TANDY CORP /DE/, 10-K, 1994-03-30

TANDY CORP /DE/
10-K, 1994-03-30
ELECTRONIC COMPUTERS

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1993

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) FOR
THE TRANSITION PERIOD

Commission file number 1-5571

TANDY CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE 75-1047710
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

1800 One Tandy Center, Fort Worth, Texas 76102
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code
(817) 390-3700

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

Name of each exchange
Title of each class on which registered
Common Stock, par value $1 per share New York Stock Exchange
10% Subordinated Debentures due 1994 New York Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
$2.14 Depositary Shares New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
None

Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No ___

As of March 22, 1994, the aggregate market value of the
voting stock held by non-affiliates of the registrant was
$3,001,535,742 based on the New York Stock Exchange closing
price.

As of March 22, 1994, there were 63,812,277 shares of
the registrant's Common Stock outstanding.

Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. ___

Documents Incorporated by Reference

Portions of the Proxy Statement for the 1994 Annual Meeting
of Stockholders are incorporated by reference into Part III.

The Index to Exhibits is on Sequential Page No. 63.
Total Pages 422.

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<PAGE>
PART I

ITEM 1. BUSINESS.

GENERAL
The Company engages in the retail sale of consumer
electronics including personal computers primarily in the
United States. The Company's retail operations include the
Radio Shack, McDuff Electronics, VideoConcepts, The Edge in
Electronics, Computer City and Incredible Universe store
chains as well as some new concepts which it is testing.
These new test concepts are Famous Brand Electronics
Warehouse, Energy Express Plus and Audio Video & Computers.

Radio Shack. Radio Shack is the Company's largest
operating division. At December 31, 1993, Radio Shack
had 4,553 company-owned stores located throughout the
United States. These stores average approximately
2,370 square feet in area and are located in major
malls, strip centers and individual store fronts,
primarily in metropolitan markets. To provide service
to smaller communities, Radio Shack had on the same date
a network of 2,002 dealer/franchise stores. The dealers
are generally engaged in other retail operations and
augment their sales with Radio Shack products. In
addition, Radio Shack had 65 international dealers at
December 31, 1993.

The 4,553 company-owned stores carry a broad
assortment of electronic parts and accessories,
audio/video equipment, cellular and conventional
telephones as well as specialized products such as
scanners, electronic toys and personal computers. The
personal computers offered through these consumer stores
primarily target entry level users seeking computers for
home, individual and small business use.

Tandy Name Brand Retail Group. The Tandy Name
Brand Retail Group is comprised of VideoConcepts, McDuff
Electronics and The Edge in Electronics retail outlets.
At December 31, 1993, this group operated a total of 322
stores which sell name brand televisions, audio
equipment, personal computers and other electronic
products and appliances.

The Tandy Name Brand Retail Group operates two
distinctly different types of store formats -- mall
stores and supercenters. The 231 mall stores average
3,100 square feet in size while the 75 supercenters,
which are located in stand-alone or strip center
locations, average 12,200 square feet. Mall stores sell
primarily electronic, audio and video products. The
supercenter product offerings also include major
appliances.

The Company closed approximately 110 Tandy Name
Brand Retail Group stores in the first quarter of 1993.
See "Management's Discussion and Analysis of Results of
Operations and Financial Condition" found in Item 7 and
Note 4 of the Notes to Consolidated Financial Statements
for more information.

"The Edge in Electronics" began operating in 1990.
This chain of electronic boutique stores is designed for
mall customers interested in fashionable personal and
portable name brand electronics. As of December 31,
1993, these 16 stores were located in major malls and
averaged approximately 1,100 square feet.

Computer City. As of December 31, 1993, the
Company had 40 Computer City stores open, three of which
were in Europe. The Computer City chain operates as a
supercenter format featuring many name brand computers,
software and related products, including U. S. Logic,
Tandy, IBM, Apple, Sony, Lotus, Borland, Microsoft,
Packard-Bell, Compaq, AST and Hewlett-Packard. These
stores average about 23,500 square feet and carry more
than 5,000 products. The Company has opened two new
stores since December 31, 1993 and plans to open an
additional 22 stores later in 1994.

Incredible Universe. In August 1993 Incredible
Universe became a separate division of Tandy. At
December 31, 1993, Tandy operated three Incredible
Universe stores: one in Portland, Oregon; a second in
Arlington, Texas; and a third store located in northeast
Dallas, Texas. These 160,000 to 200,000 square foot
stores offer a broad selection of consumer electronics
and appliances. The Company recently opened its fourth
store in Miami, Florida, and announced plans to open
stores in Tempe, Arizona; Columbus, Ohio; Sacramento,
California and Hollywood, Florida. In addition, more
Incredible Universe stores are currently planned for
1994 and 1995.

Supporting the retail operations is an extensive
infrastructure that includes:

A&A International, Inc. - This wholly owned
subsidiary of the Company serves the wide-ranging
international import/export, sourcing, evaluation,
logistics and quality control needs of the Company.
InterTAN Inc. is the largest outside customer of the
Company. Most of A&A's activity for InterTAN originates
from manufacturers in the Far East. For more discussion
on InterTAN see Note 21 of the Notes to Consolidated
Financial Statements.

Tandy Service Centers - The Company maintains a
large service and support network in the consumer
electronics retail industry. These centers repair name
brand and private label products sold through all of the
Company's retail distribution channels. Over one
million parts are stocked in the Tandy Service division
which includes 116 service centers throughout the
nation.

Regional Distribution Centers - The 14 distribution
centers ship over one million cartons each month to both
Radio Shack and the Tandy Name Brand Retail Group
operations. This group will also be instrumental in
supporting the new Radio Shack Gift Express service.

Tandy Information Services - TIS collects
information from the retail stores nationwide and
updates a large database with sales information. This
database is a sophisticated marketing tool benefiting
every phase of the Company's operations. TIS also
processes the inventory, accounting, payroll,
telecommunications and operating information for all of
the Company's operations. In addition, specialized
information is tracked for the Company's distribution
and corporate activities.

Tandy Credit Corporation - This operation, a wholly
owned subsidiary of the Company, helps support sales of
the Company's retail operations and provides retail
divisions additional marketing flexibility through the
utilization of credit promotions. This group maintains
and manages Tandy's various private label credit
cards.

Tandy Transportation, Inc. - A large fleet of
tractors and trailers transports much of the merchandise
from the ports of entry to the Company's regional
distribution centers and local distribution facilities
for delivery to Radio Shack and Tandy Name Brand Retail
Group stores.

Consumer Electronics Manufacturing - The Company
also engages in the manufacturing business with 11
manufacturing facilities in the United States and
three overseas manufacturing operations in China, Hong
Kong and Taiwan. The China operation is a joint
venture. These 14 manufacturing facilities cover a
total of 1,674,000 square feet and employ over 4,700
workers and professionals as of December 31, 1993,
excluding those persons working at facilities included
in discontinued operations. The Company continues to
manufacture a variety of products for use in its
consumer electronics retailing operations. The products
include audio, video, telephony, antennas, wire and
cable products and a wide variety of hard to find parts
for consumer electronic products. Most of the Company's
manufacturing output is sold through the Radio Shack
store chain. In addition, the Company has previously
operated several related marketing businesses that
manufacture and sell consumer electronics and computers
to retailers and end users, see "Discontinued
Operations" below for further information.

Computer Manufacturing. In furtherance of the
divestiture plan, the Company closed the sale of the
computer manufacturing and marketing businesses
to AST Research, Inc. ("AST") on July 13, 1993. In
accordance with the terms of the definitive agreement
between Tandy and AST, Tandy received $15,000,000 upon
closing of the sale. The balance of the purchase price
of $90,000,000 (as adjusted post-closing based on the
results of an audit of the assets and liabilities
conveyed) is payable by a promissory note. The
promissory note is payable in three years and interest
is accrued and paid annually. The interest rate on the
promissory note is currently 3.75% per annum and is
adjusted annually, not to exceed 5% per annum. The
terms of the promissory note stipulate that the
outstanding principal balance may be paid at maturity at
AST's option in cash or the common stock of AST.
However, at Tandy's option not more than 50% of the
initial principal balance may be paid in common stock of
AST. The promissory note is supported by a standby
letter of credit in the amount of the lesser of
$100,000,000 or 70% of the outstanding principal amount
of the promissory note. At December 31, 1993, the
standby letter of credit approximated $67,704,000.
Accounts receivable relating to the computer operations,
approximating $83,000,000 at June 30, 1993, inured to
the benefit of Tandy upon collection. At December 31,
1993, the balance of the remaining accounts receivable,
net of allowance for doubtful accounts, was $7,700,000.
Tandy also retained certain inventory which it intends
to liquidate before June 30, 1994. At December 31,
1993, this inventory amounted to approximately
$3,700,000.

In October 1993, the Company sold its computer
marketing operations in France to AST, together with
certain other multimedia assets and additional Swedish
inventory, for an aggregate of approximately $6,700,000,
which was evidenced by an increase in the amount of the
promissory note described above to $96,700,000. The
Company has discounted this note by $2,000,000 and the
discount will be recognized as interest using the
effective interest rate method over the life of the
note.

Memtek Products. On November 10, 1993, the Company
executed a definitive agreement with Hanny Magnetics
(B.V.I.) Limited, a British Virgin Islands corporation
("Hanny") to purchase certain assets of the Company's
Memtek Products operations, including the license
agreement with Memorex Telex, N.V. for the use of the
Memorex trademark on licensed consumer electronics
products. This sale closed on December 16, 1993. As of
December 31, 1993, Tandy has received payments of
$62,500,000, recorded a $7,102,000 receivable from Hanny
for the remaining purchase price and retained
approximately $61,000,000 in accounts receivable and
certain other assets for liquidation. Hanny is a
subsidiary of Hanny Magnetics (Holdings) Limited, a
Bermuda corporation, listed on the Hong Kong Stock
Exchange. At December 31, 1993, accounts receivable,
net of related allowance for doubtful accounts, retained
by Tandy approximated $40,100,000.

O'Sullivan Industries. On November 23, 1993, the
Company announced that it would sell the common stock of
O'Sullivan Industries, Inc. ("O'Sullivan") in an initial
public offering. On January 27, 1994 the Company
announced that it had reached an agreement with the
underwriters to sell O'Sullivan Industries Holdings,
Inc., the parent company of O'Sullivan, common stock to
the public at $22 per share. The net proceeds realized
by Tandy in the initial public offering, together with
the $40,000,000 cash dividend from O'Sullivan
Industries, Inc., approximated $350,000,000. The
initial public offering closed on February 2, 1994.

Pursuant to a Tax Sharing and Tax Benefit
Reimbursement Agreement between Tandy and O'Sullivan
Industries Holdings, Inc. the Company will receive
payments from O'Sullivan resulting from an increased tax
basis of O'Sullivan's assets thereby increasing tax
deductions and accordingly, reducing income taxes
payable by O'Sullivan. The amount to be received by the
Company each year will approximate the federal tax
benefit expected to be realized with respect to the
increased tax basis. These payments will be made over a
15-year time period. The Company will recognize these
payments as additional sale proceeds and gain in the
year in which the payments become due and payable to the
Company.

Lika. On January 24, 1994, the Company announced
that it had signed a definitive agreement to sell its
manufacturing facilities which make Lika printed circuit
boards. This divestiture is expected to close by June
1994 and is expected to yield approximately $17,000,000
in proceeds, including cash, a note and the liquidation
of certain retained assets.

In connection with the computer manufacturing sale and
the Memtek Products sale, the Company agreed to retain
certain liabilities primarily relating to warranty
obligations on products sold prior to the sale. Management
believes that accrued reserves, as reflected on its December
31, 1993 balance sheet, are adequate to cover estimated
future warranty obligations for the products and for any
remaining costs to dispose of these operations.

With the closing of the Lika transaction, the
divestiture program announced in June 1993 will be complete.
The proceeds from the divestitures are being used to reduce
short-term debt and for the expansion of the Incredible
Universe and Computer City store operations. See
"Management's Discussion and Analysis of Results of
Operations and Financial Condition" and Note 3 of the Notes
to Consolidated Financial Statements for further information.

SALE OF JOINT VENTURE INTEREST
During the quarter ended September 30, 1993, the Company
entered into definitive agreements with Nokia Corporation
("Nokia") to sell the Company's interests in two cellular
telephone manufacturing joint ventures with Nokia, TMC
Company Ltd. located in Masan, Korea, and TNC Company located
in Fort Worth, Texas. Pursuant to the terms of the
definitive agreements, the Company received an aggregate of
approximately $31,700,000 for its interests in these joint
ventures. The Company also entered into a three-year
Preferred Supplier Agreement pursuant to which it has agreed
to purchase from Nokia substantially all of Radio Shack's
requirements for cellular telephones at prevailing
competitive market prices at the time of the purchase. These
operations were not part of the overall divestment plan
adopted in June 1993 by the Company's Board of Directors;
therefore, the gain from the sale and their results of
operations are not included in discontinued operations.

SEASONALITY
As is the case with other retail businesses, the
Company's net sales and other revenues are greater during the
Christmas season than during other periods of the year.
There is a corresponding pre-seasonal inventory build-up
requiring working capital associated with this increased
sales volume. For additional information, see Note 22 of the
Notes to Consolidated Financial Statements.

PATENTS AND TRADEMARKS
Tandy owns or is licensed to use many trademarks related
to its business in the United States and in foreign
countries. Radio Shack, Computer City, Incredible Universe,
McDuff Electronics, VideoConcepts, Realistic, Tandy and
Optimus are some of the registered marks most widely used by
the Company. Tandy believes that the Radio Shack, Computer
City and Incredible Universe names and marks are
well-recognized and associated with a high-quality service
provider by consumers. The Company's products are sold
primarily under the Radio Shack, Optimus, Tandy and Realistic
trademarks which are registered in the U.S. and many foreign
countries. The Company believes that the loss of the Radio
Shack name or mark would be material to its business, but
does not believe that the loss of any one trademark
registration would be material.

Tandy also owns, and is in the process of applying for,
various patents relating to retail and support functions.

SUPPLIERS
The Company obtains merchandise from a large number of
suppliers from various parts of the world. Alternative
sources of supply exist for most merchandise purchased by the
Company. As the Company's product line is diverse, the
Company would not expect a lack of availability of any single
product to have a material impact on its operations.

BACKLOG ORDERS
The Company has no material backlog of orders for the
products it sells.

COMPETITION
The consumer electronics retail business is highly
competitive. The Company competes in the sale of its
products with department stores, mail order houses, discount
stores, general merchants, home appliance stores and gift
stores which sell comparable products manufactured by others.
Competitors range in size from local drug and hardware stores
to large chains and department stores. Computer store chains
and franchise groups as well as independent computer stores
and several major retailers compete with the Company in the
retail personal computer marketplace. Consumer electronic
and computer mail-order companies also compete with the
Company. The products which compete with those sold by the
Company are manufactured by numerous domestic and foreign
manufacturers. Many of these products carry nationally
recognized brand names or private labels and are sold in
markets common to the Company. Some of the Company's
competitors have financial resources equal to or greater than
the Company's resources.

Management believes that among the factors that are
important to its competitive position are price, quality,
service and the broad selection of electronic products and
computers carried at conveniently located retail outlets. The
Company's utilization of trained personnel and its ability to
use national and local advertising media are important to the
Company's ability to compete in the consumer electronics
marketplace. Management of the Company believes it is a
strong competitor in each of the factors referenced above.
Given the highly competitive nature of the consumer
electronics retail business, no assurance can be given that
the Company will continue to compete successfully in all of
the factors referenced above. However, the Company would be
adversely affected if its competitors were to offer their
products at significantly lower prices, introduce innovative
or technologically superior products not yet available to the
Company or if the Company were unable to obtain products in a
timely manner for an extended period of time.

The Company focuses on various types of store formats to
address the marketplace. Each of the Company's retailing
formats uses a distinct but complementary path to the
marketplace, based on its unique customer appeal, marketing
strengths and margin structure.

Radio Shack. Radio Shack stores offer the
shopping convenience of approximately 6,555 outlets,
high-quality private label products, unique selection,
knowledgeable personnel and excellent customer service.
Radio Shack has strong sales in approximately 3,200
different items in such consumer-demand product
categories as speakers, batteries, communications
equipment, tape decks, antennas, electronic components
and accessories.

Computer City. Computer City stores offer
approximately 5,000 different name-brand items,
competitive prices and excellent customer service on
computers, computer software and accessories.

Tandy Name Brand Retail Group. This group sells
name brand consumer electronics and appliances in three
distinctly different types of store formats.
VideoConcepts and McDuff Electronics mall stores average
approximately 3,100 square feet in size. McDuff
SuperCenters average approximately 12,200 square
feet and are located in many secondary markets. The
Edge in Electronics stores average approximately 1,100
square feet in size, carry approximately 1,000 different
name brand personal and portable consumer electronics
products and are located in major markets.

Incredible Universe. A new concept in the
retailing of name brand consumer electronics are 160,000
to 200,000 square foot stores which provide the customer
with a "universe" of choices. These stores carry over
85,000 different stock-keeping units.

The Company has faced intense competition in its
consumer electronics retailing businesses. Competition is
driven by technology and product cycles, as well as the
economy. In the consumer electronics retailing business,
competitive factors include price, product quality,
manufacturing and distribution capability and brand
reputation. The Company believes that its retailing formats
compete effectively in their respective marketplaces.

RESEARCH AND DEVELOPMENT
Research and development expenditures are not
significant.

EMPLOYEES
As of December 31, 1993, the Company had approximately
42,000 employees, excluding 2,000 full time employees
associated with discontinued operations at O'Sullivan and
Lika. The number also excludes temporary retail employees
remaining from the Christmas selling season. Management of
the Company considers the relationship between the Company
and its employees to be good. It does not anticipate any
work stoppage due to labor difficulties.

ITEM 2. PROPERTIES.

Information on the Company's properties is in
"Management's Discussion and Analysis of Results of
Operations and Financial Condition" and the financial
statements included in this Form 10-K and is incorporated
herein by reference. The following items are discussed
further on the following pages:

Page
Retail Outlets . . . . . . . . . 16
Property, Plant and Equipment. . 43
Leases . . . . . . . . . . . . . 47

The Company leases rather than owns most of its retail
facilities. However, the land and buildings of most of the
Incredible Universe stores are owned rather than leased. The
Radio Shack, Tandy Name Brand Retail Group and Computer City
stores are located primarily in major shopping malls,
stand-alone buildings or shopping centers owned by other
companies. The Company owns most of the property on which
its executive offices are located in Fort Worth, Texas as
well as five distribution facilities and most of its
manufacturing facilities and land located throughout the
United States. Existing warehouse and office facilities are
deemed adequate to meet the Company's needs in the
foreseeable future.

ITEM 3. LEGAL PROCEEDINGS.

In July 1985, Pan American Electronics, Inc., a Radio
Shack dealer in Mission, Texas ("Pan Am"), filed suit against
the Company in the 92nd Judicial District Court in Hidalgo
County, Texas. The Plaintiff's complaint alleged breach of
contract and fraud based upon the allegations that the
Company made certain misrepresentations and acted beyond the
scope of its authority under the dealer agreement, with the
alleged result that the plaintiff was forced out of the
computer mail order business in 1984. In November 1993, Pan
Am and Tandy resolved the pending litigation and the lawsuit
was dismissed in December 1993. Although the terms of the
settlement are confidential, the resolution of this legal
action did not have a materially adverse impact on the
Company's financial position or results of operation.

There are various other claims, lawsuits, disputes with
third parties, investigations and pending actions involving
allegations of negligence, product defects, discrimination,
patent infringement, tax deficiencies and breach of contract
against the Company and its subsidiaries incident to the
operation of its business. The liability, if any, associated
with these matters was not determinable at December 31, 1993.
While certain of these matters involve substantial amounts,
and although occasional adverse settlements or resolutions
may occur and negatively impact earnings in the year of
settlement, it is the opinion of management that their
ultimate resolution will not have a materially adverse effect
on Tandy's financial position.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

At the Annual Meeting of Stockholders held October 15,
1993, the Company elected directors to serve for the ensuing
year and voted to adopt the Tandy Corporation 1993 Incentive
Stock Plan. Out of the 80,915,627 eligible votes, 63,361,775
votes were cast at the meeting either by proxies solicited in
accordance with Schedule 14A or by security holders voting in
person. There were 9,890,351 broker non-votes which are not
included in the following table as they were not treated as
being present at the meeting. In the case of directors,
abstentions are treated as votes withheld and are included in
the table. No other matters were voted on at the meeting.
The tabulation of votes for each nominee is set forth below
under Item No. 1 and the vote on the Tandy Corporation 1993
Incentive Stock Plan is set forth under Item No. 2 below:

Nominees for Directors
______________________

Item No. 1
__________
VOTES VOTES
DIRECTORS FOR WITHHELD
_________ _____ ________

James I. Cash, Jr. 62,626,072 735,703
Caroline R. Hunt 62,588,534 773,241
Lewis F. Kornfeld, Jr. 62,507,688 854,087
Jack L. Messman 62,848,102 513,673
William G. Morton, Jr. 62,606,784 754,991
Thomas G. Plaskett 62,216,712 1,145,063
John V. Roach 62,391,582 970,193
William T. Smith 62,598,399 763,376
Alfred J. Stein 62,569,000 792,775
William E. Tucker 62,627,905 733,870
Jesse L. Upchurch 62,792,385 569,390
John A. Wilson 62,679,493 682,282

1993 Incentive Stock Plan
_________________________

Item No. 2
__________

FOR AGAINST ABSTAIN
___ _______ _______

52,196,098 10,338,869 826,808

EXECUTIVE OFFICERS OF THE REGISTRANT (SEE ITEM 10 OF PART
III).
The following is a list of Tandy Corporation's executive
officers, their ages, positions and length of service with
the Company as of March 30, 1994

Position
(Date Elected Years with
Name to Current Position) Age Company
____ ____________________ ___ __________

John V. Roach Chairman of the Board, 55 26
Chief Executive Officer
and President (July 1982)

William C. Bousquette Executive Vice President 57 3 (1)
and Chief Financial Officer
(January 1994)

Herschel C. Winn Senior Vice President and 62 25
Secretary (November 1979)

Robert M. McClure Senior Vice President 58 21 (2)
(January 1994)

Lou Ann Blaylock Vice President - 55 23 (3)
Corporate Relations
(January 1993)

Dwain H. Hughes Vice President and 46 14 (4)
Treasurer (June 1991)

Ronald L. Parrish Vice President - 51 7
Corporate Development
(April 1987)

Richard L. Ramsey Vice President and 48 27
Controller (January 1986)

Frederick W. Padden Vice President - Law 61 3 (5)
and Assistant Secretary
(January 1994)

Leonard H. Roberts President of Radio Shack 45 (6)
(July 1993)

David M. Thirion Vice President - 46 17 (7)
Retail Services
(January 1993-August 1993)

James B. Sheets Vice President - Legal 42 17 (8)
(January 1993-December 1993)
and Assistant Secretary
(November 1986-December 1993)

Bernie S. Appel Senior Vice President, 61 33 (9)
Tandy Corporation and
Chairman, Radio Shack
Division (January 1992-
March 1993)

There are no family relationships among the executive
officers listed and there are no arrangements or
understandings pursuant to which any of them were appointed
as executive officers. All executive officers of Tandy
Corporation are elected by the Board of Directors annually to
serve for the ensuing year, or until their successors are
elected. All of the executive officers listed above have
served the Company in various capacities over the past five
years, except for Mr. Bousquette, Mr. Padden and Mr. Roberts.

(1) Mr. Bousquette previously served as Executive Vice
President and Chief Financial Officer of the Company
from November 1990 until January 1993 when he was
elected as Chief Executive Officer of TE Electronics
Inc. Prior to joining Tandy, he served as Executive
Vice President and Chief Financial Officer of Emerson
Electric Company from March 1984 until November 1990.

(2) Mr. McClure served as President of the Tandy Electronics
Division from August 1987 until January 1993 when he was
elected as Chief Operating Officer and President of TE
Electronics Inc.

(3) Mrs. Blaylock was Director of Corporate Relations from
January 1986 until she was elected Vice President -
Corporate Relations in January 1993.

(4) Mr. Hughes was elected Vice President and Treasurer of
the Company in June 1991. From June 1989 until June
1991, Mr. Hughes was Assistant Treasurer of the Company;
and, from 1984 until June 1989, he was Director of the
Company's Internal Audit Department.

(5) Mr. Padden has been Vice President, General Counsel and
Secretary of TE Electronics Inc. since January 1993.
From January 1991 to January 1993 he was the Deputy
General Counsel - Intellectual Property for Tandy
Corporation. Prior to joining Tandy he was a General
Attorney at AT&T-Bell Laboratories from 1984 to January
1991.

(6) Mr. Roberts became President of the Radio Shack Division
on July 7, 1993. Prior to joining Tandy he served as
the Chairman and Chief Executive Officer of Shoney's
Inc. from 1990 to 1993 and as President and Chief
Executive Officer of Arby's, Inc. from 1985 to 1990.

(7) Mr. Thirion resigned as the Vice President - Retail
Services in August 1993 to become the Senior Vice
President and General Manager of the Tandy Name Brand
Retail Group Division. Mr. Thirion was Vice President
of the Radio Shack Division from January 1989 until
January 1993.

(8) Mr. Sheets served as Assistant Secretary of the Company,
a position he was elected to in November 1986. Mr.
Sheets also served as Deputy General Counsel - Corporate
from November 1986 until he was elected Vice President -
Legal in January 1993. Mr. Sheets resigned effective
December 31, 1993.

(9) Mr. Appel was President of the Radio Shack Division from
June 1984 until January 1992. In January 1992 Mr Appel
was appointed as the Senior Vice President of Tandy
Corporation and Chairman of the Radio Shack division.
Mr. Appel resigned as an executive officer of the
Company on March 1, 1993 and retired as an employee of
Tandy on June 30, 1993.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.

MARKET FOR COMMON STOCK
The Company's common stock is listed on the New York
Stock Exchange and trades under the symbol "TAN". The
following table presents the high and low sale prices for the
Company's common stock for each quarter of the two and
one-half years ended December 31, 1993.

Dividends
Quarter Ended: High Low Close Declared
____ ___ _____ _________

December 31, 1993 $50 3/4 $35 3/8 $49 1/2 $.15
September 30,1993 37 3/8 28 1/8 36 7/8 .15
June 30, 1993 32 3/8 28 3/8 30 .15
March 31, 1993 32 1/8 24 5/8 29 5/8 .15
December 31, 1992 31 3/4 24 5/8 29 3/4 .15
September 30,1992 27 3/4 22 1/4 27 1/8 .15
June 30, 1992 29 5/8 23 7/8 24 1/2 .15
March 31, 1992 31 1/4 23 7/8 29 3/4 .15
December 31, 1991 30 1/8 24 3/8 28 7/8 .15
September 30, 1991 28 3/4 23 3/8 28 3/8 .15

HOLDERS OF RECORD
At March 22, 1994 there were 35,227 holders of record of
the Company's common stock.

DIVIDENDS
The Board of Directors periodically reviews the
Company's dividend policy. The quarterly dividend rate is
currently $.15.
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA

SELECTED SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
TANDY CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTIONS>
Six Months (1)
(Dollars and shares in Year Ended Ended
thousands, except per December 31, December 31, Year Ended June 30,
share amounts) ____________ __________________ __________________________________________
1993 1992 1991 1992 1991 1990 1989
______________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
Operations
Net sales and operating
revenues. . . . . . . . . . . . . . . . $4,102,551 $2,161,149 $2,031,763 $3,649,284 $3,573,699 $3,648,946 $3,559,692
__________ __________ __________ __________ __________ __________ __________
__________ __________ __________ __________ __________ __________ __________
Income before income taxes,
discontinued operations and
cumulative effect of change in
accounting principle. . . . . . . . . . $ 311,155 $ 102,917 $ 201,856 $ 330,498 $ 343,277 $ 445,048 $ 494,576
Provision for income taxes . . . . . . . 115,523 35,236 73,153 119,785 123,342 167,926 190,754
__________ __________ __________ __________ __________ __________ __________
Income from continuing operations . . . 195,632 67,681 128,703 210,713 219,935 277,122 303,822
Income (loss) from discontinued
operations . . . . . . . . . . . . . . (111,797) (63,875) (8,060) (26,866) (13,872) 13,225 19,682
__________ __________ __________ __________ __________ __________ __________

Income before cumulative effect of
change in accounting principle . . . . 83,835 3,806 120,643 183,847 206,063 290,347 323,504
Cumulative effect on prior years of change
in accounting principle, net of taxes (2) 13,014 -- -- -- (10,619) -- --
__________ __________ __________ __________ __________ __________ __________

Net income . . . . . . . . . . . . . . . $ 96,849 $ 3,806 $ 120,643 $ 183,847 $ 195,444 $ 290,347 $ 323,504
__________ __________ __________ __________ __________ __________ __________
__________ __________ __________ __________ __________ __________ __________

Net income per average common and
common equivalent share:
Income from continuing operations . . . $ 2.48 $ 0.86 $ 1.61 $ 2.60 $ 2.75 $ 3.38 $ 3.42
Income (loss) from discontinued
operations. . . . . . . . . . . . . . . (1.47) (0.84) (0.10) (0.34) (0.17) 0.16 0.22
__________ __________ __________ __________ __________ __________ __________
Income before cumulative effect of
change in accounting principle . . . . 1.01 0.02 1.51 2.26 2.58 3.54 3.64

Cumulative effect on prior years of change
in accounting principle, net of taxes . 0.17 -- -- -- (0.14) -- --
__________ __________ __________ __________ __________ __________ __________

Net income per average common and
common equivalent share (3) . . . . . . $ 1.18 $ 0.02 $ 1.51 $ 2.26 $ 2.44 $ 3.54 $ 3.64

__________ __________ __________ __________ __________ __________ __________
__________ __________ __________ __________ __________ __________ __________

Average common and common equivalent
shares outstanding (3) . . . . . . . . 76,184 75,559 78,149 79,011 78,258 81,943 88,849
Dividends declared per
common share. . . . . . . . . . . . . . $ .60 $ .30 $ .30 $ .60 $ .60 $ .60 $ .60
Ratio of earnings to fixed
charges (4) . . . . . . . . . . . . . . 3.89 2.83 N/A 3.95 3.55 4.77 6.06
</TABLE>
<PAGE>
<TABLE>

SELECTED SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
TANDY CORPORATION AND SUBSIDIARIES
<CAPTIONS>

Six Months (1)
(Dollars and shares in Year Ended Ended
thousands, except per December 31, December 31, Year Ended June 30,
share amounts) ____________ _______________ _______________________________________
1993 1992 1992 1991 1990 1989
_________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Year-End Financial
Position
Inventories. . . . . . . . . . . . . . . $1,276,302 $1,472,365 $1,391,295 $1,301,854 $1,452,065 $1,285,373
Total assets (5) . . . . . . . . . . . . $3,219,099 $3,381,428 $3,165,164 $3,078,145 $3,239,980 $2,574,310
Working capital. . . . . . . . . . . . . $1,128,343 $1,478,041 $1,556,435 $1,550,848 $1,312,517 $1,373,311
Current ratio. . . . . . . . . . . . . . 2.09 to 1 2.39 to 1 2.99 to 1 3.18 to 1 2.12 to 1 3.41 to 1
Capital structure:
Current debt . . . . . . . . . . . . . . $ 387,953 $ 385,706 $ 231,097 $ 179,818 $ 695,871 $ 192,096
Long-term debt . . . . . . . . . . . . . $ 186,638 $ 322,778 $ 357,525 $ 427,867 $ 252,540 $ 141,124
Total debt . . . . . . . . . . . . . . . $ 574,591 $ 708,484 $ 588,622 $ 607,685 $ 948,411 $ 333,220
Total debt, net of cash
and short-term
investments . . . . . . . . . . . . . . $ 361,356 $ 595,858 $ 482,168 $ 421,392 $ 813,214 $ 274,822
Stockholders' equity (5) . . . . . . . . $1,950,750 $1,888,351 $1,930,740 $1,846,762 $1,723,496 $1,782,838
Total capitalization (5) . . . . . . . . $2,525,341 $2,596,835 $2,519,362 $2,454,447 $2,671,907 $2,116,058
Long-term debt as a % of
total capitalization. . . . . . . . . 7.4% 12.4% 14.2% 17.4% 9.5% 6.7%
Total debt as a % of total
capitalization. . . . . . . . . . . . . 22.8% 27.3% 23.4% 24.8% 35.5% 15.7%
Stockholders' equity per
common share (6). . . . . . . . . . . . $ 25.24 $ 24.74 $ 25.35 $ 23.48 $ 21.78 $ 20.65

Financial Ratios
Return on average
stockholders' equity (4) . . . . . . . 10.2% 3.5% 11.2% 12.3% 15.8% 17.9%
Percent of sales:
Income before income taxes, discontinued
operations and cumulative effect of
change in accounting principle . . . 7.6% 4.8% 9.0% 9.6% 12.2% 13.9%
Income from continuing operations . . . 4.8% 3.2% 5.7% 6.2% 7.6% 8.5%
</TABLE>

(1) The Company changed its fiscal year end from a June 30
to a December 31 year end effective with the six month
transition period ended December 31, 1992.
(2) See Note 2 of the Notes to Consolidated Financial
Statements for a discussion of the change in accounting
principles.
(3) Income (loss) per share amounts and average common and
common equivalent share amounts for the six months
ending December 31, 1992 and fiscal 1992 have been
retroactively restated to reflect the assumption that
the Series C PERCS would convert into 12,457,100 common
shares in lieu of the previously used conversion amount
of 15,000,000 common shares based upon the Company's
December 31, 1993 closing price of its common stock of
$49.50 per share. See Note 2 of the Notes to
Consolidated Financial Statements.
(4) Computed using income from continuing operations.
(5) Includes investment in discontinued operations.
(6) At December 31, 1993, December 31, 1992 and June 30,
1992, computed assuming the Series C PERCS will
convertinto 12,457,100 shares of common stock.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION.

Tandy Corporation ("Tandy" or the "Company") changed its
fiscal year end from June 30 to December 31 effective
December 31, 1992.

The following Management's Discussion and Analysis of
Results of Operations and Financial Condition compares the
full calendar year ended December 31, 1993 with the full
fiscal years ended June 30, 1992 and 1991. Although these
twelve-month periods end at different times, management
believes that the seasonality of the retail business relating
to Christmas is so significant that it would distort trends
and related percentage comparisons to sales for the readers
if a full year's results were compared to the six-month
transition period ended December 31, 1992.

NET SALES AND OPERATING REVENUES
For the year ending December 31, 1993, overall sales
grew 12% to $4,102,551,000 as compared to $3,649,284,000 for
the fiscal year ending June 30, 1992. This increase was
primarily due to the opening of three Incredible Universe
stores and the expansion of the Computer City chain. On a
comparable store basis, Radio Shack's sales increased
slightly during the year ended December 31, 1993 as compared
to the fiscal year ended June 30, 1992. A moderate increase
in sales of Radio Shack's core business (i.e., consumer
electronics and accessories) was offset by a decline in sales
of personal computers through the Radio Shack division.

The decrease in Radio Shack's computer business reflects
the impact of sharply lower pricing in response to
competitive pressures in the marketplace. The changing
dynamics of the personal computer business has had a
significant impact on Radio Shack's performance during fiscal
years 1993, 1992 and 1991. A combination of shifts in retail
distribution to super stores and telemarketing combined with
rapidly declining prices has taken the computer category from
approximately 17.0% of Radio Shack's sales with a gross
profit of 29.0% in the year ended June 30, 1992 to
approximately 14.2% of sales and a gross profit of 15.2% for
the year ended December 31, 1993. Radio Shack's extensive
assortment of electronic parts, accessories and specialty
items differentiates it from other consumer electronics
retailers in the marketplace. The table below shows the
breakdown by major category of Radio Shack sales.

