bid Loan to the Company.

 

“Bid Loan Note”: has the meaning specified in
Section 2.3(b).

 

“Board”:  the Board of Governors of the Federal Reserve
System of the United States.

 

“Borrowing Date”:  each Business Day or Eurocurrency Business
Day on which the Lenders are to make Loans to the Company pursuant to
Section 2.1 or Section 2.6.

 

“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 Lender has its principal office in the United States of
America.

 

“Canadian Indebtedness”: as defined in Section
5.13(g).

 

“Cash Flow Leverage Ratio”: 
as of the last day of any Measurement Period, the ratio of (a) the
Interest-bearing Indebtedness of the Company 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, Depreciation and Amortization and (ii) Rental and Lease Expense, in all
cases determined on a Consolidated basis in accordance with GAAP and as set
forth in the Company’s financial statements delivered hereunder.

 

“Change of Control”: either (a) the occurrence,
after the Effective Date, of any of any Person or two or more Persons acting in
concert acquiring beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934),
directly or indirectly, of common stock of the Company representing 33.33% or
more of the combined voting power of all common stock of the Company entitled
to vote in the election of directors or (b) during any period of up to twelve
consecutive months, whether commencing before or after the Effective 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.

 

3

 

“Code”:  the Internal Revenue Code of 1986, as amended
or any successor thereto.

 

“Committed Loans”: as
defined in Section 2.1(b).

 

“Committed Loan Notes”:  as
defined in Section 2.3.

 

“Commitment”:  as to any Lender, the obligation of such
Lender to make Loans pursuant to Sections 2.1 and 2.14 and, as to the Agent,
its obligation to issue Letters of Credit pursuant to Section 2.10.

 

“Commitment Amount”:  as to any Lender, the amount set opposite
such Lender’s name as its “Commitment Amount” in Schedule 1.1(a), as the
same may be reduced or increased from time to time pursuant to
Sections 2.16 or 2.32.

 

“Commitment Percentage”  as to any Lender, the percentage set forth
opposite such Lender’s name as its “Commitment Percentage” in Schedule 1.1(a).

 

“Company: as defined
in the Preamble.

 

“Competitive Bid”: an offer by a Lender to make
a Bid Loan in accordance with Section 2.6.

 

“Competitive Bid Request”: has the meaning
specified in Section 2.6(b)(i).

 

“Compliance Certificate”:  a certificate in the form of Exhibit A.

 

“Consolidated”:
means, the consolidation of accounts in accordance with GAAP.

 

“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.

 

“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,
Depreciation and Amortization”:  for
any period of determination, the Consolidated net income of the Company before
deductions for income taxes, Net Interest Expense/Income, depreciation and
amortization, all as determined in accordance with GAAP, excluding therefrom
(a) non-operating 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 Measurement Period and (b) similar
non-operating losses (including, without limitation, losses arising from the
sale of assets and other nonrecurring losses) of the Company and its
Subsidiaries during such period.

 

4

 

“Effective Date”:  the date on or after the execution and
delivery of this Agreement by the Company, the Lenders 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 Lenders.

 

“Eurocurrency Applicable Reference Page”: any
generally-published reference on interest rates applicable to U.S. Dollars and
Alternate Currencies from time to time selected by the Agent, in its sole
discretion, which may include (a) the Reuters Screen LIBO Page, (b)
Page 1700 and following pages on the Knight-Ridder MoneyCenter Service, or
(c) Telerate Page 3750, or other applicable pages setting forth rates of
interest on the Dow Jones Telerate Service (or in any case, such other pages as
may replace the pages on such services for the purpose of displaying London
interbank offered rates of major banks for U.S. Dollar, or if applicable,
Alternate Currency, deposits).  “Telerate
page 3750” means the display designated as such on the Telerate reporting
system operated by Telerate System Incorporated (or such other page as may
replace page 3750 for the purpose of displaying London interbank offered rates
of major banks for United States dollar deposits or Alternate Currencies, as
applicable).

 

“Eurocurrency Auction”: means a solicitation of
Competitive Bids setting forth a Eurocurrency Bid Margin pursuant to
Section 2.6.

 

“Eurocurrency Bid Loan”: any Bid Loan that
bears interest at a rate based upon the Adjusted Eurocurrency Rate.

 

“Eurocurrency Bid Margin”: has the meaning
specified in Section 2.6(b)(iv)(C).

 

“Eurocurrency Business Day”:  a Business Day which is also a day for
trading by and between banks in United States dollar deposits in the interbank
eurocurrency market and a day on which banks are open for business in New York
City and Minneapolis, Minnesota, and as to determinations made with respect to
Advances denominated in Alternate Currencies, in London, England.

 

“Eurocurrency Rate”:  with respect to each Interest Period
applicable to a Eurocurrency Rate Advance or a Eurocurrency Bid Loan, the
average offered rate for deposits in U.S. Dollars or in the applicable
Alternate Currency (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 Eurocurrency Applicable
Reference Page as of 11:00 A.M., London time (or such other time as of which
such rate appears) two Eurocurrency Business Days prior to the first day of
such Interest Period.

 

“Eurocurrency Rate Advance”:  an Advance with respect to which the interest
rate is determined by reference to the Adjusted Eurocurrency Rate.

 

“Eurocurrency Reserve Percentage”:  as of any day, that percentage (expressed as
a decimal) which is in effect on such day, as prescribed by the Board for
determining the maximum reserve requirement (including any basic, supplemental
or emergency reserves) 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” as such term is defined in Regulation D of the Board or in respect
of any other category of liabilities that includes deposits by reference to
which the interest rate on Eurocurrency Rate Advances is determined or any
category of

 

5

 

extensions of credit or other assets that include
loans by non-United States offices of any Lender to United States residents to
which the interest rate on Eurocurrency Rate Advances is determined. The rate
of interest applicable to any outstanding Eurocurrency Rate Advances shall be
adjusted automatically on and as of the effective date of any change in the
Eurocurrency Reserve Percentage.

 

“Event of Default”:
any event described in Section
6.1.

 

“Existing Credit
Agreement”:  the Amended and Restated
Credit Agreement dated as of March 21, 2002 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 2.18.

 

“Federal Funds Rate”:  for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions, with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average of the quotations for such day on
such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.

 

“GAAP”: 
generally accepted accounting principles set forth in the opinions and pronouncements
of the Financial Accounting Standards Board which are in effect and applicable
to the accounting period in respect of which reference to GAAP is being made.

 

“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

 

6

 

to Section 5.11(b), a
guaranty), substantially in the form of Exhibit B, of the Obligations, executed
and delivered to the Agent in connection with this Agreement.

 

“Guarantors”:  Best Buy Stores, L.P., BBC Investment Co.,
BBC Property Co., each other Restricted Subsidiary set forth on Schedule
4.14(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
5.11(b).

 

“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 the Agent, as the issuer
of the Letters of Credit, and the Lenders, 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 the Agent for any amount
drawn on any Letter of Credit, and to pay any other obligation of the Company
to the Lenders arising in connection with any Letter of Credit.  So long as no Event of Default is continuing,
the Agent will, at the request of the Company, credit to the account of the
Company the interest earned on the Holding Account in accordance with the Agent’s
customary practices.

 

“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 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 and synthetic 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.

 

“Interest-bearing
Indebtedness”: as of
the last date of any Measurement Period, all Indebtedness of the Company and
its Subsidiaries for borrowed money or that bears interest and that, in
accordance with GAAP, would be classified as long term or short term debt on
the Consolidated balance sheet of the Company.

 

“Interest Coverage Ratio”: for any Measurement Period, the ratio of (a)
the sum of (i) Earnings Before Interest, Income Taxes, Depreciation and
Amortization plus (ii) Rental and Lease Expense to (b) the sum of
(y) Net Interest Expense/Income plus (z) Rental and Lease Expense.

 

7

 

“Interest Period”:  (a)
with respect to each Eurocurrency Rate 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 and (b) as to any Eurocurrency Bid Loan, the period
commencing on the Business Day such Loan is disbursed and ending on the date
one, two, three or six months thereafter as selected by the Company in the
applicable Competitive Bid Request and agreed to by the applicable Bid Loan
Lender(s); and (c) as to any
Absolute Rate Bid Loan, a period of not less than 7 days and not more than 180
days as selected by the Company in the applicable Competitive Bid Request and
agreed to by the applicable Bid Loan Lender(s); provided, that:

 

(i)                                     Any
Interest Period which would otherwise end on a day which is not a Eurocurrency
Business Day shall be extended to the next succeeding Eurocurrency Business Day
unless such Interest Period is one month or longer and such Eurocurrency
Business Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Eurocurrency Business Day;

 

(ii)                                  Any
Interest Period of one month or longer which begins on the last Eurocurrency
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 Eurocurrency Business Day of a calendar month;

 

(iii)                               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

 

(iv)                              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 Eurocurrency Business Day of a
calendar month, then such Interest Period shall end on the last Eurocurrency
Business Day of the calendar month in which such Interest Period is to end.

 

“Invitation for Competitive
Bids”:  a request for Competitive
Bids, substantially in the form of Exhibit C.

 

“Lender”:  as defined in the Preamble.

 

“Letter of Credit”:  an
irrevocable letter of credit issued by the Agent for the account of the Company
pursuant to Section 2.10.

 

“Letter of Credit Fee”:  as
defined in Section 2.19.

 

“Letter of Credit Loan”:  a
Loan made by a Lender to or for the account of the Company pursuant to Section
2.14.

 

8

 

“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 Committed Loan, a Letter of Credit Loan, a
Bid Rate Loan or a Swingline 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 Lenders”:  As of any date of determination, so long as
the Commitments remain outstanding, Lenders whose Commitment Percentages total
at least 51% or, if the Commitments have been terminated, Lenders holding at
least 51% of the aggregate principal amount of the Loans.

 

“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 Lenders under any Loan
Document.

 

“Material Subsidiary”:  (a) the Guarantors and (b) with respect to any
fiscal year of the Company, any Subsidiary which accounted for an amount equal
to or greater than five (5%)  percent of
the Consolidated aggregate revenues of the Company for such fiscal year.

 

“Measurement Period”:  each
period of four fiscal quarters ending on the last day of the most recent 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 Effective Date, within the five years preceding the Effective Date, or at
any time after the Effective Date) for employees of Company or any ERISA
Affiliate.

 

“Net Interest
Expense/Income”: for
any period of determination, interest expense minus interest
income, in each case calculated on a Consolidated basis for the Company and its
Subsidiaries in accordance with GAAP.

 

“New Lender”: has the
meaning specified in Section 2.32.

 

9

 

“Notes”:  the Committed Loan Notes, the Swingline Note
and the Bid Loan Notes.

 

“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 2.5, 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 the Agent in the amount of each draw under a Letter of Credit on the
date of such draw, and to deposit into the Holding Account the face amount of
Letters of Credit pursuant to Sections 2.8, 2.16 or 6.2 and (c) all fees,
expenses, indemnities, reimbursements and other obligations owed to the Agent
and the Lenders under this Agreement or any other Loan Document.

 

“Offshore Rate Loans”:  any Eurocurrency Rate Advances and
Eurocurrency Bid Loans.

 

“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 Effective 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
rate of interest from time to time publicly announced by U.S. Bank as its “prime
rate”.  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 Lender, in each case expressed as a percentage:

 

(a)                                  as
such term pertains to such Lender’s obligation to make Loans, right to receive
Facility Fees and Letter of Credit Fees, and obligation to reimburse the Agent
pursuant to Section 7.9, such Lender’s Commitment Percentage, and

 

10

 

(b)                                 as
such term pertains to such Lender’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.

 

“Regulatory Change”:  with
respect to any Lender, any change after the Effective 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 Lender 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.

 

“Reference Banks”:  U.S. Bank, JPMorgan Chase Bank and Wachovia
Bank, National Association, and their successors and assigns.

 

“Rental and Lease Expense”:  for
any Measurement Period, all items that, in accordance with GAAP, would be
classified as Rental and Lease Expense that are included in selling, general
and administrative expenses on the Consolidated income statement of the
Company, in each case determined in accordance with GAAP, provided that Rental
and Lease Expense shall not include any Rental and Lease Expense incurred
during the Measurement Period in connection with discontinued operations for
which the Company is no longer obligated.

 

“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 Effective 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 Best Buy 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%).

 

11

 

“S&P”: means Standard & Poor’s, a
division of The McGraw-Hill Companies, Inc.

 

“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.

 

“Swingline Facility”: The
discretionary revolving credit facility provided by U.S. Bank to the Company
described in Section 2.1(b).

 

“Swingline Facility Amount”:  $20,000,000.

 

“Swingline Loan”: A loan made by
U.S. Bank to the Company pursuant to the Swingline Facility.

 

“Swingline Note”: As defined in Section 2.3.

 

“Termination Date”:  the earliest to occur of (a) December 22,
2009, (b) the date on which
the Commitments are terminated pursuant to Section 2.16 or (c) the date on
which the Commitments are terminated pursuant to Section 6.2.

 

“Total Outstandings”:  as of any date of determination, the U.S.
Dollar Amount 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
the Agent for a draw under a Letter of Credit, to the extent not reimbursed by
the Company in accordance with Section 2.13.

 

“U.S. Bank”:  U.S. Bank National Association, a national
banking association, in its individual capacity.

 

12

 

“U.S. Dollar Amount”:  (i) the amount of any Obligation, if
such Obligation is denominated in U.S. Dollars and, (ii) the U.S. Dollar
Equivalent of any Obligation on the day such amount is being computed, if such
Obligation is denominated in an Alternate Currency.

 

“U.S. Dollars” and “$”: The lawful
currency of the United States of America.

 

“U.S. Dollar Equivalent”: The amount of U.S.
Dollars which would be realized by converting an Alternate Currency into U.S.
Dollars in the spot market at the exchange rate quoted by the Agent, at
approximately 11:00 am (London time) two Eurocurrency Business Days prior to
the date on which a computation thereof is required to be made, to Reference
Banks in the interbank foreign exchange market for the purchase of U.S. Dollars
for such Alternate Currency.

 

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, as the same may change from time to time.

 

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 gender; 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                                      Lending
Facilities.

