“ 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

 

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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 Contro l”: 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.

 

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“ 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.

 

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“ 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

 

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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

 

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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.

 

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“ 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.

 

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“ 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

 

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(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%).

 

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“ 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.

 

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“ 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

 

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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

 

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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

 

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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

 

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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

 

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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

 

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(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

 

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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

 

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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.

 

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(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%.

 

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(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

 

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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.

 

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(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

 

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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.

 

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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,

 

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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 t