<TABLE>

RADIO SHACK SALES TO CUSTOMERS
<CAPTIONS>
Percent of Total Sales
________________________________________________
Year Ended Six Months Ended Year Ended
December 31, December 31, June 30,
____________ ________________ ______________
Class of Products 1993 1992 1992 1991
_________________________________________________________________________________

<S> <C> <C> <C> <C>
Consumer electronics . . . . . 44.6% 46.1% 43.9% 44.3%
Electronic parts, accessories
and specialty equipment . . . 36.1 35.4 34.4 33.5
Personal computers, peripherals,
software and accessories * . 14.2 14.3 17.0 17.7
Other. . . . . . . . . . . . . 5.1 4.2 4.7 4.5
_____ _____ _____ _____
. . . . . . . . . . . . . . . 100.0% 100.0% 100.0% 100.0%
_____ _____ _____ _____
_____ _____ _____ _____

* Excludes Radio Shack Computer Centers closed at June 30, 1991.
</TABLE>

The decline in Radio Shack's computer sales has been
offset by sales of the Computer City chain. The Computer
City chain opened its 40th supercenter in December 1993,
approximately two years after its initial launching of eight
stores. Computer City's sales increases were the result of
25 additional stores since June 30, 1992 and comparable store
sales gains at old stores in excess of 30% for the year ended
December 31, 1993.

The Name Brand Retail Group experienced a sales decrease
in calendar 1993 as compared to the June 1992 fiscal year.
This decrease was primarily a result of the closing of 110
McDuff and VideoConcepts stores in February 1993. This
decline was offset in part by the addition of three
Incredible Universe stores. The first two Incredible
Universe stores were opened in the fall of 1992 with the
third having been added in the fall of 1993.

Shipments to InterTAN Inc. decreased for calendar year
1993 as compared to the fiscal year ended June 30, 1992. See
the discussion in the "InterTAN Update" found on page 23.

<TABLE>

RETAIL OUTLETS
<CAPTIONS>
Average
Store
Size Dec. 31, Dec. 31, June 30, Dec. 31, June 30,
(Sq. Ft.) 1993 1992 1992 1991 1991
____________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Radio Shack
Company-owned*. . . . . . . . 2,370 4,553 4,558 4,553 4,604 4,595
Dealer/Franchise. . . . . . . N.A. 2,002 2,122 2,203 2,238 2,241
_____ _____ _____ _____ _____
6,555 6,680 6,756 6,842 6,836
_____ _____ _____ _____ _____
_____ _____ _____ _____ _____

Tandy Name Brand Retail Group
McDuff Supercenters . . . . . 12,198 75 150 151 147 138
McDuff/VideoConcepts
Mall Stores. . . . . . . . . 3,081 231 266 266 270 245
The Edge in Electronics . . . 1,107 16 16 16 15 9

Computer City . . . . . . . . 23,487 40 20 15 8 --
Incredible Universe. . . . . . 183,667 3 2 -- -- --
_____ _____ _____ _____ _____
365 454 448 440 392
_____ _____ _____ _____ _____
Total Stores 6,920 7,134 7,204 7,282 7,228
_____ _____ _____ _____ _____
_____ _____ _____ _____ _____

* Excludes Radio Shack Computer Centers closed at June 30, 1991.
</TABLE>

For the six-month period ending December 31, 1992, net
sales and operating revenues increased 6.4% to
$2,161,149,000. This increase was primarily due to the
opening of two Incredible Universe stores and expansion of
the Computer City chain. Comparable store sales were
essentially even with the six-month period ended December 31,
1991.

The change in the Company's sales in the fiscal years
ended June 30, 1992 and 1991 reflected a continued adverse
product cycle in consumer electronics, a weak economy and
widespread price cutting in the personal computer market.
Sales through all retail stores increased 3.2% in the fiscal
year ended June 30, 1992 as compared with fiscal 1991.

The increase in sales in the fiscal year ended June 30,
1992 was primarily due to new store expansions. During
fiscal 1992, 15 Computer City stores, 34 McDuff and
VideoConcepts stores and seven of The Edge in Electronics
stores were opened. On a company-wide basis, comparable
store sales declined 1% in fiscal 1992 following a similar
decline in the prior year. Comparable store sales increased
slightly at Radio Shack in fiscal 1992 due to the continued
strengthening of its electronics parts, accessories and
specialty items business. This increase more than offset a
decline in Radio Shack's computer business which was impacted
significantly by extensive price cutting in the marketplace.
Comparable store sales of the McDuff and VideoConcepts stores
were down 10% in fiscal 1992 as compared to fiscal 1991,
reflecting intense competitive pressures in name brand
electronics retailing.

To address the pricing and distribution shifts in
computer retailing, the Computer City chain of super stores
was launched in October 1991 (fiscal year ended June 30,
1992). The Computer City format is designed to sell high
volumes of well known name brand personal computers and
related products at discount prices.

Though in operation for only the last seven months of
fiscal 1992, Computer City's sales more than offset the
decline in the Company's U.S. computer sales through Radio
Shack and direct sales. As of June 30, 1992, 15 Computer
City stores were in operation, 13 in the U.S. and two in
Europe.

GROSS PROFIT
Gross profit as a percent of sales and operating
revenues for the year ended December 31, 1993 was 41.9% as
compared to 43.5% for the six months ended December 31, 1992,
47.2% for the fiscal year ended June 30, 1992 and 48.7% for
the fiscal year ended June 30, 1991. The decline, in part,
reflects the faster growth of new high-volume formats such as
Computer City and Incredible Universe with inherently lower
gross margins than Radio Shack stores. The Company expects
this trend to continue as sales at Incredible Universe and
Computer City increase. Combined Computer City and
Incredible Universe sales contributed 18.6%, 8.9% and 2.6% to
consolidated sales in the fiscal year ended December 31,
1993, the six months ended December 31, 1992 and the fiscal
year ended June 30, 1992, respectively. The 5.3% decline in
gross profit percent from fiscal 1992 reflects the growth of
the newer retail businesses. Management expects the
long-term impact of accelerated growth for its new businesses
to result in a lower consolidated gross margin as a percent
of sales and operating revenues.

In addition to the increasing effect of the lower gross
margin businesses, Radio Shack's gross margin has trended
down during the fiscal years ended December 31, 1993 and June
30, 1992 and 1991 because of a decline in computer margins
resulting from more competitive pricing. In the absence of
any additional major decreases in computer retail prices in
the industry, management believes this decline in Radio
Shack's gross margin will diminish during 1994. Partially
offsetting the decline were increased sales of high-margin
electronic parts, accessories and specialty items sold
through Radio Shack. In management's opinion, new concepts
which could increase Radio Shack gross margins include
introducing the Radio Shack Gift Express program, creating
new store formats and the launching of The Repair Shop at
Radio Shack, a name brand out-of-warranty repair program.
Competitive pressures in name brand electronics retailing
decreased McDuff's and VideoConcepts' gross margins in each
of the three fiscal years ended December 31, 1993 and June
30, 1992 and 1991. Additionally, gross margins were impacted
in the McDuff and VideoConcepts units by the increasing
percentage of sales related to the lower margin computer
category.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses ("SG&A") as
a percent of sales and operating revenues for the year ended
December 31, 1993 declined from the year ended June 30, 1992
and declined for the six months ended December 31, 1992 from
the six months ended December 31, 1991. The accompanying
table summarizes the breakdown of various components of SG&A
and their related percentage of sales and operating revenues.
The lower SG&A percent reflects the lower costs, relative to
net sales and operating revenues associated with the
Company's newer retail formats, as well as the lower
operating costs achieved through cost reduction programs and
the further streamlining of operations in the new retail
formats.

SG&A expenses as a percent of sales and operating
revenues declined in the fiscal year ended June 30, 1992 as
compared with fiscal 1991. The benefits of actions taken to
streamline operations and reduce costs are reflected in most
expense categories in fiscal 1992.

Year-to-year comparisons are impacted by the $18,987,000
gain which includes a foreign currency gain of $6,894,000 in
fiscal year 1992 from the sale of a Japanese subsidiary, the
assets of which were primarily real estate, and the remaining
foreign currency gain of $3,748,000 recognized in 1992 as
opposed to a foreign currency gain of only $762,000 in 1993.
The Company's exposure to foreign currency fluctuations has
decreased significantly with the disposal of the Company's
computer manufacturing and marketing operations as well as
the disposal of Memtek Products. Both of these operations
had significant European operations.

Advertising costs have decreased in dollars and as a
percent of sales and operating revenues in the fiscal year
ended December 31, 1993 as compared to the fiscal years ended
June 30, 1992 and 1991. Management has focused its efforts
on more efficient advertising methods in Radio Shack
utilizing the Company's data base of customer activity to
reduce costs while maintaining market awareness.

Rent expense has declined slightly in dollars and more
significantly as a percent of sales during the year ended
December 31, 1993 as compared to fiscal 1992. This
percentage decrease results primarily from the fact that the
Company owns most of the Incredible Universe locations and is
additionally impacted by Computer City's low rent to sales
ratio.

The Company's credit operations have been successful in
supporting sales of the retail operations. Private label
credit cards represented 34% of credit sales for the year
ended December 31, 1993, 36% for the six months ended
December 31, 1992, 43% in fiscal 1992 and 44% in fiscal 1991.
This decline in the percentage results from increased sales
through the Computer City and Incredible Universe stores
which have a lower percentage of private label card usage. A
decrease in bad debt expense relates to tighter credit
controls and a 4% decline from fiscal 1992 in overall private
label credit card sales. Expenses associated with the credit
card operations which are included in SG&A expense have
decreased.

<TABLE>

SUMMARY OF SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
<CAPTIONS>

Year Ended Six Months Ended Year Ended
December 31, December 31, June 30,
________________ ________________ ________________ ___________________________________
1993 1992 1991 1992 1991
% of % of % of % of % of
Sales & Sales & Sales & Sales & Sales &
(In thousands) Dollars Revenues Dollars Revenues Dollars Revenues Dollars Revenues Dollars Revenues
______________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Payroll and commissions $ 554,728 13.5% $288,057 13.3% $282,544 13.9% $ 534,779 14.7% $ 512,823 14.4%
Advertising 205,831 5.0 150,374 7.0 154,025 7.6 239,352 6.6 251,903 7.0
Rent 202,401 4.9 105,328 4.9 101,184 5.0 204,673 5.6 191,941 5.4
Other taxes 79,508 1.9 38,198 1.8 36,593 1.8 73,701 2.0 66,427 1.9
Utilities and telephone 62,4371 .5 31,197 1.4 30,990 1.5 61,468 1.7 59,675 1.7
Insurance 45,373 1.1 26,301 1.2 19,936 1.0 44,427 1.2 46,653 1.3
Stock purchase and savings plans 17,562 .4 7,749 .3 6,852 .3 15,396 .4 15,933 .4
Foreign currency transaction gains (762) -- (3,065) (.1) (1,941) (.1) (10,642) (.3) (13,051) (.4)
Other 131,684 3.3 78,845 3.6 70,472 3.5 119,893 3.3 163,534 4.6
__________ ____ ________ ____ ________ ____ __________ ____ __________ ____

Subtotal 1,298,762 31.6 722,984 33.4 700,655 34.5 1,283,047 35.2 1,295,838 36.3
Credit operations 55,914 1.4 38,815 1.8 30,089 1.5 59,073 1.6 51,702 1.4
__________ ____ ________ ____ ________ ____ __________ ____ __________ ____

$1,354,676 33.0% $761,799 35.2% $730,744 36.0% $1,342,120 36.8% $1,347,540 37.7%
__________ ____ ________ ____ ________ ____ __________ ____ __________ ____
__________ ____ ________ ____ ________ ____ __________ ____ __________ ____
</TABLE>

PROVISION FOR BUSINESS RESTRUCTURING
The Company adopted a plan resulting in business
restructuring charges during the six months ended December
31, 1992 designed to improve the Company's competitiveness
and future profitability. The pre-tax charge of $48,000,000
related primarily to the closing of approximately 110 of the
432 Tandy Name Brand Retail Group stores, mainly McDuff
Supercenters in major market areas and, to a lesser extent,
the elimination of certain product lines. Some product lines
were reduced or eliminated after consideration of competitive
factors and market trends.

In the fourth quarter of fiscal year 1991, the Company
recorded a business restructuring charge of $8,531,000. The
charge covered anticipated costs associated with Radio Shack
computer centers which were being closed, relocated or
converted to other store formats or sales offices. These
costs included the estimated lease obligations for store
closings and relocations as well as estimated fixed asset
write-offs for all affected stores.

DEPRECIATION AND AMORTIZATION
Depreciation and amortization expense as a percentage of
sales and operating revenues decreased slightly in the year
ended December 31, 1993 as compared with the year ended June
30, 1992. The dollar amount of depreciation and amortization
expense for the year ended December 31, 1993 increased 7%
over the dollar amount for the year ended June 30, 1992, due
to additional capital expenditures related to the three
Incredible Universe stores and the addition of 25 new
Computer City stores. The dollar amount of depreciation and
amortization expense for the year ended June 30, 1992
increased 5% over the prior fiscal year due to increased
capital expenditures related to the new Tandy Name Brand
Retail Group and Computer City super stores and the
remodeling of Radio Shack stores.

<TABLE>

NET INTEREST (INCOME)/EXPENSE
<CAPTIONS>

Year Ended Six Months Ended Year Ended
December 31, December 31, June 30,
____________ _________________ _________________
(In thousands) 1993 1992 1991 1992 1991
__________________________________________________________________________________________

<S> <C> <C> <C> <C> <C>
Interest expense . . . . . . $ 39,707 $ 20,532 $ 23,948 $ 43,154 $ 70,313
Less:
Interest income. . . . . . . (8,137) (1,982) (2,606) (5,092) (5,042)
Interest income of credit operations (57,401) (31,308) (27,950) (62,307) (93,830)
_________ _________ _________ _________ _________
Net interest income. . . . . $(25,831) $(12,758) $ (6,608) $(24,245) $(28,559)
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
</TABLE>

Net interest income of $25,831,000 for the year ended
December 31, 1993 and $24,245,000 for the fiscal year ended
June 30, 1992 was attributable primarily to interest income
earned by the credit operations. The decrease in interest
income of the credit company in the year ended December 31,
1993 as compared to the fiscal year ended June 30, 1992
resulted from a decrease in the average credit card
receivables outstanding during the period. This decline
results from increased payments from credit customers
reflecting the overall improvement in the economy and a
desire by consumers to shift debt to lower interest rate
instruments. The increase in interest income of the credit
company in the six months ended December 31, 1992 as compared
to December 31, 1991 resulted from growth of consumer credit
card receivables. The decrease in interest income of the
credit company in the fiscal year ended June 30, 1992 as
compared with fiscal year 1991 resulted from the
securitization of private label receivables in June 1991.

Interest income, exclusive of Tandy Credit Corporation's
income, represented primarily interest on short-term
investments. The increase in interest income for the year
ended December 31, 1993 compared to the fiscal year ended
June 30, 1992 was due to the increase in short-term
investments as proceeds from the divestiture of discontinued
operations were received and to the recognition of interest
income on the AST and InterTAN notes receivable. Interest
income as it relates to InterTAN notes receivable will
increase in fiscal 1994 as the Company will commence
recording the accretion of discount relating thereto. See
further discussion on notes receivable in the "InterTAN
Update".

The decrease in interest expense for the year ended
December 31, 1993 as compared to the year ended June 30, 1992
is due to the decrease of total debt and lower U.S. interest
rates. Overall interest expense should decline in fiscal
1994 as the Company receives cash proceeds from the disposal
of its discontinued operations and applies a significant
portion of such proceeds against short-term debt and toward
the retirement of its 10% subordinated debentures. Partially
offsetting the decline in expected interest expense in 1994
will be higher interest rates resulting from the Federal
Reserve Bank's move to keep inflation low in the overall U.S.
economy. The decrease in interest expense in the fiscal year
ended June 30, 1992 reflected the reduced debt attributable
to the securitization of private label credit card
receivables and lower interest rates.

PROVISION FOR INCOME TAXES
The effective tax rate for the year ended December 31,
1993 was 37.1%. The higher effective tax rate for the year
ended December 31, 1993 as compared to 36.2% for the year
ended June 30, 1992 and 36.0% for the year ended June 30,
1991 reflects the impact of the increase of the federal tax
rate to 35% from 34%. The effective tax rate for the
six-month period ended December 31, 1992 was 34.2%. This
lower effective rate reflects the successful resolution of
certain IRS examinations during the period.

The requirements of Financial Accounting Standard No.
109, "Accounting for Income Taxes", which the Company adopted
January 1, 1993, are discussed in Note 12 of the Notes to
Consolidated Financial Statements.

DISCONTINUED OPERATIONS
On June 25, 1993, the Board of Directors of Tandy
adopted a formal plan of divestiture under which it would
sell its computer manufacturing and marketing businesses, the
O'Sullivan Industries, Inc. ready-to-assemble furniture
manufacturing and related marketing business, the Memtek
Products division and the Lika printed circuit board
business. The divestiture plan replaced the Company's plan
to spin off all of the Company's manufacturing and marketing
businesses as described in Tandy's Transition Report on Form
10-K/A-4 for the six-month period ended December 31, 1992.
In connection with the plan of divestiture the Company
accounted for the divestiture of these businesses as
discontinued operations and recognized an after-tax charge of
$70,000,000 in its quarter ended June 30, 1993. This charge
was subsequently reduced by approximately $15,822,000 in the
quarter ended December 31, 1993. The reduction of the
reserve previously taken resulted from the better than
anticipated sales price received for O'Sullivan Industries
Holdings, Inc. partially offset by additional foreign
currency translation losses and below plan operating results
of the divested companies during the divestment period, net
of related income tax adjustments. Prior year results of
operations have been reclassified to reflect the discontinued
operations treatment.

Computer Manufacturing. In furtherance of the
divestiture plan, the Company closed the sale of the computer
manufacturing and marketing businesses to AST Research, Inc.
("AST") on July 13, 1993. In accordance with the terms of
the definitive agreement between Tandy and AST, Tandy
received $15,000,000 upon closing of the sale. The balance
of the purchase price of $90,000,000 (as adjusted
post-closing based on the results of an audit of the assets
and liabilities conveyed) is payable by a promissory note.
The promissory note is payable in three years and interest is
accrued and paid annually. The interest rate on the
promissory note is currently 3.75% per annum and is adjusted
annually, not to exceed 5% per annum. The terms of the
promissory note stipulate that the outstanding principal
balance may be paid at maturity at AST's option in cash or
the common stock of AST. However, at Tandy's option not more
than 50% of the initial principal balance may be paid in
common stock of AST. The promissory note is supported by a
standby letter of credit in the amount of the lesser of
$100,000,000 or 70% of the outstanding principal amount of
the promissory note. At December 31, 1993, the standby
letter of credit approximated $67,704,000. Accounts
receivable relating to the computer operations, approximating
$83,000,000 at June 30, 1993, inured to the benefit of Tandy
upon collection. At December 31, 1993, the balance of the
remaining accounts receivable, net of allowance for doubtful
accounts, was $7,700,000. Tandy also retained certain
inventory which it intends to liquidate before June 30, 1994.
At December 31, 1993, this inventory amounted to
approximately $3,700,000.

In October 1993, the Company sold its computer marketing
operations in France to AST, together with certain other
multimedia assets and additional Swedish inventory, for an
aggregate of approximately $6,700,000, which was evidenced by
an increase in the amount of the promissory note described
above to $96,700,000. The Company has discounted this note
by $2,000,000 and the discount will be recognized as income
using the effective interest rate method over the life of the
note.

Memtek Products. On November 10, 1993, the Company
executed a definitive agreement with Hanny Magnetics (B.V.I.)
Limited, a British Virgin Islands corporation ("Hanny") to
purchase certain assets of the Company's Memtek Products
operations, including the license agreement with Memorex
Telex, N.V. for the use of the Memorex trademark on licensed
consumer electronics products. This sale closed on December
16, 1993. As of December 31, 1993, Tandy has received
payments of $62,500,000, recorded a $7,102,000 receivable
from Hanny for the remaining purchase price and retained
approximately $61,000,000 in accounts receivable and certain
other assets for liquidation. Hanny is a subsidiary of Hanny
Magnetics (Holdings) Limited, a Bermuda corporation, listed
on the Hong Kong Stock Exchange. At December 31, 1993,
accounts receivable, net of related allowance for doubtful
accounts, retained by Tandy approximated $40,100,000.

O'Sullivan Industries. On November 23, 1993, the
Company announced that it would sell the common stock of
O'Sullivan Industries, Inc. ("O'Sullivan") in an initial
public offering. On January 27, 1994 the Company announced
that it had reached an agreement with the underwriters to
sell O'Sullivan Industries Holdings, Inc., the parent company
of O'Sullivan, common stock to the public at $22 per share.
The net proceeds realized by Tandy in the initial public
offering, together with the $40,000,000 cash dividend from
O'Sullivan, approximated $350,000,000. The initial public
offering closed on February 2, 1994.

Pursuant to a Tax Sharing and Tax Benefit Reimbursement
Agreement between Tandy and O'Sullivan Industries Holdings,
Inc., the Company will receive payments from O'Sullivan
resulting from an increased tax basis of O'Sullivan's assets
thereby increasing tax deductions and accordingly, reducing
income taxes payable by O'Sullivan. The amount to be
received by the Company each year will approximate the
federal tax benefit expected to be realized with respect to
the increased tax basis. These payments will be made over a
15-year time period. The Company will recognize these
payments as additional sale proceeds and gain in the year in
which the payments become due and payable to the Company.

Lika. On January 24, 1994, the Company announced that
it had signed a definitive agreement to sell its
manufacturing facilities which make Lika printed circuit
boards. This divestiture is expected to close by June 1994
and is expected to yield approximately $17,000,000 in
proceeds, including cash, a note and the liquidation of
certain retained assets.

With the closing of the Lika transaction, the
divestiture program announced in June 1993 will be complete.
Proceeds from the formal divestiture plan should total
approximately $715,000,000 including net income tax benefits
of $16,600,000 and notes receivable of approximately
$100,000,000 that mature by the end of 1996. The proceeds
from the divestitures are being used to reduce short-term
debt and for the expansion of the Incredible Universe and
Computer City store operations.

<TABLE>

CASH FLOW AND LIQUIDITY
<CAPTIONS>

Year Ended Six Months Ended Year Ended
December 31, December 31, June 30,
____________ ________________ ________________________
(In thousands) 1993 1992 1992 1991*
_________________________________________________________________________________________
<S> <C> <C> <C> <C>
Operating activities . . . . $ 322,294 $ 13,680 $ 146,782 $ 617,353
Investing activities . . . . (52,149) (90,171) (102,190) (140,499)
Financing activities . . . . (169,536) 82,663 (124,431) (425,758)

*Includes $350 million asset securitization
</TABLE>

Tandy's cash flow and liquidity, in management's
opinion, remains strong. During the year ended December 31,
1993, cash provided by operations was $322,294,000 as
compared to $146,782,000 for the fiscal year ended June 30,
1992. The increased cash flow from operations in calendar
1993 compared to fiscal year ended June 30, 1992 was due
partially to receivables which provided $30,133,000 in cash
in 1993 but used $121,719,000 in 1992. The decline in
accounts receivable in 1993 versus 1992 is due to the
liquidation of receivables related to the divested operations
and lower consumer receivables related to the Company's
private label credit card portfolio. The latter reason
reflects consumers' desires to liquidate debt with higher
interest rates and the overall improved economy. Inventory
required less cash in calendar 1993 than in fiscal 1992. The
increase in inventory during 1993 related to new store
openings and the expansion of Radio Shack's core product lines.

Investing activities involved capital expenditures, net
of retirements, primarily for retail expansion of
$129,287,000 for the year ended December 31, 1993 compared to
$127,495,000 for the fiscal year ended June 30, 1992.
Proceeds received from the sale of divested operations
totaled $111,988,000 during the year ended December 31, 1993.
Investing activities in 1993 also included $31,663,000 for
the purchase of InterTAN's bank debt and the
extension/funding of a working capital line of credit. See
"InterTAN Update" for further information. Short-term debt
of $46,885,000 and long-term debt of $62,195,000 were retired
during 1993. Future store expansions and refurbishments and
other capital expenditures are expected to approximate
$150,000,000 to $180,000,000 per year over the next two years
and will be funded primarily from available cash, proceeds
from divestiture of discontinued operations, cash flow from
operations and proceeds from possible sale/leaseback
arrangements of Incredible Universe stores.

Operating cash flow in the fiscal year ended June 30,
1992 was $146,782,000 compared to $617,353,000 for the fiscal
year ended June 30, 1991. This decreased cash flow was
partially due to the $89,441,000 increase in inventories for
the Tandy Name Brand Retail Group and Computer City store
expansions in fiscal 1992 compared to a $151,339,000 decrease
in inventories in 1991. Operating cash flow was also higher
in 1991 due to the cash proceeds from the securitization of
$350,000,000 of credit card receivables.

The Company's investing activities were generally for
capital expenditures in fiscal 1992 which totaled
$127,495,000. The capital expenditures were used principally
for Radio Shack's store remodeling program, expansion of the
Computer City store chain and initial construction of two
Incredible Universe stores.

Financing activities in the fiscal year ended June 30,
1992 included the sale of Depositary Shares of PERCS for
$430,000,000 and the subsequent purchase of common stock with
the proceeds of this preferred stock issue. Long-term and
short-term debt of $20,098,000 was retired in the year ended
June 30, 1992 compared to fiscal 1991 retirements of $441,577,000.

Following are the current credit ratings for Tandy
Corporation:
Standard
Category Moody's and Poor's
________ _______ __________

Senior Unsecured Baa2 A-
Subordinated Baa3 BBB
Medium Term Notes Baa2 A-
Preferred Stock Baa3 BBB
ESOP Senior Notes Baa2 A-
Commercial Paper P-2 A-2

The above ratings are investment grade ratings.
Management does not believe that a downgrade in 1993 by
Moody's has had or will have a materially adverse effect on
the Company's ability to borrow funds although the borrowings
may be slightly more costly.

CAPITAL STRUCTURE AND FINANCIAL CONDITION
The Company's balance sheet and financial condition
continue to be strong. The Company's available borrowing
facilities as of December 31, 1993 are detailed in Note 9 of
the Notes to Consolidated Financial Statements and are
incorporated herein by reference.

Proceeds from the sale of divested operations totaled
$111,988,000 through December 31, 1993. The net assets
associated with discontinued operations remaining to be
divested were $405,664,000 at December 31, 1993 and related
primarily to O'Sullivan which was disposed of in February
1994 and Lika whose sale is pending. Other information
related to discontinued operations are discussed in
"Discontinued Operations".

In the fiscal year ended June 30, 1992, the Company
issued 150,000 PERCS shares and used the proceeds of this
offering to purchase $430,000,000 of the Company's common
stock for treasury. Each PERCS share has an annual dividend
rate of $214.00 and is automatically convertible on April 15,
1995 into 100 shares of common stock, par value $1 per share,
subject to possible adjustment based upon the market value of
the common stock on the conversion date or the occurrence of
certain other events. Based upon the market price of the
Company's common stock at December 31, 1993, each PERCS share
would have converted into 83 shares. At any time prior to
April 15, 1995, the Company may call the PERCS. The PERCS
are discussed further in Note 18 of the Notes to Consolidated
Financial Statements.

The Company's issue of 10% subordinated debentures due
June 30, 1994 was called by the Company on February 23, 1994
for redemption on April 1, 1994. The redemption will be at
the price of 100% of face value or approximately $32,000,000.

In fiscal 1991, the Company filed a shelf registration
for $500,000,000, of which $400,000,000 was designated for
medium-term notes, and Tandy Credit Corporation increased its
medium-term note program by $200,000,000. During fiscal
1991, short-term debt was refinanced by the issuance of
$155,500,000 in medium-term notes. In the fourth quarter of
fiscal 1991, Tandy Credit Corporation completed an asset
securitization to increase financial flexibility. Credit
card receivables were sold to the Tandy Master Trust which
issued $350,000,000 of participating 8.25% Class A Asset
Backed Certificates, Series A. Proceeds were primarily used
to retire short-term debt.

Tandy established an employee stock ownership plan
("TESOP") in 1990. This plan issued $100,000,000 of debt in
July 1990 to purchase preferred stock from the Company for
funding of the plan. The Company has guaranteed the
repayment of the TESOP notes and, as a result, the
indebtedness of the TESOP has been recognized as a long-term
obligation on the Company's consolidated balance sheet.
Dividend payments and contributions by the Company will be
used to repay the indebtedness.

The debt-to-capitalization ratio was 22.8%, 27.3%, 23.4%
and 24.8% at December 31, 1993, December 31, 1992, June 30,
1992 and June 30, 1991, respectively. This
debt-to-capitalization ratio should improve further in fiscal
1994 due to the cash proceeds from divestitures being used to
retire debt.

The Company's available borrowing facilities as of
December 31, 1993 are detailed in Note 9 of the Notes to
Consolidated Financial Statements. Management believes that
the Company's present borrowing capacity is greater than the
established credit lines and long-term debt in place.
Management believes that the Company's cash flow from
operations, cash and short-term investments, expected
proceeds from divestitures and its available borrowing
facilities are more than adequate to fund planned store
expansion, growth in the Company's private label credit
accounts, retirement of the 10% subordinated debentures and
to meet debt service and preferred dividend requirements.

Inflation has not significantly impacted the Company
over the past three years. Management does not expect
inflation to have a significant impact on operations in the
foreseeable future unless global situations substantially
affect the world economy.

The American Institute of Certified Public Accountants
issued Statement of Position 93-7, "Reporting on Advertising
Costs" in December 1993. The statement generally requires
all advertising costs to be expensed in the period in which
the costs are incurred or the first time the advertising
takes place and is effective for years beginning after June
15, 1994. The statement is not anticipated to have any
material effect on the results of operation or financial
condition of the Company.

SALE OF JOINT VENTURE INTEREST
During the quarter ended September 30, 1993, the Company
entered into definitive agreements with Nokia Corporation
("Nokia") to sell the Company's interests in two cellular
telephone manufacturing joint ventures with Nokia, TMC
Company Ltd. located in Masan, Korea, and TNC Company located
in Fort Worth, Texas. Pursuant to the terms of the
definitive agreements, the Company received an aggregate of
approximately $31,700,000 for its interests in these joint
ventures. The Company also entered into a three-year
Preferred Supplier Agreement pursuant to which it has agreed
to purchase from Nokia substantially all of Radio Shack's
requirements for cellular telephones at prevailing
competitive market prices at the time of the purchase. These
operations were not part of the overall divestment plan
adopted in June 1993 by the Company's Board of Directors;
therefore, the gain on the sale and their results of
operations are not included in discontinued operations.

INTERTAN UPDATE
InterTAN Inc. ("InterTAN"), the former foreign retail
operations of Tandy, was spun off to Tandy stockholders as a
tax-free dividend in fiscal 1987. Under the merchandise
purchase terms of the original distribution agreement,
InterTAN could purchase on payment terms from Tandy, at
negotiated prices, new and replacement models of products
that Tandy had in its Radio Shack U.S. catalog or which Tandy
may reasonably secure. A&A International ("A&A"), a
subsidiary of Tandy, was the exclusive purchasing agent for
products originating in the Far East for InterTAN.

On July 16, 1993 InterTAN had an account payable to
Tandy of approximately $17,000,000 of which $7,600,000 was in
default. InterTAN's outstanding purchase orders for
merchandise placed under the distribution agreement with
Tandy, but not yet shipped, totaled approximately
$44,000,000. Because InterTAN had defaulted, on July 16
Tandy terminated the merchandise purchase terms of the
distribution agreement and the license agreements. Tandy
offered InterTAN interim license agreements which expired
July 22, 1993, unless extended. These were extended on July
23, 1993.

On July 30, 1993 Trans World Electronics, Inc. ("Trans
World"), a subsidiary of Tandy, reached agreement with
InterTAN's banking syndicate to buy approximately $42,000,000
of InterTAN's debt at a negotiated, discounted price. The
closing of this purchase occurred on August 5, 1993, at which
time Tandy resumed limited shipments to InterTAN and granted
a series of short-term, interim licenses pending the
execution of new license and merchandise agreements. The
debt purchased from the banks has been restructured into a
seven-year note with interest of 8.64% due semiannually
beginning February 25, 1994 and semiannual principal payments
beginning February 25, 1995 (the "Series A" note). Trans
World also provided approximately $10,000,000 in working
capital and trade credit to InterTAN. Interest on the
working capital loan (the "Series B" note) of 8.11% is due
semiannually beginning February 25, 1994 with the principal
due in full on August 25, 1996. Trans World also has
received warrants with a five-year term exercisable for
approximately 1,450,000 shares of InterTAN common stock at an
exercise price of $6.62 per share. As required by an
agreement with Trans World, InterTAN filed a registration
statement on January 21, 1994 seeking to register the
warrants under the Securities Act of 1933.

In addition to the bank debt purchased by Trans World
and the working capital loan, InterTAN's obligations to Trans
World included two additional notes for approximately
$23,665,000 (the "Series C" note) and $24,037,000 (the
"Series D" note) with interest rates of 7.5% and 8%,
respectively. The notes represent the restructuring of
InterTAN accounts payable for merchandise already shipped and
require monthly interest payments. Also, InterTAN had
obligations for purchase orders outstanding for merchandise
ordered by A&A for InterTAN but not yet shipped totaling
approximately $31,262,000 at December 31, 1993. All
principal and interest on the Series C note was paid in full
by December 31, 1993. As merchandise under existing
outstanding purchase orders is shipped, A&A will invoice
InterTAN and amounts owed will be assigned to Trans World and
will increase the amount of the Series D note. The balance
of the Series D note as of December 31, 1993 was
approximately $7,500,000. All of Tandy's debt from InterTAN
is secured by a first priority lien on substantially all of
InterTAN's assets.

A new merchandise agreement was reached with InterTAN in
October 1993 which requires future purchase orders be backed
by letters of credit posted by InterTAN. New license
agreements have been negotiated which provide for a future
royalty to Tandy.

As required by the various agreements now existing
between Tandy and InterTAN, InterTAN has obtained a bank
revolving credit facility for Canadian $30,000,000 (U.S.
$22,662,000 equivalent at December 31, 1993). Tandy has
agreed with InterTAN's new banking agent, that in case of
InterTAN's default on the bank credit line, Tandy will, at
the option of the bank, purchase InterTAN's inventory and
related accounts receivable at 50% of their net book value,
up to the amount of outstanding bank loans, but not to exceed
Canadian $60,000,000 (U.S. $45,324,000 equivalent at December
31, 1993). In that event, Tandy could foreclose on its first
priority lien on InterTAN's assets. If Tandy fails to
purchase the inventory and related accounts receivable of
InterTAN from the bank, InterTAN's banking agent, upon notice
to Tandy and expiration of time, can foreclose upon
InterTAN's assets ahead of Tandy. At December 31, 1993,
InterTAN had no borrowings under this revolving credit
facility.

As of December 31,1993 InterTAN owed Tandy an aggregate
of $63,511,000. The current portion of the obligation
approximates $11,650,000 and the non-current portion
approximates $51,861,000. In 1993 Tandy has not recognized
any accretion of discount on the note receivable from
InterTAN resulting from the purchase of the bank debt at a
discounted price but will commence accretion of such discount
in 1994 due to InterTAN's financial results and payment
history as of December 31, 1993. Accretion of this discount
will be based on the effective interest rate method and will
approximate $3,856,000 in 1994. During the year ended
December 31, 1993, Tandy recognized approximately $93,315,000
of sales to InterTAN and interest income of $3,085,000.
Tandy's sales to InterTAN totaled $90,130,000 during the six
months ended December 31, 1992, $171,126,000 during fiscal
1992, and $160,024,000 during fiscal 1991.

A&A will continue as the exclusive purchasing agent for
InterTAN in the Far East on a commission basis. Commencing
in March 1994 only the purchasing agent commission and sales
by Tandy manufacturing plants to InterTAN will be recorded as
sales. InterTAN purchases from third parties through A&A
will no longer be recorded as sales reflecting the
arrangement under the new merchandise agreement.
Accordingly, management expects that reported sales by Tandy
to InterTAN in 1994 will be considerably lower than in prior
years, however, the earned income relating thereto will not
be materially different.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The Index to Consolidated Financial Statements and
Financial Statement Schedules is found on page 29. The
Company's Financial Statements, Notes to Consolidated
Financial Statements and Financial Statement Schedules follow
the index.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Tandy will file a definitive proxy statement with the
Securities and Exchange Commission not later than 120 days
after the end of the fiscal year covered by this Form 10-K
pursuant to Regulation 14A. The information called for by
this Item with respect to directors has been omitted pursuant
to General Instruction G(3). This information is
incorporated by reference from the Proxy Statement for the 1994
Annual Meeting. For information relating to the Executive Officers
of the Company, see Part I of this report. The Section 16(A)
reporting information is incorporated by reference from the
Proxy Statement for the 1994 Annual Meeting.