 

(a)                                  Committed
Loans.  On the terms and subject to
the conditions hereof, each Lender severally agrees to make Loans to the
Company on a revolving basis in U.S. Dollars and in Alternate Currencies (each
a “Committed Loan” and collectively, the “Committed Loans”) at any time and
from time to time from the Effective Date to the

 

13

 

Termination Date, during which period the Company may
borrow, repay and reborrow in accordance with the provisions hereof, provided,
that no Loan (including any Swingline Loan and any Bid Rate 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 Lender shall be required to make any Loan if, after giving effect
thereto, the sum of the U.S. Dollar Amount of the outstanding principal balance
of such Lender’s Committed Loans and Swingline Loans plus the U.S.
Dollar Amount of such Lender’s Pro Rata Share of the sum of the Letter of Credit
Usage would exceed such Lender’s Commitment Amount.  Committed Loans hereunder shall be made by
the Lenders ratably based on their respective Pro Rata Shares.  Committed Loans may be obtained and
maintained, at the election of the Company but subject to the limitations
hereof, as Prime Rate Advances or as Eurocurrency Rate Advances, provided that
Committed Loans made in Alternate Currencies shall be made and maintained as
Eurocurrency Rate Advances.

 

(b)                                 Discretionary
Swingline Loans.  On the terms and subject
to the conditions hereof, during the period from the Effective Date to the
Termination Date, U.S. Bank, in its sole discretion, may make loans to the
Company at such times and in such amounts as the Company shall request, up to
an aggregate principal amount at any time outstanding equal to the Swingline Facility Amount, during which
period the Company may borrow, repay and reborrow in accordance with the
provisions hereof.  All Swingline Loans
shall be denominated in U.S. Dollars and shall be made and maintained as Prime
Rate Advances.

 

Section 2.2                                      Procedure for
Committed Loans and Swingline Loans.

 

(a)                                  Requests
for Advances.  Any request by the
Company for Committed Loans or Swingline Loans shall be made to the Agent by
telephone, promptly confirmed by giving the Agent a Notice of Borrowing,
Continuation or Conversion, and (i) must be received by the Agent not later
than 12:00 noon (Minneapolis time) three Eurocurrency Business Days prior to
the requested Borrowing Date if the Loans are requested as Eurocurrency Rate
Advances or as Advances denominated in Alternate Currencies, (ii) not later
than 12:00 noon (Minneapolis time) on the requested Borrowing Date if the Loans
are requested as Prime Rate Advances and (iii) not later than 2:00 p.m.
(Minneapolis time) on the requested Borrowing Date if the Loans are requested
as Swingline Loans.  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 (i) $5,000,000 or an integral multiple of
$500,000 in excess thereof, to the extent such Loans are to be funded as
Eurocurrency Rate Advances or in an Alternate Currency, (ii) $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 or (iii) $1,000,000 or an integral multiple of
$250,000 in excess thereof to the extent such Loans are to be funded as
Swingline Loans, (c) whether such Loans are to be made as Prime Rate
Advances, as Eurocurrency Rate Advances, as Swingline Loans

 

14

 

or in Alternate Currencies (and, if such Loans are to
be denominated in more than one currency choice, specifying the amount per
currency), and (d) in the case of Eurocurrency Rate 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 Lenders based on a dispute with the Agent’s record of the terms of such
request.

 

(b)                                 Funding
By Lenders.  Except in the case of
Swingline Loans, the Agent shall promptly notify each other Lender of the
receipt of such request, the matters specified therein, and of such Lender’s
Pro Rata Share of the requested Loans. 
On the requested Borrowing Date, each Lender shall provide its share of
any requested Loans at the principal office of the Agent in Minneapolis,
Minnesota (or, in the case of Swingline Loans, U.S. Bank shall, to the extent
it determines to do) not later than 2:30 P.M. (Minneapolis time), except that
if the requested Loan is denominated in an Alternate Currency, each Lender
shall make available its portion of such Loan at the principal office of the
Agent in Minneapolis, Minnesota in the specified Alternate Currency no later
than such time as is necessary for such funds to be received and transfers to
the Company.  Unless the Agent determines
that any applicable condition specified in Article III has not been satisfied,
the Agent will make available to the Company’s account the amount of the
requested Loans 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.  If the Agent
has made a Loan on behalf of a Lender 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 Lender by 4:00 P.M. (Minneapolis time) on the
requested Borrowing Date, such Lender shall pay interest to the Agent on the
amount so advanced at the Federal Funds Rate (or, in the case of a Committed
Loan denominated in an Alternate Currency, the cost to the Agent of funding the
amount it advanced to fund such Loan, as determined by the Agent) from the date
of such Loan to the date funds are received by the Agent from such Lender, such
interest to be payable with such remittance from such Lender of the principal
amount of such Loan (provided, however, that the Agent shall not make any Loans
on behalf of a Lender if the Agent has received prior notice from such Lender
that it will not make such Loan).  If the
Agent does not receive payment from such Lender by the next Business Day after
the date of any Loan, the Agent shall be entitled to recover such Loan,
including any unpaid interest thereon at the rate then applicable to such Loan,
on demand, from the Company, without prejudice to the Agent’s and the Company’s
rights against such Lender.  If such
Lender pays the Agent the amount herein required with interest at the Federal
Funds Rate (or, in the case of a Committed Loan denominated in an Alternate
Currency, the cost to the Agent of funding the amount it advanced to fund such
Loan, as determined by the Agent) before the Agent has recovered from the
Company, such Lender 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.

 

(c)                                  Limitation
on Number of Certain Loans.  Notwithstanding anything to the
contrary,  the Company will not at any
time permit the number of

 

15

 

Offshore Rate Loans then outstanding plus the number
of Bid Loans then outstanding to exceed ten in the aggregate unless otherwise
agreed by the Agent.

 

Section 2.3                                      Noteless
Transaction.

 

(a)                                  Lender’s
Records.  The Loans made by each
Lender shall be evidenced by one or more loan accounts or records maintained by
such Lender in the ordinary course of business. 
The loan accounts or records maintained by the Agent and each Lender
shall be conclusive evidence (in the absence of manifest error) of the amount
of the Loans made by the Lenders to the Company and the interest and payments
thereon.  Any failure to record or any
error in doing so shall not, however, limit or otherwise affect the obligation
of the Company hereunder to pay any amount owing with respect to the Loans.

 

(b)                                 Lender’s
Right to Request Notes.  If requested
by any Lender, the Company shall execute and deliver to such Lender a
promissory note evidencing such Lender’s Committed Loans (each a “Committed
Loan Note”) and a promissory note evidencing such Lender’s Bid Loans (each a “Bid
Loan Note”, and collectively, the “Notes”) (each such Committed Loan Note to be
substantially in the form of Exhibit D-1, and each such Bid Loan Note to be substantially
in the form of Exhibit D-2).  If
requested by U.S. Bank, the Company shall execute and deliver to such Lender a
promissory note evidencing U.S. Bank’s Swingline Loans in the form of Exhibit
D-3 (the “Swingline Note”). Each Lender shall endorse on the schedule annexed
to its Note the date, amount and maturity of each Loan made by it and the
amount of each payment of principal made by the Company with respect
thereto.  Each such Lender is irrevocably
authorized by the Company to endorse its relevant Note and each Lender’s record
shall be prima facie evidence of the amount of each such Loan; provided,
however, that the failure of a Lender to make, or an error in making, a
notation thereon with respect to any Loan shall not limit or otherwise affect the
obligations of the Company hereunder or under any such Note to such Lender.

 

Section 2.4                                      Refinancing
of Swingline Loans. 

 

(a)                                  Permissive
Refinancings of Swingline Loans. 
U.S. Bank, at any time in its sole and absolute discretion, may notify
the Agent, not later than 12:00 noon (Minneapolis time) on any Business Day,
that it desires to have any portion of the outstanding Swingline Loans refunded
with Committed Loans made by the Lenders under Section 2.1(a), whereupon
the Agent shall promptly request that each Lender (including U.S. Bank) make a
Loan in an amount equal to its Pro Rata Share of the Committed Loans to be made
to repay to U.S. Bank the portion of the aggregate unpaid principal amount of
the Swingline Loans specified in such notice.

 

(b)                                 Mandatory
Refinancings of Swingline Loans.  On
the tenth day after the making of any Swingline Loan  (or if such day is not a Business Day, on the
first Business Day immediately preceding such day), the Agent shall notify each
Lender of the aggregate amount of Swingline Loans outstanding as of the end of
the previous day and the amount of Committed Loans required to be made by each
Lender to refinance such

 

16

 

outstanding Swingline
Loans (which shall be in the amount of each Lender’s Pro Rata Share of such
outstanding Swingline Loans).

 

(c)                                  Lenders’
Obligation to Fund Refinancings of Swingline Loans.  Upon its receipt of a request from the Agent
under Section 2.4(a) or 2.4(b), each Lender (including U.S. Bank) shall
make a Committed Loan (which shall not be made as a Swingline Loan) in an
amount equal to its Pro Rata Share of the aggregate principal amount of Swingline Loans to be refinanced, and make
the proceeds of such Committed Loans available to U.S. Bank, in Immediately
Available Funds, at the main office of the Agent in Minneapolis not later than
2:30 P.M. (Minneapolis time) on the date such notice was received; provided,
however, that a Lender shall not be obligated to make any such Committed
Loan unless (A) U.S. Bank believed in good faith that all conditions to making
the subject Committed Loan were satisfied at the time the related Swingline
Loan was made, or (B) such Lender had actual knowledge, by receipt of the
statements furnished to it pursuant to Section 5.1 or otherwise, that any
such condition had not been satisfied and failed to notify U.S. Bank in writing
received by U.S. Bank prior to the time it made such Swingline Loan that U.S.
Bank was not authorized to make a Swingline Loan until such condition has been
satisfied.  The proceeds of Committed
Loans made pursuant to the preceding sentence shall be delivered to U.S. Bank
(and not to the Company) and applied to the outstanding Swingline Loans, and
the Company will pay U.S. Bank upon demand the amount of such Swingline Loans
to the extent amounts received from the other Lenders are not sufficient to
repay in full the outstanding Swingline
Loans requested or required to be refinanced. 
If for any reason any Lender is unable to make a Committed Loan to the
Company to refinance a Swingline Loan hereunder, then such Lender shall
immediately purchase from U.S. Bank a participation interest in such Swingline
Loan, at par, in an amount equal to such Lender’s Pro Rata Share of such
Swingline Loan, which participation interest shall, for all purposes hereunder
except Section 2.1 and 2.2, be deemed a Committed Loan made by such Lender
hereunder.  Each Lender’s obligation to
make Committed Loans referred to in this Section 2.4(c) shall, subject to
the proviso to the first sentence of this Section 2.4(c), be absolute and
unconditional and shall not be affected by any circumstance, provided,
that in no event shall a Lender be obligated to make a Committed Loan under
this Section 2.4(c) if, after giving effect thereto, such Lender’s Pro
Rata Share of the sum of the Total Outstandings (after giving effect to the
repayment of the Swingline Note to be funded with such Loan and Loans made the
same day by the other Lenders) would exceed such Lender’s Commitment Amount.

 

(d)                                 Funding
of Loans.  Each Committed Loan made
to refund Swingline Loans pursuant to Section 2.4(c) shall be funded as a
Prime Rate Advance, but the Company may elect to convert such Prime Rate
Advances to Eurocurrency Rate Advances pursuant to Section 2.5.

 

Section 2.5                                      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 Committed Loans
into Prime Rate Advances or Eurocurrency Rate Advances, or to continue a
Eurocurrency Rate Advance as such (in a minimum amount of $5,000,000 or an
integral multiple of $500,000 in excess thereof, with respect to any conversion

 

17

 

into or continuation
as Eurocurrency Rate 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 Eurocurrency Rate
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 Lenders,
no Advance may be converted into or continued as a Eurocurrency Rate 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 Eurocurrency
Business Days prior to requested date of conversion or continuation in the case
of the continuation of, or conversion to, Eurocurrency Rate 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 Eurocurrency Business Day in
the case of conversions to or continuations of Eurocurrency Rate 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 Eurocurrency
Rate Advances, the Interest Period applicable thereto.  Any notice given by the Company under this
Section 2.5 shall be irrevocable.  If the
Company shall fail to notify the Agent of the continuation of any Eurocurrency
Rate Advances or of the conversion of Eurocurrency Rate Advances within the
time required by this Section 2.5, 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 converted into Eurocurrency Rate Advances having
an Interest Period of one month.  All
conversions to and continuations of Advances shall be made uniformly and
ratably among the Lenders. 
Notwithstanding anything to the contrary, all Committed Loans
denominated in Alternate Currencies shall be made and maintained as
Eurocurrency Rate Advances.

 

Section 2.6                                      Bid Loans;
Procedure for Bid Loans.

 

(a)                                  Bid Loans.  In addition to requesting Committed Loans,
each Lender severally agrees that the Company may, as set forth in this
Section 2.6, from time to time request the Lenders prior to the
Termination Date, to submit offers to make Bid Loans to the Company; provided,
however, that the Lenders may, but shall have no obligation to, submit
such offers and the Company may, but shall have no obligation to, accept any
such offers; and provided, further, that at no time shall the
Total Outstandings exceed the Aggregate Commitments.

 

(b)                                 Procedure
for Bid Loans.  The Company may, as
set forth in this Section, request the Agent to solicit offers from all the
Lenders to make Bid Loans:

 

(i)                                     When
the Company wishes to request the Lenders to submit offers to make Bid Loans
hereunder, it shall transmit to the Agent by telephone call followed promptly
by facsimile transmission of a notice in substantially the form of
Exhibit E (a “Competitive Bid Request”) so as to be received no later than
10:00 a.m. (Minneapolis time) (x) four Business Days prior to the date of
a proposed Bid Loan in the case of a Eurocurrency Auction, or

 

18

 

(y) two Business Days prior to the date of a
proposed Bid Loan in the case of an Absolute Rate Auction, specifying:

 

(A)                              the
date of such proposed Bid Loan, which shall be a Eurocurrency Business Day;

 

(B)                                the
aggregate amount of such Bid Loan, which shall be a minimum amount of
$10,000,000 or in multiples of $1,000,000 in excess thereof;

 

(C)                                whether
the Competitive Bids requested are to be for Eurocurrency Bid Loans or Absolute
Rate Bid Loans or both; and

 

(D)                               the
duration of the Interest Period applicable thereto, subject to the provisions
of the definition of “Interest Period” herein.

 

Subject to
Section 2.6(b), the Company may not request Competitive Bids for more than
three Interest Periods in a single Competitive Bid Request and may not request
Competitive Bids more than once in any period of five Business Days.  All Bid Loans shall be made and maintained in
U.S. Dollars.

