Best Buy 2003 Annual Report Download - page 61
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Upon satisfaction of the conditions precedent set forth in section 13 below, any security interests granted by the Borrower to the Bank
prior to the date of this Offer Letter (the “Prior Security Documents”) shall be released and any assets covered thereby re−conveyed
by the Bank to the Borrower and any registrations or filings made with respect to the Prior Security Documents shall also be
discharged by the Bank, all at the Borrower’s cost.
12. Conditions of Loans:
12.1. The following covenants, terms and conditions shall apply so long as the
Borrower is indebted to the Bank:
12.1.1 The Borrower shall maintain the Margin Requirements specified above;
7
12.1.2 The Borrower shall not, without the prior written consent of the Bank:
12.1.2.1 declare or pay dividends on any class or kind of its shares, repurchase or redeem any of its shares, reduce its
capital in any way whatsoever or repay shareholder advances (except for the repayment of shareholder advances, interest
thereon and trade debt contemplated by the FSAI Subordination Agreement);
12.1.2.2 except in the ordinary course of the Borrower’s business, pay remuneration of any kind, including salaries,
management fees and bonuses, to any shareholder of the Borrower or any Affiliate of any shareholder of the Borrower if the
payment of such remuneration causes the Borrower to record a pre−tax operating loss or causes the Borrower to be in breach
of any Financial Covenants;
12.1.2.3 grant or allow any Lien or other encumbrance, whether fixed or floating, to be registered against or exist on
any of the assets of the Borrower except as specifically provided herein and in particular without limiting the generality of the
foregoing, shall not grant a trust deed or other instrument in favour of a trustee, other than Existing Liens and Purchase
Money Mortgages to a maximum aggregate amount of CDN $15,000,000;
12.1.2.4 become guarantor or endorser or otherwise become liable upon any note or other obligation other than in the
normal course of the Borrower’s business, unless the Borrower is required to deliver a guarantee of the indebtedness of Best
Buy Co. to U.S. Bank National Association pursuant to the terms of the U.S. Credit Agreement;
12.1.2.5 permit minimum cash flow ratio as calculated at the end of each fiscal quarter to be less than 1.0:1.0,
calculated in accordance with Canadian GAAP. For purposes of this Offer Letter, the minimum cash flow ratio shall mean
the quotient arrived at from time to time when dividing the aggregate of:
12.1.2.5.1 the Borrower’s net income plus the aggregate of taxes, depreciation, rental and lease payments, and cash investment in the Borrower
made by Best Buy Co.,