ITEM 11. EXECUTIVE COMPENSATION

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

Tandy will file a definitive proxy statement with the
Securities and Exchange Commission not later than 120 days
after the end of the fiscal year covered by this Form 10-K
pursuant to Regulation 14A. The information called for by
this Item with respect to security ownership of certain
beneficial owners and management has been omitted pursuant to
General Instruction G(3). This information is incorporated
by reference from the Proxy Statement for the 1994 Annual
Meeting.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Tandy will file a definitive proxy statement with the
Securities and Exchange Commission not later than 120 days
after the end of the fiscal year covered by this Form 10-K
pursuant to Regulation 14A. The information called for by
this Item with respect to certain relationships and
transactions with management and others has been omitted
pursuant to General Instruction G(3). This information is
incorporated by reference from the Proxy Statement for the
1994 Annual Meeting.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K.

(a) Documents filed as part of this report.
1. Financial Statements
2. Financial Statement Schedules

The financial statements and financial statement
schedules filed as a part of this report are listed in the
"Index to Consolidated Financial Statements and Financial
Statement Schedules" on page 29. The index, statements and
schedules are incorporated herein by reference.

3. Exhibits required by Item 601 of Regulation
S-K

A list of the exhibits required by Item 601 of
Regulation S-K and filed as part of this report is set forth
in the Index to Exhibits on page 63, which immediately
precedes such exhibits.

Certain instruments defining the rights of holders of
long-term debt of the Company and its consolidated
subsidiaries are not filed as exhibits to this report because
the total amount of securities authorized thereunder does not
exceed ten percent of the total assets of the Company on a
consolidated basis. The Company hereby agrees to furnish the
Securities and Exchange Commission copies of such instruments
upon request.

(b) Reports on Form 8-K.

No reports on Form 8-K were filed for the three months
ended December 31, 1993.

<PAGE>
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Tandy Corporation has duly
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

TANDY CORPORATION

March 30, 1994 /s/ John V. Roach
______________________
John V. Roach
Chairman of the Board, Chief
Executive Officer and President

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Tandy Corporation has duly
caused this report to be signed on its behalf by the
following persons in the capacities indicated on this 30th
day of March, 1994.

Signature Title

/s/ John V. Roach Chairman of the Board, Chief
___________________________
John V. Roach Executive Officer and President
(Chief Executive Officer)

/s/ William C. Bousquette Executive Vice President and
___________________________
William C. Bousquette Chief Financial Officer
(Principal Financial Officer)

/s/ Richard L. Ramsey Vice President and Controller
___________________________
Richard L. Ramsey (Principal Accounting Officer)

/s/ James I. Cash, Jr. Director
___________________________
James I. Cash, Jr.

/s/ Caroline R. Hunt Director
___________________________
Caroline R. Hunt

/s/ Lewis F. Kornfeld, Jr. Director
___________________________
Lewis F. Kornfeld, Jr.

/s/ Jack L. Messman Director
___________________________
Jack L. Messman

/s/ William G. Morton Director
___________________________
William G. Morton

/s/ Thomas G. Plaskett Director
___________________________
Thomas G. Plaskett

/s/ William T. Smith Director
___________________________
William T. Smith

/s/ Alfred J. Stein Director
___________________________
Alfred J. Stein

/s/ William E.Tucker Director
___________________________
William E. Tucker

/s/ Jesse L. Upchurch Director
___________________________
Jesse L. Upchurch

/s/ John A. Wilson Director
___________________________
John A. Wilson

<PAGE>
TANDY CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES

Page

Report of Independent Accountants. . . . . . . . . . 30
Consolidated Statements of Income for the year
ended December 31, 1993, the six months ended
December 31, 1992 and each of the two years ended
June 30, 1992. . . . . . . . . . . . . . . . . . . 31
Consolidated Balance Sheets at December 31, 1993
and December 31, 1992. . . . . . . . . . . . . . . 32
Consolidated Statements of Cash Flows for the year
ended December 31, 1993, the six months ended
December 31, 1992 and each of the two years ended
June 30, 1992. . . . . . . . . . . . . . . . . . . 33
Consolidated Statements of Stockholders' Equity for
the year ended December 31, 1993, the six months
ended December 31, 1992 and the two years ended
June 30, 1992 . . . . . . . . . . . . . . . . . . 34-35
Notes to Consolidated Financial Statements . . . . . 36-60
Financial Statement Schedules:
V-Property, Plant and Equipment. . . . . . . . . . 61
VI-Accumulated Depreciation and Amortization of
Property, Plant and Equipment . . . . . . . . . . 62
X-Supplementary Income Statement Information . . . 62

Separate financial statements of Tandy Corporation have
been omitted because Tandy is primarily an operating company
and the amount of restricted net assets of consolidated and
unconsolidated subsidiaries and Tandy's equity in
undistributed earnings of 50% or less-owned companies
accounted for by the equity method are not significant. All
subsidiaries of Tandy Corporation are included in the
consolidated financial statements. Financial statements of
50% or less-owned companies have been omitted because they do
not, considered individually or in the aggregate, constitute
a significant subsidiary.

The financial statement schedules should be read in
conjunction with the consolidated financial statements. All
other schedules have been omitted because they are not
applicable, not required or the information is included in
the consolidated financial statements or notes thereto.

<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
Tandy Corporation

In our opinion, the consolidated financial statements listed
in the accompanying index on page 29 present fairly, in all
material respects, the financial position of Tandy
Corporation and its subsidiaries (the "Company") at December
31, 1993 and 1992, and the results of their operations and
their cash flows for the year ended December 31, 1993, the
six months ended December 31, 1992, and for each of the two
years in the period ended June 30, 1992 in conformity with
generally accepted accounting principles. These financial
statements are the responsibility of the Company's
management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted
our audits of these statements in accordance with generally
accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles
used and significant estimates made by management, and
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the
opinion expressed above.

As discussed in Note 2 to the consolidated financial
statements, the Company changed its method of accounting for
income taxes in 1993 and for extended warranty and service
contracts in fiscal 1991.

/s/ Price Waterhouse____________________
PRICE WATERHOUSE

Fort Worth, Texas
February 22, 1994

CONSOLIDATED STATEMENTS OF INCOME
Tandy Corporation
and Subsidiaries
<CAPTIONS>
Year Ended Six Months Ended
December 31, December 31, Year Ended June 30,

__________________ __________________ _______________________________________
1993 1992 1992 1991
Reclassified for discontinued operations. % of % of % of % of
(In thousands, except per share amounts) Dollars Revenues Dollars Revenues Dollars Revenues Dollars Revenues
________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales and operating
revenues . . . . . . . . . . . . . . $4,102,551 100.0% $2,161,149 100.0% $3,649,284 100.0% $3,573,699 100.0%
Cost of products sold. . . . . . . . . 2,382,607 58.1 1,221,231 56.5 1,926,390 52.8 1,831,702 51.3
__________ _____ __________ _____ __________ _____ __________ _____
Gross profit . . . . . . . . . . . . . 1,719,944 41.9 939,918 43.5 1,722,894 47.2 1,741,997 48.7
__________ _____ __________ _____ __________ _____ __________ _____
Expenses:
Selling, general and
administrative . . . . . . . . . . . 1,354,676 33.0 761,799 35.2 1,342,120 36.8 1,347,540 37.7
Depreciation and
amortization . . . . . . . . . . . . 79,944 1.9 39,960 1.9 74,521 2.0 71,208 2.0
Net interest income. . . . . . . . . . (25,831) (0.6) (12,758) (0.6) (24,245) (0.6) (28,559) (0.8)
Provision for restructuring costs . . -- -- 48,000 2.2 -- -- 8,531 0.2
__________ _____ __________ _____ __________ _____ __________ _____
1,408,789 34.3 837,001 38.7 1,392,396 38.2 1,398,720 39.1
__________ _____ __________ _____ __________ _____ __________ _____
Income before income taxes,
discontinued operations and
cumulative effect of change in
accounting principle . . . . . . . . 311,155 7.6 102,917 4.8 330,498 9.0 343,277 9.6
Provision for income taxes . . . . . . 115,523 2.8 35,236 1.6 119,785 3.3 123,342 3.4
__________ _____ __________ _____ __________ _____ __________ _____
Income from continuing operations . . 195,632 4.8 67,681 3.2 210,713 5.7 219,935 6.2
__________ _____ __________ _____ __________ _____ __________ _____
Loss from discontinued operations:
Operating loss, net of tax . . . . . (57,619) (1.4) (63,875) (3.0) (26,866) (0.7) (13,872) (0.4)
Loss on disposal, net of tax . . . . (54,178) (1.3) -- -- -- -- -- --
__________ _____ __________ _____ __________ _____ __________ _____
(111,797) (2.7) (63,875) (3.0) (26,866) (0.7) (13,872) (0.4)
__________ _____ __________ _____ __________ _____ __________ _____

Income before cumulative
effect of change in
accounting principle . . . . . . . . 83,835 2.1 3,806 0.2 183,847 5.0 206,063 5.8
Cumulative effect on prior years
of change in accounting principle,
net of taxes . . . . . . . . . . . . 13,014 0.3 -- -- -- -- (10,619) (0.3)
__________ _____ __________ _____ __________ _____ __________ _____
Net income . . . . . . . . . . . . . . $ 96,849 2.4% $ 3,806 0.2% $ 183,847 5.0% $ 195,444 5.5%
__________ _____ __________ _____ __________ _____ __________ _____
__________ _____ __________ _____ __________ _____ __________ _____

Net income per average common
and common equivalent share:
Income from continuing operations . . $ 2.48 $ 0.86 $ 2.60 $ 2.75
Loss from discontinued operations . . (1.47) (0.84) (0.34) (0.17)
__________ __________ __________ __________
Income before cumulative effect of
change in accounting principle . . . 1.01 0.02 2.26 2.58
Cumulative effect on prior years of
change in accounting principle,
net of taxes . . . . . . . . . . . . 0.17 -- -- (0.14)
__________ __________ __________ __________
Net income per average common and
common equivalent share . . . . . . $ 1.18 $ 0.02 $ 2.26 $ 2.44
__________ __________ __________ __________
__________ __________ __________ __________
Average common and common
equivalent shares outstanding . . . 76,184 75,559 79,011 78,258
__________ __________ __________ __________
__________ __________ __________ __________

The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
Tandy Corporation and Subsidiaries
<CAPTIONS>
Reclassified for discontinued operations. December 31,
(In thousands) ___________________________
1993 1992
______________________________________________________________________________________________________
<S> <C> <C>
Assets
Current assets:
Cash and short-term investments. . . . . . . . . . . . . . . . . . . . $ 213,235 $ 112,626
Accounts and notes receivable, less allowance for doubtful accounts. . 582,443 797,748
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,276,302 1,472,365
Deferred tax and other current assets. . . . . . . . . . . . . . . . . 88,005 162,012
__________ __________
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . 2,159,985 2,544,751
__________ __________
Property, plant and equipment, at cost, less accumulated depreciation. . 463,738 546,585
Investment in discontinued operations. . . . . . . . . . . . . . . . . . 405,664 --
Other assets, net of accumulated amortization . . . . . . . . . . . . . 189,712 290,092
__________ __________
$3,219,099 $3,381,428
__________ __________
__________ __________

Liabilities and Stockholders' Equity
Current liabilities:
Notes payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 346,164 $ 375,006
Subordinated debentures, net of unamortized bond discount . . . . . . 31,739 --
Current portion of guarantee of TESOP indebtedness . . . . . . . . . . 10,050 10,700
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . 279,942 245,966
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 349,057 421,158
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . 14,690 13,880
__________ __________
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . 1,031,642 1,066,710
__________ __________

Notes payable, due after one year. . . . . . . . . . . . . . . . . . . . 127,708 223,218
Guarantee of TESOP indebtedness. . . . . . . . . . . . . . . . . . . . . 58,930 68,980
Subordinated debentures, net of unamortized bond discount . . . . . . . -- 30,580
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . -- 53,984
Other non-current liabilities. . . . . . . . . . . . . . . . . . . . . . 50,069 49,605
__________ __________
Total other liabilities 236,707 426,367
__________ __________

Stockholders' equity:
Preferred stock, no par value, 1,000,000 shares authorized
Series A junior participating, 100,000 shares authorized and none issued -- --

Series B convertible, 100,000 shares authorized and issued . . . . 100,000 100,000
Series C PERCS, 150,000 shares authorized and issued . . . . . . . . 429,982 429,982
Common stock, $1 par value, 250,000,000 shares authorized
with 85,645,000 shares issued. . . . . . . . . . . . . . . . . . . . 85,645 85,645
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . 85,752 86,414
Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . 2,028,041 2,006,174
Foreign currency translation effects . . . . . . . . . . . . . . . . . 1,003 (11,056)
Common stock in treasury, at cost, 21,689,000, and 22,419,000 shares,
respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . (707,331) (726,861)
Unearned deferred compensation related to TESOP . . . . . . . . . . . (72,342) (81,947)
__________ __________
Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . 1,950,750 1,888,351
Commitments and contingent liabilities . .
__________ __________
$3,219,099 $3,381,428
__________ __________
__________ __________

The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Tandy Corporation and Subsidiaries
<CAPTIONS>

Six Months
Year Ended Ended Year Ended
Reclassified for discontinued operations. December 31, December 31, June 30,
(In thousands) ____________ ____________ ________________________
1993 1992 1992 1991
__________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . $ 96,849 $ 3,806 $ 183,847 $ 195,444

Adjustments to reconcile net income to net cash
provided by operating activities:
Loss reserve on disposal of discontinued operations . 54,178 -- -- --
Reserve for restructuring. . . . . . . . . . . . . . . -- 87,500 -- 13,753
Cumulative effect on prior years of change in
accounting principle, net of taxes . . . . . . . . . (13,014) -- -- 10,619
Depreciation and amortization. . . . . . . . . . . . . 98,571 53,502 103,281 99,698
Deferred income taxes and other items . . . . . . . . 11,552 (29,097) 9,302 (29,633)
Provision for credit losses and bad debts . . . . . . 57,491 41,483 67,388 60,643
Gain on sale of subsidiary, assets of which
were primarily real estate . . . . . . . . . . . . . -- -- (18,987) --
Changes in operating assets and liabilities:
Securitization of customer receivables . . . . . . -- -- -- 350,000
Receivables. . . . . . . . . . . . . . . . . . . . 30,133 (107,295) (121,719) (256,445)
Inventories. . . . . . . . . . . . . . . . . . . . (63,965) (81,069) (89,441) 151,339
Other current assets . . . . . . . . . . . . . . . 16,158 (11,882) (2,955) (2,028)
Accounts payable, accrued expenses and income taxes 34,341 56,732 16,066 23,963

_________ _________ _________ _________
Net cash provided by operating activities . . . . . . . . 322,294 13,680 146,782 617,353
_________ _________ _________ _________
Investing activities:
Additions to property, plant and equipment . . . . . . . . (129,287) (69,661) (127,495) (151,098)
Proceeds from sale of divested operations . . . . . . . . 111,988 -- -- --
Proceeds from sale of subsidiary, assets
of which were primarily real estate . . . . . . . . . . -- -- 20,293 --
Purchase of InterTAN's bank debt and restructuring
of working capital . . . . . . . . . . . . . . . . . . . (31,663) -- -- --
Other investing activities . . . . . . . . . . . . . . . . (3,187) (20,510) 5,012 10,599
_________ _________ _________ _________
Net cash used by investing activities . . . . . . . . . . (52,149) (90,171) (102,190) (140,499)
_________ _________ _________ _________
Financing activities:
Purchases of treasury stock. . . . . . . . . . . . . . . . (27,650) (24,595) (527,773) (83,086)
Sales of treasury stock to employee
stock purchase program . . . . . . . . . . . . . . . . . 42,067 25,412 49,590 50,383
Issuance of Series C PERCS . . . . . . . . . . . . . . . . -- -- 429,982 --
Issuance of preferred stock to TESOP . . . . . . . . . . . -- -- -- 100,000
Dividends paid, net of taxes . . . . . . . . . . . . . . . (74,873) (37,443) (56,132) (51,478)
Changes in short-term borrowings-net . . . . . . . . . . . (46,885) 186,917 57,533 (598,763)
Additions to long-term borrowings. . . . . . . . . . . . . -- 1,043 21,071 210,167
Repayments of long-term borrowings . . . . . . . . . . . . (62,195) (68,671) (98,702) (52,981)
_________ _________ _________ _________
Net cash provided (used) by financing activities . . . . . (169,536) 82,663 (124,431) (425,758)
_________ _________ _________ _________
Increase (decrease) in cash and
short-term investments . . . . . . . . . . . . . . . . . 100,609 6,172 (79,839) 51,096
Cash and short-term investments
at the beginning of the year . . . . . . . . . . . . . . 112,626 106,454 186,293 135,197
_________ _________ _________ _________
Cash and short-term investments
at the end of the year . . . . . . . . . . . . . . . . . $ 213,235 $ 112,626 $ 106,454 $ 186,293
_________ _________ _________ _________
_________ _________ _________ _________

The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Tandy Corporation and Subsidiaries
<CAPTIONS>

Common Stock
Preferred ___________________
(In thousands) Stock Shares Dollars
_________________________________________________________________________________________________
<S> <C> <C> <C>
Balance at June 30, 1990 . . . . . . . . . . . . . . . . . $ -- 95,645 $ 95,645
Purchase of treasury stock . . . . . . . . . . . . . . . . -- -- --
Foreign currency translation adjustments, net of taxes . . -- -- --
Sale of treasury stock to SPP. . . . . . . . . . . . . . . -- -- --
Exercise of stock options. . . . . . . . . . . . . . . . . -- -- --
GRiD earn out. . . . . . . . . . . . . . . . . . . . . . . -- -- --
Retirement of treasury stock . . . . . . . . . . . . . . . -- (10,000) (10,000)
Issuance of 100,000 shares of Series B convertible shares 100,000 -- --
Series B convertible stock dividends, net of taxes of
$2,337,000 . . . . . . . . . . . . . . . . . . . . . . . -- -- --
TESOP deferred compensation earned . . . . . . . . . . . . -- -- --
Common stock dividends declared. . . . . . . . . . . . . . -- -- --
Net income . . . . . . . . . . . . . . . . . . . . . . . . -- -- --
________ _______ ________
Balance at June 30, 1991 . . . . . . . . . . . . . . . . . 100,000 85,645 85,645
Purchase of treasury stock . . . . . . . . . . . . . . . . -- -- --
Tender offer for common stock. . . . . . . . . . . . . . . -- -- --
Foreign currency translation adjustments, net of taxes . . -- -- --
Sale of treasury stock to SPP. . . . . . . . . . . . . . . -- -- --
Exercise of stock options. . . . . . . . . . . . . . . . . -- -- --
Issuance of 150,000 shares of Series C PERCS . . . . . . . 429,982 -- --
Series B convertible stock dividends, net of taxes of
$2,530,000 . . . . . . . . . . . . . . . . . . . . . . . -- -- --
TESOP deferred compensation earned . . . . . . . . . . . . -- -- --
Series C PERCS dividends . . . . . . . . . . . . . . . . . -- -- --
Common stock dividends declared. . . . . . . . . . . . . . -- -- --
Net income . . . . . . . . . . . . . . . . . . . . . . . . -- -- --
________ _______ ________
Balance at June 30, 1992 . . . . . . . . . . . . . . . . . 529,982 85,645 85,645
Purchase of treasury stock . . . . . . . . . . . . . . . . -- -- --
Foreign currency translation adjustments, net of taxes . . -- -- --
Sale of treasury stock to SPP. . . . . . . . . . . . . . . -- -- --
Exercise of stock options. . . . . . . . . . . . . . . . . -- -- --
Series B convertible stock dividends, net of taxes of
$1,246,000 . . . . . . . . . . . . . . . . . . . . . . . -- -- --
TESOP deferred compensation earned . . . . . . . . . . . . -- -- --
Series C PERCS dividends . . . . . . . . . . . . . . . . . -- -- --
Common stock dividends declared. . . . . . . . . . . . . . -- -- --
Net income . . . . . . . . . . . . . . . . . . . . . . . . -- -- --
________ _______ ________
Balance at December 31, 1992 . . . . . . . . . . . . . . . 529,982 85,645 85,645
Purchase of treasury stock . . . . . . . . . . . . . . . . -- -- --
Foreign currency translation adjustments, net of taxes . . -- -- --
Sale of treasury stock to SPP. . . . . . . . . . . . . . . -- -- --
Exercise of stock options. . . . . . . . . . . . . . . . . -- -- --
Series B convertible stock dividends, net of taxes of
$2,497,000 . . . . . . . . . . . . . . . . . . . . . . . -- -- --
TESOP deferred compensation earned . . . . . . . . . . . . -- -- --
Series C PERCS dividends . . . . . . . . . . . . . . . . . -- -- --
Repurchase of preferred stock. . . . . . . . . . . . . . . -- -- --
Common stock dividends declared. . . . . . . . . . . . . . -- -- --
Net income . . . . . . . . . . . . . . . . . . . . . . . . -- -- --
________ _______ ________
Balance at December 31, 1993 . . . . . . . . . . . . . . . $529,982 85,645 $ 85,645
________ _______ ________
________ _______ ________
</TABLE>
<PAGE>
<TABLE>
<CAPTIONS>

Foreign
Treasury Stock Additional Currency Unearned
___________________ Paid-In Retained Translation Deferred
Shares Dollars Capital Earnings Effects Compensation Total
____________________________________________________________________________________________________
<C> <C> <C> <C> <C> <C> <C>
(16,513) $(634,739) $132,750 $2,121,405 $ 8,435 $ -- $1,723,496
(2,933) (83,086) -- -- -- -- (83,086)
-- -- -- -- (9,633) -- (9,633)
1,667 62,161 (11,778) -- -- -- 50,383
53 1,867 (5) -- -- -- 1,862
476 15,974 (2,167) -- -- -- 13,807
10,000 370,670 (13,150) (347,520) -- -- --
-- -- -- -- -- (100,000) --

-- -- -- (4,538) -- -- (4,538)
-- -- -- -- -- 5,967 5,967
-- -- -- (46,940) -- -- (46,940)
-- -- -- 195,444 -- -- 195,444
_______ _________ ________ __________ _______ _________ __________
(7,250) (267,153) 105,650 1,917,851 (1,198) (94,033) 1,846,762
(3,521) (96,348) -- -- -- -- (96,348)
(13,500) (433,575) -- -- -- -- (433,575)
-- -- -- -- 3,477 -- 3,477
1,795 62,256 (12,666) -- -- -- 49,590
20 688 -- -- -- -- 688
-- -- -- -- -- -- 429,982

-- -- -- (4,911) -- -- (4,911)
-- -- -- -- -- 8,233 8,233
-- -- -- (12,573) -- -- (12,573)
-- -- -- (44,432) -- -- (44,432)
-- -- -- 183,847 -- -- 183,847
_______ _________ ________ __________ _______ _________ __________
(22,456) (734,132) 92,984 2,039,782 2,279 (85,800) 1,930,740
(959) (25,000) -- -- -- -- (25,000)
-- -- -- -- (13,335) -- (13,335)
987 31,982 (6,570) -- -- -- 25,412
9 289 -- -- -- -- 289

-- -- -- (2,419) -- -- (2,419)
-- -- -- -- -- 3,853 3,853
-- -- -- (16,050) -- -- (16,050)
-- -- -- (18,945) -- -- (18,945)
-- -- -- 3,806 -- -- 3,806
_______ _________ ________ __________ _______ _________ __________
(22,419) (726,861) 86,414 2,006,174 (11,056) (81,947) 1,888,351
(763) (24,749) -- -- -- -- (24,749)
-- -- -- -- 12,059 -- 12,059
1,311 42,292 (225) -- -- -- 42,067
182 5,882 (437) -- -- -- 5,445

-- -- -- (4,638) -- -- (4,638)
-- -- -- -- -- 9,605 9,605
-- -- -- (32,100) -- -- (32,100)
-- (3,895) -- -- -- -- (3,895)
-- -- -- (38,244) -- -- (38,244)
-- -- -- 96,849 -- -- 96,849
_______ _________ ________ __________ _______ _________ __________
(21,689) $(707,331) $ 85,752 $2,028,041 $ 1,003 $ (72,342) $1,950,750
_______ _________ ________ __________ _______ _________ __________
_______ _________ ________ __________ _______ _________ __________
</TABLE>
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Tandy Corporation and Subsidiaries

NOTE 1-DESCRIPTION OF BUSINESS

Tandy Corporation ("Tandy" or the "Company") is engaged
in consumer electronics retailing including the retail sale
of personal computers. Radio Shack is the largest of Tandy's
retail store systems with company-owned stores and
dealer/franchise outlets. The Tandy Name Brand Retail Group
includes McDuff Electronics mall stores and Supercenters,
VideoConcepts mall stores and The Edge in Electronics stores.
Tandy also operates the Computer City and Incredible Universe
store chains. Additionally, Tandy continues to operate
certain related retail support groups and consumer
electronics manufacturing businesses.

NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION: The consolidated financial
statements include the accounts of Tandy and its wholly owned
subsidiaries, including its credit and insurance
subsidiaries. Investments in 20% to 50% owned companies are
accounted for on the equity method. The manufacturing and
marketing operations included in the divestment plan have
been accounted for as discontinued operations. See Note 3
for further information relating to discontinued operations.
Significant intercompany transactions are eliminated in
consolidation.

CHANGE IN FISCAL YEAR: On January 10, 1993, the Board
of Directors authorized the fiscal year of Tandy to be
changed from June 30 to December 31 and as of December 31,
1992 this change was made. The fiscal periods of certain
foreign operations end one month earlier than the Company's
year end to facilitate their inclusion in the consolidated
financial statements.

FOREIGN CURRENCY TRANSLATION: In accordance with the
Financial Accounting Standards Board (the "FASB") Statement
No. 52, "Foreign Currency Translation," balance sheet
accounts of the Company's foreign operations are translated
from foreign currencies into U.S. dollars at year end or
historical rates while income and expenses are translated at
the weighted average sales exchange rates for the year.
Translation gains or losses related to net assets located
outside the United States are shown as a separate component
of stockholders' equity. Losses aggregating $19,803,000, net
of tax, relating to discontinued operations were transferred
from equity and charged to loss on disposal of discontinued
operations during 1993. Gains and losses resulting from
foreign currency transactions (transactions denominated in a
currency other than the entity's functional currency) are
included in net income. Such foreign currency transaction
gains approximated $762,000 for the year ended December 31,
1993, $3,065,000 for the six months ended December 31, 1992
and $10,642,000 and $13,051,000 for fiscal years 1992 and
1991, respectively.

CHANGE IN ACCOUNTING PRINCIPLE-PROVISION FOR INCOME
TAXES: In January 1993, the Company adopted Statement of
Financial Accounting Standards ("FAS") No. 109, "Accounting
for Income Taxes" ("FAS 109") and applied the provisions
prospectively. The adoption of FAS 109 changes the Company's
method of accounting for income taxes from the deferred
method ("APB 11") to an asset and liability approach.
Previously, the Company deferred the past tax effects of
timing differences between financial reporting and taxable
income. The asset and liability approach requires the
recognition of deferred tax liabilities and assets for the
expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets and
liabilities.

The adjustments to the January 1, 1993 balance sheet to
adopt FAS 109 totaled $13,014,000. Approximately $9,786,000
of this adjustment related to continuing operations and the
remaining $3,228,000 was from discontinued operations. The
aggregate amount of $13,014,000 is reflected in the
accompanying 1993 Consolidated Statements of Income as the
cumulative effect of change in accounting principle. It
primarily represents the impact of adjusting deferred taxes
to reflect the then current tax rate of 34% as opposed to the
higher tax rates that were in effect when the deferred taxes
originated. See Note 12 for further discussion of income
taxes.

CHANGE IN ACCOUNTING PRINCIPLE-EXTENDED WARRANTY AND
SERVICE CONTRACTS: Tandy's retail operations offer extended
warranty and service contracts on products sold. These
contracts generally provide extended warranty coverage for
periods of 12 to 48 months.

The FASB issued Technical Bulletin No. 90-1, "Accounting
for Separately Priced Extended Warranty and Product
Maintenance Contracts" in December 1990. This bulletin
requires revenues from sales of extended warranty and service
contracts to be recognized ratably over the lives of the
contracts. Costs directly related to sales of such contracts
are to be deferred and charged to expense proportionately as
the revenues are recognized. A loss is recognized on
extended warranty and service contracts if the sum of the
expected costs of providing services under the contracts
exceeds related unearned revenue.

During the fourth quarter of fiscal 1991, the Company
elected to adopt this technical bulletin on a retroactive
basis to the beginning of fiscal 1991 by restating the
previously reported three quarters. The method of adoption
included the application of this accounting change to all
existing contracts outstanding at July 1, 1990 and to all
contracts entered into during fiscal 1991. Prior to the
adoption of this technical bulletin, the Company had
recognized a portion of the extended warranty and service
contract revenues immediately, deferred the remaining
revenues which were recognized ratably over their contract
lives and expensed associated costs as incurred.

The effect of this change for fiscal 1991 was to
decrease income before the cumulative effect of the change in
accounting by $3,708,000 ($.05 per share). The cumulative
effect of the change on years prior to 1991, net of income
taxes of $5,471,000, was to decrease 1991 net income by
$10,619,000 ($.14 per share).

CASH AND SHORT-TERM INVESTMENTS: Cash on hand in
stores, deposits in banks and short-term investments with
original maturities of three months or less are considered
cash and cash equivalents. Short-term investments are
carried at cost, which approximates market value.

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS:
CREDIT OPERATIONS-The customer receivables of the
credit operations are classified as current assets, including
amounts which are contractually due after one year. This is
consistent with retail industry practices.

Finance charges, late charges and returned check fees
arising from the Company's private label credit cards are
recognized when earned, as interest income. The Company's
policy is to write off accounts after 210 days past the
initial billing date without payment of the amount due or
whenever deemed uncollectible by management, whichever is
sooner. Collection efforts continue subsequent to write-off.

The Company is charged a fee by an outside accounts
receivable processing service for establishing new accounts.
These initial direct costs are capitalized and amortized on a
straight-line basis over a period of 84 months, the estimated
life over which the account will be used by a customer. These
costs are shown in the accompanying consolidated balance
sheets as a part of the related accounts receivable.
Amortization of these loan origination costs are included as
a reduction of interest income in the accompanying
consolidated statements of income. Costs to process accounts
on an ongoing basis are expensed as incurred.

OTHER CUSTOMER RECEIVABLES-An allowance for doubtful
accounts is provided when accounts are determined to be
uncollectible.

Concentrations of credit risk with respect to customer
receivables are limited due to the large number of customers
comprising the Company's base and their location in many
different geographic areas of the country.

INVENTORIES: Inventories are stated at the lower of
cost (principally based on average cost) or market value.

PROPERTY AND EQUIPMENT: For financial reporting
purposes, depreciation and amortization are primarily
calculated using the straight-line method, which amortizes
the cost of the assets over their estimated useful lives. The
ranges of estimated useful lives are:
_____________________________________________________________
Buildings. . . . . . . . . . . . . . . . . . . .10-40 years
Equipment. . . . . . . . . . . . . . . . . . . . 2-15 years
Leasehold improvements . . . . . . . . . . . . .the shorter
of the life of the improvements or the
term of the related lease and certain renewal periods
_____________________________________________________________

When depreciable assets are sold or retired, the related
cost and accumulated depreciation are removed from the
accounts. Any gains or losses are included in selling,
general and administrative expenses. Major additions and
betterments are capitalized. Maintenance and repairs which
do not materially improve or extend the lives of the
respective assets are charged to operating expenses as
incurred.

AMORTIZATION OF EXCESS PURCHASE PRICE OVER NET TANGIBLE
ASSETS OF BUSINESSES ACQUIRED: The excess purchase price is
generally amortized over a 40-year period using the
straight-line method and is classified as a non-current
asset.

FAIR VALUE OF FINANCIAL INSTRUMENTS: The fair value of
financial instruments is determined by reference to various
market data and other valuation techniques as appropriate.
Unless otherwise disclosed, the fair values of financial
instruments approximate their recorded values.

REVENUES: Retail sales are recorded on the accrual
basis. Credit service charges are recorded monthly on the
basis of customer account balances.

PRE-STORE OPENING EXPENSES: Direct incremental expenses
associated with the openings of new stores are deferred and
amortized over a twelve-month period from the date of the
store opening.

NET INCOME PER AVERAGE COMMON AND COMMON EQUIVALENT
SHARE: Net income per average common and common equivalent
share is computed by dividing net income less the Series B
convertible stock dividends, net of taxes, by the weighted
average common and common equivalent shares outstanding
during the period. Current year weighted average share
calculations include 12,457,000 common shares relating to the
Preferred Equity Redemption Convertible Preferred Stock
("PERCS"). Per share amounts and the weighted average number
of shares outstanding for the six-month period ended December
31, 1992 and for the fiscal year ended June 30, 1992, have
been retroactively restated to reflect the assumption that
the PERCS would convert into 12,457,000 common shares in lieu
of the maximum number of common shares of 15,000,000. The
reduction is based upon Tandy's common stock price at
December 31, 1993 being in excess of the conversion strike
price thereby reducing the number of common shares that would
be issued to PERCS shareholders upon conversion. Earnings
per share amounts previously reported by the Company for the
six months ended December 31, 1992 and the fiscal year ended
June 30, 1992 were $0.84 and $2.58 for income from continuing
operations, respectively, and $0.02 and $2.24 for net income,
respectively. Fiscal 1991 and 1990 were not effected as the
PERCS were not outstanding during these years.

The Series B convertible stock dividends, net of taxes,
were $7,136,000 for the fiscal year ended December 31, 1993,
$2,419,000 for the six months ended December 31, 1992,
$4,911,000 in fiscal 1992 and $4,538,000 in fiscal 1991. The
taxes netted against these amounts were $0, $1,246,000,
$2,530,000 and $2,337,000, respectively. Upon adoption of
FAS 109 as of January 1, 1993 and in accordance with EITF
92-3, preferred dividends utilized in the earnings per share
calculation can no longer be reduced for associated tax
benefits paid on unallocated preferred stock held by an
employee stock ownership plan.

As the Series C PERCS mandatorily convert into common
stock, they are considered outstanding common stock and the
dividends are not deducted from net income for purposes of
calculating net income per average common and common
equivalent share. Dividends on the Series C PERCS, which
were issued in February 1992, were $32,100,000 for the year
ended December 31, 1993, $16,050,000 for the six months ended
December 31, 1992 and $12,573,000 for the year ended June 30,
1992.

Fully diluted earnings per common and common equivalent
share are not presented since dilution is less than 3%.

NOTE 3-DISCONTINUED OPERATIONS
On June 25, 1993, the Board of Directors of Tandy
adopted a formal plan of divestiture under which it would
sell its computer manufacturing and marketing businesses, the
O'Sullivan Industries, Inc. ready-to-assemble furniture
manufacturing and related marketing business, the Memtek
Products division and the Lika printed circuit board
business. The divestiture plan replaced the Company's plan
to spin off all of the Company's manufacturing and marketing
businesses as described in Tandy's Transition Report on Form
10-K/A-4 for the six-month period ended December 31, 1992. In
connection with the plan of divestiture the Company accounted
for the divestiture of these businesses as discontinued
operations and recognized an after-tax charge of $70,000,000
in its quarter ended June 30, 1993. This charge was
subsequently reduced by approximately $15,822,000 in the
quarter ended December 31, 1993. The reduction of the
reserve previously taken resulted from the better than
anticipated sales price received for O'Sullivan Industries
Holdings, Inc. partially offset by additional foreign
currency translation losses and below plan operating results
of the divested companies during the divestment period, net
of related income tax adjustments. Prior year results of
operations have been reclassified to reflect the discontinued
operations treatment.