 

(ii)                                  Upon
receipt of a Competitive Bid Request, the Agent will promptly send to the
Lenders by facsimile transmission an Invitation for Competitive Bids, which
shall constitute an invitation by the Company to each Lender to submit
Competitive Bids offering to make the Bid Loans to which such Competitive Bid
Request relates in accordance with this Section 2.6.

 

(iii)                               Each
Lender may at its discretion submit a Competitive Bid containing an offer or
offers to make Bid Loans in response to any Invitation for Competitive
Bids.  Each Competitive Bid must comply with
the requirements of this subsection 2.6(b) and must be submitted to the
Agent by facsimile transmission at its offices specified on the signature pages
hereto not later than (1) 10:00 a.m. (Minneapolis time) three Business
Days prior to the proposed Bid Loans, in the case of a Eurocurrency Auction or
(2) 10:00 a.m. (Minneapolis time) one Business Day prior to the proposed
date of Bid Loans, in the case of an Absolute Rate Auction.

 

(iv)                              Each
Competitive Bid shall be in substantially the form of Exhibit F,
specifying therein:

 

(A)                              the
proposed date of Bid Loan;

 

(B)                                the
principal amount of each Bid Loan for which such Competitive Bid is being made,
which principal amount (x) may be equal to, greater than or less than the
Commitment Amount of the quoting Lender, (y) must be $10,000,000 or in

 

19

 

multiples of $1,000,000 in excess thereof, and
(z) may not exceed the principal amount of the Bid Loans for which
Competitive Bids were requested;

 

(C)                                in
case the Company elects a Eurocurrency Auction, the margin above or below the
Adjusted Eurocurrency Rate (exclusive of the Applicable Margin) (the “Eurocurrency
Bid Margin”) offered for each such Bid Loan, expressed in multiples of 1/100th
of one basis point to be added to or subtracted from the applicable
Eurocurrency Rate (exclusive of the Applicable Margin) and the Interest Period
applicable thereto;

 

(D)                               in
case the Company elects an Absolute Rate Auction, the rate of interest per
annum expressed in multiples of 1/1000th of one basis point (the “Absolute Rate”)
offered for each such Bid Loan and the Interest Period applicable thereto; and

 

(E)                                 the
identity of the quoting Lender.

 

(v)                                 Any
Competitive Bid shall be disregarded if it:

 

(A)                              is
not substantially in conformity with Exhibit F or does not specify all of
the information required by subsection (b)(iv) of this Section;

 

(B)                                contains
qualifying, conditional or similar language;

 

(C)                                proposes
terms other than or in addition to those set forth in the applicable Invitation
for Competitive Bids; or

 

(D)                               is
transmitted after the time set forth in subsection (b)(iii).

 

(vi)                              Promptly
on receipt and not later than 12:00 p.m. (Minneapolis time) three Business Days
prior to the proposed date of the Bid Loan, in the case of a Eurocurrency
Auction, or 12:00 p.m. (Minneapolis time) one Business Day prior to the
proposed date of the Bid Loan, in the case of an Absolute Rate Auction, the
Agent will notify the Company of the terms of any Competitive Bid submitted by
a Lender that is in accordance with subsection 2.6(b)(iv).  Notwithstanding the foregoing, any such
subsequent Competitive Bid shall be disregarded by the Agent unless such
subsequent Competitive Bid is submitted solely to correct a manifest error in
such former Competitive Bid and only if received within the times set forth in
subsection 2.6(b)(iii).  The Agent’s
notice to the Company shall specify (1) the aggregate principal amount of
Bid Loans for which offers have been received for each Interest Period
specified in the related Competitive Bid Request; (2) the respective
principal amounts and Eurocurrency Bid Margins or Absolute Rates, as the case
may be, so offered; and (3) any other information regarding such

 

20

 

Competitive Bid reasonably requested by the
Company.  Subject only to the provisions
of Section 3.2 and the provisions of this Section 2.6, any
Competitive Bid shall be irrevocable except with the written consent of the
Agent given on the written instructions of the Company.

 

(vii)                           Not
later than 2:00 p.m. (Minneapolis time) three Business Days prior to the
proposed Bid Loan, in the case of a Eurocurrency Auction, or 2:00 p.m.
(Minneapolis time) one Business Day prior to the proposed Bid Loan, in the case
of an Absolute Rate Auction, the Company shall notify the Agent, in writing by
signing the relevant Competitive Bid forms in the space indicated at the bottom
of such form, of its acceptance or non-acceptance of the offers received by it
pursuant to subsection 2.6(b)(iv). 
The Company shall be under no obligation to accept any offer and may
choose to accept or reject some or all offers. 
In the case of acceptance, such notice shall specify the aggregate
principal amount of offers for each Interest Period that is accepted.  The Company may accept any Competitive Bid in
whole or in part; provided that:

 

(A)                              the
aggregate principal amount of each Bid Loan may not exceed the applicable
amount set forth in the related Competitive Bid Request;

 

(B)                                the
principal amount of each Bid Loan must be $10,000,000 or in any multiple of
$1,000,000 in excess thereof;

 

(C)                                acceptance
of offers may only be made on the basis of ascending Eurocurrency Bid Margins
or Absolute Rates within each Interest Period, as the case may be; and

 

(D)                               the
Company may not accept any offer that is described in
Section 2.6(b)(v) or that otherwise fails to comply with the
requirements of this Agreement.

 

(viii)                        If offers
are made by two or more Lenders with the same Eurocurrency Bid Margins or
Absolute Rates, as the case may be, for a greater aggregate principal amount
than the amount in respect of which such offers are accepted for the related
Interest Period, the principal amount of Bid Loans in respect of which such
offers are accepted shall be allocated by the Agent among such Lenders (in such
multiples, not less than $1,000,000, as the Agent may deem appropriate) as
nearly as practicable in proportion to the aggregate principal amounts of such
offers. Determination by the Agent of the amounts of Bid Loans shall be
conclusive in the absence of manifest error.

 

(ix)                                the
Agent will promptly notify each Lender having submitted a Competitive Bid if
its offer has been accepted and, if its offer has been accepted, of the amount
of the Bid Loan or Bid Loans to be made by it on the date of the Bid Loan.

 

21

 

(x)                                   Each
Lender, which has received notice pursuant to Section 2.6(b)(ix) that
its Competitive Bid has been accepted, shall make the amounts of such Bid Loans
available to the Agent for the account of the Company, by 11:00 a.m.
(Minneapolis time) in the case of Absolute Rate Bid Loans, and by
11:00 a.m. (Minneapolis time) in the case of Eurocurrency Bid Loans, on
such date of Bid Loan, in funds immediately available to the Agent for the
account of the Company at the principal office of the Agent in Minneapolis,
Minnesota.

 

(xi)                                Promptly
following each Bid Loan, the Agent shall notify each Lender of the ranges of
bids submitted and the highest and lowest bids accepted for each Interest
Period requested by the Company and the aggregate amount borrowed pursuant to
such Bid Loan.  If, on or prior to the
date of the proposed Bid Loan, the Commitments have not been terminated and if,
on date of such proposed Bid Loan all applicable conditions to funding
referenced in Sections 3.2 hereof are satisfied, the Lender or Lenders
whose offers the Company has accepted will fund each Bid Loan so accepted.  Nothing in this Section 2.6 shall be
construed as a right of first offer in favor of the Lenders or to otherwise
limit the ability of the Company to request and accept credit facilities from
any Person (including any of the Lenders), provided that such credit facilities
are not prohibited by this Agreement.

 

Section 2.7                                      Interest
Rates, Interest Payments and Default Interest.  Interest shall accrue and be payable as
follows:

 

(a)                                  Subject
to paragraph (d) below, each Committed Loan that is a Eurocurrency Rate 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 Eurocurrency Rate for such Interest Period plus (ii) the
Applicable Margin.

 

(b)                                 Subject
to paragraph (d) below, each Committed Loan that is a Prime Rate Advance shall
bear interest on the unpaid principal amount thereof at a rate per annum equal
to the sum of (i) the Prime Rate plus (ii) the Applicable
Margin.

 

(c)                                  Each
Bid Loan shall bear interest on the outstanding principal amount thereof from
the date of the making of such Bid Loan at a per annum rate equal to the
Adjusted Eurocurrency Rate plus (or minus) the Eurocurrency Bid Margin, or at
the Absolute Rate, as the case may be.

 

(d)                                 Upon
and during the continuation of any Event of Default, each Advance shall, at the
option of the Majority Lenders (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), thereafter bear interest until paid
in full (or until the corresponding Event of Default is waived in writing by
the Majority Lenders), whether at the date scheduled therefor or earlier upon
acceleration, at a rate per annum equal to the sum of the rate otherwise
applicable to such Advance plus 2.00%.

 

22

 

(e)                                  Interest
accrued to the day of payment shall be payable (i) with respect to each
Offshore Rate Loan having an Interest Period of three months or less, on the
last day of the Interest Period applicable thereto; (ii) with respect to any
Offshore Rate 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;
(iii) with respect to any Prime Rate Advance and any Absolute Rate Bid Loans,
on the first day of each month; and (iv) with respect to all Loans, on the
Termination Date; provided that interest under Section 2.5(c) shall be payable
on demand.

 

Section 2.8                                      Repayment;
Mandatory Prepayments.

 

(a)                                  Principal
of all Loans, together with all accrued, unpaid interest thereon, shall be due
and payable by the Company on the Termination Date.  Upon issuance of any Letters of Credit having
an expiration date after the Termination Date, the Company shall deposit in the
Holding Account in the appropriate currency an amount equal to the aggregate
undrawn face amount of all outstanding Letters of Credit (and the Lenders
shall, effective on and after the Termination Date, be automatically released
from their obligations under Section 2.14 with respect to any such 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 in the appropriate currency equal to the amount by which the
amount of such deposit exceeds the aggregate undrawn face amount of outstanding
Letters of Credit (after giving effect to such expiration or reduction).

 

(b)                                 If
at any time the Total Outstandings exceed the Aggregate Commitment Amount, the
Company shall prepay the Loans in the amount of such excess.

 

(c)                                  If
at any time, solely as a result of fluctuations in currency exchange rates the
Total Outstandings exceed one hundred five percent (105%) of the Aggregate
Commitment Amount, the Company for the ratable benefit of the Lenders shall
prepay the Loans on the next Business Day after demand therefor by the Agent in
an aggregate amount such that after giving effect thereto the Total
Outstandings are less than or equal to the Aggregate Commitment Amount.

 

Section 2.9                                      Optional
Prepayments.  The Company may, upon
(i) at least three Eurocurrency Business Days’ prior written notice to the
Agent, in the case of Offshore Rate Loans and Absolute Rate Bid Loans, and (ii)
written notice to the the Agent given prior to 1:00 P.M. on any Business Day,
in the case of Prime Rate Advances and Swingline Loans, in each case stating
the proposed date and the aggregate principal amount of the prepayment, and if
such notice is given the Company shall, prepay the Advances, in whole or in
part, together with (A) accrued interest to the date of such prepayment on the
principal amount prepaid and (B) in the case of Offshore Rate Loans, any amount
payable to the Lenders pursuant to Section 2.8; provided, however, that each
partial prepayment shall be in an aggregate principal amount of not

 

23

 

less than (i)
$5,000,000 or an integral multiple of $500,000 in excess thereof, as to
prepayments of Eurocurrency Rate Advances or in an Alternate Currency, (ii)
$5,000,000 or an integral multiple of $1,000,000 in excess thereof, as to
prepayments of Bid Loans , (ii) $2,000,000 or an integral multiple of $500,000
in excess thereof, as to prepayments of Prime Rate Advances or (iii) $1,000,000
or an integral multiple of $250,000 in excess thereof as to prepayments of
Swingline Loans.  Amounts paid (unless
following an acceleration or upon termination of the Commitments in whole) or
prepaid under this Section 2.9 may be re-borrowed upon the terms and subject to
the conditions and limitations of this Agreement.  All principal paid or prepaid under Section
2.8, this Section 2.9 or Section 2.16 shall be applied to the outstanding
principal balance of each Lender’s Committed Loans (in accordance with such
Lender’s Pro Rata Share).

 

Part B —  Terms of the Letter of Credit Facility

 

Section 2.10                                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 Lenders 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 Letters of Credit
for the account of the Company from time to time between the Effective Date and
the Termination Date in such amounts and in U.S. Dollars or in Alternate
Currencies, 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 the Total
Outstandings to exceed the Aggregate Commitment Amount.

 

Section 2.11                                Procedures for
Letters of Credit.  Each request for
the issuance of a Letter of Credit shall be made by the Company in writing and
received by the Agent by 1:00 p.m. (Minneapolis time) (a) not later than one
Business Day preceding the requested date of issuance (which shall also be a
Business Day) in the case of the issuance of Letters of Credit or in the case
of Letters of Credit denominated in U.S. Dollars and (b) not later than three
Business Days preceding the requested date of issuance in the case of Letters
of Credit denominated in Alternate Currencies. 
Each request for the issuance of a Letter of Credit shall be deemed a
representation by the Company that on the date of issuance 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 Lenders by 1:00 P.M. (Minneapolis time) on the date the Agent issues any
Letter of Credit, of the issuance of each Letter of Credit, and each Lender’s
Pro Rata Share thereof, and the Agent will promptly provide to the other
Lenders a copy of each Letter of Credit issued hereunder.

 

Section 2.12                                Terms of Letters of
Credit; Auto-Renewal Letters of Credit.

 

(a)                                  Letters
of Credit shall be issued in support of obligations of the Company incurred in
the ordinary course of its business. 
Each Letter of Credit shall list the Company as the account party
thereon.  No Letter of Credit may have an
expiration date more than one year after the date of its issuance.

 

24

(b)                                 If
the Company so requests, the Agent shall, issue a Letter of Credit that has
automatic renewal provisions (each, an “Auto-Renewal Letter of Credit”); provided
that any such Auto-Renewal Letter of Credit must permit the Agent to prevent
any such renewal at least once in each twelve-month period (commencing with the
date of issuance of such Letter of Credit) by giving prior notice to the
beneficiary thereof of the Agent’s option not to extend the Letter of Credit
beyond the expiration date (the “Non-renewal Notice”).  The Agent shall have the option to issue a
Non-renewal Notice during a specified period in each such twelve-month period
to be agreed upon at the time such Letter of Credit is issued (the date of such
notice shall be referred to herein as the “Non-renewal Notice Date”).  Once an Auto-Renewal Letter of Credit has
been issued, each Lender shall be deemed to have authorized (but may not
require) the Agent to permit the renewal of such Letter of Credit at any time
to an expiry date not later than one year after its date of issuance or
renewal; provided, however, that the Agent shall not permit any
such renewal if (A) the Agent has determined that it would have no
obligation at such time to issue such Letter of Credit in its renewed form
under the terms hereof (by reason of the provisions of Section 2.10 or
otherwise), or (B) it has received notice (which may be by telephone or in
writing) on or before the day that is two Business Days before the Non-renewal
Notice Date (1) from the Majority Lenders stating that the Majority
Lenders have elected not to permit such renewal or (2) from any Lender or
the Company that one or more of the applicable conditions specified in
Section 3.2 is not then satisfied.