Computer Manufacturing. In furtherance of the
divestiture plan, the Company closed the sale of the
computer manufacturing and marketing businesses to AST
Research, Inc. ("AST") on July 13, 1993. In accordance
with the terms of the definitive agreement between Tandy
and AST, Tandy received $15,000,000 upon closing of the
sale. The balance of the purchase price of $90,000,000
(as adjusted post-closing based on the results of an
audit of the assets and liabilities conveyed) is payable
by a promissory note. The promissory note is payable in
three years and interest is accrued and paid annually.
The interest rate on the promissory note is currently
3.75% per annum and is adjusted annually, not to exceed
5% per annum. The terms of the promissory note
stipulate that the outstanding principal balance may be
paid at maturity at AST's option in cash or the common
stock of AST. However, at Tandy's option not more than
50% of the initial principal balance may be paid in
common stock of AST. The promissory note is supported
by a standby letter of credit in the amount of the
lesser of $100,000,000 or 70% of the outstanding
principal amount of the promissory note. At December
31, 1993, the standby letter of credit approximated
$67,704,000. Accounts receivable relating to the
computer operations, approximating $83,000,000 at June
30, 1993, inured to the benefit of Tandy upon
collection. At December 31, 1993, the balance of the
remaining accounts receivable, net of allowance for
doubtful accounts, was $7,700,000. Tandy also retained
certain inventory which it intends to liquidate before
June 30, 1994. At December 31, 1993, this inventory
amounted to approximately $3,700,000.

In October 1993, the Company sold its computer
marketing operations in France to AST, together with
certain other multimedia assets and additional Swedish
inventory, for an aggregate of approximately $6,700,000,
which was evidenced by an increase in the amount of the
promissory note described above to $96,700,000. The
Company has discounted this note by $2,000,000 and the
discount will be recognized as income using the
effective interest rate method over the life of the
note.

O'Sullivan Industries. On November 23, 1993, the
Company announced that it would sell the common stock of
O'Sullivan Industries, Inc. ("O'Sullivan") in an initial
public offering. On January 27, 1994 the Company
announced that it had reached an agreement with the
underwriters to sell O'Sullivan Industries Holdings,
Inc., the parent company of O'Sullivan, common stock to
the public at $22 per share. The net proceeds realized
by Tandy in the initial public offering, together with
the $40,000,000 cash dividend from O'Sullivan,
approximated $350,000,000. The initial public offering
closed on February 2, 1994.

Pursuant to a Tax Sharing and Tax Benefit
Reimbursement Agreement between Tandy and O'Sullivan
Industries Holdings, Inc., the Company will receive
payments from O'Sullivan resulting from an increased tax
basis of O'Sullivan's assets thereby increasing tax
deductions and accordingly, reducing income taxes
payable by O'Sullivan. The amount to be received by the
Company each year will approximate the federal tax
benefit expected to be realized with respect to the
increased tax basis. These payments will be made over a
15-year time period. The Company will recognize these
payments as additional sale proceeds and gain in the
year in which the payments become due and payable to the
Company.

Lika. On January 24, 1994, the Company announced
that it had signed a definitive agreement to sell its
manufacturing facilities which make Lika printed
circuit boards. This divestiture is expected to close
by June 1994 and is expected to yield approximately
$17,000,000 in proceeds, including cash, a note and the
liquidation of certain retained assets.

The losses from discontinued operations prior to the
measurement date are outlined in the table below.

<TABLE>
<CAPTIONS>
Year Ended Six Months Ended Year Ended
December 31, December 31, June 30,
____________ _________________ __________________
(In thousands) 1993 1992 1992 1991
______________________________________________________________________________________________
<S> <C> <C> <C> <C>
Net sales and operating revenues . . . $ 368,137 $500,861 $940,591 $954,821
_________ ________ ________ ________
_________ ________ ________ ________

Loss from discontinued operations:
Operating loss before income tax . . . $ (59,549) $(72,665) $(30,503) $ (4,387)
Income tax benefit (provision) . . . . 1,930 8,790 3,637 (9,485)
_________ ________ ________ ________
Operating loss . . . . . . . . . . . . (57,619) $(63,875) $(26,866) $(13,872)
_________ ________ ________ ________
________ ________ ________

Estimated loss on disposal . . . . . . (63,778)
Estimated operating loss during
phase out period . . . . . . . . . . (7,000)
Income tax benefit . . . . . . . . . . 16,600
_________
Loss on disposal . . . . . . . . . . . (54,178)
_________
Total loss from discontinued operations $(111,797)
_________
_________
</TABLE>
A loss from the sale of the Company's computer
manufacturing operations to AST, inclusive of losses from
operations during the phase out period, is offset by the
gains from the sale of Memtek Products, O'Sullivan and Lika,
also inclusive of results of operations during the phase out
period.

Interest expense of $4,608,000 allocated through the
measurement date of June 30, 1993 and $5,170,000 for the six
months ended December 31, 1992, have been allocated to
discontinued operations based on the percentage of the net
assets of discontinued operations to total net assets.

At December 31, 1993 net assets of discontinued
operations consist primarily of inventories, accounts
receivable and property, plant and equipment, primarily
relating to O'Sullivan and Lika operations.

NOTE 4-RESTRUCTURING AND OTHER CHARGES

The Company adopted a plan resulting in business
restructuring charges during the six months ended December
31, 1992 designed to improve the Company's competitiveness
and future profitability. The pre-tax charge of $48,000,000
related primarily to the closing of approximately 110 of the
432 Tandy Name Brand Retail Group stores, mainly McDuff
Supercenters in major market areas and, to a lesser extent,
the elimination of certain product lines. Some product lines
were reduced or eliminated after consideration of competitive
factors and market trends. Additional restructuring charges
of $39,500,000 related to discontinued operations were
recognized in the six months ending December 31, 1992 and
primarily related to the write-off of goodwill, the
rationalization of certain product lines and the closure of
certain operations. This restructuring charge is included in
the operating loss from discontinued operations.

In fiscal 1991 an $8,531,000 charge was incurred for
restructuring. The charges consisted principally of costs
associated with closings of Radio Shack computer centers.
Restructuring charges relating to continuing operations are
presented in the accompanying income statements as a separate
line item.

NOTE 5-SHORT-TERM INVESTMENTS

The weighted average interest rate was 3.2% at December
31, 1993 for short-term investments totaling $153,839,000.
The weighted average interest rate was 3.5% at December 31,
1992 for short-term investments totaling $40,913,000.

NOTE 6-ACCOUNTS AND NOTES RECEIVABLE

Accounts and Notes Receivable
<TABLE>
<CAPTIONS>
December 31,
__________________
(In thousands) 1993 1992
________________________________________________________________________________
<S> <C> <C>
Gross customer receivable balances of credit operations. . $ 797,550 $834,321
Less securitized customer receivables . . . . . . . . . . (350,000) (350,000)
_________ ________

Customer receivable balances of credit operations . . . . 447,550 484,321
Plus initial direct costs, net of amortization of
$5,302,000 and $4,018,000, respectively . . . . . . . . 9,202 7,351
_________ ________

Net customer receivable balances of credit operations . . 456,752 491,672
Trade accounts receivable. . . . . . . . . . . . . . . . . 114,143 85,246
Receivable from InterTAN . . . . . . . . . . . . . . . . . 11,650 15,585
Other receivables. . . . . . . . . . . . . . . . . . . . . 22,238 26,257
Less allowance for doubtful accounts . . . . . . . . . . . (22,340) (21,945)
_________ ________
Receivables related to continuing operations . . . . . . . 582,443 596,815
Receivables related to discontinued operations, net. . . . -- 200,933
_________ ________

$582,443 $797,748
_________ ________
_________ ________
</TABLE>
<TABLE>
Allowance for Doubtful Accounts
<CAPTIONS>

Year Ended Six Months Ended Year Ended
December 31, December 31, June 30,
____________ ________________ ________________
(In thousands) 1993 1992 1992 1991
__________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Balance at the beginning of the year . . . . $ 21,945 $ 17,203 $ 16,359 $ 16,263
Provision for credit losses and bad debts
included in selling, general and
administrative expense. . . . . . . . . . . 55,043 38,735 62,509 53,049
Reserve allocated to securitized receivables (1,203) (2,033) (1,136) (12,126)
Uncollected receivables written off,
net of recoveries. . . . . . . . . . . . . (53,445) (31,960) (60,529) (40,827)
________ ________ ________ ________
Balance at the end of the year related to
continuing operations. . . . . . . . . . . 22,340 21,945 17,203 16,359
Balance at the end of the year related to
discontinued operations. . . . . . . . . . -- 8,849 8,208 15,604
________ ________ ________ ________
Balance at the end of the year . . . . . . . $ 22,340 $ 30,794 $ 25,411 $ 31,963
________ ________ ________ ________
________ ________ ________ ________
</TABLE>

Effective May 1, 1991, the Company transferred
$573,500,000 of its customer receivables to a trust which, in
turn, on June 18, 1991, sold $350,000,000 of certificates
representing undivided interests in the trust in a public
offering. Net proceeds from the sale of receivables
approximated $346,000,000 and the Company recognized a gain
of approximately $3,900,000 related to the transaction. At
December 31, 1993 and 1992, all $350,000,000 of the
certificates were outstanding and, accordingly, were not
reflected in the Company's accounts receivable balances. The
fair value of the certificates at December 31, 1993 was
approximately $367,815,000. At December 31, 1993, the
balance of the receivables in the trust approximated
$651,700,000. The Company owns the remaining undivided
interest in the trust not represented by the certificates and
will continue to service the receivables for the trust.

Cash flows generated from the receivables in the trust
are dedicated to the payment of interest on the certificates
which have an annual fixed interest rate of 8.25%, absorption
of defaulted accounts in the trust and payment of servicing
fees to the Company with any remaining cash flows remitted to
the Company. In the event that such excess cash flows are
not sufficient to absorb defaulted accounts, the Company is
contingently liable up to a maximum amount of $136,100,000.

Under this agreement the trust may issue additional
series of certificates from time to time. Terms of any
future series will be determined at the time of issuance.

NOTE 7-PROPERTY, PLANT AND EQUIPMENT

December 31,
____________________
(In thousands) 1993 1992
_____________________________________________________________

Land . . . . . . . . . . . . . . . . . . $ 32,346 $ 20,942
Buildings. . . . . . . . . . . . . . . . 174,126 156,783
Furniture, fixtures and equipment . . . 394,242 393,886
Leasehold improvements . . . . . . . . . 314,424 310,509
________ ________
915,138 882,120
Less accumulated depreciation. . . . . . 451,400 437,180
________ ________
Property, plant and equipment related to
continuing operations. . . . . . . . . 463,738 444,940
Property, plant and equipment related to
discontinued operations, net . . . . . -- 101,645
________ ________
$463,738 $546,585
________ ________
________ ________

NOTE 8-OTHER ASSETS

Other assets includes the excess purchase price over net
tangible assets of businesses acquired for continuing
operations of $18,207,000 at December 31, 1993 and
$18,728,000 at December 31, 1992. These amounts are net of
accumulated amortization of $4,485,000, and $3,964,000,
respectively. The balance at December 31, 1993 includes
long-term receivables relating to InterTAN and AST of
$126,384,000, net of discount of $22,198,000. See Notes 3
and 21 for a further description of the terms of the AST and
InterTAN notes receivable. The balance at December 31, 1992
includes other assets relating to discontinued operations of
approximately $207,864,000.

NOTE 9-INDEBTEDNESS AND BORROWING FACILITIES

Borrowings payable within one year are summarized in the
accompanying short-term debt table on page 45. The
short-term debt caption includes primarily domestic seasonal
borrowings. The current portion of long-term debt at
December 31, 1993 includes $82,701,000 of medium-term notes
and other loans compared to $48,696,000 at December 31, 1992.
The short-term debt additionally includes $31,739,000 of 10%
subordinated debentures due June 30, 1994. This subordinated
debenture has been called by the Company for redemption on
April 1, 1994.

Tandy's short-term credit facilities, including
revolving credit lines, are summarized in the accompanying
short-term borrowing facilities table found on page 46.

A commercial paper program was established during fiscal
1991 for Tandy. The Company has a $400,000,000 committed
facility in place for the commercial paper program. This
facility is to be used only if maturing commercial paper
cannot be repaid due to an inability to sell new paper. This
facility is composed of two tranches of $200,000,000 each
expiring in June 1994 with annual commitment fees for the
tranches of 1/10 of 1% per annum and 3/20 of 1% per annum,
respectively, whether used or unused. The commercial paper
facility limits the amount of commercial paper that may be
outstanding to a maximum of $400,000,000.

Long-term debt at December 31, 1993 and December 31,
1992 totaled $186,638,000 and $322,778,000, respectively.
Included in both years are $45,000,000 of 8.69% senior notes
due January 15, 1995. These senior notes have been
outstanding since February 7, 1990.

Tandy completed a $500,000,000 shelf registration in
January 1991 of which $400,000,000 was designated for
medium-term notes. Tandy Credit's $400,000,000 shelf
registration was amended in October 1990 to add a
$200,000,000 Series B medium-term note program. At December
31, 1993 available borrowing capacity under Tandy's and Tandy
Credit's medium-term note programs aggregated $429,200,000.
Medium-term notes outstanding at December 31, 1993 totaled
$125,479,00 compared 6to $148,900,000 at December 31, 1992.
The weighted average coupon rates of medium-term notes
outstanding at both of these dates was 8.7%.

The Company established an employee stock ownership
trust in June 1990. Further information on the trust and its
related indebtedness, which is guaranteed by the Company, is
detailed in the discussion of the Tandy Employees Stock
Ownership Plan in Note 14.

Long-term borrowings outstanding at December 31, 1993
mature as follows:

(In thousands)
_____________________________________________________________
1994 . . . . . . . . . . . . . . . . . . . $124,490
1995 . . . . . . . . . . . . . . . . . . . 61,008
1996 . . . . . . . . . . . . . . . . . . . 22,678
1997 . . . . . . . . . . . . . . . . . . . 40,921
1998 . . . . . . . . . . . . . . . . . . . 37,331
1999 and thereafter. . . . . . . . . . . . 24,700
_____________________________________________________________

The fair value of the Company's long-term debt of
$311,128,000 (including current portion) is approximately
$328,516,000 at December 31, 1993.

Consolidated interest expense was $39,707,000 for the
year ended December 31, 1993, $20,532,000 for the six months
ended December 31, 1992 and $43,154,000, and $70,313,000 for
the years ended June 30, 1992 and 1991. Interest income,
primarily related to the Company's credit card operations,
totaled $65,538,000 for the year ended December 31, 1993,
$33,290,000 for the six months ended December 31, 1992 and
$67,399,000 and $98,872,000 for the years ended June 30, 1992
and 1991.

Short-Term Debt
<CAPTIONS>
December 31,
_______________________
(In thousands) 1993 1992
_________________________________________________________________________________
<S> <C> <C>
Short-term bank debt . . . . . . . . . . . . . . . . . $ 90,612 $245,692
Current portion of long-term debt. . . . . . . . . . . 82,701 48,696
Commercial paper, less unamortized discount. . . . . . 172,851 63,879
________ ________
346,164 358,267

Current portion of guarantee of TESOP indebtedness . . 10,050 10,700

10% subordinated debentures due 1994, less
unamortized discount of $692,000 . . . . . . . . . . 31,739 --
________ ________

Total short-term debt related to continuing operations 387,953 368,967
Total short-term debt related to discontinued operations -- 16,739
________ ________
Total short-term debt. . . . . . . . . . . . . . . . . $387,953 $385,706
________ ________
________ ________
</TABLE>
<TABLE>
Long-Term Debt
<CAPTIONS>
December 31,
___________________
(In thousands) 1993 1992
___________________________________________________________________________________
<S> <C> <C>
Notes payable with interest rates at December 31, 1993
ranging from 3.54% to 8.69% . . . . . . . . . . . . $ 84,930 $110,131
Medium-term notes payable with interest rates at
December 31, 1993 ranging from 7.25% to 9.67% . . . 125,479 148,900
________ ________
210,409 259,031
Less portion due within one year included in current
notes payable. . . . . . . . . . . . . . . . . . . . (82,701) (48,696)
________ ________
127,708 210,335
________ ________
Guarantee of TESOP indebtedness. . . . . . . . . . . . 68,980 79,680
Less current portion. . . . . . . . . . . . . . . . . (10,050) (10,700)
________ ________
58,930 68,980
________ ________
10% subordinated debentures due 1994, less unamortized
discount of $1,851,000 . . . . . . . . . . . . . . . -- 30,580
________ ________

Total long-term debt related to continuing operations 186,638 309,895
Total long-term debt related to discontinued operations -- 12,883
________ ________
Total long-term debt . . . . . . . . . . . . . . . . . $186,638 $322,778
________ ________
________ ________
</TABLE>
<PAGE>
<TABLE>
Short-Term Borrowing Facilities
<CAPTIONS>

Six Months
Year Ended Ended Year Ended
December 31, December 31, June 30,
____________ ____________ ____________________
(In thousands) 1993 1992 1992 1991
_____________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Domestic seasonal bank credit lines and
bank money market lines:
Lines available at period end . . . . . . . . . . $1,050,000 $1,255,000 $1,398,000 $1,125,000
Loans outstanding at period end . . . . . . . . . $ 90,000 $ 240,500 $ 15,000 $ 1,165
Compensating balance requirements . . . . . . . . None None None None
Weighted average interest rate at
period end . . . . . . . . . . . . . . . . . 3.6% 3.6% 4.0% 6.3%
Weighted average of loans outstanding
during period. . . . . . . . . . . . . . . . $ 168,901 $ 75,454 $ 20,394 $ 235,878
Highest month-end borrowings. . . . . . . . . . . $ 253,200 $ 255,000 $ 50,350 $ 526,540
Weighted average interest rate during
period . . . . . . . . . . . . . . . . . . . 3.6% 3.6% 5.1% 8.2%

Short-term foreign credit lines:
Lines available at period end . . . . . . . . . . $ 143,685 $ 186,841 $ 340,704 $ 331,267
Loans outstanding at period end . . . . . . . . . $ 612 $ 21,257 $ 13,774 $ 41,110
Compensating balance requirements . . . . . . . . None None None None
Weighted average interest rate at
period end . . . . . . . . . . . . . . . . . 6.7% 9.1% 11.1% 9.8%
Weighted average of loans outstanding
during period. . . . . . . . . . . . . . . . $ 1,956 $ 22,590 $ 42,638 $ 76,610
Highest month-end borrowings. . . . . . . . . . . $ 4,382 $ 29,260 $ 61,637 $ 96,201
Weighted average interest rate during
period . . . . . . . . . . . . . . . . . . . 4.0% 9.7% 13.9% 12.1%

Letters of credit and banker's acceptance lines
of credit:
Lines available at period end . . . . . . . $ 526,000 $ 442,785 $ 410,000 $ 475,000
Acceptances outstanding at period end. . . . None None None None
Compensating balance requirements. . . . . . None None None None
Letters of credit open against outstanding
purchase orders at period end . . . . . $ 124,701 $ 128,798 $ 232,791 $ 206,625

Commercial paper credit facilities:
Commercial paper outstanding at period
end. . . . . . . . . . . . . . . . . . . . . $ 172,851 $ 63,879 $ 109,295 $ 8,554
Weighted average interest rate at
period end . . . . . . . . . . . . . . . . . 3.5% 3.8% 3.8% 6.1%
Weighted average of commercial paper
outstanding during period. . . . . . . . . . $ 174,494 $ 112,000 $ 80,601 $ 247,583
Highest month-end borrowings. . . . . . . . . . . $ 295,500 $ 312,250 $ 201,900 $ 346,782
Weighted average interest rate during
period . . . . . . . . . . . . . . . . . . . 3.5% 3.5% 5.0% 7.6%
</TABLE>
<PAGE>
NOTE 10-LEASES

Tandy leases rather than owns most of its facilities.
The Radio Shack stores comprise the largest portion of
Tandy's leased facilities. The Radio Shack, Tandy Name Brand
Retail Group and Computer City stores are located primarily
in major shopping malls, shopping centers or freestanding
facilities owned by other companies. The Company owns most
of the Incredible Universe stores. The store leases are
generally based on a minimum rental plus a percentage of the
store's sales in excess of a stipulated base figure. Radio
Shack store leases average approximately 10 years, generally
with renewal options. Tandy also leases distribution centers
and office space. Capital leases are not material as the
Company's operations are basically structured in a manner
that precludes the need for significant financing or capital
leases.

Future minimum rent commitments at December 31, 1993 for
all long-term noncancelable leases (net of immaterial amounts
of sublease rent income) are in the following table.

(In thousands)
-------------------------------------------------------------
1994 . . . . . . . . . . . . . . . . . . . $144,102
1995 . . . . . . . . . . . . . . . . . . . 140,105
1996 . . . . . . . . . . . . . . . . . . . 126,148
1997 . . . . . . . . . . . . . . . . . . . 109,907
1998 . . . . . . . . . . . . . . . . . . . 93,541
1999 and thereafter. . . . . . . . . . . . 305,763
-------------------------------------------------------------

<TABLE>

Rent Expense
<CAPTIONS>
Year Ended Six Months Ended Year Ended
December 31, December 31, June 30,
____________ _________________ _________________
(In thousands) 1993 1992 1992 1991
_________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Minimum rents. . . . . $200,183 $102,986 $201,794 $188,868
Contingent rents . . . 2,644 2,456 3,938 4,560
Sublease rent income . (426) (114) (1,059) (1,487)
________ ________ ________ ________
Total rent expense . $202,401 $105,328 $204,673 $191,941
________ ________ ________ ________
________ ________ ________ ________
</TABLE>
<TABLE>
Space Owned and Leased (Unaudited)
<CAPTIONS>
Approximate Square Footage
____________________________________________________
at December 31,
1993 1992
________________________ ________________________
(In thousands) Owned Leased Total Owned Leased Total
___________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Retail
Radio Shack. . . . . . . . . -- 10,767 10,767 -- 10,766 10,766
Computer City. . . . . . . . -- 940 940 -- 566 566
Name Brand Retail Group. . . 550 1,649 2,199 366 2,553 2,919
Other. . . . . . . . . . . . 275 -- 275 272 162 434
_____ ______ ______ _____ ______ ______
825 13,356 14,181 638 14,047 14,685

Manufacturing. . . . . . . . 641 212 853 794 212 1,006
Warehouse and office . . . . 3,134 1,957 5,091 3,137 1,915 5,052
_____ ______ ______ _____ ______ ______
4,600 15,525 20,125 4,569 16,174 20,743
_____ ______ ______ _____ ______ ______
_____ ______ ______ _____ ______ ______

Note: Square footage related to continuing operations only.
</TABLE>
<PAGE>
<TABLE>
NOTE 11-ACCRUED EXPENSES
<CAPTIONS>
December 31,
___________________
(In thousands) 1993 1992
___________________________________________________________________________
<S> <C> <C>
Payroll and bonuses. . . . . . . . . . . . . . . $ 57,600 $ 38,222
Sales and payroll taxes. . . . . . . . . . . . . 44,790 38,887
Insurance. . . . . . . . . . . . . . . . . . . . 48,609 47,388
Deferred service contract income . . . . . . . . 102,223 97,044
Rent . . . . . . . . . . . . . . . . . . . . . . 22,093 20,117
Advertising. . . . . . . . . . . . . . . . . . . 25,546 27,506
Interest expense . . . . . . . . . . . . . . . . 7,358 8,262
Restructuring reserve. . . . . . . . . . . . . . 6,790 38,320
Other. . . . . . . . . . . . . . . . . . . . . . 34,048 44,591
________ ________
Accrued expenses related to continuing operations 349,057 360,337
Accrued expenses related to discontinued operations -- 60,821
________ ________
$349,057 $421,158
________ ________
________ ________
</TABLE>

NOTE 12-INCOME TAXES

The components of the provision for income taxes and a
reconciliation of the U.S. statutory tax rate to the
Company's effective income tax rate are given in the
accompanying tables.
<TABLE>

Income Tax Expense
<CAPTIONS>
Year Ended Six Months Ended Year Ended
December 31, December 31, June 30,
____________ _________________ _________________
(In thousands) 1993 1992 1992 1991
____________________________________________________________________________________
<S> <C> <C> <C> <C>
Current
Federal. . . . . . . . . . $109,543 $ 63,869 $118,552 $132,693
State. . . . . . . . . . . 8,543 1,482 4,822 8,049
Foreign. . . . . . . . . . 1,781 1,003 3,530 9,164
________ ________ ________ ________
119,867 66,354 126,904 149,906
________ ________ ________ ________

Deferred
Federal. . . . . . . . . . (4,344) (31,123) (5,619) (24,454)
Foreign. . . . . . . . . . -- 5 (1,500) (2,110)
________ ________ ________ ________
(4,344) (31,118) (7,119) (26,564)
________ ________ ________ ________

Total Income tax expense . . $115,523 $ 35,236 $119,785 $123,342
________ ________ ________ ________
________ ________ ________ ________
</TABLE>
<PAGE>
<TABLE>
Statutory vs. Effective Tax Rate
<CAPTIONS>
Year Ended Six Months Ended Year Ended
December 31, December 31, June 30,
____________ _________________ __________________
(In thousands) 1993 1992 1992 1991
__________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Components of pretax income from continuing operations:
United States. . . . . . . . . . . . . . . . . . . . . $298,506 $ 97,874 $325,584 $337,576
Foreign. . . . . . . . . . . . . . . . . . . . . . . . 12,649 5,043 4,914 5,701
________ ________ ________ ________
Income before income taxes . . . . . . . . . . . . . . $311,155 $102,917 $330,498 $343,277
Statutory tax rate . . . . . . . . . . . . . . . . . . x 35% x 34% x 34% x 34%
________ ________ ________ ________

Federal income tax at statutory rate . . . . . . . . . 108,904 34,992 112,369 116,714
State income taxes, less federal income
tax benefit . . . . . . . . . . . . . . . . . . . 5,553 978 3,183 5,312
Other, net . . . . . . . . . . . . . . . . . . . . . . 1,066 (734) 4,233 1,316
________ ________ ________ ________
Total income tax expense . . . . . . . . . . . . . . . $115,523 $ 35,236 $119,785 $123,342
________ ________ ________ ________
________ ________ ________ ________
Effective tax rate . . . . . . . . . . . . . . . . . . 37.13% 34.24% 36.24% 35.93%
________ ________ ________ ________
________ ________ ________ ________
</TABLE>

As of December 31, 1993, the Company has tax net
operating loss carryforwards of approximately $20,659,000
which are available to offset future taxable income. These
carryforwards which are expected to be fully utilized, expire
beginning in the year ending December 31, 2006. Accordingly,
the Company has recognized a deferred tax asset relating to
these carryforwards.

In January 1993, the Company adopted FAS No. 109. The
adoption of FAS 109 changes the Company's method of
accounting for income taxes from the deferred method ("APB
11") to an asset and liability approach. Previously, the
Company deferred the past tax effects of timing differences
between financial reporting and taxable income. The asset
and liability approach requires the recognition of deferred
tax liabilities and assets for the expected future tax
consequences of temporary differences between the carrying
amounts and the tax bases of assets and liabilities.

The adjustments to the January 1, 1993 balance sheet to
adopt FAS 109 totaled $13,014,000. Approximately $9,786,000
of this adjustment related to continuing operations and the
remaining $3,228,000 was from discontinued operations. The
aggregate amount of $13,014,000 is reflected in 1993 net
income as the cumulative effect of change in accounting
principle. It primarily represents the impact of adjusting
deferred taxes to reflect the then current tax rate of 34% as
opposed to the higher tax rates that were in effect when the
deferred taxes originated. The Company subsequently
increased its U.S. deferred tax asset in 1993 as a result of
legislation enacted during 1993 which increased the corporate
tax rate from 34% to 35%. Deferred tax assets and
liabilities as of December 31, 1993 for continuing operations
were comprised of the following:

Deferred Tax Assets
___________________

(In thousands) December 31, 1993
_________________

Bad debt reserve $14,268
Intercompany profit elimination 6,654
Deferred service contract income 41,290
Restructuring reserves 3,362
Insurance reserves 5,607
Loss carryforwards and carrybacks 7,231
Foreign tax credits 4,396
_______
82,808
Valuation allowance (4,396)
_______
Total deferred tax assets 78,412
_______

Deferred Tax Liabilities
________________________

Inventory adjustments, net 8,445
Depreciation and amortization 8,322
Credit card origination costs 3,221
Deferred taxes on foreign operations 4,275
Other 4,269
_______
Total deferred tax liabilities 28,532
_______

Net Deferred Tax Assets $49,880
_______
_______

NOTE 13-STOCK PURCHASE AND SAVINGS PLANS

Stock purchase and savings plans are offered by Tandy
Corporation to its employees. These plans are designed to
provide employees with a consistent investment program which
provides for their retirement and an opportunity to
participate in the Company's growth.

TANDY CORPORATION STOCK PURCHASE PROGRAM. The Program
is available to most employees who have been employed at
least six months. Each participant may contribute 1% to 10%
of annual compensation, except that the President of the
Company may limit the maximum contribution for employees of
certain divisions or subsidiaries to a percentage less than
10%. The Company matches 40%, 60% or 80% of the employee's
contribution depending on the length of the employee's
participation in the program. The Company periodically
purchases common stock on the open market and then sells the
number of shares required by the program each month at a
price equal to the average of the daily closing prices for
that month. The stock purchased by each participant is
distributed annually after December 31. In the event of a
tender offer (other than an issuer tender offer) or a change
in control, as defined in the program, all stock credited to
participants' accounts will be distributed to the
participants. If the Company elects, treasury shares or
authorized but unissued shares may be used. Tandy's
contributions to the stock purchase program were $18,955,000
for the year ended December 31, 1993 and $8,756,000 for the
six months ended December 31, 1992. For fiscal 1992 and 1991
the Company's contributions were $20,253,000 and $19,614,000,
respectively.

TANDY EMPLOYEES DEFERRED SALARY AND INVESTMENT PLAN. The
Plan became effective on July 1, 1982. An eligible employee
electing to participate in this plan may defer 5% of annual
compensation, subject to certain limitations established by
the Tax Reform Act of 1986. The Company pays this amount
into the plan as a deferred salary contribution for the
account of the employee. The employee's 5% contribution is
considered deferred compensation and is not taxed to the
employee as long as it remains in the plan. Prior to October
1, 1990, the Company matched 80% of the employee's deferred
salary contribution. This matching contribution ceased on
September 30, 1990. Beginning October 1990, the Company
began making contributions to the newly formed employee stock
ownership plan described in Note 14 in lieu of the matching
contributions to the deferred salary and investment plan. To
participate in the employee stock ownership plan, employees
must continue to make deferred salary contributions to the
Tandy Employees Deferred Salary and Investment Plan. The
plan is available to most employees who have been employed at
least one year. The contributions made by the Company until
the employee stock ownership plan became effective October 1,
1990 were fully vested upon payment to the trustee. In June
1992, the Company received a determination letter ruling that
the Tandy Employees Deferred Salary and Investment Plan is a
qualified 401(k) plan. An administrative committee appointed
by the Board of Directors invests the plan's assets. A
substantial majority of the plan's assets are invested in
Tandy securities. The Company's contribution to the
investment plan from July 1, 1990 through September 30, 1990
was $3,401,000.

NOTE 14-TANDY EMPLOYEES STOCK OWNERSHIP PLAN

As a continuation of the Company's programs to encourage
employee ownership of Tandy stock, the Company formed the
Tandy Employees Stock Ownership Plan and trust (the "TESOP")
on June 28, 1990. On July 31, 1990, the TESOP trustee
borrowed $100,000,000 at an interest rate of 9.34% with
varying semi-annual principal payments through June 30, 2000.
Dividend payments and contributions from Tandy will be used
to repay the indebtedness. Because Tandy has guaranteed the
repayment of these notes, the indebtedness of the TESOP is
recognized as a long-term obligation in the accompanying
consolidated balance sheet. An offsetting charge has been
made in the stockholders' equity section of the accompanying
consolidated balance sheet to reflect unearned compensation
related to the TESOP.

The TESOP trustee used the proceeds from the issuance of
the notes to purchase 100,000 shares of Series B TESOP
Convertible Preferred Stock (the "TESOP Preferred Stock")
from Tandy at a price of $1,000 per share. Each share of
such stock is convertible into 21.768 shares of Tandy common
stock. The number of shares of Company common stock into
which each share of the TESOP Preferred Stock is convertible
("the Conversion Price") is subject to anti-dilution
adjustment upon the occurrence of a number of corporate
events. The annual cumulative dividend on TESOP Preferred
Stock is $75.00 per share, payable semi-annually. This
series of stock has certain liquidation preferences and may
be redeemed by Tandy after July 1, 1994 at specified
premiums. The TESOP Preferred Stock will be held by the
trustee until redemption or conversion and may not be sold or
distributed outside the TESOP except for resale to Tandy. The
TESOP requires that shares of TESOP Preferred Stock not yet
allocated to any participant's account, as well as allocated
shares for which no voting instructions are received, be
voted by the trustee in proportion to the votes cast with
respect to allocated shares of TESOP Preferred Stock.

Participants in the Tandy Employees Deferred Salary and
Investment Plan became eligible to participate in the TESOP
effective October 1, 1990. At that time the Company began
making payments to the TESOP in lieu of its matching
contributions to the Tandy Employees Deferred Salary and
Investment Plan. During the term of the TESOP, the TESOP
Preferred Stock will be allocated to the participants
semi-annually based on the principal payments made on the
indebtedness. The allocations to the individual
participants' accounts are determined according to the terms
of the TESOP. As vested participants withdraw from the
TESOP, payments are made in cash or Tandy common stock. The
preferred stock has a face value of $1,000 per share and the
Company is obligated to redeem the preferred stock at the
higher of the appraised value or $1,000 per share in the
event of a participant's withdrawal. The Company has the
option to redeem the preferred stock in either cash or common
stock. Participants in the TESOP that were hired prior to
October 1, 1990 became immediately vested in all allocations
made to their accounts. Employees hired after September 30,
1990 who become TESOP participants will become vested in
amounts allocated to their accounts upon the earlier of three
years of participation in the TESOP or the completion of five
years of employment with the Company. Forfeited shares are
returned to the TESOP and allocated to the accounts of other
participants.

In June 1992 the Company received a determination letter
ruling from the IRS that the TESOP was a qualified employee
stock ownership plan.

In fiscal 1991 Tandy recorded, as a component of
stockholders' equity, $100,000,000 of unearned compensation
to reflect the value of the TESOP Preferred Stock sold to the
TESOP. As shares of the TESOP Preferred Stock are allocated
to the TESOP participants, compensation expense is recorded
and unearned compensation is reduced. Interest expense on
the TESOP notes is also recognized as a cost of the TESOP.
The compensation component of the TESOP expense is reduced by
the amount of dividends accrued on the TESOP Preferred Stock
with any dividends in excess of the compensation expense
reflected as a reduction of interest expense. During the
year ended December 31, 1993, the compensation and interest
costs related to the TESOP before the reduction for the
allocation of dividends were $9,605,000 and $7,195,000,
respectively. During the six months ended December 31, 1992,
the compensation and interest costs related to the TESOP
before the reduction for the allocation of dividends were
$4,266,000 and $3,969,000, respectively. Such amounts for
fiscal 1992 were $8,233,000 and $8,526,000, respectively. For
the fiscal year ended June 30, 1991, these amounts were
$5,967,000 and $8,488,000, respectively. Contributions from
Tandy to the TESOP for the year ended December 31, 1993 and
the six months ended December 31, 1992 totaled $17,895,000
and $9,269,000, respectively, including the $7,135,000 and
$3,665,000 of dividends paid on the TESOP Preferred Stock.
Contributions for the year ended June 30, 1992 totaled
$16,926,000, including the $7,441,000 of dividends paid on
the TESOP Preferred Stock. The fiscal 1991 cash contributions
were $15,108,000, including $6,875,000 of dividends paid on
the TESOP Preferred Stock.

At September 30, 1993, 25,620 shares of TESOP Preferred
Stock had been released and allocated to participants'
accounts in the TESOP (including 6,093 shares which had been
withdrawn by participants). During the six months ended
December 31, 1993, 5,400 shares of TESOP Preferred Stock were
released for allocation to participants at March 31, 1994.
At December 31, 1993, 68,980 shares of TESOP Preferred Stock
were available for later release and allocation to
participants over the remaining life of the TESOP.

Under the terms of Tandy's guarantee of the notes, Tandy
is obligated to make annual contributions to the TESOP to
enable it to pay principal and interest on the debt
securities. Tandy has fully and unconditionally guaranteed
the TESOP's payment obligations, whether at maturity, upon
redemption, upon declaration of acceleration or otherwise.
The holders of the notes have no recourse against the assets
of the TESOP except in the event that the TESOP defaults on
payments due and then only to the extent that the TESOP holds
cash payments made by Tandy to the TESOP to enable it to meet
its obligations under the notes and any earnings attributable
to such contributions. No amounts were in default as of
December 31, 1993.

The TESOP fiscal year ends on March 31. At March 31,
1993, the TESOP held as assets $97,725,000 of TESOP Preferred
Stock and $4,511,000 of receivables and had liabilities
comprised of the remaining principal on the notes of
$79,680,000 and accrued interest payable on the notes of
$1,861,000, resulting in net assets of $20,695,000.

NOTE 15-STOCK OPTIONS AND PERFORMANCE AWARDS

1985 Stock Option Plan
______________________
Under the 1985 Stock Option Plan, as amended, options to
acquire up to 2,000,000 shares of Tandy's common stock may be
granted to officers and key management employees of the
Company. The shares authorized for issuance under the Plan
upon the exercising of an option have been registered with
the Securities and Exchange Commission. The Organization and
Compensation Committee (the "Committee") has sole discretion
in determining whether to grant options, who shall receive
them, the number of options granted to any individual and
whether an option will be an incentive stock option or a
nonstatutory stock option. The term of incentive stock
options may not exceed 10 years and the term of nonstatutory
stock options may not exceed a term of 10 years plus one
month. No option may be exercised within one year of the
date of grant and then may be exercised in specified
installments only after stated intervals of time.

The maximum amount that may be exercised at the
expiration of each of the first through fifth anniversaries
of the nonstatutory stock options is 20%. On each of the
first three anniversaries of the date of grant of the
incentive stock options, one-third of each individual's
options become exercisable. Upon termination of employment,
the optionee must exercise all currently vested options by
the earlier of the option expiration date(s) or three months
from the date of termination of employment or forfeit such
options, except that upon retirement at age 55 or older the
three months is extended to 12 months in the case of
nonstatutory stock options only. Notwithstanding the grant of
options initially exercisable in installments, upon the
termination of employment as a result of death or total
disability of an optionee, all options then held shall for a
period of 12 months, subject to earlier termination at the
fixed expiration date, become immediately exercisable without
regard to dates at which the installments are exercisable.
Upon the retirement of an optionee at age 55 or older, the
Committee may in its discretion accelerate the dates at which
remaining installments of options may be exercised to the
date of retirement. In the event of a change in control, all
outstanding options become immediately exercisable for the
full number of shares subject to options. The option price
was determined by the Committee at the time the option is
granted, but the option price will not be less than 100% of
the fair market value of the stock on the date of grant.
Since the option prices have been fixed at the market price
on the date of grant, no compensation has been charged
against earnings by the Company. Authorized and unissued
shares or treasury stock may be issued to participants when
options are exercised.

The 1985 Stock Option Plan provides for adjustments to
be made to options outstanding under the plan in order to
prevent dilution of options upon the occurrence of a number
of events, including the distribution of shares of a
subsidiary of the Company to its stockholders.

Tandy assumed an option plan which had been created by
GRiD prior to its acquisition. All unexercised GRiD options
expired June 30, 1993. Under the 1985 Stock Option Plan
there were 1,268,205 vested options which could have been
exercised for a total price of $44,710,134 at December 31,
1993. Shares available for additional grants under the 1985
Stock Option Plan were 138,599 at December 31, 1993.

1993 Incentive Stock Plan
_________________________
During March 1993, the Board adopted the Tandy
Corporation 1993 Incentive Stock Plan (the "1993 Plan"). The
1993 Plan was approved by stockholders in October 1993.
Certain provisions of the 1993 Plan were amended by the Board
on October 15, 1993. The 1993 Plan is administered by the
Organization and Compensation Committee (the "Committee") of
the Board. A total of 3,000,000 shares of the Company's
common stock were reserved for issuance under the 1993 Plan
and have been registered with the Securities and Exchange
Commission.

The 1993 Plan permits the grant of incentive stock
options ("ISOs"), nonstatutory stock options (options which
are not ISOs) ("NSOs"), stock appreciation rights ("SARs"),
restricted stock, performance units or performance shares.

Grants of options under the 1993 Plan shall be for terms
specified by the Committee, except that the term shall not
exceed 10 years (5 years if granted to a 10% or more
stockholder of the Company's common stock). Subject to the
discretion of the Committee, options become exercisable in
such installments and at such times payments for shares
issuable upon exercise of an option may be made in cash,
common stock, or a combination of both. The amount payable
upon exercise of a SAR may be made at the discretion of the
Committee either in cash or common stock or in a combination
of cash and common stock. Provisions of the 1993 Plan
generally provide that in the event of a change in control
all options become immediately and fully exercisable and all
restrictions lapse on restricted stock.

As part of the 1993 Plan, each non-employee director of
the Company receives a grant of NSOs for 3,000 shares of the
Company's common stock on the first business day of September
of each year ("Director Options"). Director Options have an
exercise price of 100% of the fair market value of the
Company's common stock on the trading day prior to the date
of grant, vest as to one-third of the shares annually on the
first three anniversary dates of the date of grant and expire
10 years after the date of grant. The first grant of the
Director Options was made on September 1, 1993.

The exercise price of an option (other than a Director
Option) is determined by the Committee, provided that the
exercise price shall not be less than 100% of the fair market
value of a share of the Company's common stock on the date of
grant.

At December 31, 1993 there were no vested options which
could have been exercised and 2,650,050 shares available for
additional grants under the 1993 Plan. The 1993 Plan shall
terminate on the tenth anniversary of the day preceding the
date of its adoption by the Board and no option or award
shall be granted under the 1993 Plan thereafter.

Stock option activity from June 30, 1990 through
December 31, 1993, including the exercise of GRiD options, is
summarized in the accompanying chart.

<TABLE>

Stock Option Activity
<CAPTIONS>
Aggregate
Number Option Price Exercised
(In thousands, except per share amounts) of Shares Per Share Value
___________________________________________________________________________________
<S> <C> <C> <C>
June 30, 1990. . . . . . . . . . . . . . . 1,119 $5.94-$47.50 $41,467
Options granted. . . . . . . . . . . . . . 369 $25.06-$32.63 9,333
Options exercised. . . . . . . . . . . . . (53) $5.94-$47.50 (413)
Options cancelled. . . . . . . . . . . . . (21) $5.94-$47.50 (736)

June 30, 1991. . . . . . . . . . . . . . . 1,414 $5.94-$47.50 49,651
Options granted. . . . . . . . . . . . . . 358 $24.25-$28.19 10,057
Options exercised. . . . . . . . . . . . . (20) $5.94-$17.81 (119)
Options cancelled. . . . . . . . . . . . . (45) $5.94-$47.50 (1,574)

June 30, 1992. . . . . . . . . . . . . . . 1,707 $5.94-$47.50 58,015
Options granted. . . . . . . . . . . . . . 254 $30.38 7,716
Options exercised. . . . . . . . . . . . . (9) $5.94 (52)
Options cancelled. . . . . . . . . . . . . (12) $5.94-$47.50 (353)

December 31, 1992. . . . . . . . . . . . . 1,940 $5.94-$47.50 65,326
Options granted. . . . . . . . . . . . . . 368 $30.00-$37.25 13,343
Options exercised. . . . . . . . . . . . . (182) $5.94-$47.50 (5,341)
Options cancelled. . . . . . . . . . . . . (162) $5.94-$47.50 (5,533)

December 31, 1993. . . . . . . . . . . . . 1,964 $25.06-$46.13 $67,795
</TABLE>

NOTE 16-PREFERRED SHARE PURCHASE RIGHTS

In August 1986 the Board of Directors adopted a
stockholder rights plan and declared a dividend of one right
for each outstanding share of Tandy common stock. The Board
amended the rights plan in June 1988 and amended and restated
the rights plan in June 1990. The rights, which will expire
on June 22, 2000, are currently represented by the common
stock certificates and when they become exercisable will
entitle holders to purchase one one-thousandth of a share of
Tandy Series A Junior Participating Preferred Stock for an
exercise price of $140 (subject to adjustment). The rights
will become exercisable and will trade separately from the
common stock only upon the date of public announcement that a
person, entity or group ("Person") has acquired 15% or more
of Tandy's outstanding common stock without the prior consent
or approval of the disinterested directors ("Acquiring
Person") or ten days after the commencement or public
announcement of a tender or exchange offer which would result
in any person becoming an Acquiring Person. In the event
that any person becomes an Acquiring Person, the rights will
be exercisable for 60 days thereafter for Tandy common stock
with a prior market value (as determined under the rights
plan) equal to twice the exercise price. In the event that,
after any person becomes an Acquiring Person, the Company
engages in certain mergers, consolidations, or sales of
assets representing 50% or more of its assets or earning
power with an Acquiring Person (or persons acting on behalf
of or in concert with an Acquiring Person) or in which all
holders of common stock are not treated alike, the rights
will be exercisable for common stock of the acquiring or
surviving company with a prior market value (as determined
under the rights plan) equal to twice the exercise price.
The rights will not be exercisable by any Acquiring Person.
The rights are redeemable at a price of $.05 per right prior
to any person becoming an Acquiring Person or, under certain
circumstances, after the expiration of the 60-day period
described above, but the rights may not be redeemed or the
rights plan amended for 180 days following a change in a
majority of the members of the Board (or if certain
agreements are entered into during such 180-day period).

NOTE 17-TERMINATION PROTECTION PLANS

In August 1990, the Board of Directors of the Company
approved termination protection plans and amendments to
various other benefit plans including the stock purchase
program and deferred salary and investment plan described in
Note 13. These plans provide for defined termination
benefits to be paid to eligible employees of the Company who
have been terminated, without cause, following a change in
control of the Company (as defined). In addition, for a
certain period of time following employee termination, the
Company, at its expense, must continue to provide on behalf
of the terminated employee certain employment benefits. In
general, during the twelve months following a change in
control, the Company may not terminate or change existing
employee benefit plans in any way which will affect accrued
benefits or decrease the rate of the Company's contribution
to the plans.

NOTE 18-ISSUANCE OF SERIES C PERCS AND TENDER OFFER

In February 1992, the Company issued 15,000,000
depositary shares of Series C Conversion Preferred Stock
("Series C PERCS") at $29.50 per depositary share (equivalent
to $2,950.00 for each Series C PERCS). Each of the
depositary shares represents ownership of 1/100th of a share
of Series C PERCS. The annual dividend for each depositary
share is $2.14 (based on the annual dividend rate for each
Series C PERCS of $214.00). On April 15, 1995, each of the
depositary shares will automatically convert into (i) one
share of Tandy common stock (equivalent to 100 shares for
each Series C PERCS) subject to adjustment in certain events
and (ii) the right to receive on such date an amount in cash
equal to all accrued and unpaid dividends thereon.
Conversion of the outstanding depositary shares (and the
Series C PERCS) is also required upon certain mergers or
consolidations of the Company or in connection with certain
other events. The Company has reserved 15,000,000 shares of
its common stock for the potential conversion of the Series C
PERCS. At any time and from time to time prior to the
mandatory conversion date, the Company may call the
outstanding Series C PERCS (and thereby the depositary
shares), in whole or in part, for redemption. Upon any such
redemption, each owner of depositary shares will receive, in
exchange for each depositary share so called, shares of Tandy
common stock having a market value initially equal to $43.87
(equivalent to $4,387.00 for each Series C PERCS), declining
by $.004085 (equivalent to $.408500 for each Series C PERCS)
on each day following the date of issue of the Series C PERCS
to $39.50 (equivalent to $3,950.00 for each Series C PERCS)
on February 15, 1995, and equal to $39.25 (equivalent to
$3,925.00 for each Series C PERCS) thereafter, plus an amount
in cash equal to all proportionate accrued and unpaid
dividends thereon. The liquidation preference for each
depositary share is $29.50 (equivalent to $2,950 for each
Series C PERCS) plus any accrued and unpaid dividends. The
holders of the Series C PERCS have the right, voting together
with the common stockholders as one class, to vote in the
election of directors and upon such other matters coming
before any meeting of the stockholders and are entitled to
cast 100 common stock votes for each Series C PERCS (or one
common stock vote for each depositary share).

Using a substantial portion of the proceeds from the
issuance of the Series C PERCS, the Company purchased
13,500,000 shares of its common stock at $32.00 per share in
a "Dutch Auction" self tender offer that expired on March 26,
1992.

NOTE 19-SUPPLEMENTAL CASH FLOW INFORMATION

The effects of changes in foreign exchange rates on cash
balances have not been material. Cash flows from operating
activities included cash payments as follows:

<TABLE>
<CAPTIONS>
Year Ended Six Months Ended Year Ended
December 31, December 31, June 30,
____________ ________________ ________________
(In thousands) 1993 1992 1992 1991
___________________________________________________________________________________________
<S> <C> <C> <C> <C>
Interest paid. . . . . . . . . . . . . $ 47,223 $29,480 $ 59,214 $ 89,321
Income taxes paid. . . . . . . . . . . $105,313 $62,466 $135,736 $142,355
</TABLE>

During the fiscal year ended June 30, 1991, the Company
incurred non-cash financing activities which included the
guarantee of TESOP indebtedness and increase in unearned
deferred compensation of $100,000,000 and treasury stock
issued under an earn-out program of $13,807,000.

NOTE 20-LITIGATION

NOTE 21-RELATIONS WITH INTERTAN
InterTAN Inc. ("InterTAN"), the former foreign retail
operations of Tandy, was spun off to Tandy stockholders as a
tax-free dividend in fiscal 1987. Under the merchandise
purchase terms of the original distribution agreement,
InterTAN could purchase on payment terms from Tandy, at
negotiated prices, new and replacement models of products
that Tandy had in its Radio Shack U.S. catalog or which Tandy
may reasonably secure. A&A International ("A&A"), a
subsidiary of Tandy, was the exclusive purchasing agent for
products originating in the Far East for InterTAN.

On July 30, 1993 Trans World Electronics, Inc. ("Trans
World"), a subsidiary of Tandy, reached agreement with
InterTAN's banking syndicate to buy approximately $42,000,000
of InterTAN's debt at a negotiated, discounted price. The
closing of this purchase occurred on August 5, 1993, at which
time Tandy resumed limited shipments to InterTAN and granted
a series of short-term, interim licenses pending the
execution of new license and merchandise agreements. The
debt purchased from the banks has been restructured into a
seven-year note with interest of 8.64% due semiannually
beginning February 25, 1994 and semiannual principal payments
beginning February 25, 1995 (the "Series A" note). Trans
World has provided approximately $10,000,000 in working
capital and trade credit to InterTAN. Interest on the
working capital loan (the "Series B" note) of 8.11% is due
semiannually beginning February 25, 1994 with the principal
due in full on August 25, 1996. Trans World also has
received warrants with a five-year term exercisable for
approximately 1,450,000 shares of InterTAN common stock at an
exercise price of $6.62 per share. As required by an
agreement with Trans World, InterTAN filed a registration
statement on January 21, 1994 seeking to register the
warrants under the Securities Act of 1933.

In addition to the bank debt purchased by Trans World
and the working capital loan, InterTAN's obligations to Trans
World included two additional notes for approximately
$23,665,000 (the "Series C" note) and $24,037,000, (the
"Series D" note) with interest rates of 7.5% and 8%,
respectively. The notes represent the restructuring of
InterTAN accounts payable for merchandise already shipped and
require monthly interest payments. Also, InterTAN had
obligations for purchase orders outstanding for merchandise
ordered by A&A for InterTAN but not yet shipped totaling
approximately $31,262,000 at December 31, 1993. All
principal and interest on the Series C note was paid in full
by December 31, 1993. As merchandise under existing
outstanding purchase orders is shipped, A&A will invoice
InterTAN and amounts owed will be assigned to Trans World and
will increase the amount of the Series D note. The balance
of the Series D note as of December 31, 1993 was
approximately $7,500,000. All of Tandy's debt from InterTAN
is secured by a first priority lien on substantially all of
InterTAN's assets.

NOTE 22-QUARTERLY DATA (UNAUDITED)

As the Company's operations are predominantly retail
oriented, its business is subject to seasonal fluctuations
with the December 31 quarter being the most significant in
terms of sales and profits because of the Christmas selling
season.

During the quarter ended December 31, 1993, the Company
recognized a gain, net of tax, from discontinued operations
of approximately $15,822,000. This gain partially offsets
the after-tax charge of $70,000,000 previously taken in the
June 1993 quarter and reduces the loss on disposal of
discontinued operations to approximately $54,178,000. The
gain resulted from the better than anticipated sales price
received for O'Sullivan partially offset by additional
foreign currency translation losses and below plan operating
results of the divested companies during the divestment
period, net of related income tax adjustments. See Note 3
for further information on discontinued operations.

During the quarter ended March 31, 1993, the Company
adopted FAS 109 which changes the Company's method of
accounting for income taxes from the deferred method to an
asset and liability approach. The adjustments to the January
1, 1993 balance sheet to adopt FAS 109 totaled $13,014,000.
This amount is reflected in 1993 net income as the cumulative
effect of a change in accounting principle. See Note 2 for
further information on Change in Accounting Principle -
Provision for Income Taxes.

During the quarter ended December 31, 1992, the Company
provided pre-tax reserves of $48,000,000 and $39,500,000 for
business restructuring relating to continuing and
discontinued operations, respectively. See Note 4 for
further information on restructuring and other charges.

During the quarter ended June 30, 1992, the Company
completed the sale of a Japanese subsidiary, the assets of
which were primarily real estate. The pre-tax gain from this
sale, including recognition of foreign currency translation
adjustments, was $18,987,000.

As discussed in detail in Note 2, income per share
amounts and the weighted average of common and common
equivalent shares outstanding for all quarters commencing
with the quarter ending March 31, 1992 (date of issuance)
through September 30, 1993 have been retroactively restated
for the assumption that the PERCS will convert into
12,457,133 shares in lieu of the previously used 15,000,000
common shares based upon the Company's stock price at
December 31, 1993.
<PAGE>
<TABLE>

QUARTERLY DATA (Unaudited)
<CAPTIONS>

Three Months Ended
Reclassified for discontinued operations. ________________________________________________________________
(In thousands, except per share Sept. 30, Dec. 31, Mar. 31, Jun. 30, Sept. 30, Dec. 31,
amounts) 1991 1991 1992 1992 1992 1992
________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Net sales and operating revenues . . . . . $834,977 $1,196,786 $815,668 $801,853 $875,850 $1,285,299
Cost of products sold. . . . . . . . . . . 430,980 638,490 425,713 431,207 477,065 744,166
________ __________ ________ ________ ________ __________
Gross profit . . . . . . . . . . . . . . . 403,997 558,296 389,955 370,646 398,785 541,133
________ __________ ________ ________ ________ __________

Expenses:
Selling, general and
administrative . . . . . . . . . . . . . 315,939 414,805 318,843 292,533 326,019 435,780
Depreciation and
amortization . . . . . . . . . . . . . . 18,256 18,045 18,654 19,566 19,713 20,247
Net interest income. . . . . . . . . . . . (2,743) (3,865) (9,173) (8,464) (6,310) (6,448)
Provision for restructuring
costs. . . . . . . . . . . . . . . . . . -- -- -- -- -- 48,000
________ __________ ________ ________ ________ __________
331,452 428,985 328,324 303,635 339,422 497,579

Income before income taxes,
discontinued operations and
cumulative effect of change in
accounting principle . . . . . . . . . . 72,545 129,311 61,631 67,011 59,363 43,554
Provision for income
taxes. . . . . . . . . . . . . . . . . . 26,290 46,863 22,335 24,297 20,326 14,910
________ __________ ________ ________ ________ __________

Income from continuing operations. . . . . 46,255 82,448 39,296 42,714 39,037 28,644

Income (loss) from discontinued operations (4,422) (3,638) (4,205) (14,601) (6,894) (56,981)
________ __________ ________ ________ ________ __________
Income (loss) before
cumulative effect of change
in accounting principle. . . . . . . . . 41,833 78,810 35,091 28,113 32,143 (28,337)

Cumulative effect on prior years
of change in accounting principle. . . . -- -- -- -- -- --
________ __________ ________ ________ ________ __________
Net income (loss). . . . . . . . . . . . . $ 41,833 $ 78,810 $ 35,091 $ 28,113 $ 32,143 $ (28,337)
________ __________ ________ ________ ________ __________
________ __________ ________ ________ ________ __________

Net income (loss) per average common
and common equivalent share:
Income from continuing operations. . . . . $ .57 $ 1.04 $ .46 $ .54 $ .50 $ .36
Loss from discontinued operations. . . . . (0.05) (0.04) (0.05) (0.19) (0.09) (0.75)
________ __________ ________ ________ ________ __________
Income (loss) before cumulative effect of
change in accounting principle . . . . . .52 1.00 .41 .35 .41 (0.39)
Cumulative effect on prior years
of change in accounting principle. . . . -- -- -- -- -- --
________ __________ ________ ________ ________ __________

Net income (loss) per average common
and common equivalent share. . . . . . . $ .52 $ 1.00 $ .41 $ .35 $ .41 $ (0.39)
________ __________ ________ ________ ________ __________
________ __________ ________ ________ ________ __________

Dividends declared per common
share. . . . . . . . . . . . . . . . . . $ .15 $ .15 $ .15 $ .15 $ .15 $ .15
________ __________ ________ ________ ________ __________
________ __________ ________ ________ ________ __________
Average common and common equivalent
shares outstanding . . . . . . . . . . . 78,434 77,863 82,259 77,387 75,507 75,611
________ __________ ________ ________ ________ __________
________ __________ ________ ________ ________ __________
</TABLE>
<PAGE>
<TABLE>
QUARTERLY DATA (Unaudited) (continued)
<CAPTIONS>
Three Months Ended
Reclassified for discontinued operations. __________________________________________
(In thousands, except per share Mar. 31, Jun. 30, Sept. 30, Dec. 31,
amounts) 1993 1993 1993 1993
________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Net sales and operating revenues . . . . . . . . . . $864,712 $ 843,111 $939,897 $1,454,831
Cost of products sold. . . . . . . . . . . . . . . . 474,992 474,245 539,362 894,008
________ _________ ________ __________
Gross profit . . . . . . . . . . . . . . . . . . . . 389,720 368,866 400,535 560,823
________ _________ ________ __________
________ _________ ________ __________

Expenses:
Selling, general and
administrative . . . . . . . . . . . . . . . . . . 313,190 306,654 317,699 417,133
Depreciation and
amortization . . . . . . . . . . . . . . . . . . . 19,965 20,438 20,090 19,451
Net interest income. . . . . . . . . . . . . . . . . (7,488) (8,211) (4,276) (5,856)
Provision for
restructuring costs. . . . . . . . . . . . . . . . -- -- -- --
________ _________ ________ __________
325,667 318,881 333,513 430,728

Income before income taxes,
discontinued operations and
cumulative effect of change in
accounting principle . . . . . . . . . . . . . . . 64,053 49,985 67,022 130,095
Provision for income
taxes. . . . . . . . . . . . . . . . . . . . . . . 23,380 18,244 24,463 49,436
_______ _________ ________ __________
Income from continuing operations. . . . . . . . . . 40,673 31,741 42,559 80,659

Income (loss) from discontinued operations . . . . . (18,542) (109,077) -- 15,822
________ _________ ________ __________
Income (loss) before
cumulative effect of change
in accounting principle. . . . . . . . . . . . . . 22,131 (77,336) 42,559 96,481

Cumulative effect on prior years
of change in accounting principle. . . . . . . . . 13,014 -- -- --
________ _________ ________ __________
Net income (loss). . . . . . . . . . . . . . . . . . $ 35,145 $ (77,336) $ 42,559 $ 96,481
________ _________ ________ __________
________ _________ ________ __________

Net income (loss) per average common
and common equivalent share:
Income from continuing operations. . . . . . . . . . $ .51 $ .39 $ .53 $ 1.03
Income (loss) from discontinued operations . . . . . (.24) (1.43) -- .21
________ _________ ________ __________
Income (loss) before cumulative effect of
change in accounting principle . . . . . . . . . . .27 (1.04) .53 1.24
Cumulative effect on prior years of change
in accounting principle. . . . . . . . . . . . . . .17 -- -- --
________ _________ ________ __________

Net income (loss) per average common
and common equivalent share. . . . . . . . . . . . $ .44 $ (1.04) $ .53 $ 1.24
________ _________ ________ __________
________ _________ ________ __________

Dividends declared per common
share. . . . . . . . . . . . . . . . . . . . . . . $ .15 $ .15 $ .15 $ .15
________ _________ ________ __________
________ _________ ________ __________
Average common and common equivalent
shares outstanding . . . . . . . . . . . . . . . . 75,722 76,028 76,307 76,674
________ _________ ________ __________
________ _________ ________ __________
</TABLE>
<PAGE>
<TABLE>
Property, Plant and Equipment SCHEDULE V
Tandy Corporation and Subsidiaries
<CAPTIONS>
Reclassification
Balance at of Balance at
Beginning Additions Retirements Discontinued End of
(In thousands) of Period at Cost and Sales Other(1) Operations Period
_______________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Year Ended December 31, 1993
Land . . . . . . . . . . . . . . . $ 26,044 $ 8,650 $ (1,126) $ -- $ (1,222) $ 32,346
Buildings. . . . . . . . . . . . . 209,608 18,137 (21,868) (359) (31,392) 174,126
Furniture, fixtures and equipment. 534,316 64,768 (124,665) (527) (79,650) 394,242
Leasehold improvements . . . . . . 319,701 37,732 (42,907) (102) -- 314,424
__________ ________ __________ ________ __________ __________
$1,089,669 $129,287 $(190,566) $ (988) $(112,264) $ 915,138
__________ ________ __________ ________ __________ __________
__________ ________ __________ ________ __________ __________

Six Months Ended December 31, 1992
Land . . . . . . . . . . . . . . . $ 25,802 $ 242 $ -- $ -- $ -- $ 26,044
Buildings. . . . . . . . . . . . . 197,286 12,515 -- (193) -- 209,608
Furniture, fixtures and equipment. 510,310 40,087 (13,742) (2,339) -- 534,316
Leasehold improvements . . . . . . 311,560 16,817 (8,414) (262) -- 319,701
__________ ________ __________ ________ __________ __________
$1,044,958 $ 69,661 $ (22,156) $(2,794) $ -- $1,089,669
__________ ________ __________ ________ __________ __________
__________ ________ __________ ________ __________ __________

Year Ended June 30, 1992
Land . . . . . . . . . . . . . . . $ 18,657 $ 8,458 $ (1,313) $ -- $ -- $ 25,802
Buildings. . . . . . . . . . . . . 186,656 11,334 (1,707) 1,003 -- 197,286
Furniture, fixtures and equipment. 464,341 72,240 (28,953) 2,682 -- 510,310
Leasehold improvements . . . . . . 295,674 35,462 (19,658) 82 -- 311,560
__________ ________ __________ ________ __________ __________
$ 965,328 $127,494 $ (51,631) $ 3,767 $ -- $1,044,958
__________ ________ __________ ________ __________ __________
__________ ________ __________ ________ __________ __________

Year Ended June 30, 1991
Land . . . . . . . . . . . . . . . $ 16,781 $ 2,075 $ (332) $ 133 $ -- $ 18,657
Buildings. . . . . . . . . . . . . 154,282 34,735 (2,279) (82) -- 186,656
Furniture, fixtures and equipment. 451,486 69,111 (56,321) 65 -- 464,341
Leasehold improvements . . . . . . 271,206 45,178 (20,701) (9) -- 295,674
__________ ________ __________ ________ __________ __________
$ 893,755 $151,099 $ (79,633) $ 107 $ 965,328
__________ ________ __________ ________ __________ __________
__________ ________ __________ ________ __________ __________
</TABLE>

(1) FAS No. 52, "Foreign Currency Translation," requires
that foreign fixed assets and related accumulated
depreciation be translated into U.S. dollars at the rates in
effect at the date of the balance sheet. The amounts shown
in the "Other" column reflect the changes in currency values
between the balance sheet dates.
<PAGE>
<TABLE>
Accumulated Depreciation and Amortization SCHEDULE VI
of Property, Plant and Equipment
Tandy Corporation and Subsidiaries
<CAPTIONS>
Reclassification
Balance at of Balance at
Beginning Retirements Discontinued End of
(In thousands) of Period Depreciation and Sales Other(1) Operations Period
________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1993
Buildings. . . . . . . . . . . . $ 45,814 $ 5,941 $ (4,314) $ (40) $ (7,036) $ 40,365
Furniture, fixtures and equipment 319,969 60,484 (95,872) (108) (46,781) 237,692
Leasehold improvements . . . . . 177,301 27,106 (31,094) 30 -- 173,343
________ _______ __________ ________ _________ ________
$543,084 $93,531 $(131,280) $ (118) $(53,817) $451,400
________ _______ __________ ________ _________ ________
________ _______ __________ ________ _________ ________

Six Months Ended December 31, 1992
Buildings. . . . . . . . . . . . $ 42,874 $ 2,733 $ -- $ 207 $ -- $ 45,814
Furniture, fixtures and equipment 300,000 32,673 (11,193) (1,511) -- 319,969
Leasehold improvements . . . . . 170,984 14,371 (7,941) (113) -- 177,301
________ _______ __________ ________ _________ ________
$513,858 $49,777 $ (19,134) $(1,417) $ -- $543,084
________ _______ __________ ________ _________ ________
________ _______ __________ ________ _________ ________

Year Ended June 30, 1992
Buildings. . . . . . . . . . . . $ 38,641 $ 5,251 $ (1,149) $ 131 $ -- $ 42,874
Furniture, fixtures and equipment 262,508 61,377 (25,622) 1,737 -- 300,000
Leasehold improvements 159,273 29,301 (17,668) 78 -- 170,984
________ _______ __________ ________ _________ ________
$460,422 $95,929 $ (44,439) $ 1,946 $ -- $513,858
________ _______ __________ ________ _________ ________
________ _______ __________ ________ _________ ________

Year Ended June 30, 1991
Buildings. . . . . . . . . . . . $ 35,194 $ 4,225 $ (858) $ 80 $ -- $ 38,641
Furniture, fixtures and equipment 252,545 60,040 (50,308) 231 -- 262,508
Leasehold improvements . . . . . 148,193 28,433 (17,408) 55 -- 159,273
________ _______ __________ ________ _________ ________
$435,932 $92,698 $ (68,574) $ 366 $ -- $460,422
________ _______ __________ ________ _________ ________
________ _______ __________ ________ _________ ________
</TABLE>

SCHEDULE X
Charged to Costs and Expenses
Tandy Corporation and Subsidiaries
<CAPTIONS>

Year Ended Six Months Ended
December 31, December 31, Year Ended June 30,
____________ ________________ ____________________
(In thousands) 1993 1992 1992 1991
___________________________________________________________________________________________
<S> <C> <C> <C> <C>
Maintenance and repairs. . . . . . . * * * *
Depreciation and amortization of
intangible assets, preoperating
costs and similar deferrals. . . . * * * *
Taxes, other than payroll and
income taxes . . . . . . . . . . . $ 37,719 $ 18,919 $ 32,225 $ 28,446
Royalties. . . . . . . . . . . . . . * * * *
Advertising costs. . . . . . . . . . $205,831 $150,374 $239,352 $251,903

* Less than 1% of sales and operating revenues.
</TABLE>
<PAGE>

TANDY CORPORATION
INDEX TO EXHIBITS

Exhibit
Number Description

2a Agreement for Purchase and Sale of Assets dated
as of June 30, 1993 between AST Research, Inc.,
as Purchaser and Tandy Corporation, TE
Electronics Inc., and GRiD Systems Corporation,
as Sellers (without exhibits) (filed as Exhibit 2
to Tandy's July 13, 1993 Form 8-K filed on July
27, 1993, Accession No. 0000096289-93-000004 and
incorporated herein be reference).

2b Amended and Restated Stock Exchange Agreement
dated February 1, 1994 by and among O'Sullivan
Industries Holdings, Inc., and TE Electronics
Inc.

2c U.S. Purchase Agreement dated January 26, 1994 by
and among O'Sullivan Industries Holdings, Inc.,
TE Electronics Inc. and the U.S. Underwriters
which included Merrill Lynch & Co., Wheat First
Butcher & Singer, The Chicago Dearborn Company
and Rauscher Pierce Refsnes, Inc.

2d International Purchase Agreement dated January
26, 1994 by and among O'Sullivan Industries
Holdings, Inc., TE Electronics Inc. and the U.S.
Underwriters which included Merrill Lynch
International Limited and UBS Limited.

3a(i) Restated Certificate of Incorporation of Tandy
dated December 10, 1982 (filed as Exhibit 4A to
Tandy's 1993 Form S-8 for the Tandy Corporation
Incentive Stock Plan, Reg. No. 33-51603, filed on
November 12, 1993, Accession No.
0000096289-93-000017 and incorporated herein by
reference).

3a(ii) Certificate of Amendment of Certificate of
Incorporation of Tandy Corporation dated November
13, 1986 (filed as Exhibit 4A to Tandy's 1993
Form S-8 for the Tandy Corporation Incentive
Stock Plan, Reg. No. 33-51603, filed on November
12, 1993, Accession No. 0000096289-93-000017 and
incorporated herein by reference).

3a(iii) Certificate of Amendment of Certificate of
Incorporation, amending and restating the
Certificate of Designation, Preferences and
Rights of Series A Junior Participating Preferred
Stock dated June 22, 1990 (filed as Exhibit 4A to
Tandy's 1993 Form S-8 for the Tandy Corporation
Incentive Stock Plan, Reg. No. 33-51603, filed on
November 12, 1993, Accession No.
0000096289-93-000017 and incorporated herein by
reference).

3a(iv) Certificate of Designations of Series B TESOP
Convertible Preferred dated June 29, 1990 (filed
as Exhibit 4A to Tandy's 1993 Form S-8 for the
Tandy Corporation Incentive Stock Plan, Reg. No.
33-51603, filed on November 12, 1993, Accession
No. 0000096289-93-000017 and incorporated herein
by reference).

3a(v) Certificate of Designation, Series C Conversion
Preferred Stock dated February 13, 1992 (filed as
Exhibit 4A to Tandy's 1993 Form S-8 for the
Tandy Corporation Incentive Stock Plan, Reg. No.
33-51603, filed on November 12, 1993, Accession
No. 0000096289-93-000017 and incorporated herein
by reference).

3b Tandy Corporation Bylaws, restated as of August
4, 1993 (filed as Exhibit 4B to Tandy's Form S-8
for the Tandy Corporation Incentive Stock Plan,
Reg. No. 33-51603, filed on November 12, 1993,
Accession No. 0000096289-93-000017 and
incorporated herein by reference).

4a Indenture, dated June 30, 1974, for 10%
Subordinated Debentures due 1994.

4b Amended and restated Rights Agreement with the
First National Bank of Boston dated June 22, 1990
for Preferred Share Purchase Rights.

4c(i) Revolving Credit Agreement between Tandy Credit
Corporation, Tandy Corporation and Texas Commerce
Bank, individually and as Agent for eleven other
banks, dated as of June 17, 1991.

4c(ii) First Amendment to Revolving Credit Agreement
between Tandy Credit Corporation, Tandy
Corporation and Texas Commerce Bank, individually
and as agent for eleven other banks, dated June
11, 1992.