 

Section 2.13                                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 in the appropriate currency.  To the extent that funds in the appropriate
currency are contained 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 contained in the Holding Account in the
appropriate currency available 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 2.14                                Loans to Cover
Unpaid Draws.  Whenever any Unpaid
Draw exists for which there are not then funds contained in the Holding Account
sufficient to cover the same, the Agent shall give the Lenders notice to that
effect, specifying the amount thereof, in which event each Lender is authorized
(and the Company does here so authorize each Lender) to, and shall, make a
Committed Loan (which Loan (a) shall be made as a Prime Rate Advance, in the
case of an Unpaid Draw on a Letter of Credit denominated in U.S. Dollars and
(b) shall be made as a Eurocurrency Rate Advance having an initial Interest
Period of one day (and not of one, two, three or six months), in the case of an
Unpaid Draw on a Letter of Credit denominated in an Alternate Currency) to the
Company in an amount equal to such Lender’s Pro Rata Share of the amount of the
Unpaid Draw.  The Agent shall notify each
Lender by 11:00 AM (Minneapolis time) on the date such Unpaid Draw occurs of
the amount of the Committed Loan to be made by such Lender.  Notices received after such time shall be
deemed to have been received on the next

 

25

 

Business Day.  Each Lender shall then make such Committed
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 Commitments have been terminated) and each Lender shall
provide the Agent with the proceeds of such Committed Loan in Immediately
Available Funds in the appropriate currency at the office of the Agent, not
later than 2:00 PM (Minneapolis time) on the day on which such Lender received
such notice , or, in the case of notices received after 11:00 AM, Minneapolis
time, is deemed to have received such notice. 
The Agent shall apply the proceeds of such Committed 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 Lenders in the manner
contemplated by Section 7.10 and 7.11 hereof. 
If at the time the Lenders make funds available to the Agent pursuant to
the provisions of this Section, 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 Lenders interest on the funds so advanced at a
floating rate per annum equal to the sum of the Prime Rate (or, in the case of
a Letter of Credit denominated in an Alternate Currency, such rate reasonably
determined by the Agent in conjunction with the Reference Banks) plus two
percent (2.00%).  If for any reason any
Lender is unable to make a Committed Loan to the Company to reimburse the Agent
for an Unpaid Draw, then such Lender shall immediately purchase from the Agent
a risk participation in such Unpaid Draw, at par, in an amount equal to such
Lender’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 Lender hereunder.

 

Section 2.15                                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 2.13
and to repay any Letter of Credit Loan 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 or any Lender 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.

 

26

 

Neither the Agent nor any Lender nor the officers,
directors, agents or employees of any thereof shall be liable or responsible
for, and the obligations of the Company to the Agent and the Lenders 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 the Agent 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 the Agent, and the Agent shall be liable to the Company,
to the extent, but only to the extent, of any direct, as opposed to
consequential, damages suffered by the Company which the Company proves were
caused by the Agent’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 2.16                                Optional Reduction
or Termination of Commitments

 

(a)                                  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 Lenders of $5,000,000, or an integral
multiple thereof, or terminate the Commitments in their entirety; provided,
however, that 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 into the Holding Account an amount equal to the Letter of Credit
Usage as of such date.  Upon any
reduction in the Commitments pursuant to this Section 2.16, the Company shall
pay to the Agent for the account of the Lenders the amount, if any, by which
the Total Outstandings exceed the Aggregate Commitment Amount after giving effect
to such reduction.

 

(b)                                 Upon
termination of the Commitments pursuant to this Section, the Company shall pay
to the Agent for the account of the Lenders the full amount of all outstanding
Loans, all accrued and unpaid interest thereon, all unpaid Facility Fees
accrued to the date of such termination, any indemnities payable pursuant to
Section 2.27 and all other unpaid Obligations of the Company to the Lenders and
the Agent hereunder,

 

27

 

and shall deposit into the Holding Account an amount
equal to the Letter of Credit Usage as of such date.

 

Section 2.17                                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.

 

Section 2.18                                Facility Fees.  The Company shall pay to the Agent, for the
account of each Lender, a facility fee (the “Facility Fee”) in an amount equal
to the Applicable Margin calculated on the average daily Commitment Amount
(whether used or unused) of such Lender during each calendar quarter during the
period from the Closing Date to the Termination 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 2.19                                Letter of Credit
Fees.  For each Letter of Credit
issued, the Company shall pay to the Agent (i) for the ratable account of the
Lenders, a fee (a “Letter of Credit Fee”) in an amount per annum equal to the
Applicable Margin for Eurocurrency Rate Advances (or, in the case of
Documentary Letters of Credit, 50% of the Applicable Margin for Eurocurrency
Rate Advances) of the original face amount of each outstanding Letter of Credit
for the period from the date of issuance of such Letter of Credit to the
scheduled expiration date of such Letter of Credit and (ii) for its own benefit
a “fronting fee”  equal to 0.10% per
annum multiplied by the amount available to be drawn upon such Letter of Credit
for the period from the date of issuance of such Letter of Credit to the
scheduled expiration date of such Letter of Credit.  The fees specified in the foregoing sentence
are payable calendar quarterly in arrears on the first day of each calendar
quarter and on the Termination Date. The Company shall also pay to the Agent,
for its own account, on demand all issuance, amendment, drawing and other fees
regularly charged by the Agent to its letter of credit customers and all
customary out-of-pocket expenses incurred by the Agent in connection with the
issuance, amendment, administration or payment of any Letter of Credit.

 

Section 2.20                                Computation.  Facility Fees, Letter of Credit Fees and
interest on Eurocurrency Rate Advances denominated in U.S. Dollars shall be
computed on the basis of actual days elapsed 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, or in the case of Offshore Rate Loans denominated in an Alternate
Currency, a year having a number of days as is customary for the settlement of
international transactions in such currency.

 

Section 2.21                                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 Lenders shall be made without setoff or
counterclaim in Immediately Available Funds not later than 12:00 noon
(Minneapolis time) (or, as to prepayments of Prime Rate Loans and Swingline
Loans, 1:00 PM (Minneapolis time)) on the dates called for under this Agreement
to the Agent at its main office in Minneapolis, Minnesota.  Payments payable to the Agent 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) on the dates called for in this Agreement to the
Agent at its principal office in Minneapolis, Minnesota.  Funds received after such time shall be
deemed to have been received on the next

 

28

 

Business Day.  The Agent will promptly distribute in like
funds to each Lender its Pro Rata Share (or in the case of payments upon Bid
Loans, to the Bid Lender making such Bid Loan) of each payment of principal or
interest applied to the Loans, and each payment of Facility Fees, Letter of
Credit Fees or other amounts received by the Agent for the account of the
Lenders.  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, the Agent will pay interest to each Lender
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 2.22                                Use of Loan Proceeds.  The proceeds of the initial Loans shall be
used to refinance in full all of the Company’s obligations under the Existing
Credit Agreement.  The proceeds of any
subsequent 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 2.23                                Interest Rate Not
Ascertainable, Etc.  If, on or prior
to the date for determining the Adjusted Eurocurrency Rate in respect of the
Interest Period, any Lender 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
Lender in the relevant market for such Interest Period, or

 

(b)                                 the
Adjusted Eurocurrency Rate will not adequately and fairly reflect the cost to
such Lender of funding or maintaining Offshore Rate Loans for such Interest
Period,

 

such Lender shall forthwith
give notice to the Agent and the Company and the other Lenders of such
determination, whereupon the obligation of such Lender to make or continue, or
to convert any Advances to, Offshore Rate Loans shall be suspended until such Lender
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 Lender shall be made as
Prime Rate Advances, or, as to Bid Loans, as Absolute Rate Bid Loans.  No such suspension shall affect the interest
rate then in effect during the applicable Interest Period for any Offshore
Rate Loan outstanding at the time such
suspension is imposed.

 

Section 2.24                                Increased Cost.  If, after the date hereof, any Regulatory
Change:

 

(a)                                  shall
subject any Lender (or its applicable lending office) to any tax, duty or other
charge with respect to its Offshore Rate Loans, its Note(s), its obligation to
make Offshore Rate Loans, 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

 

29

 

Lender (or its applicable lending office) of the
principal of or interest on its Offshore Rate Loans, or any other amounts due
under this Agreement in respect of its Offshore Rate Loans, its obligation to
make Offshore Rate Loans, 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 such Lender or its applicable lending office
imposed by the jurisdiction in which such Lender’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 Offshore Rate Loan any such requirement to
the extent included in calculating the applicable Adjusted Eurocurrency Rate)
against assets of, deposits with or for the account of, or credit extended by,
any Lender’s applicable lending office or shall impose on any Lender (or its
applicable lending office) or on the interbank eurocurrency market any other
condition affecting its Offshore Rate Loans, its Note(s), its obligation to
make Offshore Rate Loans, 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 Lender (or its applicable lending
office) of making or maintaining any Offshore Rate Loan, 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 Lender (or its applicable lending office) under this
Agreement or under its Note(s), then, within 30 days after demand by such
Lender (with a copy to the Agent), the Company shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction in amounts received or receivable.  Each Lender 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 Lender to compensation pursuant
to this Section 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 Lender, be otherwise disadvantageous
to such Lender.  A certificate of any
Lender claiming compensation under this Section, 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 Lender 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 Lender under the
third preceding sentence with respect to any Regulatory Change (the “Section
2.24 Excluded Period”), except to the extent any amount is attributable to the
Section 2.24 Excluded Period as a result of the retroactive application of the
applicable Regulatory Change.  Failure on
the part of any Lender 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 Lender’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 2.25                                Illegality.  If, after the date of this Agreement, any
Regulatory Change shall make it unlawful or impossible for such Lender to make,
maintain or fund any

 

30

 

Offshore Rate
Loans, such Lender shall notify the Company and the Agent, whereupon the
obligation of such Lender to make or continue, or to convert any Advances
(including Bid Loans for which the Company has accepted such Lender’s
Competitive Bid, but as to which such Bid Loan has not yet been made) to,
Offshore Rate Loans shall be suspended until such Lender notifies the Company
and the Agent that the circumstances giving rise to such suspension no longer
exist.  Before giving any such notice,
such Lender 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 Lender, be otherwise disadvantageous to such Lender.  If such Lender determines that it may not
lawfully continue to maintain any Offshore Rate Loans to the end of the
applicable Interest Periods, all of the affected Advances shall be
automatically converted to Prime Rate Advances (or, in the case of Bid Rate
Loans, shall thereafter bear interest at a rate per annum equal to the prime or
reference rate from time to time announced by the relevant Bid Lender) as of
the date of such Lender’s notice, and upon such conversion or prepayment the
Company shall indemnify such Lender in accordance with Section 2.27.

 

Section 2.26                                Capital Adequacy.  In the event that any Lender shall have
reasonably determined that any Regulatory Change has or shall have the effect
of reducing the rate of return on such Lender’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 Lender or its parent corporation could have
achieved but for such Regulatory Change (taking into account such Lender’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 Lender (with a copy to the Agent), pay to such Lender
additional amounts sufficient to compensate such Lender or its parent corporation
for such reduction; provided, that the Company shall not be obligated to
pay any such additional amount (i) unless such Lender shall first have
notified (in the absence of gross negligence by the Agent) the Company in
writing that it intends to seek such compensation pursuant to this Section 2.26
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 2.26
Excluded Period”), except to the extent any amount is attributable to the
Section 2.26 Excluded Period as a result of the retroactive application of the
applicable Regulatory Change.  Any
determination by such Lender under this Section and any certificate as to the
amount of such reduction given to the Company by such Lender shall be final,
conclusive and binding for all purposes, absent manifest error.

 

Section 2.27                                Funding Losses.  The Company shall compensate each Lender,
upon its written request, for all losses, expenses and liabilities (including,
without limitation, any interest paid by such Lender to lenders of funds
borrowed by it to make or carry Eurocurrency Rate Advances to the extent not
recovered by such Lender in connection with the re-employment of such funds)
which such Lender may sustain: 
(a) if for any reason, other than a default by such Lender, a
funding of a Eurocurrency Rate 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 2.5, (b) if, for any reason, the Company fails to borrow a Bid Loan
after the Agent has notified a Lender pursuant to Section 2.6 that its
Competitive Bid has been accepted by the Company or (c) 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 Eurocurrency
Rate Advance or Absolute Rate Bid Loans, or a conversion pursuant to Section
2.25, occurs on any day other than the last

 

31

 

day of the
Interest Period applicable thereto.  A
Lender’s request for compensation shall set forth the basis for the amount
requested and shall be final, conclusive and binding, absent manifest error.

 

Section 2.28                                Discretion of
Lenders as to Manner of Funding.  Each
Lender shall be entitled to fund and maintain its funding of Offshore Rate
Loans 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 2.27, but excluding determinations of
the Eurocurrency Rate that the Agent may elect to make from the Telerate or
Reuters screen) shall be made as if such Lender had actually funded and
maintained each Offshore Rate Loan 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
Eurocurrency Rate.

 

Section 2.29                                Setoff.  Whenever an Event of Default shall have occurred
and be continuing, the Company hereby irrevocably authorizes each Lender to set
off the Obligations owed to it (including, without limitation, any
participation in the Obligations of other Lenders 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 related to this Agreement against, such Lender.  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 Lenders. 
Each Lender 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 Lender 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 Lender pursuant to law.  If any
Lender having outstanding Committed Loans and Bid Loans exercises its right of
setoff, it shall apply the product of such set off first to such Lender’s
Committed Loans, until its Committed Loans are reduced to zero and thereafter
to its Bid Loans.

 

Section 2.30                                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 Lender 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 Lender and the Agent for the full amount of Taxes
imposed on or paid by such Lender or the Agent and any penalties, interest and
expenses with respect thereto. Payments on this indemnification shall be

 

32

 

made within 30 days from the date such Lender or the
Agent makes written demand therefor.

 

(c)                                  Within
30 days after the date of any payment of Taxes pursuant to the Company’s
obligations under Sections 2.30(a) or (b), 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 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 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 (c) and
subsection (d), the terms “United States” and “United States person” shall have
the meanings specified in Section 7701 of the Internal Revenue Code.

 

(d)                                 Lenders
to Submit Forms.  Each Lender, 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 Lender 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 Lender becomes a Lender, 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 Lender’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 Lender 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
Lender hereunder.  Upon the request of
the Company or the Agent, each Lender 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 Lender.  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

 

33

 

of Puerto Rico) or any area subject to the jurisdiction
of the United States of America (“U.S. Taxes”) from any payments to a Lender
pursuant to any Loan Document in respect of the Obligations payable to such
Lender 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 Lender.  In the event the Company
is required pursuant to this Section 2.30 to pay any additional amount to any
Lender, such Lender shall, if no Event of Default or Unmatured Event of Default
has occurred and is continuing, upon the request of the Company to such Lender
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 Lender 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 Lender of the principal of, and
interest accrued and unpaid to the date of such assignment on, the Loans made
by such Lender, (ii) the payment by the Company to the assigning Lender of any
and all other amounts owing to such Lender under any provision of this
Agreement accrued and unpaid to the date of such assignment and (iii) the
Company’s release of the assigning Lender from any further obligation or
liability under this Agreement. 
Notwithstanding anything to the contrary in this Section 2.30(f), in no
event shall the replacement of any Lender result in a decrease in the aggregate
Commitment Amounts without the written consent of the Majority Lenders.

 

Section 2.31                                Additional Alternate
Currency Provisions.

 

(a)                                  Market
Disruption.  Notwithstanding the
satisfaction of all applicable conditions referred to in Articles II and III
with respect to any Advance in any Alternate Currency,  if there shall occur on or prior to the date
of such Advance any change in national or international financial, political or
economic conditions or currency exchange rates or exchange controls which would
in the reasonable opinion of the Agent or the Majority Lenders make it
impracticable for the Loans comprising such Advance to be denominated in the
Alternate Currency specified by the Company, then the Agent shall forthwith
give notice thereof to the Company and the Lenders and such Advance shall not
be denominated in such Alternate Currency, but shall be made in U.S. Dollars,
in an aggregate principal amount equal to the U.S. Dollar Amount of the
aggregate principal amount specified in the related Notice of Borrowing,
Continuation or Conversion, as the case may be, as a Prime Rate Advance, unless
the Company notifies the Agent at least one Business Day before such date that
it elects not to borrow on such date.

 

(b)                                 Payment
of Loans in Alternate Currency.  The
specification of payment of Loans denominated in Alternate Currency in each
case at a specific place pursuant to this Agreement, is of the essence.  Notwithstanding anything in this Agreement,
the Obligations denominated in an Alternate Currency shall not be discharged by
an amount paid in any other currency or at another place, whether pursuant to a
judgment or otherwise, to the extent the amount so paid, on prompt conversion into
such Alternate Currency, and transfer to such Lender under normal banking
procedure,

 

34

 

does not yield the amount of such Alternate Currency
due under this Agreement.  If any
payment, whether pursuant to a judgment or otherwise, upon conversion and
transfer, does not result in payment of the amount of such Alternate Currency
due under this Agreement, such Lender shall have an independent cause of action
against the Company for the currency deficit.

 

(c)                                  Currency
Indemnity.  If, for the purposes of
obtaining judgment in any court in any jurisdiction with respect to this
Agreement or any other Loan Document, it becomes necessary to convert the
currency of such jurisdiction (the “Judgment Currency”) into any amount due
under this Agreement or under any other Loan Document into any currency other
than the Judgment Currency (the “Currency Due”), then conversion shall be made
at the rate of exchange prevailing on the second Eurocurrency Business Day
before the day on which judgment is given. For this purpose, “rate of exchange”
means the rate at which the Agent is able, on the relevant date, to purchase
the Currency Due with the Judgment Currency in accordance with its normal
practice at its office in Minneapolis, Minnesota. In the event that there is a
change in the rate of exchange prevailing between the second Eurocurrency
Business Day before the day on which the judgment is given and the date of
receipt by the Agent of the amount due, the Company will, on the date of
receipt by the Agent, pay such additional amounts, if any, or be entitled to
receive reimbursement of such amount, if any, as may be necessary to ensure
that the amount received by the Agent on such date is the amount in the
Judgment Currency which when converted at the rate of exchange prevailing on
the date of receipt by the Agent is the amount then due under this Agreement or
such other Loan Document in the Currency Due. If the amount of the Currency Due
which the Agent is so able to purchase is less than the amount of the Currency
Due originally due to it, the Company shall indemnify and save the Agent and
the relevant Lenders harmless from and against all loss or damage arising as a
result of such deficiency. This indemnity shall constitute an obligation
separate and independent from the other obligations contained in this Agreement
and the other Loan Documents, shall give rise to a separate and independent
cause of action, shall apply irrespective of any indulgence granted by any
Agent or any Lender from time to time and shall continue in full force and
effect notwithstanding any judgment or order for a liquidated sum in respect of
an amount due under this Agreement or any other Loan Document or under any
judgment or order.

 

Section 2.32                                Accordion Feature.  Notwithstanding anything to the contrary,
from time to time, the Company may agree, with the prior written consent of
Agent (which consent shall not be unreasonably withheld), to (i) permit a
Lender to increase its Commitment Amount, or (ii) add a bank chartered under
the laws of the United States (a “New Lender”) as a “Lender” under this
Agreement with a Commitment, for the purpose of increasing the Aggregate
Commitment Amounts; provided that upon giving effect to any such new
Commitment, the Commitment Amount of the New Lender shall not be less than
$15,000,000; and provided, further, that the Aggregate Commitment
Amounts, after giving effect to any such increase, shall not exceed
$400,000,000.  The Company and each
Lender increasing its Commitment Amount or New Lender shall agree on the date
as of which the increased Commitment Amount or New Lender’s Commitment Amount
shall become effective, and each New Lender shall execute and deliver an
instrument in the form prescribed by Agent (which instrument need not be
executed by any other Lender in order to be effective) to evidence its
agreement to be bound by this

 

35

 

Agreement and the
other Loan Documents.  Upon the effective
date (the “Increase Date”) of an increase in any Lender’s Commitment Amount or
inclusion of a New Lender as a Lender under this Agreement (the “Subject Lender”),
Agent shall deliver to the Company and each Lender a revised Schedule 1.1(a)
reflecting the revised Aggregate Commitment Amounts.   Further, upon the Increase Date, the Subject
Lender shall make Committed Loans as calculated by the Agent so that its
outstanding Committed Loans are equal to its respective Pro Rata Share of all
Committed Loans outstanding on such date and the Agent shall distribute the
proceeds of such Committed Loans to the other Lenders in accordance with their
Pro Rata Share of all Committed Loans outstanding on the Increase Date, in each
case after giving effect to the increase to the Aggregate Commitment Amounts
upon the Increase Date, but prior to any additional Loans requested by the
Company to be made on the Increase Date. 
Notwithstanding anything to the contrary, no Lender shall be obligated
to increase its Commitment Amount pursuant to this Section 2.32.

 

ARTICLE
III

CONDITIONS PRECEDENT

 

Section 3.1                                      Conditions
Precedent to Effectiveness of Agreement. 
The effectiveness of this Agreement shall be subject to the prior or
simultaneous fulfillment of each of the following conditions:

 

(a)                                  the
Agent shall have received the following:

 

(i)                                     This
Agreement, duly executed by the Company and the Lenders;

 

(ii)                                  Notes
payable to any Lenders requesting such Notes, duly executed by the Company,
complying with the requirements of Section 2.3;

 

(iii)                               Guaranties
of the initial Guarantors, duly executed by such Guarantors;

 

(iv)                              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;

 

(v)                                 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;

 

(vi)                              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,

 

36

 

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;

 

(vii)                           the
favorable written opinion of Robins, Kaplan, Miller & Ciresi, L.L.P.
counsel for the Company and its Subsidiaries, addressed to the Lenders, as to
the matters and to the effect set forth in Exhibit G; 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 Lenders shall have received all fees and other amounts due and
payable by the Company to the Agent and the Lenders 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.

 

(c)                                  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 Effective Date.

 

(d)                                 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 Lenders to make all Loans (including the initial Loan) other
than Letter of Credit Loans, to continue any Eurocurrency Rate Advances as such
or to convert any outstanding Advances to Eurocurrency Rate Advances, to make
Bid Loans as to which the Company has accepted the relevant Competitive Bid and
the obligation of the Agent 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 (except
for the last sentence of Section 4.5) 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

 

37

 

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)                                  except
with respect to any Committed Loan, 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 the Agent 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 2.10.

 

ARTICLE
IV

REPRESENTATIONS AND WARRANTIES

 

To induce the Lenders to
enter into this Agreement, to grant their respective Commitments and to make
Loans thereunder, and to induce the Agent to issue Letters of Credit hereunder,
the Company hereby represents and warrants to the Lenders 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 Material 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
each 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.

 

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

 

38

 

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.

 

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 February 28, 2004, and
its Consolidated unaudited financial statements as of August 28, 2004, as
heretofore furnished to the Lenders and as filed with the Securities and
Exchange Commission, 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 February 28, 2004, no material adverse change
has occurred in the business, assets, operations or financial condition of the
Company and its Subsidiaries taken as a whole.

 

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.  As of the Effective Date, neither the Company
nor any ERISA Affiliate is a party to or has any liability to any Multiemployer
Plan.  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 4.8                                      Environmental,
Health and Safety Laws.  Neither the
Company nor any Subsidiary has received any notice to the effect that any part
of its operations or properties is not in 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.

 

39

 

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.  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 Lenders 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 Material Subsidiaries is lessor, in each case which actual, threatened or
alleged defaults could have a Material Adverse Effect.

 

Section 4.11                                Taxes.  No tax Liens have been filed and no material
claims are being asserted with respect to any such taxes, fees or charges,
other than those permitted by Section 5.12(c). 
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 2,
2002.

 

Section 4.12                                Trademarks, Patents.  Each of the Company and its Material
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                                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 4.14                                Subsidiaries.  Schedule 4.14(a) sets forth the
organizational chart of the Company and its Subsidiaries as of the Effective
Date, including the legal name and the jurisdiction of incorporation of each of
the Company’s Subsidiaries as of the date indicated therein.  Schedule 4.14(b) separately identifies all
Restricted Subsidiaries and Material Subsidiaries as of the Company’s fiscal
year ended February 28, 2004 and, with respect to each 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.

 

40

 

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 Lenders shall otherwise consent in writing, the
Company will:

 

Section 5.1                                      Financial
Statements.  Furnish to the Agent,
with a copy for each Lender:

 

(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, by Ernst & Young LLP or other independent certified public
accountants of recognized national standing selected by the Company;

 

(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, 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;

 

(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)                                 such
other information respecting the financial condition and results of operations
of the Company as the Agent or any Lender may from time to time reasonably
request; and

 

(e)                                  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.

 

Documents required to be
delivered pursuant to Section 5.1(a), (b) and (c) (to the extent any such
documents are included in materials otherwise filed with the Securities and
Exchange Commission) may be delivered electronically and, if so delivered,
shall be

 

41

 

deemed to have
been delivered on the date (i) on which the Company posts such documents on
www.sec.gov, or provides a link thereto, on the Company’s website at
www.bestbuy.com; or (ii) on which such documents are posted on the Company’s
behalf on IntraLinks/IntraAgency or another relevant website, if any, to which
each Lender and the Agent have ready access without charge (whether a
commercial, third-party website or whether sponsored by the Agent); provided
that the Company shall deliver paper copies of such documents to the Agent or
any Lender that requests the Company to deliver such paper copies.

 

Section 5.2                                      Corporate
Existence.  Except as permitted by
Section 5.11, maintain, and cause each Material 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 Material 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 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.

 

42

 

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 Lender 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 with its independent
certified public accountants, all at such times during regular business hours
as such Lender shall reasonably request (collectively, the “Inspections”);
provided that the Company shall not be obligated to permit any Lender to
conduct more than one Inspection in any calendar year unless a Default or Event
of Default is then continuing.

 

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, except to the extent that
the failure to so maintain its properties would not likely have a Material
Adverse Effect on the Company or such Subsidiary.

 

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 $20,000,000
or (c) fail to make any payments in an aggregate amount exceeding
$20,000,000 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 5.9                                      Litigation and
Other Notices.  Furnish to the Agent,
with a copy for each Lender, 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 or
such Subsidiary;

 

43

 

(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 or such Subsidiary;

 

(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 in which an adverse determination or
result could result in the revocation of on any operating permits, air emission
permits, water discharge permits, 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
liability on the Company or such Subsidiary to any Person or which will require
an expenditure by the Company or such Subsidiary to cure any alleged problem or
violation, in each case to the extent such revocation or liability has had or
would likely have a Material Adverse Effect on the Company or such Subsidiary;
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, restricting the business of the Company or any Subsidiary
or concerning any business practice of the Company or any Subsidiary, in each
case to the extent such issuance has had or would likely have a Material
Adverse Effect on the Company or such Subsidiary; or

 

(h)                                 any
change in the Company’s long-term senior unsecured debt rating by either Moody’s
or S&P.

 

Section 5.10                                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 5.11                                Restrictions on
Fundamental Changes; Guaranties of Restricted Subsidiaries.

 

(a)                                  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 Effective Date.  So long as no Unmatured Event of Default or
Event of Default is continuing the Company is and continues to be in

 

44

 

compliance with the requirements of Section 5.18
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 Lenders, merge or consolidate with any other
Person, so long as the Company or any other 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.

 

(b)                                 With
respect to each Subsidiary that becomes a Restricted Subsidiary after the
Effective Date: (a) the Company will furnish to the Lenders written notice
within 30 Business Days after such Subsidiary becomes a Restricted Subsidiary
and (b) the Company will, within
30 Business Days of any written request therefor by the Agent at the direction
of the Majority Lenders (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 Lenders 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 Lenders to release or terminate a Guaranty of
any Guarantor which ceases to be a Restricted Subsidiary.