4c(iii) Second Amendment to Revolving Credit Agreement
between Tandy Credit Corporation, Tandy
Corporation and Texas Commerce Bank National
Association, individually and as agent for eleven
other banks, dated June 8, 1993 (filed as Exhibit
4c(iii) to Tandy's Form 10-Q filed on November
16, 1993, Accession No. 0000096289-93-000018
and incorporated herein by reference).

4d Continuing Guaranty dated June 18, 1991 by Tandy
of obligations of the Company in favor of the
banks participating in the Revolving Credit
Agreement.

4e Continuing Guaranty dated as of June 18, 1991 by
Tandy Corporation in favor of holders of
indebtedness issued by Tandy Credit Corporation
that is or may be publicly traded and is rated by
at least one nationally recognized rating agency.

10a* Salary Continuation Plan for Executive Employees
of Tandy Corporation and Subsidiaries including
amendment dated June 14, 1984 with respect to
participation by certain executive employees, as
restated October 4, 1990.

10b* Form of Executive Pay Plan Letters

10c* Post Retirement Death Benefit Plan for Selected
Executive Employees of Tandy Corporation and
Subsidiaries as restated June 10, 1991.10d

10d* Tandy Corporation Officers Deferred Compensation
Plan as restated July 10, 1992.

10e* Special Compensation Plan No. 1 for Tandy
Corporation Executive Officers, adopted in 1993.

10f* Special Compensation Plan No. 2 for Tandy
Corporation Executive Officers, adopted in 1993.

10g* Special Compensation Plan for Directors of Tandy
Corporation dated November 13, 1986.

10h* Director Fee Resolution.

10i* Tandy Corporation 1985 Stock Option Plan as
restated effective August 1990.

10j* Tandy Corporation 1993 Incentive Stock Plan as
restated October 14, 1993 (filed as Exhibit 4B to
Tandy's Form S-8 for Tandy Corporation Incentive
Stock Plan, Reg. No. 33-51603, filed on November
12, 1993, Accession No. 0000096289-93-000017 and
incorporated herein by reference).

10k* Tandy Corporation Officers Life Insurance Plan as
amended and restated effective August 22, 1990.

10l* Restated Trust Agreement Tandy Employees
Supplemental Stock Program through Amendment No.
III dated March 29, 199 (filed as Exhibit 10H
to Tandy's Form 10-K/A-4 filed on September 3,
1993, Accession No. 0000096289-93-000011 and
incorporated herein by reference).

10m* Forms of Termination Protection Agreements for
(i) Corporate Executives, (ii) Division
Executives, and iii) Subsidiary Executives.

10n* Tandy Corporation Termination Protection Plans
for Executive Employees of Tandy Corporation and
its Subsidiaries (i) the Level I and (ii) Level
II Plans.

10o* Forms of Bonus Guarantee Letter Agreements with
certain Executive Employees of Tandy Corporation
and its Subsidiaries i) Formula, ii) Discretionary,
and iii) Pay Plan.

10p* Form of Indemnity Agreement with Directors,
Corporate Officers and two Division Officers of
Tandy Corporation.

11 Statement of Computation of Earnings per Share

12 Statement of Computation of Ratios of Earnings to
Fixed Charges

22 Subsidiaries

23 Consent of Independent Accountants

_______________________

* Each of these exhibits is a "management contract or
compensatory plan, contract, or arrangement".

Exhibit 2b
O'SULLIVAN INDUSTRIES HOLDINGS, INC.
AMENDED AND RESTATED
STOCK EXCHANGE AGREEMENT

This AMENDED AND RESTATED STOCK EXCHANGE AGREEMENT (the
"Agreement") is made and entered into as of February 1, 1994,
between O'Sullivan Industries Holdings, Inc., a Delaware
corporation ("O'Sullivan"), and TE Electronics Inc., a
Delaware corporation ("TE").

RECITALS
WHEREAS, TE owns 100 shares of common stock, par value
$1.00 per share, of O'Sullivan Industries, Inc. (the "Old
O'Sullivan Stock"), a Delaware corporation ("Old
O'Sullivan"), such stock being all of the issued and
outstanding capital stock of Old O'Sullivan;

WHEREAS, TE desires to transfer the Old O'Sullivan Stock
to O'Sullivan in exchange for the issuance by O'Sullivan to
TE of 14,999,900 shares of common stock, par value $1.00 per
share, of O'Sullivan together with the Preferred Stock
Purchase Rights of O'Sullivan associated with such shares
(the "Common Stock"),and O'Sullivan desires to issue the
Common Stock to TE in exchange for the Old O'Sullivan Stock;

WHEREAS, following such issuance the issued and
outstanding capital stock of O'Sullivan will consist of
15,000,000 shares of Common Stock, all of which will be owned
by TE; and

WHEREAS, all of the shares of O'Sullivan Common Stock
issued to TE will be offered for sale in the Offerings
pursuant to the U.S. Purchase Agreement and International
Purchase Agreement, as such terms are defined in the
Prospectus (as amended from time to time, the "Prospectus")
constituting a part of the Registration Statement No.
33-72120 on Form S-1 filed by O'Sullivan with the Securities
and Exchange Commission on November 24, 1993 (as amended from
time to time, the "Registration Statement").

AGREEMENT

NOW, THEREFORE, in consideration of the premises and of
the mutual agreements, covenants, representations and
warranties contained herein, the above parties hereby agree,
subject to the terms and conditions hereinafter set forth, as
follows:

1. Terms of Purchase and Sale of Shares.

1.01 Purchase and Sale of Shares. At the closing (as
defined in Section 1.02): (i) O'Sullivan shall issue to TE
14,999,900 shares of the Common Stock and (ii) TE shall sell,
assign, transfer and convey to O'Sullivan (x) the Old
O'Sullivan Stock free and clear of all liens, encumbrances,
restrictions and claims whatsoever and (y) the right to
receive the Adjustment Date Payment Amount (as defined below)
if a negative number. As additional purchase price under
this Agreement, O'Sullivan shall pay to TE the Tax Benefit
Payments (as such term is defined in the Tax Sharing and Tax
Benefit Reimbursement Agreement, dated as of January 24,
1994, between Tandy, TE and O'Sullivan the ("Tax Sharing
Agreement")) and the right to receive the Adjustment Date
Payment Amount, if a positive number. "Adjustment Date
Payment Amount" shall have the meaning given to it in the
Closing Adjustment Agreement to be entered into by TE and
O'Sullivan.

1.02 Closing. The issuance of the Common Stock in
exchange for the Old O'Sullivan Stock contemplated by Section
1.01 (the "Closing") shall take place at the offices of TE
Electronics Inc., 200 Taylor Street, Suite 700, Fort Worth,
Texas 76102 at 12:01 a.m. on the date that the transactions
contemplated by the U.S. Purchase Agreement and the
International Purchase Agreement (the "Purchase Agreements")
close; or such earlier date as TE and O'Sullivan shall
mutually agree (the "Closing Date"); provided, however, that
the Closing shall not occur earlier than one day after the
date (the "Underwriting Date") that TE enters into the
Purchase Agreements committing TE to sell 15,000,000 shares
of Common Stock.

2. Representations and Warranties of O'Sullivan.

O'Sullivan hereby represents and warrants as
follows:

2.01 Organization, Standing and Power. O'Sullivan is a
corporation, duly organized, validly existing and in good
standing under the laws of the State of Delaware. O'Sullivan
has all requisite corporate power and authority to own, lease
and operate its properties and assets and to carry on its
business as now conducted and as proposed to be conducted
prior to or on the Closing Date and to execute, deliver and
perform this Agreement and to consummate the transactions
hereby contemplated.

2.02 Authority. The execution, delivery and
performance by O'Sullivan of this Agreement and the
consummation by O'Sullivan of the transactions contemplated
hereby have been duly and validly authorized by all necessary
corporate action on the part of the Company (including
without limitation; the approval of its Board of Directors
and any approval or consent of stockholders required by law
or by its Certificate of Incorporation or By-laws). This
Agreement is the legal, valid and binding obligation of
O'Sullivan, enforceable in accordance with its terms, except
to the extent that such enforceability may be limited by
bankruptcy, insolvency or other similar laws relating to
creditors' rights generally, and is subject to general
principles of equity.

2.03 No Conflicts. Neither the execution and delivery
of this Agreement nor the consummation of the transactions
contemplated hereby nor compliance by O'Sullivan with any of
the provisions hereof, will:

(a) conflict with or result in a breach of any
provision of O'Sullivan's Certificate of Incorporation or
By-laws; or

(b) constitute or result in the breach of any
term, condition or provision of, or constitute a default
under, or give rise to any right of termination, cancellation
or acceleration with respect to, or result in the creation of
any lien, charge or encumbrance upon any property or asset of
O'Sullivan pursuant to, any note, bond, mortgage, indenture,
license, agreement or other instrument or obligation to which
O'Sullivan is a party or by which O'Sullivan or any of its
properties or assets may be bound and which is material to
the operations of O'Sullivan except for such conflicts,
breaches or defaults as to which written waivers or consents
shall have been obtained by O'Sullivan on or prior to the
Closing Date; or

(c) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to O'Sullivan or any
of its properties or assets.

2.04 Capital Structure.

(a) Upon consummation of the transaction
contemplated hereby, the authorized capital stock of
O'Sullivan will consist of:

(i) 100,000,000 shares of Common Stock, par
value $1.00 per share, of which 15,000,000 shares will be
validly issued and outstanding; and

(ii) 20,000,000 shares of preferred stock,
par value $1.00 per share, of which no shares will be validly
issued and outstanding.

(b) All outstanding shares of O'Sullivan's capital
stock will have been duly authorized and validly issued, will
be fully paid and non-assessable, and will not have been
issued in violation of any pre-emptive rights.

(c) Except as set forth on Schedule 2.04, there is
outstanding no security, option, warrant, right, call,
subscription, agreement, commitment or understanding of any
nature whatsoever, fixed or contingent, that directly or
indirectly:

(i) calls for the issuance, sale, pledge or
other disposition of any shares or of any other capital stock
of O'Sullivan or any securities convertible into, or other
rights to acquire, any such shares or other capital stock of
O'Sullivan; or

(ii) obligates O'Sullivan to grant, offer or
enter into any of the foregoing; or

(iii) relates to the voting or control of
such shares, capital stock, securities or rights.

2.05 Certificate of Incorporation; By-laws.
O'Sullivan's Certificate of Incorporation, as certified by
the appropriate official of the State of Delaware, and its
By-laws are attached hereto as Exhibit A. Such Certificate
and By-laws are complete and correct, and are in full force
and effect, and O'Sullivan is not in violation of any of the
provisions of either such document.

2.06 Title to Shares. Upon issuance and delivery to TE
of the O'Sullivan Common Stock, and subject to the terms of
the Purchase Agreements, O'Sullivan will convey to TE legal
and valid title to the Common Stock free and clear of all
liens, encumbrances and claims whatsoever.

2.07 Consents and Approvals. Except as set forth on
Schedule 2.07, no authorization, consent, order or approval
of or notice to or filing with, any federal, state or local
governmental authority is required in connection with the
execution, delivery and performance by O'Sullivan of the
transactions contemplated hereby.

2.08 Formation. O'Sullivan has been formed prior to
the Closing solely to permit registration of its common stock
with the Securities and Exchange Commission and to enable it
to acquire all of the Old O'Sullivan stock at the Closing.
Except for activities incident to these actions, prior to
Closing, O'Sullivan will have engaged in no activities and
will have carried on no business.

3. Representations and Warranties of TE.

TE hereby represents and warrants as follows:

3.01 Organization, Standing and Power of TE. TE is a
corporation, duly organized, validly existing and in good
standing under the laws of the State of Delaware. TE has all
requisite corporate power and authority to own, lease and
operate its properties and assets and to carry on its
business as now conducted and as proposed to be conducted
prior to the Closing Date and to execute, deliver and perform
this Agreement and to consummate the transactions hereby
contemplated.

3.02 Organization of Old O'Sullivan. Old O'Sullivan is
a corporation, duly organized, validly existing and in good
standing under the laws of the State of Delaware.

3.03 Authority. The execution, delivery and performance
by TE of this Agreement and the consummation by TE of the
transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action on the
part of TE (including without limitation; the approval of its
Board of Directors and the approval or consent of its
stockholder). This Agreement is the legal, valid and binding
obligation of TE, enforceable in accordance with its terms,
except to the extent that such enforceability may be limited
by bankruptcy, insolvency or other similar laws relating to
creditors' rights generally, and is subject to general
principles of equity.

3.04 No Conflicts. Neither the execution and delivery
of this Agreement nor the consummation of the transactions
contemplated hereby nor compliance by TE with any of the
provisions hereof, will:

(a) conflict with or result in a breach of any
provision of TE's Certificate of Incorporation or By-laws; or

(b) constitute or result in the breach of any
term, condition or provision of, or constitute a default
under, or give rise to any right of termination, cancellation
or acceleration with respect to, or result in the creation of
any lien, charge or encumbrance upon any property or asset of
TE pursuant to, any note, bond, mortgage, indenture, license,
agreement or other instrument or obligation to which TE is a
party or by which TE or any of its respective properties or
assets may be bound and which is material to the operations
of TE except for such conflicts, breaches or defaults as to
which written waivers or consents shall have been obtained by
TE on or prior to the Closing Date; or

(c) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to TE or any of its
properties or assets.

3.05 Capital Structure of Old O'Sullivan.

(a) The authorized capital structure of Old
O'Sullivan consists of 100 shares of Common Stock, par value
$1.00 per share, of which 100 shares are validly issued and
outstanding; and

(b) All outstanding shares of Old O'Sullivan's
capital stock have been duly authorized and validly issued,
are fully paid and non-assessable, and have not been issued
in violation of any pre- emptive rights.

(c) Except as set forth on Schedule 3.05, there is
outstanding no security, option, warrant, right, call,
subscription, agreement, commitment or understanding of any
nature whatsoever, fixed or contingent, that directly or
indirectly:

(i) calls for the issuance, sale, pledge or
other disposition of any shares or of any other capital stock
of Old O'Sullivan or any securities convertible into, or
other rights to acquire, any such shares or other capital
stock of Old O'Sullivan; or

(ii) obligates Old O'Sullivan to grant, offer
or enter into any of the foregoing; or

(iii) relates to the voting or control of
such shares, capital stock, securities or rights.

3.06 Certificate of Incorporation; By-laws. TE's
Certificate of Incorporation, as certified by the appropriate
official of the State of Delaware, and its By-laws are
attached hereto as Exhibit B. Such Certificate and By-laws
are complete and correct, and are in full force and effect,
and TE is not in violation of any of the provisions of either
such document.

3.07 Title to Shares. Upon the sale and delivery to
O'Sullivan of the Old O'Sullivan Stock, TE will convey to
O'Sullivan legal and valid title to the Old O'Sullivan Stock
free and clear of all liens, encumbrances and claims
whatsoever.

3.08 Consents and Approvals. Except as set forth on
Schedule 3.08, no authorization, consent, order or approval
of or notice to or filing with, any federal, state or local
governmental authority is required in connection with the
execution, delivery and performance by TE of the transactions
contemplated hereby.

4. Certain Covenants of the Parties.

O'Sullivan and TE hereby covenant to and agree with one
another as follows:

4.01 Conduct of Business. O'Sullivan will take such
action that is necessary to effect the offering and sale of
Common Stock pursuant to the Purchase Agreements.

4.02 Fees and Expenses. TE shall pay all of the fees
and expenses incurred by O'Sullivan, Old O'Sullivan or TE in
connection with (a) the registration and sale of shares of
O'Sullivan Common Stock and (b) the sale of any shares sold
by O'Sullivan pursuant to the exercise of the over-allotment
options (as such term is defined in the Prospectus).

4.03 Tax Covenants.

(a) O'Sullivan agrees that for at least a three
(3) year period following the Closing, neither O'Sullivan nor
Old O'Sullivan shall cease to remain in existence as separate
corporations.

(b) No later than two (2) business days after the
Closing, TE will sell all of the Common Stock to the U.S.
Underwriters and the Managers, as such terms are defined in
the Prospectus, pursuant to the Purchase Agreements.

4.04 Sale of Shares. TE acknowledges that all of the
shares of O'Sullivan Common Stock may be resold only upon
registration under the Securities Act of 1933 or pursuant to
an exemption from registration thereunder.

5. Conditions Precedent to Obligations of O'Sullivan.

The obligations of O'Sullivan to consummate the
transactions contemplated hereby shall be subject to the
satisfaction on or prior to the Closing Date of all of the
following conditions, except such conditions as O'Sullivan
may waive (other than the condition contained in Section
5.03, which condition O'Sullivan shall not be entitled to
waive):

5.01 Representations, Warranties and Covenants of TE.
TE shall have complied in all material respects with all of
its agreements and covenants contained herein required to be
complied with at or prior to the Closing Date, and all the
representations and warranties of TE contained herein shall
be true in all material respects on and as of the Closing
Date with the same effect as though made on and as of the
Closing Date, except to the extent that such representations
and warranties expressly make reference to a specified date
and as to such representations and warranties the same shall
continue on the Closing Date to have been true in all
material respects as of the specified date. O'Sullivan shall
have received a certificate executed by or on behalf of TE,
and dated as of the Closing Date, (a) certifying as to the
fulfillment of the conditions set forth in this Section 5.01
and (b) attaching thereto a certified copy of the resolutions
of TE's Board of Directors and sole stockholder approving
this Agreement.

5.02 No Governmental or Other Proceeding. No order of
any court or governmental or regulatory authority or body
which restrains or prohibits the transactions contemplated
hereby shall be in effect on the Closing Date and no suit or
investigation by any government agency to enjoin the
transactions contemplated hereby or seek damages or other
relief as a result thereof shall be pending or threatened as
of the Closing Date.

5.03 Purchase Agreement. TE and O'Sullivan shall have
executed the Purchase Agreements, in substantially the forms
thereof attached hereto as Exhibit C, and TE's obligation to
sell the Common Stock pursuant to the Purchase Agreements
shall be a legal, valid and binding obligation of TE.

5.04 Tax Sharing Agreement. Tandy shall have executed
the Tax Sharing Agreement.

6. Conditions Precedent to Obligations of TE.

The obligations of TE to consummate the transactions
contemplated hereby shall be subject to the satisfaction on
or prior to the Closing Date of all of the following
conditions, except such conditions as TE may waive (other
than the conditions set forth in Section 6.03, which
condition may not be waived):

6.01 Warranties, Representations and Covenants of
O'Sullivan. O'Sullivan shall have complied in all material
respects with all of its agreements and covenants contained
herein required to be complied with at or prior to the
Closing Date, and all the representations and warranties of
O'Sullivan contained herein shall be true in all material
respects on and as of the Closing Date with the same effect
as though made on and as of the Closing Date, except to the
extent that such representations and warranties expressly
make reference to a specified date and as to such
representations and warranties the same shall continue on the
Closing Date to have been true in all material respects as of
the specified date. TE shall have received a certificate
executed by or on behalf of O'Sullivan, and dated as of the
Closing Date, (a) certifying as to the fulfillment of the
conditions set forth in this Section 6.01 and (b) attaching
thereto a certified copy of the resolutions of O'Sullivan's
Board of Directors approving this Agreement.

6.02 No Governmental or Other Proceeding. No order of
any court or governmental or regulatory authority or body
which restrains or prohibits the transactions contemplated
hereby shall be in effect on the Closing Date and no suit or
investigation by any government agency to enjoin the
transactions contemplated hereby or seek damages or other
relief as a result thereof shall be pending or threatened as
of the Closing Date.

6.03 Purchase Agreement. TE and O'Sullivan shall have
executed the Purchase Agreements, in substantially the forms
thereof attached hereto as Exhibit C, and TE's obligation to
sell the Common Stock pursuant to the Purchase Agreements
shall be a legal, valid and binding obligation of TE.

6.04 Tax Sharing Agreement. O'Sullivan shall have
executed the Tax Sharing Agreement.

7. Deliveries at Closing.

7.01 Deliveries by O'Sullivan. At the Closing,
O'Sullivan shall deliver, or cause to be delivered, to TE the
following:

(a) one or more stock certificates representing an
aggregate of 14,999,900 shares of O'Sullivan Common Stock,
duly executed and indicating TE as holder thereof;

(b) the certificate referred to in Section 6.01.

7.02 Deliveries by TE. At the Closing, TE shall
deliver, or cause to be delivered, to O'Sullivan thefollowing:

(a) stock certificates representing 100 shares of
Old O'Sullivan Stock, duly endorsed in blank or accompanied
by appropriate stock transfer powers executed by TE;

(b) the certificate referred to in Section 5.01.

8. Termination Prior to Closing.

8.01 Termination of Agreement. This Agreement may be
terminated prior to the Closing in any of the following ways:

(a) By the mutual written consent of O'Sullivan
and TE;

(b) By termination of the Purchase Agreements;

(c) By either party in writing, against the other,
if one or the other, as the case may be, shall (i) fail to
perform in any material respect its agreements contained
herein required to be performed prior to the Closing Date or
(ii) materially breach any of its representations,
warranties, covenants or agreements contained herein, which
failure or breach is not cured within five days after the
party seeking to terminate has notified the other party of
its intent to terminate this Agreement pursuant to this
clause;

(d) On the Closing Date by O'Sullivan in writing,
if any of the conditions set forth in Article V hereof shall
not have been met and, if not so met, has not been waived by
O'Sullivan in writing;

(e) On the Closing Date by TE in writing, if any
of the conditions set forth in Article VI hereof shall not
have been met and, if not so met, has not been waived by TE
in writing; or

(f) By either party in writing if the Closing
shall not have occurred on or before February 28, 1994 or
such other date to which the Agreement has been extended
pursuant to Section 1.02; provided, however, that this
Agreement may not be terminated by a party pursuant to this
Section 8.01(f) if the failure of the Closing to occur on or
before such date is due to the breach by such party of any of
its obligations hereunder.

8.02 Automatic Termination. This Agreement shall be
terminated if the Purchase Agreements have not been executed
on or before February 15, 1994.

9. Miscellaneous.

9.01 Severability. A determination that any provision
of this Agreement is unenforceable or invalid shall not
affect the enforceability or validity of any other provision
and a determination that the application of any provision of
this Agreement to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity
of such provision as it may apply to other persons or
circumstances.

9.02 Successors and Assigns. The terms and conditions
of this Agreement shall inure to the benefit of and be
binding upon the respective successors of the parties hereto;
provided, however, that this Agreement may not be assigned by
any party without the prior written consent of the other
party hereto; and provided further, that, notwithstanding the
prior proviso, TE may, at its election and without the prior
written consent of O'Sullivan, assign this Agreement to any
direct or indirect wholly-owned subsidiary or any other
affiliate of TE so long as the representations and warranties
of TE made herein are equally true of such assignee. If this
Agreement is assigned with such consent or pursuant to such
exception, the terms and conditions hereof shall be binding
upon and shall inure to the benefit of the parties hereto and
their respective assigns; provided, however, that no
assignment of this Agreement or any of the rights or
obligations hereof shall relieve any party of its obligations
under this Agreement. With the exception of the parties to
this Agreement, there shall exist no right of any person to
claim a beneficial interest in this Agreement or any rights
occurring by virtue of this Agreement.

9.03 Survival. The representations, warranties,
covenants and agreements contained herein to be performed or
complied with after the Closing shall survive without
limitation as to time, unless the covenant or agreement
specifies a term, in which case such covenant or agreement
shall survive until the expiration of such specified term.

9.04 Notices. Any notice, request, instruction or
other document (each, a "notice") to be given hereunder by
any party hereto to any other party hereto shall be in
writing and shall be deemed to have been duly given if
delivered personally, sent by facsimile transmission, or
registered or certified mail, postage prepaid, to the parties
hereto at the following addresses or to such other addresses
as any party hereto shall hereafter specify by notice to the
other party or parties hereto:

(a) if to O'Sullivan to:
O'Sullivan Industries Holdings, Inc.
1900 Gulf Street
Lamar, Missouri 64759
Attention: Daniel F. O'Sullivan
with a copy to General Counsel

(b) if to TE to:
TE Electronics Inc.
200 Taylor Street, Suite 700
Fort Worth, TX 76102
Attention: Frederick W. Padden

Any such notice, request, instruction or document shall
be deemed to have been received on the date of delivery
thereof.

9.05 Governing Law. The validity, performance and
enforcement of this Agreement and any agreement entered into
pursuant hereto, unless expressly provided to the contrary,
will be governed by the laws of the State of New York,
without giving effect to the principles of conflicts of law
thereof.

9.06 Descriptive Headings. The descriptive headings
herein are inserted for convenience of reference only and are
not intended to be part of, or to affect the meaning or
interpretation of any provision of, this Agreement.

9.07 Word Usage. Whenever required by the context and
as used in this Agreement, the singular shall include the
plural and pronouns and any variation thereof shall be deemed
to refer to the masculine, feminine, neuter, singular or
plural, as the identification of the party in question may
require.

9.08 Counterparts; Modification. This Agreement (a)
may be executed in two or more counterparts, each of which
shall be deemed to be an original, but all of which shall
constitute one and the same agreement and (b) may be amended
only by an instrument in writing intended for that purpose
executed jointly by an authorized representative of each
party hereto.

9.09 Entire Agreement. This Agreement constitutes the
entire agreement among the parties hereto with respect to the
subject matter hereof, and supersedes any and all other prior
agreements and understandings among the parties hereto with
respect to this subject matter.

9.10 Further Assurances. From and after the Closing
Date, each party, at the request of the other party and at
the requesting party's expense, will each take all such
action and deliver all such documents as shall be reasonably
necessary or appropriate to confirm and vest title to the
Common Stock in TE and otherwise enable O'Sullivan and TE to
enjoy the respective benefits contemplated by this Agreement.

9.11 Public Announcements. Except as required by law
or any other provision of this Agreement, O'Sullivan and TE
shall consult with each other before issuing any press
releases or otherwise making any public statements with
respect to this Agreement and the transactions contemplated
hereby and shall not issue any such press release or make any
public statement prior to such consultation.

9.12 Specific Performance. O'Sullivan and TE each
acknowledges that the other will be irreparably harmed and
that there will be no adequate remedy at law in the event of
a violation by it of any of its covenants or agreements which
are contained in this Agreement. It is accordingly agreed
that, in addition to any other remedies which may be
available upon the breach of such covenants and agreements,
O'Sullivan or TE, as the case may be, shall have the right to
obtain injunctive relief to restrain any breach or threatened
breach of, or otherwise to obtain specific performance of,
the other's covenants or agreements contained in thisAgreement.

IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed on its behalf by its officers
thereunto duly authorized, all as of the day and year first
above mentioned.

O ' SULLIVAN INDUSTRIES HOLDINGS, INC.

/s/ Rowland H. Geddie, III
Rowland H. Geddie, III
Vice President, General Counsel and Secretary

TE ELECTRONICS INC.
/s/ Frederick W. Padden
Frederick W. Padden
Vice President-General Counsel and Secretary

<PAGE>

Schedule 2.04

This Stock Exchange Agreement

The U.S. Purchase Agreement and U.S. Pricing Agreement to
be entered into among the Company, TE and the Underwriters
named therein.

The International Purchase Agreement and International
Pricing Agreement to be entered into among the Company, TE
and the Underwriters named therein.

The Management Purchase Agreement to be entered into between
the Company and certain members of the management of the
Company and their affiliates.

The O'Sullivan Incentive Stock Plan.

The O'Sullivan Stock Purchase Program

The O'Sullivan Stockholder Rights Plan.

<PAGE>

Schedule 3.05

This Stock Exchange Agreement
<PAGE>

Exhibit 2c
_____________________________________________________________

O'SULLIVAN INDUSTRIES HOLDINGS, INC.

11,764,000 Shares
Common Stock

U.S. PURCHASE AGREEMENT

MERRILL LYNCH & CO.
WHEAT FIRST BUTCHER & SINGER
THE CHICAGO DEARBORN COMPANY
RAUSCHER PIERCE REFSNES, INC.

_____________________________________________________________

<PAGE>

11,764,000 Shares
O'SULLIVAN INDUSTRIES HOLDINGS, INC.
(a Delaware corporation)

Common Stock
(Par Value $1.00 Per Share)

U.S. PURCHASE AGREEMENT

January 26, 1994
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
WHEAT FIRST BUTCHER & SINGER
Wheat, First Securities, Inc.
THE CHICAGO DEARBORN COMPANY
RAUSCHER PIERCE REFSNES, INC.
as U.S. Representatives of the
several U.S. Underwriters
c/o MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
250 Vesey Street
New York, New York 10281

Dear Sirs:

O'Sullivan Industries Holdings, Inc., a Delaware
corporation (the "Company"), and TE Electronics Inc., a
Delaware corporation (the "Selling Stockholder"), confirm
their agreement with you and each of the other underwriters
named in Schedule A hereto (collectively, the "U.S.
Underwriters," which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof),
for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), Wheat, First Securities, Inc., The Chicago
Dearborn Company and Rauscher Pierce Refsnes, Inc. are acting
as U.S. representatives (in such capacity, Merrill Lynch,
Wheat, First Securities, Inc., The Chicago Dearborn Company
and Rauscher Pierce Refsnes, Inc. being hereinafter
collectively referred to as the "U.S. Representatives"), with
respect to (i) the sale by the Selling Stockholder and the
purchase by the U.S. Underwriters, acting severally and not
jointly, of the respective number of shares of Common Stock,
par value $1.00 per share ("Common Stock"), of the Company
set forth in Schedule A hereto, together with the Preferred
Stock Purchase Rights of the Company (the "Rights")
associated with such shares, and (ii) the grant by the
Company to the U.S. Underwriters, acting severally and not
jointly, of the option described in Section 2(b) hereof to
purchase all or any part of the U.S. Underwriters' pro rata
portion of up to an additional 1,800,000 shares of Common
Stock, together with the Rights associated with such shares,
to cover over-allotments, in each case except as may
otherwise be provided in the U.S. Pricing Agreement (as
hereinafter defined). The 11,764,000 shares of Common Stock,
together with the Rights associated with such shares, to be
purchased by the U.S. Underwriters from the Selling
Stockholder (the "Initial U.S. Securities") and all or any
part of the U.S. Underwriters' pro rata portion of the
1,800,000 shares of Common Stock, together with the Rights
associated with such shares, subject to the option described
in Section 2(b) hereof (the "U.S. Option Securities") are
hereinafter collectively referred to as the "U.S.
Securities."

It is understood that the Company and the Selling
Stockholder are concurrently entering into an International
Purchase Agreement of even date herewith (the "International
Purchase Agreement") with respect to (i) the sale by the
Selling Stockholder of 3,000,000 shares of Common Stock,
together with the Rights associated with such shares (the
"Initial International Securities"), through arrangements
with certain managing underwriters outside the United States
and Canada (the "Managers"), for whom Merrill Lynch
International Limited and UBS Limited are acting as lead
managers (the "Lead Managers"), and (ii) the grant by the
Company to the Managers of an option to purchase all or any
part of the Managers' pro rata portion of up to an additional
1,800,000 shares of Common Stock, together with the Rights
associated with such shares (the "International Option
Securities"), to cover over-allotments, in each case except
as may otherwise be provided in the International Pricing
Agreement (as hereinafter defined). The Initial
International Securities and the International Option
Securities are hereinafter collectively referred to as the
"International Securities." It is understood that the U.S.
Underwriters are not obligated to purchase any Initial U.S.
Securities unless all of the Initial International Securities
are contemporaneously purchased by the Managers.

The U.S. Underwriters and the Managers are
hereinafter collectively referred to as the "Underwriters."
The Initial U.S. Securities and the Initial International
Securities are hereinafter collectively referred to as the
"Initial Securities." The U.S. Option Securities and the
International Option Securities are hereinafter collectively
referred to as the "Option Securities." The U.S. Securities
and the International Securities are hereinafter collectively
referred to as the "Securities." Unless the context
otherwise requires, all references contained herein to the
Initial U.S. Securities, the U.S. Option Securities, the U.S.
Securities, the Initial International Securities, the
International Option Securities, the International
Securities, the Initial Securities, the Option Securities and
the Securities shall include the respective numbers of shares
of Common Stock set forth above, together with the Rights
associated with such shares.

The Company and the Selling Stockholder understand
that the Underwriters are concurrently entering into an
Intersyndicate Agreement of even date herewith providing for
the coordination of certain transactions among the
Underwriters under the direction of the U.S. Representatives
and Lead Managers.

Prior to the purchase and public offering of the
U.S. Securities by the several U.S. Underwriters, the
Company, the Selling Stockholder and the U.S.
Representatives, acting on behalf of the several U.S.
Underwriters, shall enter into an agreement substantially in
the form of Exhibit A hereto (the "U.S. Pricing Agreement").
The U.S. Pricing Agreement may take the form of an exchange
of any standard form of written telecommunication among the
Company, the Selling Stockholder and the U.S. Representatives
and shall specify such applicable information as is indicated
in Exhibit A hereto. The offering of the U.S. Securities will
be governed by this Agreement, as supplemented by the U.S.
Pricing Agreement. From and after the date of the execution
and delivery of the U.S. Pricing Agreement, this Agreement
shall be deemed to incorporate, and all references to "this
Agreement" or "herein" shall be deemed to include, the U.S.
Pricing Agreement, unless the context requires otherwise.
The initial public offering price and the purchase price with
respect to the International Securities shall be set forth in
a separate instrument (the "International Pricing
Agreement"), the form of which is attached to the
International Purchase Agreement. The price per share for
the International Securities to be purchased by the Managers
pursuant to the International Purchase Agreement shall be
identical to the price per share for the U.S. Securities to
be purchased by the U.S. Underwriters hereunder.

The Company has filed with the United States
Securities and Exchange Commission (the "Commission") a
registration statement on Form S-1 (Commission File No.
33-72120) to effect the registration of the Securities under
the Securities Act of 1933, as amended (the "1933 Act"), has
filed such amendments thereto, if any, as may have been
required to the date hereof, and will file such additional
amendments thereto as may hereafter be required. Such
registration statement includes two forms of prospectus for
use in connection with the offering and sale of the
Securities: the U.S. prospectus, for use in connection with
the offering and sale of Securities in the United States and
Canada to United States and Canadian persons and the
international prospectus, for use in connection with the
offering and sale of Securities outside the United States and
Canada to persons other than United States and Canadian
persons. The U.S. prospectus and international prospectus
are identical except that they contain different outside
front and outside back cover pages and different sections
under the caption "Underwriting" and the international
prospectus contains an additional section under the caption
"Certain United States Tax Consequences to Non-United States
Holders." Such registration statement also includes a third
form of prospectus relating to a separate offering of 236,000
shares of Common Stock, together with the Rights associated
with such shares, to certain members of the Company's
management and their affiliates. Such registration statement
(as amended, if applicable) and the prospectuses constituting
a part thereof at the time such registration statement
becomes effective (including, in each case, the information,
if any, deemed to be part thereof pursuant to Rule 430A(b) of
the rules and regulations of the Commission under the 1933
Act (the "1933 Act Regulations")), as from time to time
amended or supplemented pursuant to the 1933 Act or
otherwise, is hereinafter referred to as the "Registration
Statement." The U.S. prospectus and the international
prospectus in the respective forms included in the
Registration Statement are hereinafter referred to as the
"U.S. Prospectus" and the "International Prospectus," except
that if any revised prospectuses shall be provided to the
U.S. Underwriters or the Managers by the Company for use in
connection with the offering of the Securities which differ
from the prospectuses on file at the Commission at the time
the Registration Statement becomes effective (whether or not
such revised prospectuses are required to be filed by the
Company pursuant to Rule 424(b) of the 1933 Act Regulations),
the terms "U.S. Prospectus" and "International Prospectus"
shall refer to such revised prospectuses from and after the
time they are first provided to the U.S. Underwriters or the
Managers for such use. The U.S. Prospectus and the
International Prospectus are hereinafter referred to
collectively as the "Prospectuses" and, each individually, as
a "Prospectus." The prospectus relating to the separate
offering of 236,000 shares of Common Stock and associated
Rights to certain members of the Company's management and
their affiliates in the form included in the Registration
Statement is hereinafter referred to as the "Management
Prospectus."

The Company and the Selling Stockholder understand
that the U.S. Underwriters propose to make a public offering
of the U.S. Securities as soon as the U.S. Representatives
deem advisable after the Registration Statement becomes
effective and the U.S. Pricing Agreement has been executed
and delivered.