 

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 Effective Date (or such other date set forth in such Schedule
5.12(a)) 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, or cash collateral given to any financial institution that has
issued a letter of credit, in any case 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’, materialmen’s or mechanic’s liens and other similar liens and
encumbrances none of which interfere materially with the use of the property
covered thereby in the

 

45

 

ordinary course of the business of the Company or such
Subsidiary and which do not materially detract from the value of such
properties;

 

(e)                                  Subject
to the limitation set forth in Section 5.13(d), Liens created or assumed in
connection with the acquisition of real 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(d), 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 equipment, 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 equipment.

 

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)                                 any
other Indebtedness existing on the Effective Date and described in Schedule
5.13, and Indebtedness the proceeds of which are used solely to refinance such
Indebtedness;

 

(c)                                  Indebtedness
secured by Liens permitted under Section 5.12(g);

 

(d)                                 Indebtedness
secured by Liens permitted under Section 5.12(e) and (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 real estate or inventory, respectively ;

 

(e)                                  Indebtedness
in respect of Documentary Letters of Credit incurred in the ordinary course of
business;

 

(f)                                    current
liabilities, other than for borrowed money, incurred in the ordinary course of
business;

 

(g)                                 the
Indebtedness existing on the Effective Date and described in Schedule 5.13(g),
and Indebtedness the proceeds of which are used solely to refinance such Indebtedness
(the “Canadian Indebtedness”);

 

46

 

(h)                                 other
Indebtedness not secured by a Lien prohibited by Section 5.12, so long as such
Indebtedness is created at a time when no Unmatured Event of Default or Event
of Default is continuing or would result therefrom.

 

Section 5.14                                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.

 

Section 5.15                                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 Lenders 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 Lenders, or to lenders providing credit facilities to
replace the Commitments or refinance the Obligations, except (i) 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(b), (e), (f) or
(g) or (ii) limitations in agreements creating the Canadian Indebtedness, or
(b) require the Company or such Subsidiary to grant a Lien to any other Person
if the Company or such Subsidiary grants Liens to the Agent, for the benefit of
the Lenders, or to lenders providing credit facilities to replace the
Commitments or refinance the Obligations.

 

Section 5.16                                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 5.17                                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 5.18                                Financial Covenants.

 

(a)                                  Cash
Flow Leverage Ratio.  Not permit the
Cash Flow Leverage Ratio at the end of each fiscal quarter during any such
fiscal year to exceed 3.50 to 1.00

 

(b)                                 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 2.75
to 1.00.

 

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:

 

47

 

(a)                                  the
Company shall fail to pay 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 Lender
pursuant to this Agreement or any other Loan Document, or fails to make, when
due, any deposit into the Holding Account as required hereunder, and in the
case of any such failure with respect to any interest or fee payment hereunder,
such failure shall continue for 3 Business Days; 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 Lender 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 or any Material Subsidiary 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 5.9(h),
5.10 through 5.18; 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

 

48

 

(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
$50,000,000 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 $50,000,000, 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 $50,000,000 (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

 

49

(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

 

(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 $20,000,000 or the Company shall incur liability in excess of
$20,000,000 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 $50,000,000 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 $25,000,000 or (ii) any material
interference with the Company’s or any Subsidiary’s operations at any leased
property; or

 

(m)                               a
Change of Control shall occur.

 

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 deposit into the
Holding Account an amount equal to the outstanding Letter of

 

50

 

Credit Usage as of
such date and the Agent, at the direction of the Majority Lenders, may enforce
all rights and exercise all remedies of the Agent or the Lenders 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 Lenders, shall 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 deposit
into 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
the Agent, and (iv) enforce all rights and exercise all remedies of the
Agent or the Lenders under the Loan Documents and under applicable law.

 

ARTICLE
VII

THE AGENT

 

The following provisions
shall govern the relationship of the Agent with the Lenders.

 

Section 7.1                                      Appointment
and Authorization.  Each Lender
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 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 Lenders.

 

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
Lender 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.

 

51

 

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 Lender 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 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
Lenders, and such instructions shall be binding upon all holders of Loans; 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 Lender 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 Lender 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 Lender 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 Lender 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 Lenders.  Upon receipt from any
Lender 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 Lenders and will take such action and assert
such rights under this Agreement and the other Loan Documents as the Majority
Lenders shall direct in writing.  . 

 

Section 7.9                                      Indemnification.  Each Lender agrees to indemnify the Agent, as
Agent (to the extent not reimbursed by the Company), according to such Lender’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 of the Loan Documents or any action
taken or omitted by the Agent under the Loan Documents, provided that no Lender
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

 

52

 

gross negligence
or willful misconduct.  No payment by any
Lender 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 Committed
Loans, Facility Fees, or Letter of Credit Fees shall be distributed by the
Agent among the Lenders on the date received or deemed received pursuant to
Section 2.21, in like currency and funds as received, ratably according to each
Lender’s Pro Rata Share.  All funds
received by the Agent in respect of the Bid Loans shall be distributed to the
relevant Bid Lender on the date received or deemed received pursuant to Section
2.21, in like currency and funds as received. 
If the Agent does not make any distribution on the date any such payment
is received or deemed received pursuant to Section 2.21, the Agent will pay
interest to each Lender 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 and the Commitments have been terminated or the obligations have
been accelerated, 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 Lender who has incurred unreimbursed costs of collection with respect to
any Indebtedness of the Company hereunder, ratably to the Agent and each Lender
in the proportion that the costs incurred by the Agent or such Lender bear to
the total of all such costs incurred by the Agent and all Lenders;
(b) next to the Agent in payment of any Unpaid Draws outstanding and to
satisfy any requirement that the Company deposit amounts into the Holding
Account; (c) next ratably to the Lenders for application on the Loans ;
and (d) last to the Lenders (in accordance with their respective Pro Rata
Shares) for any unpaid Facility Fees or Letter of Credit Fees owing by the
Company hereunder.  To the extent the
Agent or any Lender 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 Lender shall purchase from the Agent or such Lender, 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 Lenders. 
The Agent or such Lender, as the case may be, shall promptly notify the
other Lenders and, if applicable, the Agent, of any such recovery.

 

Section 7.11                                Sharing of Payments.  If any Lender 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 Lender’s share thereof as determined
under this Agreement, then such Lender shall purchase from the other Lenders
for cash and at face value and without recourse, such participation in the
Loans held by such other Lenders as shall be necessary to cause such excess
payment to be shared ratably as aforesaid with such other Lenders; provided,
that if such excess payment or part thereof is thereafter recovered from such
purchasing Lender, the related purchases from the other Lenders shall be
rescinded ratably and the purchase price restored as to the portion of such
excess payment so recovered, but without interest.

 

53

 

Section 7.12                                Successor Agent.  The Agent may resign at any time by giving
ten days written notice thereof to the Lenders and the Company.  The Majority Lenders 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 Lenders 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 Lenders, appoint
an Agent which shall be a Lender 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 $500,000,000, 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 relieved from any
further duties and obligations in its capacity as Agent, 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.

 

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 Lenders; provided, that (i) no amendment,
waiver or consent shall, unless in writing and signed by all the Lenders, 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 Lenders”, (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 Lenders
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 51% or more, amend Section 5.12(f) or Section 5.13(d) (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 Lenders indicated above to take such
action, affect the rights or duties of the Agent under this Agreement;
(iv) no amendment may increase any Lender’s Commitment Amount unless it is
in writing and signed by each Lender; 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

 

54

 

Credit, amend or modify Section 2.1, 2.2, 2.4, 2.5,
2.6, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 2.15, 2.16 or 2.32, unless it is in
writing and signed by the Agent.  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 Lender 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 Lenders hereunder and under any other Loan Document are
cumulative and not exclusive of any right or remedy which the Agent or any
Lender 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 and be deemed received when transmitted by
telecopier 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 or any Lender under the provisions of Article
II shall not be effective until received by the Agent or such Lender.

 

Section 8.3                                      Costs and
Expenses.  The Company agrees to pay
on demand:  (a) all reasonable
out-of-pocket costs, expenses and fees incurred by the Agent in connection with
the negotiation, preparation, approval, syndication and execution and delivery
of the Loan Documents (including
reasonable charges and disbursements of outside counsel to the Agent
(determined on the basis of such counsel’s generally applicable rates, which
may be higher than the rates such counsel charges the Agent in certain matters)
and/or the allocated costs of in-house counsel incurred from time to time) 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 Loan Documents and (c) all reasonable costs and expenses of the
Agent and the Lenders (including reasonable counsels’ fees) in connection with
the enforcement (whether through negotiations, legal proceedings or otherwise)
of this Agreement and the other Loan Documents.

 

55

 

Section 8.4                                      Survival of
Agreement. All representations, warranties, covenants and agreements made
by the Company herein or in the other Loan Documents and in the 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 Lenders and shall survive the making of the Loans by the Lenders and the
execution and delivery to the Lenders by the Company of the Notes, regardless
of any investigation made by or on behalf of the Lenders, and shall continue in
full force and effect as long as any Obligation is outstanding and unpaid and
so long as the Commitments have not been terminated; provided, however, that
the obligations of the Company under Section 8.3 and
8.15 shall survive payment in full of the Obligations and
the termination of the Commitments.

 

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 Lenders, 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 Lender.

 

(b)                                 Any
Lender 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 any Loan or other
Obligation owing to such Lender, any Note held by such Lender, and any
Commitment of such Lender, or any other interest of such Lender hereunder.  In the event of any such sale by a Lender of
participating interests to a Participant, (i) such Lender’s obligations under
this Agreement to the other parties to this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible for the performance thereof,
(iii) such Lender shall remain the holder of any such Note for all purposes
under this Agreement, (iv) the Company and the Agent shall continue to deal
solely and directly with such Lender in connection with such Lender’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 Lender 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
Lender 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
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 Note or other Loan Document to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under this Agreement or any Note or other Loan Document; provided,
that such right of setoff shall be subject to the obligation of such
Participant to share with the Lenders, and the Lenders agree to share with such
Participant, as provided in Section 2.29.

 

56

 

(c)                                  Each
Lender may, from time to time, with the consent of the Agent, 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; and if the relevant assignment is made to a Lender or an
Affiliate of a Lender, the consents of the Agent and 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 of the Loans then held by that Lender (or, if
less, the entire amount of the Loans then held by that Lender) together with
equivalent proportions of its Commitment pursuant to written agreements
executed by such assigning Lender, such Assignee(s), the Company and the Agent
in substantially the form of Exhibit H, which agreements shall specify in each
instance the portion of the Obligations which is to be assigned to each
Assignee and the portion of the Pro Rata Share and Commitment of such Lender to
be assumed by each Assignee (each, an “Assignment Agreement”); provided,
however, that the assigning Lender must pay to the Agent a processing
and recordation fee of $3,500.  Upon the execution of each Assignment
Agreement by the assigning Lender, the relevant Assignee, the Company and the
Agent, payment to the assigning Lender 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 “Lender” 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
Lender under this Agreement, (y) such assigning Lender 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 Lender shall surrender to the Agent the Note (if any)
a portion of which is being assigned, and the Company shall execute and deliver
a Note (if any such Note is requested by the Assignee) to the Assignee in the
amount of its Commitment, and a new Note to the assigning Lender in the amount
of its Commitment, after giving effect to the reduction occasioned by such
assignment, any such Notes shall constitute a “Note” for all purposes of this
Agreement and of the other Loan Documents.

 

(d)                                 Each
Lender may disclose to any Assignee or Participant and to any prospective
Assignee or Participant any and all financial information in such Lender’s
possession concerning the Company or any Subsidiary which has been delivered to
such Lender by or on behalf of the Company or any Subsidiary pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of the
Company or any of their Subsidiary in connection with such Lender’s credit
evaluation of the Company or any of Subsidiary prior to entering into this
Agreement, provided that prior to disclosing such information, such
Lender shall first obtain the agreement of such prospective Assignee or
Participant to comply with the provisions of Section 8.18.

 

(e)                                  Notwithstanding
any other provision in this Agreement, any Lender 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

 

57

 

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 Lenders 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.

 

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 LENDERS.

 

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 OVER ANY ACTION OR PROCEEDING COMMENCED
BY THE AGENT OR ANY LENDER 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 LENDER TO BRING ANY ACTION OR
PROCEEDING AGAINST THE COMPANY OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTIONS.

 

58

 

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 Lenders 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 Lender.

 

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 Lender 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 Lender,
and (d) the Agent and the Lenders 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 Lender is for the protection of the Agent and the Lenders 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 Lender
limiting the highest rate of interest which may be lawfully contracted for,
charged or received by such Lender.

 

Section 8.15                                Indemnification.  The Company hereby agrees to defend, protect,
indemnify and hold harmless the Agent, the Lenders, their respective
Affiliates, and their respective directors, officers, employees, 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:

 

59

 

(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 Lender against the Agent or any other Lender, 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
under the Loan Documents.  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
LENDERS 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.  The Agent, the
lenders party to the Existing Credit Agreement, in their capacities as such (in
such capacities, the “Existing Lenders”) and the Company agree that, upon the
Effective Date: (a) all indebtedness owed by the Company to the existing
Lenders under the Existing Credit Agreement shall be fully paid and discharged;
(b) all provisions of the Existing Credit Agreement and the other Loan
Documents (as defined in the Existing Credit Agreement) shall terminate and
have no further force or effect, except those provisions that are specified in
the Existing Credit Agreement or any other such existing Loan Document as
surviving that respective agreement’s termination and (c) without limiting the
generality of the foregoing, the commitments of the Existing Lenders to extend
credit accommodations to the Company under the Existing Credit Agreement shall
be terminated notwithstanding any requirement for the giving notice prior to
such termination as set forth in the Existing Credit Agreement.

 

Section 8.18                                Confidentiality
of Information.  The Agent and each
Lender shall use reasonable efforts to assure that information about the
Company and its operations, affairs and financial condition, not generally
disclosed to the public or to trade and other creditors, which is furnished to
the Agent or such Lender pursuant to the provisions hereof is used only for the
purposes of this Agreement and any other relationship between any Lender and
the Company

 

60

 

and shall not be divulged to any Person other than the
Lenders, their Affiliates and their respective officers, directors, employees
and agents, except such information may be disclosed : (a) to their attorneys,
accountants and other advisors that are in a confidential relationship with
such Lender, (b) in connection with the enforcement of the rights of the Agent
or the Lenders under the Loan Documents or otherwise in connection with
applicable litigation, (c) in connection with assignments and participations
and the solicitation of prospective assignees and participants referred to in
Section 8.5(d), (d) if such information is generally available to the public
other then as a result of disclosure by the Agent or a Lender, and (e) as may
otherwise be required or requested by any regulatory authority having
jurisdiction over the Agent or any Lender or any of its Affiliates or by any
applicable law, rule, regulation or judicial process, the opinion of the Agent
or such Lender’s counsel concerning the making of such disclosure to be binding
on the parties hereto.  Neither the Agent
nor any Lender shall incur any liability to the Company by reason of any
disclosure permitted by this Section 8.18.

 

61

 

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/
  Ryan D. Robinson

  	
   

  
	
   

  	
  Its

  	
  V.P.

  	
   

  
					

 

S-1

 

	
   

  	
  U.S. BANK
  NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
    /s/
  Karen E. Weathers

  	
   

  
	
   

  	
  Its

  	
  Vice President

  	
   

  
						

 

S-2

 

	
   

  	
  JPMORGAN CHASE
  BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Teri Streusand

  	
   

  
	
   

  	
  Its

  	
  TERI STREUSAND

  VICE PRESIDENT

  	
   

  
					

 

S-3

 

	
   

  	
  WACHOVIA BANK,
  NATIONAL

  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
    /s/
  Michael R Jordan

  	
   

  
	
   

  	
  Its

  	
  Managing Director

  	
   

  
					

 

S-4

 

	
   

  	
  BANK OF AMERICA,
  N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Dan M.
  Killian

  	
   

  
	
   

  	
  Its

  	
  Dan M. Killian

  Senior Vice President

  	
   

  
					

 

S-5

 

	
   

  	
  THE BANK OF TOKYO-MITSUBISHI, LTD.,

  CHICAGO BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  Patrick McCue

  	
   

  
	
   

  	
  Its:

  	
  Patrick McCue

  Vice President & Manager

  	
   

  

 

 

Signature Page to 5-Year
Revolving Credit Agreement

 

S-6

 

	
   

  	
  CREDIT SUISSE
  FIRST BOSTON acting through

  its Cayman Islands Branch

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
    /s/
  Phillip Ho

  	
   

  
	
   

  	
  Its

  	
  PHILLIP HO

  DIRECTOR

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Cassandra
  Droogan

  	
   

  
	
   

  	
  Its

  	
  CASSANDRA DROOGAN

  ASSOCIATE

  	
   

  
						

 

S-7

 

	
   

  	
  FIFTH THIRD BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
    /s/
  Ann-Drea Burns

  	
   

  
	
   

  	
  Its

  	
  AUP

  	
   

  
					

 

S-8

 

	
   

  	
  HSBC BANK USA,
  NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
    /s/
  Anne Serewicz

  	
   

  
	
   

  	
  Its

  	
  Anne Serewicz

  Managing Director

  	
   

  
					

 

S-9

 

	
   

  	
  MERRILL LYNCH
  BANK USA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Louis Alder

  	
   

  
	
   

  	
  Its

  	
  Louis Alder,
  Director

  	
   

  
					

 

S-10

 

	
   

  	
  WELLS FARGO
  BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Scott Bjelde

  
	
   

  	
   

  	
  Scott Bjelde

  
	
   

  	
   

  	
  Senior Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Jennifer
  Barrett

  
	
   

  	
   

  	
  Jennifer Barrett

  
	
   

  	
   

  	
  Vice President

  

 

S-11

 

	
   

  	
  WILLIAM STREET
  COMMITMENT

  CORPORATION

  
	
   

  	
   

  
	
   

  	
  (Recourse only
  to assets of William Street

  Commitment Corp)

  
	
   

  	
   

  
	
   

  	
  By

  	
    /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
    Its

  	
  Chief Financial
  Officer

  	
   

  
					

 

S-12

 

ADDRESS FOR NOTICES

 

Best Buy Co., Inc.

7601 Penn Avenue South

Richfield, MN 
55423

Attn: Sheila Colgan

Fax: (952) 430-6389

 

U.S. Bank National Association

800 Nicollet Mall

Minneapolis, MN 55402

Attn: Karen Weathers

Fax: (612) 303-2265

 

JPMorgan Chase Bank, N.A.

270 Park Avenue

4th Floor

New York, NY  10017

Attn: Teri Streusand

Fax: (212) 270-3279

 

Wachovia Bank, National
Association

301 South College

One Wachovia Center

Charlotte, NC  28288

Attn: Michael Jordan

Fax: (704)383-7611

 

Bank of America, N.A.

901 Main Street

64th Floor

Dallas, TX  75202

Attn: Ross Evans

Fax: (214) 209-1286

 

Bank of Tokyo-Mitsubishi,
Ltd., Chicago Branch

601 Carlson Parkway

Suite 370

Minnetonka, MN  55305

Attn: Patrick McCue

Fax: (951) 473-5152

 

Credit Suisse First
Boston

11 Madison Avenue

New York, NY  10010

Attn: Cassandra Droogan

Fax: (212) 325-8319

 

 

Fifth Third Bank

Fifth Third Center

38 Fountain Square Plaza

Cincinnati, OH  45263

Attn: AnnDrea Burns

Fax: (513) 534-5947

 

HSBC Bank USA, National
Association

452 Fifth Avenue

5th Floor

New York, NY  10018

Attn: Anne Serewicz

Fax: (212) 525-2479

 

Merrill Lynch Bank USA

15 W. South Temple

Suite 300

Salt Lake City, UT  84101

Attn: David Miller

Fax: (801) 933-8641

 

Wells Fargo Bank, N.A.

Sixth & Marquette

MAC N9305-031

Minneapolis, MN  55479

Attn: Scott D. Bjelde

Fax: (612) 667-2276

 

William Street Commitment
Corporation

30 Hudson Street

17th Floor

Jersey City, NJ  07302

Attn: Pedro Ramirez

Fax: (212) 428-1243

 

SCHEDULE 1.1(a)

 

BEST BUY CO., INC.

REVOLVING COMMITMENTS OF THE

BANK GROUP

 

	
  Lenders

  	
   

  	
  Commitment

  Percentage

  	
   

  	
  Commitment

  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  U.S. Bank
  National Association

  	
   

  	
  15

  	
  %

  	
  $

  	
  30,000,000

  	
   

  
	
  JPMorgan Chase
  Bank, N.A.

  	
   

  	
  12.5

  	
  %

  	
  $

  	
  25,000,000

  	
   

  
	
  Wachovia Bank, National
  Association

  	
   

  	
  12.5

  	
  %

  	
  $

  	
  25,000,000

  	
   

  
	
  Bank of America,
  N.A.

  	
   

  	
  7.5

  	
  %

  	
  $

  	
  15,000,000

  	
   

  
	
  Bank of
  Tokyo-Mitsubishi, Ltd., Chicago Branch

  	
   

  	
  7.5

  	
  %

  	
  $

  	
  15,000,000

  	
   

  
	
  Credit Suisse
  First Boston

  	
   

  	
  7.5

  	
  %

  	
  $

  	
  15,000,000

  	
   

  
	
  Fifth Third Bank

  	
   

  	
  7.5

  	
  %

  	
  $

  	
  15,000,000

  	
   

  
	
  HSBC Bank USA,
  National Association

  	
   

  	
  7.5

  	
  %

  	
  $

  	
  15,000,000

  	
   

  
	
  Merrill Lynch
  Bank USA

  	
   

  	
  7.5

  	
  %

  	
  $

  	
  15,000,000

  	
   

  
	
  Wells Fargo
  Bank, N.A.

  	
   

  	
  7.5

  	
  %

  	
  $

  	
  15,000,000

  	
   

  
	
  William Street
  Commitment Corporation

  	
   

  	
  7.5

  	
  %

  	
  $

  	
  15,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  100

  	
  %

  	
  $

  	
  200,000,000

  	
   

  

 

 

Schedule 5.13(g)

 

CANADIAN INDEBTEDNESS

 

Best Buy Canada Ltd./Magasins Best Buy Ltee (“Best Buy
Canada”) has a [CAD $25,000,000]
unsecured revolving operating loan facility from Royal Bank of Canada pursuant
to an offer letter (the “Cdn Credit Agreement”), in the form furnished to the
Agent.  Best Buy Canada’s obligations
under the Cdn Credit Agreement are guarantied by the Company and by its
subsidiary, Best Buy Stores, L.P., pursuant to the terms of separate
guaranties, each in the form furnished to the Agent.

 

 

Insert S-1-A

 

EXHIBIT C

 

FORM OF INVITATION FOR COMPETITIVE BIDS

 

Via Facsimile

 

Date:                               

 

To the Lenders Listed on Annex
A Attached Hereto

 

Ladies and Gentlemen:

 

Reference
is made to the certain 5-Year Revolving Credit Agreement dated as of                    ,
2004 (as extended, renewed, amended or restated from time to time, the “Credit
Agreement”), among Best Buy Co., Inc., (the “Company”), the Lenders
party thereto and U.S. Bank National Association, as Agent for the Lenders (the
“Agent”) and certain other parties. 
Capitalized terms used herein have the meanings specified in the Credit
Agreement.

 

Pursuant
to subsection 2.6(b)(ii) of the Credit Agreement, you are hereby invited
to submit offers to make Bid Loans to the Company based on the following
specifications:

 

1.             Date of Bid Loan:                       ;

 

2.             Aggregate amount of Bid Loan:  $                               ;

 

3.             The Bid Loans shall be: 
[Eurocurrency Bid Loans] [Absolute Rate Bid Loans]; and

 

4.             Interest Period[s], if any: [                                 ],
[                                 ]
and [                                 ].

 

All
Competitive Bids shall be in the form of Exhibit F to the Credit
Agreement and shall be received by the Agent no later than 10:00 a.m.
(Minneapolis time) on                       .(1)

 

	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as

  Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

(1)  Insert a date which is three Business Days
prior to the date of Borrowing, in the case of a Eurocurrency Auction, or on
the date of Borrowing, in the case of an Absolute Rate Auction.

 

D-1

 

ANNEX A

to the Invitation for Competitive Bids

 

 

List of Bid Loan Lenders

	
  [Lender]

  
	
   

  
	
  Facsimile: (      )
        -        

  
	
   

  
	
  [Lender]

  
	
   

  
	
  Facsimile: (      )
        -        

  
	
   

  
	
  [Lender]

  
	
   

  
	
  Facsimile: (      )
        -        

  
	
   

  
	
  [Lender]

  
	
   

  
	
  Facsimile: (      )
        -        

  
	
   

  
	
  [Lender]

  
	
   

  
	
  Facsimile: (      )
        -        

  

 

 

EXHIBIT E

 

FORM OF
COMPETITIVE BID REQUEST

 

Date:                                

 

To:                              U.S.
BANK NATIONAL

ASSOCIATION

as Agent

 

Ladies and Gentlemen:

 

Reference
is made to the 5-Year Revolving Credit Agreement dated as of                           ,
2004 (as extended, renewed, amended or restated from time to time, the “Credit
Agreement”), among Best Buy Co., Inc. (the “Company”), the Lenders
party thereto, and U.S. BANK NATIONAL ASSOCIATION, as Agent for the Lenders
(the “Agent”).  Capitalized terms
used herein have the meanings specified in the Credit Agreement.

 

This
is a Competitive Bid Request for Bid Loans pursuant to Section 2.6(b) of
the Credit Agreement as follows:

 

The Business Day of the
proposed Bid Loan is:                              .

The aggregate amount of
the proposed Bid Loan is:  $                                      
(which is in a minimum amount of $10,000,000 or, if more, an integral multiple
of $1,000,000).

The proposed Bid Loan to
be made pursuant to Section 2.6 shall be comprised of [Eurocurrency RATE]
[Absolute Rate] Bid Loans.

The Interest Period[s]
shall be:                                ,
[                                  ]
and [                                      ].

 

	
   

  	
  BEST BUY CO., INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

EXHIBIT F

 

FORM OF
COMPETITIVE BID

 

Date:                                

 

To:                              U.S.
BANK NATIONAL ASSOCIATION

as Agent

 

Ladies and Gentlemen:

 

Reference
is made to the 5-Year Revolving Credit Agreement dated as of                           ,
2004 (as extended, renewed, amended or restated from time to time, the “Credit
Agreement”), among Best Buy Co., Inc. (the “Company”), the Lenders
party thereto, and U.S. BANK NATIONAL 
ASSOCIATION, as Agent for the Lenders (the “Agent”).  Capitalized terms used herein have the
meanings specified in the Credit Agreement.

 

In
response to the Invitation for Competitive Bids dated                       
and in accordance with Section 2.6(b)(iii)(B) of the Credit
Agreement, the undersigned Lender offers to make [a] Bid Loan[s] thereunder in
the following principal amounts[s], at the following interest rates and for the
following Interest Period[s] as specified by the Company:

 

Date of Bid Loan:                                            

 

Aggregate Maximum Bid
Amount:  $                                

 

(Maximum Bid Amount:  $                                )               Interest Period: 
                                

 

	
  Principal Amount $

  	
   

  	
  Principal Amount $

  	
   

  	
  Principal Amount $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Interest:

  	
   

  	
  Interest:

  	
   

  	
  Interest:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [Absolute Rate   %]

  	
   

  	
  [Absolute Rate   %]

  	
   

  	
  [Absolute Rate   %]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  or

  	
   

  	
  or

  	
   

  	
  or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [Eurocurrency Bid Margin +/-

     %]

  	
   

  	
  [Eurocurrency Bid Margin +/-

     %]

  	
   

  	
  [Eurocurrency Bid Margin +/-

     %]

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
   

  	
  [NAME OF LENDER ]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

	
  ACCEPTED BY COMPANY:

  
	
   

  
	
  BEST BUY CO., INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  
	
  Title:

  	
   

  	
   

  
				

 

D-2

 

SCHEDULE 4.14(a)

 

BEST BUY CO., INC.

ORGANIZATIONAL CHART OF
THE COMPANY

AND ITS SUBSIDIARIES

[See attached]

 

 

Best Buy Co., Inc.

and Directly Owned Subsidiaries

 

 

 

BBC Property Co. And BBC
Investment Co.

and Subsidiaries

 

 

 

Best Buy Enterprise Services,
Inc.

and Subsidiaries

 

 

 

Best Buy Canada Ltd. (Formerly
Future Shop Ltd.)

and Subsidiaries

 

 

 

vpr Matrix, Inc.

and Subsidiaries

 

 

 

Best Buy Finance, Inc.

and Subsidiaries

 

 

 

Best Buy (Bermuda) Limited

and Subsidiaries

 

 

 

 

SCHEDULE 4.14(b)

 

BEST BUY CO., INC.