SECTION 1. Representations and Warranties.

(a) The Company and the Selling Stockholder
jointly and severally represent and warrant to each
of the U.S. Underwriters (except that the Selling
Stockholder does not make any representation or
warranty with respect to the matters addressed by
clauses (xii), (xvi), (xvii), (xviii) and (xxi)
below) as of the date hereof and as of the date of
the U.S. Pricing Agreement (such latter date being
hereinafter referred to as the "U.S. Representation
Date") as follows:

(i) At the time the Registration Statement
becomes effective and at the U.S. Representation
Date, the Registration Statement will comply in all
material respects with the requirements of the 1933
Act and the 1933 Act Regulations and will not
contain an untrue statement of a material fact or
omit to state a material fact required to be stated
therein or necessary to make the statements therein
not misleading. The Prospectuses, at the U.S.
Representation Date (unless the term "Prospectuses"
refers to prospectuses which have been provided to
the U.S. Underwriters and the Managers by the
Company for use in connection with the offering of
the Securities which differ from the prospectuses
on file at the Commission at the time the
Registration Statement becomes effective, in which
case at the time such prospectuses are first
provided to the U.S. Underwriters and the Managers
for such use) and at Closing Time (as hereinafter
defined) will not include an untrue statement of a
material fact or omit to state a material fact
necessary in order to make the statements therein,
in the light of the circumstances under which they
were made, not misleading; provided, however, that
the representations and warranties in this
subsection shall not apply to statements in or
omissions from the Registration Statement or
Prospectuses made in reliance upon and in
conformity with information furnished to the
Company in writing by any Underwriter through
Merrill Lynch expressly for use in the Registration
Statement or the Prospectuses.

(ii) Price Waterhouse, the accountants who
reported on the combined financial statements
included in the Registration Statement and the
Prospectuses are independent public accountants
with respect to the Company and its Subsidiaries
(as hereinafter defined) as required by the 1933
Act and the 1933 Act Regulations.

(iii) The combined financial statements,
including the notes thereto, included in the
Registration Statement and the Prospectuses present
fairly the combined financial position of the
Company and its Subsidiaries as at the dates
indicated and the combined results of operations
and cash flows for the Company and its Subsidiaries
for the periods specified; such financial
statements have been prepared in conformity
with generally accepted accounting principles
applied on a consistent basis throughout the
periods involved; there are no supporting schedules
required to be included in the Registration
Statement pursuant to the 1933 Act or the 1933 Act
Regulations (other than schedules which have been
ommitted therefrom because the required information
is included in the combined financial statements,
including the notes thereto, included in the
Registration Statement and the Prospectuses).

(iv) The pro forma financial information
included in the Registration Statement and the
Prospectuses has been prepared in all material
respects in accordance with the applicable rules
and regulations of the Commission with respect to
pro forma financial statements, presents fairly the
information included therein and has been properly
compiled on the pro forma basis described therein;
in the opinion of the Company and the Selling
Stockholder, the assumptions used in the
preparation of such pro forma financial information
are reasonable and the adjustments made thereto are
appropriate to give effect to the transactions and
events referred to therein.

(v) Since the respective dates as of which
information is given in the Registration Statement
and the Prospectuses, except as otherwise stated
therein or expressly contemplated thereby, (A)
there has been no material adverse change in the
condition, financial or otherwise, or the earnings,
business affairs or business prospects of the
Company and its Subsidiaries considered as one
enterprise, whether or not arising in the ordinary
course of business, (B) there have been no
transactions entered into by the Company or any of
its Subsidiaries, other than the reorganization
transactions to be consummated prior to or at
Closing Time as described in the Prospectuses under
the caption "Certain Transactions --Reorganization
Transactions" and other transactions entered into
in the ordinary course of business, which are
material with respect to the Company and its
Subsidiaries considered as one enterprise and
(C) except for (1) the dividend in the amount of
$40 million to be paid to the Selling Stockholder
by Old O'Sullivan (as hereinafter defined) prior to
Closing Time as described in the Prospectuses under
the caption "Certain Transactions -- Reorganization
Transactions, (2) the final adjusting payment, if
any, to be made by the Company to Tandy as a result
of the accounting of the stockholders' equity of
the Company at Closing Time described in the
Prospectuses under the caption "Certain
Transactions -- The Reorganization" and (3) the
dividend of one Right to be issued with respect to
each share of Common Stock as described in the
Prospectuses under the caption "Description of
Capital Stock -- Stockholder Rights Plan," there
has been no dividend or distribution of any kind
declared, paid or made by the Company or any of its
Subsidiaries on any class of their capital stock.

(vi) The Company has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of the State of Delaware
and has all necessary corporate power to own, lease
and operate its properties and to conduct its
business as described in the Prospectuses, and the
Company is duly qualified as a foreign corporation
to transact business and is in good standing in
each jurisdiction in which such qualification is
required, whether by reason of the ownership or
leasing of property or the conduct of business,
except where the failure to have such corporate
power or to be so qualified would not have a
material adverse effect on the condition, financial
or otherwise, or on the earnings, business affairs
or business prospects of the Company and its
Subsidiaries considered as one enterprise.

(vii) Each Subsidiary of the Company has been
duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its incorporation and has all
necessary corporate power to own, lease and operate
its properties and to conduct its business as
described in the Prospectuses, and each Subsidiary
of the Company is duly qualified as a foreign
corporation to transact business and is in good
standing in each jurisdiction in which such
qualification is required, whether by reason of the
ownership or leasing of property or the conduct of
business, except where the failure to have such
corporate power or to be so qualified would not
have a material adverse effect on the condition,
financial or otherwise, or on the earnings,
business affairs or business prospects of the
Company and its Subsidiaries considered as one
enterprise; all of the issued and outstanding
capital stock of each such Subsidiary has been duly
authorized and, at Closing Time, will be validly
issued, fully paid and nonassessable and will be
owned by the Company, directly or indirectly, free
and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity, except
any such security interest, mortgage, pledge, lien,
encumbrance, claim or equity that is disclosed in
the Prospectuses.

(viii) At Closing Time, the authorized,
issued and outstanding capital stock of the Company
will be as set forth in the Prospectuses under the
column entitled "As Adjusted" under the caption
"Capitalization;" the 100 shares of Common Stock
heretofore issued by the Company to the Selling
Stockholder have been duly authorized and are
validly issued, fully paid and nonassessable; the
14,999,900 shares of Common Stock to be issued by
the Company to the Selling Stockholder in
accordance with the Stock Exchange Agreement (as
hereinafter defined) have been duly authorized and,
when issued and delivered by the Company in
accordance with said agreement, will be validly
issued, fully paid and nonassessable; the Option
Securities have been duly authorized for issuance
and sale to the Underwriters pursuant to this
Agreement and the International Purchase Agreement
and, when issued and delivered by the Company in
accordance with this Agreement and the
International Purchase Agreement against payment of
the consideration set forth herein and therein,
will be validly issued, fully paid and
nonassessable; the issuance of the Securities is
not subject to any preemptive or other similar
rights to subscribe for or purchase the same
arising by operation of law, under the charter or
bylaws of the Company or otherwise; the Common
Stock conforms in all material respects to all
statements relating thereto contained in the
Prospectuses; at Closing Time, the Rights
associated with the shares of Common Stock to be
sold or issued pursuant to this Agreement and the
International Purchase Agreement will have been
duly and validly authorized and, when the shares of
Common Stock with which they are associated are
sold or issued and delivered in accordance with
this Agreement and the International Purchase
Agreement, will be validly issued in accordance
with the terms of the Rights Agreement, dated as of
February 1, 1994, between the Company and The First
National Bank of Boston, as Rights Agent, as
amended; the Rights conform in all material
respects to the statements relating thereto
contained in the Prospectuses.

(ix) This Agreement has been duly authorized,
executed and delivered by the Company and, at the
U.S. Representation Date, the U.S. Pricing
Agreement will be duly authorized, executed and
delivered by the Company.

(x) Neither the Company nor any of its
Subsidiaries is in violation of its charter or
bylaws or is in default in the performance or
observance of any obligation, agreement, covenant
or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its
Subsidiaries is a party or by which any of them is
bound or to which any of the property or assets of
any of them is subject, except as disclosed in the
Prospectuses and except for any such violations or
defaults which would not have a material adverse
effect on the condition, financial or otherwise, or
on the earnings, business affairs or business
prospects of the Company and its Subsidiaries
considered as one enterprise; the execution,
delivery and performance by the Company of this
Agreement, the International Purchase Agreement,
the U.S. Pricing Agreement and the International
Pricing Agreement and the consummation by the
Company of the transactions contemplated herein and
therein will not conflict with or constitute a
breach or violation of, or default under, or result
in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the
Company or any of its Subsidiaries pursuant to, any
contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to
which the Company or any of its Subsidiaries is a
party or by which any of them is bound or to which
any of the property or assets of any of them is
subject, nor will such action result in any breach
or violation of, or default under, the provisions
of the charter or bylaws of the Company or any of
its Subsidiaries or of any existing applicable law,
administrative regulation or administrative or
court decree, except for such conflicts, breaches,
violations, defaults, liens, charges or
encumbrances that would not affect in any material
respect the transactions contemplated by this
Agreement or the International Purchase Agreement
and would not have a material adverse effect on the
condition, financial or otherwise, or on the
earnings, business affairs or business prospects of
the Company and its Subsidiaries considered as one
enterprise.

(xi) No authorization, approval or consent
of, or registration or filing with, any court or
governmental authority or agency is required for
the execution, delivery or performance by the
Company of this Agreement, the International
Purchase Agreement, the U.S. Pricing Agreement or
the International Pricing Agreement or the
consummation by the Company of the transactions
contemplated herein and therein, except such as may
be required under the 1933 Act, the 1933 Act
Regulations, the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and the rules and
regulations of the Commission under the 1934 Act
(the "1934 Act Regulations") or under the
securities laws of any state or other jurisdiction.

(xii) No labor dispute with the employees of
the Company or any of its subsidiaries exists or,
to the knowledge of the Company, is imminent, which
could reasonably be expected to result in any
material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs
or business prospects of the Company and its
Subsidiaries considered as one enterprise.

(xiii) There is no action, suit or proceeding
before or by any court or governmental agency or
body, domestic or foreign, now pending or, to the
knowledge of the Company or the Selling
Stockholder, threatened against or affecting the
Company or any of its Subsidiaries, except as
disclosed in the Prospectuses, which (A) is
required to be disclosed in the Registration
Statement and the Prospectuses, (B) might
reasonably be expected to result in any material
adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or
business prospects of the Company and its
Subsidiaries considered as one enterprise or to
materially and adversely affect their properties or
assets or (C) might reasonably be expected to
materially and adversely affect the consummation of
the transactions contemplated by this Agreement or
the International Purchase Agreement; all pending
legal or governmental proceedings to which the
Company or any of its Subsidiaries is a party or of
which any of their respective property or assets is
the subject which are not described in the
Registration Statement and the Prospectuses,
including ordinary routine litigation incidental to
their business, are, considered in the aggregate,
not material.

(xiv) There are no contracts or documents
which are required to be described in the
Registration Statement or the Prospectuses or to be
filed as exhibits to the Registration Statement by
the 1933 Act or the 1933 Act Regulations which have
not been so described or filed.

(xv) Each of the Company and its Subsidiaries
has filed all federal, state, local and foreign
income and franchise tax returns required to be
filed through the date hereof, except insofar as
the failure to file any such returns would not have
a material adverse effect on the condition,
financial or otherwise, or on the earnings,
business affairs or business prospects of the
Company and its Subsidiaries considered as one
enterprise, and has paid all taxes due as shown
thereon, and except for such taxes, if any, as are
being contested in good faith and as to which
adequate reserves have been provided, there is no
tax deficiency asserted against the Company or any
of its Subsidiaries which, if determined adversely
to the Company or any of its Subsidiaries, would
have a material adverse effect on the condition,
financial or otherwise, or on the earnings,
business affairs or business prospects of the
Company and its Subsidiaries considered as one
enterprise.

(xvi) The Company and its Subsidiaries have
good and marketable title to all material
properties and assets described in the Prospectuses
as owned by them and valid, subsisting and
enforceable leases for all of the material
properties and assets, real or personal, described
in the Prospectuses as leased by them, in each case
free and clear of any security interests,
mortgages, pledges, liens, encumbrances or charges
of any kind, other than those which (A) are
described in the Prospectuses or (B) could not
materially impair or interfere with the use
currently made by the Company or its Subsidiaries
of the properties or assets to which it applies or
otherwise have a material adverse effect on the
condition, financial or otherwise, or on the
earnings, business affairs or business prospects of
the Company and its Subsidiaries considered as one
enterprise.

(xvii) The Company and its Subsidiaries own
or possess, or can acquire on reasonable terms,
adequate rights to use the patents, patent rights,
licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented or
unpatentable proprietary or confidential
information, systems or procedures),
trademarks, service marks and trade names
(collectively, "patent and proprietary rights")
necessary to conduct the business now conducted by
them, and neither the Company nor any of its
Subsidiaries has received any notice or is
otherwise aware of any infringement of or
conflict with asserted rights of others with
respect to any patent and proprietary rights,
except where such infringement or conflict, if the
subject of an unfavorable decision, ruling or
finding, would not result in a material adverse
change in the condition, financial or otherwise, or
the earnings, business affairs or business
prospects of the Company and its Subsidiaries
considered as one enterprise.

(xviii) The Company and its Subsidiaries
possess such licenses, permits, consents, orders,
certificates or authorizations issued by
appropriate federal, state, foreign or local
regulatory agencies or bodies as are necessary to
conduct the business now operated by them as
described in the Prospectuses, except as disclosed
in the Prospectuses and except where the failure to
possess such licenses, permits, consents, orders,
certificates or authorizations would not have a
material adverse effect on the condition, financial
or otherwise, or on the earnings, business affairs
or business prospects of the Company and its
Subsidiaries considered as one enterprise; and
neither the Company nor any of its Subsidiaries has
received any notice of proceedings relating to the
revocation or modification of any such licenses,
permits, consents, orders, certificates or
authorizations which, if the subject of an
unfavorable decision, ruling or finding, would have
a material adverse effect on the condition,
financial or otherwise, or on the earnings,
business affairs or business prospects of the
Company and its Subsidiaries considered as one
enterprise.

(xix) Neither the Company nor any of its
Subsidiaries is in violation of any existing
applicable law, ordinance, governmental rule or
regulation or court decree to which the Company or
any of its Subsidiaries or any of their respective
properties and assets are subject, except where
such violation would not have a material adverse
effect on the condition, financial or otherwise, or
on the earnings, business affairs or business
prospects of the Company and its Subsidiaries
considered as one enterprise; without limiting the
generality of the foregoing, neither the Company
nor any of its subsidiaries has violated (A) any
existing applicable foreign, federal, state or
local law or regulation relating to the protection
of human health and the environment, including, but
not limited to, any such law pertaining to
hazardous or toxic substances or wastes, pollutants
or contaminants (collectively, "Environmental
Laws"), (B) the terms of any licenses, permits,
consents, orders, certificates or authorizations
required of them under applicable Environmental
Laws, (C) any federal or state law relating to
discrimination in the hiring, promotion or pay of
employees or any applicable federal or state wages
and hours laws, or (D) any provisions of the
Employee Retirement Income Security Act or the
rules and regulations promulgated thereunder,
except as disclosed in the Prospectus and except
for any such violations which would not have a
material adverse effect on the condition, financial
or otherwise, or the earnings, business affairs or
business prospects of the Company and its
Subsidiaries considered as one enterprise.

(xx) The Company has reasonably concluded
that, except as disclosed in the Prospectus, the
costs and liabilities associated with compliance
with Environmental Laws are not likely to have a
material adverse effect on the condition, financial
or otherwise, or the earnings, business affairs or
business prospects of the Company and its
Subsidiaries considered as one enterprise.

(xxi) The Company and its Subsidiaries
maintain books and records and internal accounting
controls which provide reasonable assurance that
(A) transactions are executed in all material
respects in accordance with management's general or
specific authorization, (B) transactions are
recorded in all material respects as necessary to
permit preparation of their financial statements
and to maintain accountability for their assets and
(C) access to assets that are material to the
Company or its Subsidiaries is permitted only in
accordance with management's general or specific
authorization.

(xxii) At Closing Time, each of the
Reorganization Agreements (as hereinafter defined)
to which the Company or any of its Subsidiaries are
or are proposed to be parties will be duly
authorized, executed and delivered by the Company
and each of its Subsidiaries (to the extent that
each of them is proposed to be a party thereto).
Substantially all of the assets to be transferred
by Tandy Marketing Canada (as hereinafter defined)
to Old O'Sullivan as described in the Prospectus
have been transferred to Old O'Sullivan.

(xxiii) The execution, delivery and
performance by the Company and each of its
Subsidiaries of the Reorganization Agreements to
which each of them is a party or is proposed to be
a party and the consummation by the Company and
each of its Subsidiaries of the transactions
contemplated therein will not conflict with or
constitute a breach or violation of, or default
under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property
or assets of the Company or any of its Subsidiaries
pursuant to, any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or
instrument to which the Company or any of its
Subsidiaries is a party or by which it or any of
them is bound, or to which any of the property or
assets of the Company or any of its Subsidiaries is
subject, nor will such action result in any breach
or violation of, or default under, the provisions
of the charter or bylaws of the Company or any of
its Subsidiaries or of any existing applicable
law, administrative regulation or administrative or
court decree, in each case, except as disclosed in
the Prospectuses and except for such conflicts,
breaches, violations, defaults, liens, charges or
encumbrances that would not have a material adverse
effect on the condition, financial or otherwise, or
on the earnings, business affairs or business
prospects of the Company and its Subsidiaries
considered as one enterprise.

(xxiv) Neither the Company nor any of its
Subsidiaries is an "investment company" or a
company "controlled" by an "investment company"
within the meaning of the Investment Company Act of
1940, as amended.

(xxv) The Company and its Subsidiaries have
complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida)
relating to doing business with the Government of
Cuba or any person or affiliate located in Cuba.

(b) The Selling Stockholder further represents and
warrants to each of the U.S. Underwriters as of the date
hereof and as of the U.S. Representation Date as follows:

(i) At Closing Time, the Selling Stockholder
will be the sole record and beneficial owner of the
Initial Securities, and will have valid and
marketable title to the Initial Securities, free
and clear of any claim, lien, security interest,
encumbrance, restriction on transfer or other
defect in title; upon delivery of and payment for
the Initial Securities pursuant to this Agreement
and the International Purchase Agreement, the
Underwriters will acquire valid and marketable
title to the Initial Securities, free and clear of
any claim, lien, security interest, encumbrance,
restriction on transfer or other defect in title.

(ii) This Agreement has been duly authorized,
executed and delivered by the Selling Stockholder
and, at the U.S. Representation Date, the U.S.
Pricing Agreement will be duly authorized, executed
and delivered by the Selling Stockholder.

(iii) The execution, delivery and performance
of this Agreement, the International Purchase
Agreement, the U.S. Pricing Agreement and the
International Pricing Agreement by the Selling
Stockholder and the consummation by the Selling
Stockholder of the transactions contemplated herein
and therein will not conflict with or constitute a
breach or violation of, or a default under, or
result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets
of the Selling Stockholder pursuant to, any
contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to
which the Selling Stockholder is a party or by
which it is bound, or to which any of the property
or assets of the Selling Stockholder is subject,
nor will such action result in any breach or
violation of, or default under, the provisions of
the charter or bylaws of the Selling Stockholder or
of any existing applicable law, administrative
regulation or administrative or court decree.

(iv) No authorization, approval or consent
of, or registration or filing with, any court or
governmental authority or agency is required for
the execution, delivery or performance by the
Selling Stockholder of this Agreement, the
International Purchase Agreement, the U.S. Pricing
Agreement or the International Pricing Agreement or
the consummation by the Selling Stockholder of the
transactions contemplated herein and therein,
except such as may be required under the 1933 Act,
the 1933 Act Regulations, the 1934 Act or the 1934
Act Regulations or under the securities laws of any
state or other jurisdiction.

(v) At Closing Time, each of the
Reorganization Agreements to which the Selling
Stockholder is proposed to be a party will be duly
authorized, executed and delivered by the Selling
Stockholder; at Closing Time, each of the
Reorganization Agreements to which the Selling
Stockholder is proposed to be a party will
constitute a valid and binding obligation of the
Selling Stockholder, enforceable against the
Selling Stockholder in accordance with its terms
(except to the extent that the enforceability
thereof is subject to (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally
and (ii) general principles of equity, whether such
principles are considered in a proceeding at law or
in equity).

(vi) The execution, delivery and performance
by the Selling Stockholder of the Reorganization
Agreements to which the Selling Stockholder is or
is proposed to be a party and the consummation by
the Selling Stockholder of the transactions
contemplated therein will not conflict with or
constitute a breach or violation of, or a default
under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property
or assets of the Selling Stockholder pursuant to,
any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to
which the Selling Stockholder is a party or by
which it is bound, or to which any of the property
or assets of the Selling Stockholder is subject,
nor will such action result in any breach or
violation of, or default under, the provisions of
the charter or bylaws of the Selling Stockholder or
of any existing applicable law, administrative
regulation or administrative or court decree, in
each case, except as disclosed in the Prospectuses
and except for such conflicts, breaches,
violations, defaults, liens, charges or
encumbrances that would not affect in any material
respect the transactions contemplated by this
Agreement or the International Purchase Agreement
and would not have a material adverse effect on the
condition, financial or otherwise, or on the
earnings, business affairs or business prospects of
the Selling Stockholder and its subsidiaries
considered as one enterprise.

(c) Any certificate signed by any officer of the
Company delivered to the U.S. Representatives or to counsel
for the U.S. Underwriters under or in connection with this
Agreement or at Closing Time or any Date of Delivery (as
hereinafter defined) shall be deemed a representation and
warranty by the Company to each U.S. Underwriter as to the
matters covered thereby; and any certificate signed by any
officer of the Selling Stockholder and delivered to the U.S.
Representatives or to counsel for the U.S. Underwriters under
or in connection with this Agreement or at Closing Time or
any Date of Delivery shall be deemed a representation and
warranty by the Selling Stockholder to each U.S. Underwriter
as to the matters covered thereby.

SECTION 2. Sale and Delivery to U.S. Underwriters;
Reorganization Transactions; Closing.

(a) On the basis of the representations and
warranties herein contained and subject to the terms and
conditions herein set forth, the Selling Stockholder agrees
to sell to each U.S. Underwriter, severally and not jointly,
and each U.S. Underwriter, severally and not jointly, agrees
to purchase from the Selling Stockholder, at the price per
share set forth in the U.S. Pricing Agreement, the number of
Initial U.S. Securities set forth in Schedule A opposite the
name of such U.S. Underwriter (except as otherwise provided
in the U.S. Pricing Agreement), plus any additional number of
Initial U.S. Securities which such U.S. Underwriter may
become obligated to purchase pursuant to the provisions of
Section 10 hereof, subject, in each case, to such adjustments
as the U.S. Representatives in their discretion shall make to
eliminate any sales or purchases of fractional securities.

(i) If the Company has elected not to rely
upon Rule 430A of the 1933 Act Regulations, the
initial public offering price of the Securities and
the purchase price per share to be paid by the
several U.S. Underwriters for the U.S. Securities
have each been determined and set forth in the U.S.
Pricing Agreement, dated the date hereof, and an
amendment to the Registration Statement and the
Prospectuses will be filed before the Registration
Statement becomes effective.

(ii) If the Company has elected to rely upon
Rule 430A of the 1933 Act Regulations, the purchase
price per share to be paid by the several U.S.
Underwriters for the U.S. Securities shall be an
amount equal to the initial public offering price,
less an amount per share to be determined by
agreement among the Company, the Selling
Stockholder and the U.S. Representatives. The
initial public offering price per share of the
Securities shall be a fixed price to be determined
by agreement among the Company, the Selling
Stockholder and the U.S. Representatives and the
Selling Stockholder. The initial public offering
price per share and the purchase price, when so
determined, shall be set forth in the U.S. Pricing
Agreement. In the event that such prices have not
been agreed upon and the U.S. Pricing Agreement has
not been executed and delivered by the parties
thereto by the close of business on the fourth
business day following the date of this Agreement,
this Agreement shall terminate forthwith, without
liability of any party to any other party, unless
otherwise agreed to by the Company, the Selling
Stockholder and the U.S. Representatives.
Notwithstanding the foregoing, the provisions of
Sections 4(a), 6 and 7 hereof shall remain in
effect following any such termination.

(b) In addition, on the basis of the
representations and warranties herein contained and subject
to the terms and conditions herein set forth, the Company
hereby grants an option to the Underwriters, severally and
not jointly, to purchase from the Company an aggregate of up
to an additional 1,800,000 shares of Common Stock, together
with the Rights associated with such shares, at the price per
share set forth in the U.S. Pricing Agreement and the
International Pricing Agreement, of which 1,440,000 shares
and associated Rights shall be the pro rata portion for the
U.S. Underwriters and 360,000 shares and associated Rights
shall be the pro rata portion for the Managers. The option
hereby granted will expire on the 30th day after the date the
Registration Statement becomes effective or, if the Company
has elected to rely on Rule 430A of the 1933 Act Regulations,
the 30th day after the U.S. Representation Date, and may be
exercised in whole or in part from time to time only for the
purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial
Securities upon notice by the U.S. Representatives and the
Lead Managers to the Company setting forth the aggregate
number of Option Securities as to which the several
Underwriters are then exercising said option and the time and
date of payment and delivery for such Option Securities. Any
such time and date of delivery for the U.S. Option Securities
(a "Date of Delivery") shall be determined by the U.S.
Representatives but shall be not earlier than two nor later
than seven full business days after the exercise of said
option, nor in any event prior to Closing Time, unless
otherwise agreed upon by the U.S. Representatives and the
Company. If the option is exercised as to all or any portion
of the U.S. Option Securities, each of the U.S. Underwriters,
acting severally and not jointly, will purchase from the
Company that proportion of the number of U.S. Option
Securities then being purchased which the number of Initial
U.S. Securities set forth in Schedule A opposite the name of
such U.S. Underwriter (plus any additional number of Initial
U.S. Securities which such U.S. Underwriter may become
obligated to purchase pursuant to the provisions of Section
10 hereof) bears to the total number of Initial U.S.
Securities (except as otherwise provided in the U.S. Pricing
Agreement), subject, in each case, to such adjustments as the
U.S. Representatives in their discretion shall make to
eliminate any sales or purchases of fractional securities.
For purposes of this Agreement, the term "business day" means
a day on which the New York Stock Exchange is open for
trading.

(c) The Selling Stockholder and the Company agree
with the several Underwriters that, immediately prior to
Closing Time, (i) the Selling Stockholder will transfer to
the Company, in exchange for the issuance by the Company of
14,999,900 shares of Common Stock, together with the Rights
associated with such shares (the receipt of which shares and
associated Rights shall be subject to the obligations of the
Selling Stockholder to sell the Initial Securities to the
Underwriters pursuant to this Agreement and the International
Purchase Agreement), all the issued and outstanding shares of
capital stock of O'Sullivan Industries, Inc., a Delaware
corporation and a wholly owned subsidiary of the Selling
Stockholder ("Old O'Sullivan"), and (ii) the Company will
accept such transfer and will issue such shares of Common
Stock and associated Rights to the Selling Stockholder. The
foregoing transactions will be effected in accordance with a
Stock Exchange Agreement (the "Stock Exchange Agreement") to
be entered into between the Selling Stockholder and the
Company after the execution and delivery of this Agreement
but prior to Closing Time. In addition, (i) Tandy Marketing
(Canada) Ltd., an Alberta corporation ("Tandy Marketing
Canada"), has transferred to Old O'Sullivan certain assets
located in Canada that are used in connection with the
business conducted by Old O'Sullivan, (ii) Tandy Corporation,
the Selling Stockholder and the Company will enter into a
Cross Indemnification Agreement (the "Cross Indemnification
Agreement") prior to Closing Time pursuant to which the
parties will agree to indemnify each other for certain claims
and liabilities as specified therein, (iii) Tandy
Corporation, the Selling Stockholder and the Company will
enter in to a Tax Sharing and Tax Benefit Reimbursement
Agreement (the "Tax Agreement") prior to Closing Time
pursuant to which (A) the parties will agree upon the
allocation of certain federal, state and local taxes of Old
O'Sullivan (including any adjustments to such taxes), (B) Old
O'Sullivan and Tandy Corporation will agree to make elections
under Sections 338(g) and 338(h)(10) of the Internal Revenue
Code of 1986, as amended, and (C) Old O'Sullivan will agree
to pay to the Selling Stockholder, as additional purchase
price under the Stock Exchange Agreement, amounts
approximately equal to certain federal tax benefits related
to the increase in the tax basis of Old O'Sullivan's assets
resulting from the consummation of the transactions
contemplated by the Stock Exchange Agreement and the Sections
338(g) and 338(h)(10) elections. The Stock Exchange
Agreement, Cross Indemnification Agreement and Tax Agreement
will be substantially in the respective forms filed as
exhibits to the Registration Statement. The Stock Exchange
Agreement, Cross Indemnification Agreement and Tax Agreement
are hereinafter collectively referred to as the
"Reorganization Agreements." Old O'Sullivan and each other
direct or indirect subsidiary of the Company as of the
Closing Time are hereinafter collectively referred to as the
"Subsidiaries."

(d) Payment of the purchase price for, and
delivery of certificates evidencing the Initial U.S.
Securities to be purchased by the U.S. Underwriters shall be
made at the office of Baker & Botts, L.L.P., 2001 Ross
Avenue, Dallas, Texas 75201, or at such other place as shall
be agreed upon by the U.S. Representatives, the Company and
the Selling Stockholder, at 9:00 a.m., Dallas, Texas time, on
the fifth business day (unless postponed in accordance with
the provisions of Section 10 hereof) following the date of
the execution of the U.S. Pricing Agreement or such other
time not later than ten business days after such date as
shall be agreed upon by the U.S. Representatives, the Company
and the Selling Stockholder (such time and date of payment
and delivery being hereinafter referred to as "Closing
Time"). In addition, in the event that any or all of the U.S.
Option Securities are purchased by the U.S. Underwriters,
payment of the purchase price for, and delivery of
certificates for, such U.S. Option Securities shall be made
at the above-mentioned office of Baker & Botts, L.L.P., or at
such other place as shall be mutually agreed upon by the U.S.
Representatives and the Company, on each Date of Delivery as
specified in the notice from the U.S. Representatives to the
Company. Payment shall be made to the Selling Stockholder,
with respect to the Initial U.S. Securities, and to the
Company, with respect to any U.S. Option Securities, by
certified or official bank check or checks drawn in New York
Clearing House funds or similar next-day funds payable to the
order of the Selling Stockholder or the Company, as the case
may be, against delivery to the U.S. Representatives for the
respective accounts of the U.S. Underwriters of certificates
for the U.S. Securities to be purchased by them.
Certificates evidencing the Initial U.S. Securities and the
U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S.
Representatives may request in writing at least two business
days before Closing Time or the Date of Delivery, as the case
may be. It is understood that each U.S. Underwriter has
authorized the U.S. Representatives, for its account, to
accept delivery of, receipt for, and make payment of the
purchase price for, the U.S. Securities which it has agreed
to purchase. The U.S. Representatives, individually and not
as representatives of the U.S. Underwriters, may (but shall
not be obligated to) make payment of the purchase price for
the U.S. Securities to be purchased by any U.S. Underwriter
whose check has not been received by Closing Time or the Date
of Delivery, as the case may be, but such payment shall not
relieve such U.S. Underwriter from its obligations hereunder.
The certificates evidencing the Initial U.S. Securities and
the U.S. Option Securities to be purchased by the U.S.
Underwriters will be made available in New York City for
examination and packaging by the U.S. Representatives not
later than 10:00 a.m. on the last business day prior to
Closing Time or the Date of Delivery, as the case may be.

SECTION 3. Certain Covenants of the Company. The
Company covenants with each of the U.S. Underwriters asfollows:

(a) If the Company has elected not to rely upon
Rule 430A of the 1933 Act Regulations, the Company will
promptly prepare and file with the Commission an amendment to
the Registration Statement that sets forth the information
specified in Section 2(a)(i) hereof and will make every
reasonable effort to cause the Registration Statement to
become effective as promptly as practicable. If the Company
has elected to rely upon Rule 430A of the 1933 Act
Regulations, the Company will promptly prepare and file with
the Commission pursuant to Rule 424 of the 1933 Act
Regulations Prospectuses that comply in all material respects
with the 1933 Act and the 1933 Act Regulations and that set
forth the information specified in Section 2(a)(ii) hereof
and all other information omitted from the prospectuses
included in the Registration Statement as permitted by Rule
430A.

(b) The Company will notify the U.S.
Representatives immediately, and confirm the notice in
writing, (i) of the effectiveness of the Registration
Statement and any amendment thereto (including any
post-effective amendment), (ii) of the mailing or delivery to
the Commission for filing of any revised prospectus which the
Company proposes for use by the U.S. Underwriters or the
Managers in connection with the offering of the Securities
which differs from the prospectuses on file at the Commission
at the time the Registration Statement becomes effective,
(iii) of the receipt of any comments from the Commission with
respect to the Registration Statement or the Prospectuses,
(iv) of any request by the staff of the Commission for any
amendment to the Registration Statement or any amendment or
supplement to the Prospectuses or for additional information,
and (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement,
the suspension of the registration or qualification of the
Securities for offering or sale under the securities laws of
any state or jurisdiction or the initiation or threat of any
proceedings for any such purpose. The Company will make
every reasonable effort to prevent the issuance of any such
stop order or of any order suspending such registration or
qualification and, if any such order is issued, to obtain the
lifting thereof as promptly as practicable.

(c) The Company will give the U.S. Representatives
notice of its intention to file or prepare any amendment to
the Registration Statement (including any post-effective
amendment) or any amendment or supplement to the Prospectuses
(including any revised prospectus which the Company proposes
for use by the U.S. Underwriters or the Managers in
connection with the offering of the Securities which differs
from the prospectuses on file at the Commission at the time
the Registration Statement becomes effective, whether or not
such revised prospectus is required to be filed pursuant to
Rule 424(b) of the 1933 Act Regulations), will furnish the
U.S. Representatives with copies of any such amendment or
supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such
amendment or supplement to which the U.S. Representatives
shall reasonably object unless the Company shall have (i)
otherwise fully complied with its obligations contained in
this subsection (c) and (ii) received a written opinion of
counsel to the effect that such amendment or supplement is
legally required under the 1933 Act and the 1933 Act
Regulations.

(d) The Company has delivered or will deliver to
the U.S. Representatives five signed copies of the
Registration Statement as originally filed and each amendment
thereto (including exhibits filed therewith) and has
delivered or will deliver to the U.S. Representatives as many
conformed copies of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) as the
U.S. Representatives may reasonably request for delivery to
each of the U.S. Underwriters.

(e) The Company will furnish to each U.S.
Underwriter, from time to time during the period when the
U.S. Prospectus is required to be delivered under the 1933
Act or the 1934 Act, such number of copies of the U.S.
Prospectus (as amended or supplemented) as such U.S.
Underwriter may reasonably request for the purposes
contemplated by the 1933 Act, the 1933 Act Regulations, the
1934 Act or the 1934 Act Regulations.

(f) If at any time when a prospectus relating to
the Securities is required to be delivered, any event shall
occur as a result of which it is necessary, in the reasonable
judgment of the U.S. Representatives based on the advice of
their counsel, to amend or supplement the U.S. Prospectus in
order to ensure that the U.S. Prospectus does not contain an
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the
time it is delivered to a purchaser, not misleading, the
Company will forthwith amend or supplement the U.S.
Prospectus (and will provide drafts thereof to the U.S.
Underwriters and provide them a reasonable opportunity to
review such drafts and provide comments with respect thereto)
so that, as so amended or supplemented, the U.S. Prospectus
will not contain such an untrue statement or omission, and
the Company will furnish to the U.S. Underwriters a
reasonable number of copies of any such amendment or
supplement to the U.S. Prospectus.