RESTRICTED AND
MATERIAL SUBSIDIARIES

 

Restricted Subsidiaries:

 

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

 

Material Subsidiaries:

 

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

 

Best Buy Canada Ltd., a
Canada federal corporation

 

BBC Property Co., a
Minnesota corporation

 

BBC Investment Co., a
Nevada corporation

 

 

SCHEDULE 5.12(a)

 

BEST BUY CO., INC.

LIENS EXISTING ON
THE EFFECTIVE DATE

 

 

Master Lease-Wachovia, due 2006 (interest rate 5.9%)

 

Inventory Liens-GE
Commercial Distribution Finance

(Total Facilities of $210M)

 

Capitalized Leases
(computer equipment, vehicles, cash registers, telephone, security and 

other equipment)

 

Mortgage on former headquarters building (Eden Prairie, MN)

 

Mortgage on Galyan’s property (Richfield, MN)

 

 

SCHEDULE 5.13

 

BEST BUY CO., INC.

INDEBTEDNESS
EXISTING ON THE EFFECTIVE DATE

 

	
   

  	
   

  	
  (in millions)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Convertible
  Subordinated Debentures, unsecured, due 2022

  	
   

  	
   

  	
   

  
	
  Initial Interest
  Rate of 2.25%

  	
   

  	
  402.5

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Mortgage and
  other Indebtedness (interest rates 8.4% to 9.2%)

  	
   

  	
   

  	
   

  
	
  Best Buy Canada
  Ltd.

  	
   

  	
  4.9

  	
   

  
	
  Aegon Mortgage
  (former headquarters)

  	
   

  	
  7.7

  	
   

  
	
  Galyan’s
  Mortgage (Richfield, MN)

  	
   

  	
  8.9

  	
   

  
	
  TOTAL

  	
   

  	
  21.5

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Master
  Lease-Wachovia, due 2006 (interest rate 5.94%)

  	
   

  	
  55.9

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Inventory
  Financing-GE Commercial Distribution Finance

  	
   

  	
  118.8

  	
  (1)

  
	
   

  	
   

  	
   

  	
   

  
	
  Capitalized
  Lease Obligations (computer equipment, vehicles, cash Registers, telephone,
  security and other equipment)

  	
   

  	
   

  	
   

  

 

(1)  Dollar amount included in payables as of
November 27, 2004.

 

 

SCHEDULE 5.13(g)

 

BEST BUY CO., INC.

CANADIAN
INDEBTEDNESS

 

Best Buy Canada Ltd./Magasins Best Buy Ltee (“Best Buy Canada”) has two
unsecured revolving credit facilities from Royal Bank of Canada totaling CAD
25,000,000.  The first facility, in the
amount of CAD 20,000,000, is available at anytime to Best Buy Canada.  The second facility, in the amount of CAD
5,000,000, is only available from August 1st to and including
January 31st annually.   Both facilities are issued pursuant to an
offer letter (the “Cdn Credit Agreement”), in the form furnished to the
Agent.  Best Buy Canada’s obligations
under the Cdn Credit Agreement are guarantied by the Company and by its
subsidiary, Best Buy Stores, L.P., pursuant to the terms of separate
guaranties, each in the form furnished to the Agent.

 

 

Best Buy Canada Ltd./Magasins Best Buy Ltee (“Best Buy Canada”) has a CAD $25,000,000 unsecured revolving
operating loan facility from Royal Bank of Canada pursuant to an offer letter
(the “Cdn Credit Agreement”), in the form furnished to the Agent.  Best Buy Canada’s obligations under the Cdn
Credit Agreement are guarantied by the Company and by its subsidiary, Best Buy
Stores, L.P., pursuant to the terms of separate guaranties, each in the form
furnished to the Agent.Exhibit
10.1

 

Second Amendment
to Loan and Security Agreement

 

                This Second Amendment to Loan
and Security Agreement (this “Second Amendment”) made and entered into as of
the 21st day of December, 2004, is by and between LASALLE BANK NATIONAL ASSOCIATION, a
national banking association (“LENDER”),
having its principal place of business at 135 South LaSalle Street, Chicago,
Illinois 60603-4105, and VITA
FOOD PRODUCTS, INC., a Nevada corporation, with its chief executive
office located at 2222 West Lake Street, Chicago, Illinois 60612 (“Vita Food”),
VIRGINIA HONEY COMPANY, INC.,
a Virginia corporation, with its chief executive office located at 2222 West
Lake Street, Chicago, Illinois 60612 (“Virginia Honey”), THE HALIFAX GROUP, INC., a Georgia corporation, with its
chief executive office located at 2222 West Lake Street, Chicago, Illinois
60612 (“Halifax”), and VITA
SPECIALTY FOODS, INC., a Delaware corporation, with its chief
executive office located at 2222 West Lake Street, Chicago, Illinois 60612  (“Specialty Foods”) (Vita Food, Virginia
Honey, Halifax and Specialty Foods are individually a “Borrower” and
collectively the “Borrowers”).

 

W I T N E S S E T H:

 

WHEREAS, prior hereto,
Lender provided certain loans, extensions of credit and other financial accommodations
(the “Financial Accommodations”) to Borrowers pursuant to (a) that certain Loan
and Security Agreement dated as of September 5, 2003, as amended by that
certain First Amendment to Loan and Security Agreement dated as of November 5,
2004, each by and between Lender and Borrowers (as further amended or restated
from time to time, the “Loan Agreement”), and (b) the other documents,
agreements and instruments referenced in the Loan Agreement or executed and
delivered pursuant thereto;

 

WHEREAS, Borrowers have
requested that Lender, among other things, (i) extend the maturity date of the
Revolving Loans to January 31, 2006, and (ii) modify certain financial
covenants (collectively the “Additional Financial Accommodations”); and

 

                WHEREAS, Lender is
willing to provide the Additional Financial Accommodations, but solely on the
terms and subject to the provisions set forth in this Second Amendment and the
other agreements, documents and instruments referenced herein or executed and
delivered pursuant hereto.

 

NOW, THEREFORE, in
consideration of the foregoing, the mutual promises and understandings of the
parties hereto set forth herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Lender and Borrowers
hereby agree as set forth in this Second Amendment.

 

I.              Definitions.

 

                A.            Use of Defined Terms. 
Except as expressly set forth in this Second Amendment, all terms which
have an initial capital letter where not required by the rules of grammar are
used herein as defined in the Loan Agreement.

 

 

 

 

 

                B.            Amended Definitions.  Effective as of the date of this Second
Amendment, Section 1.1 of the Loan Agreement is hereby amended by deleting the
definitions of “Revolving Loan Termination Date”, “Revolving Note” and
“Tangible Net Worth Benchmark” and substituting therefor the following,
respectively:

 

                “Revolving Loan Termination Date”: shall mean January
31, 2006.

 

                “Revolving Note”: shall mean that certain Revolving
Note dated as of December 21, 2004, executed and delivered by Borrowers to
Lender in a maximum aggregate principal amount not to exceed $8,500,000.00, as
amended, renewed, restated or replaced from time to time.

 

                “Tangible Net Worth Benchmark”: shall mean: (i)
negative One Million Eight Hundred Thousand and no/100 Dollars (-$1,800,000.00)
as of December 31, 2004, (ii) negative One Million Nine Hundred Thousand and
no/100 Dollars  (-$1,900,000.00) as of
March 31, 2005, through September 30, 2005, and (iii) negative Eight Hundred
Thousand and no/100 Dollars (-$800,000.00) as of December 31, 2005, and at all
times thereafter.

 

II.            Amendments to Loan Agreement.  Effective as of the date of this Second
Amendment, Section 9.4 of the Loan Agreement is hereby amended by deleting
Section 9.4 of the Loan Agreement in its entirety and substituting therefor the
following:

 

“9.4         Financial Covenants.  During the term of this Loan Agreement, and
thereafter for so long as there are any outstanding Liabilities owed to Lender,
Borrowers covenant that they shall:

 

                        (A)          Tangible Net Worth.  Maintain
a minimum Tangible Net Worth of not less than the Tangible Net Worth Benchmark
tested as of the last day of each calendar quarter.

 

                        (B)           Cash Flow Coverage Ratio.  Not permit Borrowers’ Cash Flow Coverage
Ratio, calculated on a trailing twelve (12) month basis, to be less than: (i)
0.50 to 1.00 as of March 31, 2005, (ii) 0.65 to 1.00 as of June 30, 2005, (iii)
0.70 to 1.00 as of September 30, 2005, and (v) 1.10 to 1.00 as of December 31,
2005, or as of the last day of each calendar quarter thereafter.

 

                        (C)           Minimum
EBITDA.  Borrowers shall maintain
EBITDA of not less than: (i) Eight Hundred Fifty Thousand and no/100 Dollars
($850,000.00) as of December 31, 2004, (ii) One Million Two Hundred Thousand
and no/100 Dollars ($1,200,000.00) as of March 31, 2005, (iii) One Million Four
Hundred Thousand and no/100 Dollars ($1,400,000.00) as of June 30, 2005, (iv)
Two Million and no/100 Dollars ($2,000,000.00) as of September 30, 2005, and
(v) Three Million and no/100 Dollars ($3,000,000.00) as of December 31,
2005.  The December 31, 2004 EBITDA shall
be calculated for the three (3) month period ending December 31, 2004.  Thereafter, EBITDA shall be calculated on a
trailing twelve (12) month basis.”

 

 

2

 

III.           Conditions
Precedent. Lender’s obligation to provide the Additional
Financial Accommodations to Borrowers is subject to the full and timely
performance of the following covenants prior to or contemporaneously with the
execution of this Second Amendment:

 

A.            Borrowers executing
and delivering, or causing to be executed and delivered to Lender, the
following documents, each of which shall be in form and substance acceptable to
Lender:

 

(i)                                     An original
executed Revolving Note;

 

(ii)                                  An original
Secretary’s Certificate of even date herewith executed by the Secretary of each
Borrower to Lender; and

 

(iii)                             such other
agreements, documents and instruments as Lender may reasonably request;

 

B.            No Unmatured Event
of Default or Event of Default exists under the Loan Agreement, as amended by
this Second Amendment, or the Other Agreements;

 

C.            No claims,
litigation, arbitration proceedings or governmental proceedings not disclosed
in writing to Lender prior to the date of hereof shall be pending or known to
be threatened against Borrowers and no known material development not so
disclosed shall have occurred in any claims, litigation, arbitration
proceedings or governmental proceedings so disclosed which in the opinion of
Lender is likely to materially or adversely affect the financial position or
business of any Borrower or the capability of any Borrower to pay its
obligations and liabilities to Lender; and

 

D.            There shall have
been no material or adverse change in the business, financial condition or
results of operations since the date of each Borrower’s most recently delivered
financial statements to Lender.

 

IV.           Conflict.  If, and to the extent, the terms and
provisions of this Second Amendment contradict or conflict with the terms and
provisions of the Loan Agreement, the terms and provisions of this Second
Amendment shall govern and control; provided, however, to the extent the terms
and provisions of this Second Amendment do not contradict or conflict with the
terms and provisions of the Loan Agreement, the Loan Agreement, as amended by
this Second Amendment, shall remain in and have its intended full force and
effect, and Lender and Borrowers hereby affirm, confirm and ratify the same.

 

V.            Severability.
 Wherever possible, each provision of
this Second Amendment shall be interpreted in such manner as to be valid and
enforceable under applicable law, but if any provision of this Second Amendment
is held to be invalid or unenforceable by a court of competent jurisdiction,
such provision shall be severed herefrom and such invalidity or
unenforceability shall not affect any other provision of this Second Amendment,
the balance of which shall remain in and have its intended full force and
effect.  Provided, however, if such
provision may be modified so as to be valid and enforceable as a matter of law,
such provision 

 

3

 

shall
be deemed to be modified so as to be valid and enforceable to the maximum
extent permitted by law.

 

VI.           Reaffirmation.  Borrowers hereby reaffirm and remake all of
the representations, warranties, covenants, duties, obligations and liabilities
contained in the Loan Agreement, as amended hereby.

 

VII.          Fees, Costs and Expenses.  Borrowers agree to pay, upon demand, all
fees, costs and expenses of Lender, including, but not limited to, reasonable
attorneys’ fees, in connection with the preparation, execution, delivery and
administration of this Second Amendment and the other agreements, documents and
instruments executed and delivered in connection herewith or pursuant hereto.

 

VIII.        Choice
of Law.  This Second
Amendment has been delivered and accepted in Chicago, Illinois, and shall be
governed by and construed in accordance with the laws of the State of Illinois,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of law as to all matters, including matters of validity,
construction, effect, performance and remedies.

 

IX.           Counterpart.  This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.

 

X.            Waiver
of Jury Trial.  BORROWERS
AND LENDER EACH HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL BY JURY.

 

 

[signature page follows]

 

4

 

IN WITNESS WHEREOF, Lender and Borrowers have
caused this Second Amendment to be executed and delivered by their duly
authorized officers as of the date first set forth above.

 

	
  LASALLE BANK NATIONAL ASSOCIATION,

  	
  VITA FOOD PRODUCTS, INC.,

  
	
  a
  national banking association

  	
   

  	
  a
  Nevada corporation

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Sara A. Huizinga

  	
   

  	
  By:

  	
  /s/
  Stephen D. Rubin

  
	
  Name:

  	
  Sara
  A. Huizinga

  	
   

  	
  Name:

  	
  Stephen
  D. Rubin

  
	
  Title:

  	
  Assistant
  Vice President

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VIRGINIA HONEY COMPANY, INC.,

  
	
   

  	
   

  	
  a
  Virginia corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Clark L. Feldman

  
	
   

  	
   

  	
  Name:

  	
  Clark
  L. Feldman

  
	
   

  	
   

  	
  Title:

  	
  Executive
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE HALIFAX GROUP, INC.,

  
	
   

  	
   

  	
  a
  Georgia corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Clifford Bolen

  
	
   

  	
   

  	
  Name:

  	
  Clifford
  Bolen

  
	
   

  	
   

  	
  Title:

  	
  Treasurer
  & Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VITA SPECIALTY FOODS, INC.,

  
	
   

  	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Clifford Bolen

  
	
   

  	
   

  	
  Name:

  	
  Clifford
  Bolen

  
	
   

  	
   

  	
  Title:

  	
  Assistant
  Secretary

  
	
   

  	
   

  	
   

  	
   

  

 

5

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