(g) The Company will endeavor, in cooperation with
the U.S. Underwriters, to qualify the Securities for offering
and sale under the applicable securities laws of such states
and other jurisdictions of the United States as the U.S.
Representatives may designate; provided, however, that the
Company shall not be obligated (i) to qualify as a foreign
corporation in any jurisdiction in which it is not so
qualified, (ii) to take any action that would subject it to
income or franchise taxation in any jurisdiction in which
would not otherwise be subject to such taxation, (iii) to
execute a consent to service of process under the laws of any
jurisdiction (except service of process with respect to the
offering and sale of the Securities). In each jurisdiction
in which the Securities have been qualified as above
provided, the Company will file such statements and reports
as may be required by the laws of such jurisdiction to
continue such qualification in effect for so long as it may
be required to complete the distribution of such Securities.

(h) The Company will make generally available to
its security holders as soon as practicable, but not later
than 90 days after the close of the period covered thereby,
an earnings statement (which need not be audited, but in form
complying with the provisions of Rule 158 of the 1933 Act
Regulations) covering a twelve-month period beginning not
later than the first day of the Company's fiscal quarter next
following the "effective date" (as defined in said Rule 158)
of the Registration Statement.

(i) The Company will use the net proceeds, if any,
received by it from the sale of the Option Securities in the
manner specified in the Prospectus under "Use of Proceeds."

(j) The Company will file with the Commission such
reports on Form SR as may be required pursuant to Rule 463 of
the 1933 Act Regulations.

(k) The Company will use every reasonable effort
to cause the Securities to be listed on the New York Stock
Exchange.

SECTION 4. Certain Covenants of the Company and
the Selling Stockholder. The Company and the Selling
Stockholder covenant with each of the U.S. Underwriters as
follows:

(a) The Company and Selling Stockholder will be
jointly and severally responsible for and will pay all
expenses incident to the performance of the obligations of
the Company and the Selling Stockholder under this Agreement,
including (i) the printing and filing of the Registration
Statement as originally filed and of each amendment thereto,
(ii) the printing of this Agreement and the U.S. Pricing
Agreement, (iii) the preparation, sale or issuance and
delivery of the certificates evidencing the U.S. Securities
to the U.S. Underwriters, (iv) the reasonable fees and
disbursements of the Company's counsel and accountants, (v)
the expenses in connection with the qualification of the
Securities under state securities laws in accordance with the
provisions of Section 3(g) hereof, including filing fees and
the fees and disbursements of counsel for the U.S.
Underwriters in connection therewith and in connection with
the preparation of the Blue Sky Survey, (vi) the printing and
delivery to the U.S. Underwriters as provided in this
Agreement of copies of the Registration Statement as
originally filed and of each amendment thereto, of each of
the preliminary prospectuses, and of the Prospectuses and any
amendments or supplements thereto, (vii) the printing and
delivery to the U.S. Underwriters of copies of the Blue Sky
Survey, (viii) the fees and expenses incurred in connection
with any filings required to be made by the U.S. Underwriters
with the National Association of Securities Dealers, Inc. in
connection with the offering and sale of the Securities and
(viii) the fees and expenses incurred in connection with the
listing of the Securities on the New York Stock Exchange.

(b) If this Agreement is terminated by the U.S.
Representatives in accordance with the provisions of Section
5 hereof or Section 9(a)(i) hereof, the Company and the
Selling Stockholder will be jointly and severally responsible
for and will reimburse the U.S. Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the U.S. Underwriters.

(c) During the period of 180 days from the date of
the U.S. Pricing Agreement, the Company and the Selling
Stockholder will not, without the prior written consent of
the U.S. Representatives (which consent will not be
unreasonably withheld), directly or indirectly, sell, offer
to sell, grant any option for the sale of, or otherwise
dispose of any shares of Common Stock or any security
convertible into or exchangeable or exercisable for any
shares of Common Stock, except for (i) the issuance and sale
by the Company to the Selling Stockholder of 14,999,900
shares of Common Stock and associated Rights in accordance
with the Stock Exchange Agreement, (ii) the sale by the
Selling Stockholder of the Initial Securities to the
Underwriters in accordance with this Agreement and the
International Underwriting Agreement, (iii) the sale by the
Selling Stockholder of 236,000 shares of Common Stock,
together with the Rights associated with such shares, to
certain members of the Company's management and their
affiliates as contemplated by the Management Prospectus, (iv)
the issuance by the Company of the Option Securities to the
Underwriters in accordance with this Agreement and the
International Underwriting Agreement and (v) the grant by the
Company of options to purchase shares of Common Stock or the
issuance by the Company of shares of Common Stock pursuant to
the O'Sullivan Incentive Stock Plan and other benefit plans
as disclosed in the Prospectuses.

(d) Prior to the time at which the distribution of
the Securities is completed, neither the Company nor the
Selling Stockholder shall, directly or indirectly, (i) take
any action designed to cause or result in, or that
constitutes or might reasonably be expected to constitute,
stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the
Securities or (ii) bid for, purchase or pay anyone any
compensation for soliciting purchases of, the Securities.

SECTION 5. Conditions to Obligations of the U.S.
Underwriters. The obligations of the several U.S.
Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling
Stockholder herein contained at the date hereof and at
Closing Time, to the performance by the Company and the
Selling Stockholder of their respective obligations hereunder
required to be performed prior to or at Closing Time, and to
the following further conditions:

(a) The Registration Statement shall have become
effective not later than 5:30 p.m. on the date hereof or at
such later time and date as may be approved by the U.S.
Representatives; and at Closing Time and any Date of
Delivery, as the case may be, no stop order suspending the
effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated
or threatened by the Commission. If the Company has elected
to rely upon Rule 430A of the 1933 Act Regulations,
Prospectuses that set forth the initial public offering price
per share of the Securities, the purchase price per share to
be paid by the U.S. Underwriters, and any other information
previously omitted from the effective Registration Statement
pursuant to such Rule 430A shall have been transmitted to the
Commission for filing pursuant to Rule 424(b) of the 1933 Act
Regulations within the prescribed time period, and prior to
Closing Time the Company shall have provided evidence
reasonably satisfactory to the U.S. Representatives of such
timely filing, or a post-effective amendment providing such
information shall have been promptly filed and declared
effective in accordance with the requirements of Rule 430A of
the 1933 Act Regulations.

(b) At Closing Time the U.S. Representatives shall
have received:

(1) The favorable opinion, dated as of Closing
Time, of Fried, Frank, Harris, Shriver & Jacobson,
counsel for the Company and the Selling Stockholder, in
form and substance reasonably satisfactory to the U.S.
Representatives, to the effect that:

(i) The Company has been duly incorporated and
is validly existing as a corporation in good
standing under the laws of the State of Delaware.

(ii) The Company has corporate power and
authority to own, lease and operate its properties
and to conduct its business substantially as
described in the Prospectus.

(iii) To the knowledge of such counsel, the
Company is duly licensed or qualified to conduct
business as a foreign corporation and is in good
standing in each jurisdiction set forth on Annex A
to the opinion of such Counsel.

(iv) Each of the Subsidiaries of the Company
is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation.

(v) The authorized, issued and outstanding
capital stock of the Company is as set forth in the
Prospectuses under the column entitled "As
Adjusted" under the caption "Capitalization."

(vi) The 15,000,000 shares of Common Stock
heretofore issued by the Company to the Selling
Stockholder have been duly authorized and are
validly issued, fully paid and nonassessable; the
1,800,000 shares of Common Stock subject to the
option granted pursuant to Section 2(b) hereof have
been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and the
International Purchase Agreement and, when issued
and delivered by the Company in accordance with
this Agreement and the International Purchase
Agreement against payment of the consideration set
forth herein and therein, will be validly issued,
fully paid and nonassessable.

(vii) The issuance of the Securities is not
subject to any preemptive or other similar rights
to subscribe for or purchase the same arising under
the DGCL, the Certificate of Incorporation or
By-laws of the Company or any of the agreements,
contracts or instruments filed as Exhibits 10.1
through 10.14 to the Registration Statement.

(viii) Assuming that the Underwriters have
taken physical possession of the Initial Securities
to be sold by the Selling Stockholder at the
Closing Time in good faith without notice of any
adverse claim as such term is used in Section 8-302
of the Uniform Commercial Code in effect in the
State of New York, upon delivery of such Securities
in registered form issued to the Underwriters and
payment for such Securities as contemplated in this
Agreement and the International Purchase Agreement,
the Underwriters will acquire such Securities free
and clear of all security interests, liens,
encumbrances, equities or other adverse claims.

(ix) The Common Stock conforms as to legal
matters in all material respects to the statements
concerning the Common Stock of the Company
contained in the Prospectuses under the caption
"Description of Capital Stock Common Stock." The
statements contained in the Prospectuses under the
caption "Description of Capital Stock," insofar as
they purport to summarize certain provisions of the
Company's Certificate of Incorporation and By-laws,
fairly summarize in all material respects such
provisions.

(x) The Rights conform as to legal matters in
all material respects to the statements concerning
the Rights contained in the Prospectuses under the
caption "Description of Capital Stock Stockholder
Rights Plan."

(xi) The Company has all necessary corporate
power and authority to execute and deliver this
Agreement, the International Purchase Agreement,
the U.S. Pricing Agreement and the International
Pricing Agreement and to perform its obligations
hereunder and thereunder; this Agreement, the
International Purchase Agreement, the U.S. Pricing
Agreement and the International Pricing Agreement
have each been duly authorized, executed and
delivered by the Company, and each constitutes a
valid and binding agreement of the Company,
enforceable in accordance with its terms (except to
the extent that enforceability hereof or thereof is
subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws
now or hereafter in effect affecting creditors'
rights generally and (ii) general principles of
equity (including, without limitation, standards of
materiality, good faith, fair dealing and
reasonableness), whether such principles are
considered in a proceeding at law or in equity, and
except that the rights to indemnification and
contribution granted hereunder and thereunder may
be limited by applicable federal and state
securities laws or the public policy underlying
such laws).

(xii) The Selling Stockholder has all
necessary corporate power and authority to execute
and deliver this Agreement, the International
Purchase Agreement, the U.S. Pricing Agreement and
the International Pricing Agreement and to perform
its obligations hereunder and thereunder; this
Agreement, the International Purchase Agreement,
the U.S. Pricing Agreement and the International
Pricing Agreement have each been duly authorized,
executed and delivered by the Selling Stockholder,
and each constitutes a valid and binding agreement
of the Selling Stockholder, enforceable in
accordance with its terms (except to the extent
that enforceability hereof or thereof is subject
to (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws
now or hereafter in effect affecting creditors'
rights generally and (ii) general principles of
equity (including, without limitation, standards of
materiality, good faith, fair dealing and
reasonableness, whether such principles are
considered in a proceeding at law or in equity),
and except that the rights to indemnification and
contribution granted hereunder and thereunder may
be limited by applicable federal and state
securities laws or the public policy underlying
such laws).

(xiii) The execution, delivery and performance
by the Company of this Agreement, the International
Purchase Agreement, the U.S. Pricing Agreement and
the International Pricing Agreement and the
consummation by the Company of the transactions
herein and therein contemplated (i) will not
violate (A) any law or present regulation of any
governmental agency or authority of the United
States of America or the State of New York or the
Delaware General Corporation Law (the "DGCL") or
(B) any agreement binding upon the Company or any
of its Subsidiaries or their respective properties
or any court decree or order binding upon the
Company or any of its Subsidiaries (such opinion
being limited to the decrees or orders that are set
forth on Annex B to the opinion of such counsel and
the agreements, contracts and instruments filed as
Exhibits 10.1 through 10.14 to the Registration
Statement (collectively, the "Covered Decrees,
Orders, and Agreements")), (ii) will not result in
a breach or violation of the terms or provisions of
the Certificate of Incorporation or By-laws of the
Company or any of its Subsidiaries, and (iii) will
not result in or require the creation or imposition
of any security interest or lien upon any of their
properties pursuant to the provisions of any
agreement binding upon the Company or any of its
Subsidiaries or their respective properties (such
opinion being limited to the Covered Decrees,
Orders and Agreements) (except for purposes of
clause (i) and (iii), where such a violation or
breach or resulting security interest or lien would
not affect in any material respect the transactions
contemplated by this Agreement or the International
Purchase Agreement or have a material adverse
effect on the condition (financial or otherwise),
business, properties or results of operation of the
Company, Old O'Sullivan and their respective
subsidiaries, taken as a whole).

(xiv) The execution, delivery and performance
by the Selling Stockholder of this Agreement, the
International Purchase Agreement, the U.S. Pricing
Agreement and the International Pricing Agreement
and the consummation by the Selling Stockholder of
the transactions herein and therein contemplated
(i) will not violate (A) any law or present
regulation of any governmental agency or authority
of the United States of America or the State of New
York or the DGCL or (B) any agreement binding upon
the Selling Stockholder or its properties or any
court decree or order binding upon the Selling
Stockholder (such opinion being limited to (1) the
Covered Decrees, Orders, and Agreements and (2) the
agreements, contracts and instruments to which the
Selling Stockholder or its subsidiaries are parties
or by which they are bound set forth on Annex C to
the opinion of such counsel), (ii) will not result
in a breach or violation of the terms or provisions
of the Certificate of Incorporation or By-laws of
the Selling Stockholder, and (iii) will not result
in or require the creation or imposition of any
security interest or lien upon any of its
properties pursuant to the provisions of any
agreement binding upon the Selling Stockholder or
its properties (such opinion being limited to (1)
the Covered Decrees, Orders and Agreements and (2)
the agreements, contracts and instruments to which
the Selling Stockholder or its subsidiaries are
parties or by which they are bound set forth on
Annex C hereto) (except for purposes of clause (i)
and (iii), where such a violation or breach or
resulting security interest or lien would not
affect in any material respect the transactions
contemplated by this Agreement or the International
Purchase Agreement or have a material adverse
effect on the condition (financial or otherwise),
business, properties or results of operations of
the Selling Stockholder and its subsidiaries, taken
as a whole).

(xv) No authorization, approval or consent
of, or registration or filing with, any court or
governmental authority or agency of the United
States or the State of New York or under the DGCL
is required for the execution, delivery or
performance by the Company of this Agreement, the
International Purchase Agreement, the U.S. Pricing
Agreement or the International Pricing Agreement or
the consummation by the Company of the transactions
contemplated herein and therein, except such as
have been obtained or made under the 1933 Act, the
1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations.

(xvi) No authorization, approval or consent
of, or registration or filing with, any court or
governmental authority or agency of the United
States or the State of New York or under the DGCL
is required for the execution, delivery or
performance by the Selling Stockholder of this
Agreement, the International Purchase Agreement,
the U.S. Pricing Agreement or the International
Pricing Agreement or the consummation by the
Selling Stockholder of the transactions
contemplated herein and therein, except
such as have been obtained or made under the 1933
Act, the 1933 Act Regulations, the 1934 Act and the
1934 Act Regulations.

(xvii) The Registration Statement became
effective under the 1933 Act on January 26, 1994
and any required filing of the Prospectuses
pursuant to Rule 424(b) of the 1933 Act Regulations
has been made within the time period required by
such Rule. To the knowledge of such counsel, no
stop order suspending the effectiveness of the
Registration Statement has been issued and no
proceeding for that purpose is pending or
threatened by the Commission.

(xviii) The Registration Statement and the
Prospectuses and any amendments or supplements
thereto (except for (i) the financial statements,
notes or schedules thereto and (ii) other financial
information and statistical information included in
the Registration Statement or Prospectuses, as to
both of which such counsel need express no opinion)
appear on their face to be appropriately responsive
as to form in all material respects to the
requirements of the 1933 Act and the 1933 Act
Regulations.

(xix) To the knowledge of such counsel, there
are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments
required to be described or referred to in the
Registration Statement or to be filed as exhibits
thereto other than those described or referred to
therein or filed as exhibits thereto as required.

(xx) The information set forth in the
Prospectuses under the caption "Certain United
States Tax Consequences to Non-United States
Holders," to the extent that such information
constitutes summaries of legal matters or
documents, or legal conclusions, is true and
correct in all material respects.

(xxi) Each of the Company and Old O'Sullivan
has all necessary corporate power and authority to
execute and deliver each of the Reorganization
Agreements to which it is a party and to perform
its obligations thereunder. Each of the
Reorganization Agreements to which the Company or
Old O'Sullivan is a party has been duly authorized,
executed and delivered by each of them (to the
extent each of them is a party thereto) and
constitutes a valid and binding obligation of each
of them (to the extent each of them is a party
thereto), enforceable in accordance with its terms
(except to the extent that enforceability thereof
is subject to (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting
creditors' rights generally and (ii) general
principles of equity (including, without
limitation, standards of materiality, good faith,
fair dealing and reasonableness), whether such
principles are considered in a proceeding at law or
in equity).

(xxii) The Selling Stockholder has all
necessary corporate power and authority to execute
and deliver each of the Reorganization Agreements
to which it is a party and to perform its
obligations thereunder. Each of the Reorganization
Agreements to which the Selling Stockholder is a
party has been duly authorized, executed and
delivered by the Selling Stockholder and
constitutes a valid and binding obligation of the
Selling Stockholder, enforceable in accordance with
its terms (except to the extent that enforceability
thereof is subject to (i) appliable bankruptcy,
insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting
creditors' rights generally and (ii) general
principles of equity (including, without
limitation, standards of materiality, good faith,
fair dealing and reasonableness), whether such
principles are considered in a proceeding at law or
in equity).

(xxiii) The execution, delivery and
performance by the Company and Old O'Sullivan of
the Reorganization Agreements to which each of them
is a party and the consummation by the Company and
Old O'Sullivan of the transactions contemplated
therein (i) will not violate (A) any law or present
regulation of any governmental agency or authority
of the United States of America or the State of New
York or the DGCL or (B) any agreement binding upon
the Company or Old O'Sullivan or their respective
subsidiaries or properties or any court decree or
order binding upon the Company or Old O'Sullivan or
their respective subsidiaries (such opinion being
limited (x) to the Covered Decrees, Orders and
Agreements and (y) in that such counsel need not
express an opinion with respect to any violation
arising under or based upon any cross-default
provision insofar as such violation relates to a
default under an agreement not filed as an exhibit
to the Registration Statement or such violation
arises under or is based upon any covenant of a
financial or numerical nature or requires
mathematic computation), (ii) will not result in a
breach or violation of the terms or provisions of
the Certificate of Incorporation or By-laws of the
Company or Old O'Sullivan or their respective
subsidiaries, and (iii) will not result in or
require the creation or imposition of any security
interest or lien upon any of their properties
pursuant to the provisions of any agreement binding
upon the Company or Old O'Sullivan or their
respective subsidiaries or properties (such opinion
being limited to the Covered Decrees, Orders and
Agreements) (except for purposes of clauses (i) and
(iii), where such a violation or breach or
resulting security interest or lien would not have
a material adverse effect on the condition
(financial or otherwise), business, properties or
results of operations of the Company, Old
O'Sullivan and their respective subsidiaries, taken
as a whole).

(xxiv) The execution, delivery and
performance by the Selling Stockholder of the
Reorganization Agreements to which it is a party
and the consummation by the Selling Stockholder of
the transactions contemplated therein (i) will not
violate (A) any law or present regulation of any
governmental agency or authority of the United
States of America or the State of New York or the
DGCL or (B) any agreement binding upon the Selling
Stockholder or its properties or any court decree
or order binding upon the Selling Stockholder (such
opinion being limited (x) to (1) the Covered
Decrees, Orders and Agreements and (2) the
agreements, contracts and instruments to which the
Selling Stockholder or its subsidiaries are parties
or by which they are bound set forth on Annex C to
the opinion of such counsel) and (y) in that such
counsel need not express an opinion with respect to
any violation arising under or based upon any
cross-default provision insofar as such violation
relates to a default under an agreement not filed
as an exhibit to the Registration Statement or such
violation arises under or is based upon any
covenant of a financial or numerical nature or
requires arithmetic computation), (ii) will not
result in a breach or violation of the terms or
provisions of the Certificate of Incorporation or
By-laws of the Selling Stockholder, and (iii) will
not result in or require the creation or imposition
of any security interest or lien upon any of its
properties pursuant to the provisions of any
agreement binding upon the Selling Stockholder or
its properties (such opinion being limited to (1)
the Covered Decrees, Orders and Agreements and (2)
the agreements, contracts and instruments to which
the Selling Stockholder or its subsidiaries are
parties or by which they are bound set forth on
Annex C to the opinion of such counsel) (except,
for purposes of clauses (i) and (iii), where such a
violation or breach or resulting security interest
or lien would not affect in any material respect
the transactions contemplated by this Agreement or
the International Purchase Agreement or have a
material adverse effect on the condition (financial
or otherwise), business, properties or results of
operation of the Selling Stockholder and its
subsidiaries, taken as a whole).

In addition, such opinion will contain the
following statements: In the course of the preparation by the
Company and its counsel of the Registration Statement and
Prospectuses, such counsel attended conferences with certain
of the officers of the Company and the Selling Stockholder
and representatives of the independent public accountants for
the Company, the Underwriters and counsel to the
Underwriters, at which the Registration Statement and the
Prospectuses were discussed. In addition, between the date
of the effectiveness of the Registration Statement and the
time of delivery of this opinion, such counsel attended
additional conferences with certain of the officers of the
Company and the Selling Stockholder and representatives of
the independent public accountants for the Company, at which
the contents of the Registration Statement and Prospectuses
were discussed to a limited extent. Given the limitations
inherent in the independent verification of factual matters
and the character of determinations involved in the
registration process, such counsel is not passing upon and
does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement and the Prospectuses (other than as
set forth in paragraphs (ix), (x) and (xx) above). Subject
to the foregoing and on the basis of the information such
counsel gained in the performance of the services referred to
above, including information obtained from officers and other
representatives of the Company and the Selling Stockholder,
no facts have come to such counsel's attention that cause
such counsel to believe that the Registration Statement, at
the time of the Registration Statement was declared effective
by the Commission, contained any untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statement therein
not misleading. Also, subject to the foregoing, no facts
have come to such counsel's attention that cause such counsel
to believe that the Prospectuses, as of the date thereof, at
Closing Time or at any Date of Delivery, contained or
contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading, except in each case
that such counsel need not express a view or belief with
respect to financial statements, notes or schedules thereto
or other financial and statistical information included in
the Registration Statement or Prospectuses.

In rendering the foregoing opinion, such counsel
shall be entitled to state that such counsel expresses no
opinion regarding the laws of any jurisdiction other than the
federal laws of the United States, the laws of the State of
New York and the DGCL. In addition, such counsel shall be
entitled to state that such counsel expresses no opinion
regarding the securities or "blue sky" laws of any state or
other non-federal jurisdiction in which the Securities are
offered or sold.

(2) The favorable opinion, dated as of Closing
Time, of Rowland H. Geddie, III, Vice President, General
Counsel and Secretary of the Company, in form and
substance reasonably satisfactory to the U.S.
Representatives, to the effect that:

(i) Each of the Subsidiaries of the Company
has been duly incorporated and is validly existing
as a corporation in good standing under the laws of
the jurisdiction of its incorporation.

(ii) Each of the Subsidiaries of the Company
has all the necessary corporate power and authority
to own, lease and operate its properties and to
conduct its business as described in the
Prospectuses.

(iii) Each of the Subsidiaries of the Company
is duly licensed or qualified to conduct business
as a foreign corporation and is in good standing in
each jurisdiction set forth on Annex A to the
opinion of such counsel.

(iv) All of the issued and outstanding
capital stock of each of the Subsidiaries of the
Company has been validly issued and is fully paid
and nonassessable and is, to the knowledge of such
counsel, owned by the Company, directly or
indirectly, free and clear of any security
interest, mortgage, pledge, lien, encumbrance,
claim or equity.

(v) To the knowledge of such counsel, there
is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or
foreign, now pending or threatened against the
Company or any of its Subsidiaries, which (A) is
required to be disclosed in the Registration
Statement and the Prospectuses (other than as
disclosed therein) or (B) might reasonably be
expected to result in any material adverse change
in the condition, financial or otherwise, or in
the earnings, business affairs or business
prospects of the Company and its Subsidiaries
considered as one enterprise.

(vi) To the knowledge of such counsel, the
Company is not in violation of its Certificate or
By-laws, and no default by the Company or any of
its Subsidiaries exists in the due performance or
observance of any obligation, agreement, covenant
or condition contained in any Covered Decrees,
Orders, and Agreements, except for defaults that
would not have a material adverse effect on the
condition, financial or otherwise, or on the
earnings, business affairs or business prospects of
the Company and its Subsidiaries considered as one
enterprise.

(vii) The execution, delivery and performance
by the Company of this Agreement, the International
Purchase Agreement, the U.S. Pricing Agreement and
the International Pricing Agreement and the
consummation by the Company of the transactions
herein and therein contemplated (i) will not
violate (A) any law or present regulation of any
governmental agency or authority of the State of
Texas or Missouri or (B) any agreement or court
decree or order known to such counsel and binding
upon the Company or any of its Subsidiaries or
their respective properties (such opinion being
limited to the Covered Decrees, Orders, and
Agreements), and (ii) will not result in or require
the creation or imposition of any security interest
or lien upon any of their properties pursuant to
the provisions of any agreement known to such
counsel and binding upon the Company or any of its
Subsidiaries or their respective properties.

(viii) The execution, delivery and
performance by the Company and Old O'Sullivan of
the Reorganization Agreements to which each of them
is a party and the consummation by the Company and
Old O'Sullivan of the transactions contemplated
therein (i) will not violate (A) any law or present
regulation of any governmental agency or authority
of the State of Texas or Missouri or (B) any
agreement or court decree or order known to such
counsel and binding upon the Company or Old
O'Sullivan or their respective subsidiaries or
properties and (ii) will not result in or require
the creation or imposition of any security interest
or lien upon any of their properties pursuant to
the provisions of any agreement known to such
counsel and binding upon the Company or Old
O'Sullivan or their respective subsidiaries or
properties (such opinion being limited to the
Covered Decrees, Orders, and Agreements) (except in
each case where such a violation or breach or
resulting security interest or lien would not have
a material adverse effect on the condition
(financial or otherwise), business, properties or
results of operations of the Company, Old
O'Sullivan and their respective subsidiaries, taken
as a whole).

In rendering the foregoing opinion, such counsel shall
be entitled to state that he expresses no opinion regarding
the laws of any jurisdiction other than the federal laws of
the United States, the laws of the State of Texas and
(subject to the qualification set forth in the immediately
following sentence) the laws of the State of Missouri.
Insofar as the foregoing opinion relates to matters governed
by the laws of the State of Missouri, such counsel shall be
entitled to state that he has assumed, without investigation,
that the laws of the State of Missouri are in all respects
identical to the laws of the State of Texas.

(3) The favorable opinion, dated as of Closing Time, of
Frederick W. Padden, General Counsel of the Selling
Stockholder, in form and substance reasonably satisfactory to
the U.S. Representatives, to the effect that:

(i) The Selling Stockholder is the sole record
owner and, to the knowledge of such counsel, beneficial
owner of the Initial Securities; to the knowledge of
such counsel, the Selling Stockholder has valid and
marketable title to the Initial Securities, free and
clear of any claim, lien, security interest,
encumbrance, restriction on transfer or other defect in
title.

(ii) To the knowledge of such counsel, there are
no contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be
described or referred to in the Registration Statement
or to be filed as exhibits thereto other than those
described or referred to therein or filed as exhibits
thereto as required.

(iii) The information set forth in the
Prospectuses under the captions "Management Company
Compensation and Benefits" and "Certain Transactions,"
to the extent that such information constitutes
summaries of legal matters, documents or proceedings,
fairly summarizes in all material respects such legal
matters, documents or proceedings.

(iv) The execution, delivery and performance by
the Selling Stockholder of this Agreement, the
International Purchase Agreement, the U.S. Pricing
Agreement and the International Pricing Agreement and
the consummation by the Selling Stockholder of the
transactions herein and therein contemplated (i) will
not violate (A) any law or present regulation of any
governmental agency or authority of the State of Texas
or (B) any agreement or court decree or order known to
such counsel and binding upon the Selling Stockholder
or its properties and (ii) will not result in or
require the creation or imposition of any security
interest or lien upon any of its properties pursuant to
the provisions of any agreement known to such counsel
and binding upon the Selling Stockholder or its
properties.

(v) The execution, delivery and performance by
the Selling Stockholder of the Reorganization
Agreements to which it is a party and the consummation
by the Selling Stockholder of the transactions
contemplated therein (i) will not violate (A) any law
or present regulation of any governmental agency or
authority of the State of Texas or (B) any agreement or
court decree or order known to such counsel and binding
upon the Selling Stockholder or its properties and (ii)
will not result in or require the creation or
imposition of any security interest or lien upon any of
its properties pursuant to the provisions of any
agreement known to such counsel and binding upon the
Selling Stockholder or its properties (except in each
case where such a violation or breach or resulting
security interest or lien would not have a material
adverse effect on the condition (financial or
otherwise), business, properties or results of
operation of the Selling Stockholder and its
subsidiaries, taken as a whole).

(4) The favorable opinion, dated as of Closing Time, of
Baker & Botts, L.L.P., counsel for the Underwriters, with
respect to the matters set forth in clauses (i), (vi), (vii)
(solely as to preemptive rights arising by operation of law
or under the Certificate of Incorporation and By-laws of the
Company), (ix) (solely as to the matters addressed in the
first sentence thereof), (xi) (solely as to the due
authorization, execution and delivery of the U.S. Purchase
Agreement and the International Purchase Agreement), (xii)
(solely as to the due authorization, execution and delivery
of the U.S. Purchase Agreement and the International
Purchase Agreement), (xvii) and (xviii) of subsection (b)(1)
of this Section.

Such opinion of Baker & Botts, L.L.P. shall further
state that nothing has come to the attention of such counsel
that causes them to believe that the Registration Statement
(other than the financial statements and schedules contained
therein, including the notes thereto and the auditors'
reports thereon, and the other financial and statistical data
contained therein, as to which such counsel need not
comment), at the time it became effective, contained an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading or that the
Prospectus (other than the financial statements and schedules
contained therein, including the notes thereto and the
auditors' reports thereon, and the other financial and
statistical data contained therein, as to which such counsel
need not comment), at the Representation Date (unless the
term "Prospectus" refers to a prospectus which has been
provided to the Underwriters by the Company for use in
connection with the offering of the Offered Securities which
differs from the prospectus on file at the Commission at the
Representation Date, in which case at the time it is first
provided to the Underwriters for such use), included an
untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading.

(c) At Closing Time there shall not have been, since
the date hereof or since the respective dates as of which
information is given in the Prospectuses, any materialadverse
change in the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business,
and the U.S. Representatives shall have received a
certificate of the President or a Vice President of the
Company and of the chief financial or chief accounting
officer of the Company, dated as of Closing Time, to the
effect that (i) there has been no such material adverse
change, (ii) the representations and warranties of the
Company contained in Section 1(a) of this Agreement are true
and correct with the same force and effect as though
expressly made at and as of Closing Time, (iii) the Company
has complied with all covenants and agreements and satisfied
all conditions on its part to be performed or satisfied at or
prior to Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued
and, to the knowledge of each such officer, no proceedings
for that purpose have been initiated or threatened by the
Commission. As used in this Section 5(c), the term
"Prospectuses" shall mean the Prospectuses in the form first
used to confirm sales of the Securities.

(d) At Closing Time the U.S. Representatives shall have
received a certificate from the President or a Vice President
of the Selling Stockholder and of the chief financial officer
or chief accounting officer of the Selling Stockholder, dated
as of Closing Time, to the effect that (i) the
representations and warranties of the Selling Stockholder
contained in Sections 1(a) and 1(b) of this Agreement are
true and correct with the same force and effect as though
expressly made at and as of Closing Time and (ii) the Selling
Stockholder has complied with all covenants and agreements
and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time.

(e) At the time of the execution of this Agreement, the
U.S. Representatives shall have received from Price
Waterhouse a letter dated such date, in form and substance
satisfactory to the U.S. Representatives, to the effect that:

(i) they are independent public accountants with
respect to the Company and its Subsidiaries within the
meaning of the 1933 Act and the 1933 Act Regulations;

(ii) it is their opinion that the audited combined
financial statements of the Company and its Subsidiaries
included in the Registration Statement and covered by
their reports therein comply as to form in all material
respects with the applicable accounting requirements of
the 1933 Act and the 1933 Act Regulations with respect
to registration statements on Form S-1;

(iii) on the basis of procedures (but not an audit
in accordance with generally accepted auditing
standards) consisting of (A) reading the minutes of
meetings of the stockholders, the Board of Directors,
and of the Company and its Subsidiaries since the date
of the latest audited balance sheet as set forth in the
minute books through a specified date not more than five
business days prior to the date of this Agreement, (B)
performing the procedures specified by the American
Institute of Certified Public Accountants for a review
of interim financial information as described in SAS
No. 71, Interim Financial Information, on the unaudited
condensed interim financial statements of the Company
included in the Registration Statement and reading the
unaudited interim financial statements of the Company
for the period from December 31, 1993 to the date of
latest available interim financial statements, and (C)
making inquiries of certain officials of the Company who
have responsibility for financial and accounting matters
regarding the specific financial statement items
referred to below, nothing has come to their attention
that causes them to believe that (1) the unaudited
condensed combined financial statements of the Company
and its Subsidiaries included in the Registration
Statement do not comply as to form in all material
respects with the applicable accounting requirements of
the 1933 Act and the 1933 Act Regulations or that any
material modifications should be made to the unaudited
condensed combined interim financial statements,
included in the Registration Statement, for them to be
in conformity with generally accepted accounting
principles, or (2) at a specified date not more than
five business days prior to the date of this Agreement,
there was any change in the capital stock or any
increase in the combined long-term debt of the Company
and its Subsidiaries as compared with the amounts shown
in the December 31, 1993 combined balance sheet included
in the Registration Statement or, during the period from
January 1, 1994 to a specified date not more than five
business days prior to the date of this Agreement, there
were any decreases, as compared with the corresponding
period in the preceding year, in the combined net sales,
the total or per share amounts of income before
cumulative effect of change in accounting principle, or
the net income of the Company and its Subsidiaries,
except in all instances for changes, increases or
decreases which the Registration Statement discloses
have occurred or may occur, or except as specifically
stated in such letter;

(iv) although they are unable to and do not
express an opinion on the Pro Forma Combined Statements
of Operations and Pro Forma Combined Balance Sheet
(collectively, the "Pro Forma Financial Statements")
included in the Registration Statement, they have (A)
read the Pro Forma Financial Statements, (B) made
inquiries of certain officials of the Company who have
responsibility for financial and accounting matters
about the basis for their determination of the pro forma
adjustments to the historical amounts in the Pro Forma
Financial Statements and whether the Pro Forma Financial
Statements comply in form in all material respects with
the applicable accounting requirements of Rule 11-02 of
Regulation S-X; and (C) proved the arithmetic accuracy
of the application of the pro forma adjustments to the
historical amounts in the Pro Forma Statements; on the
basis of such procedures, and such other inquiries and
procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that
the Pro Forma Financial Statements do not comply in form
in all material respects with the applicable
requirements of Rule 11-02 of Regulation S-X and that
the pro forma adjustments have not been properly applied
to the historical amounts in the compilation of such
statements; and

(v) they have read, with respect to certain
amounts, percentages and financial information which are
included in the Registration Statement and Prospectuses
and which have been specified by the U.S.
Representatives, and have found such amounts,
percentages and financial information to be in agreement
with the relevant accounting and financial records of
the Company and its Subsidiaries identified in such
letter.

(f) At Closing Time the U.S. Representatives shall
have received from Price Waterhouse a letter, dated as of
Closing Time, to the effect that they confirm the statements
made in the letter furnished pursuant to subsection (e) of
this Section, except that the "specified date" referred to in
such letter shall be a date not more than five days prior to
Closing Time and, if the Company has elected to rely on Rule
430A of the 1933 Act Regulations, to the further effect that
they have carried out procedures as specified in clause (v)
of subsection (e) of this Section with respect to certain
amounts, percentages and financial information specified by
the U.S. Representatives and deemed to be a part of the
Registration Statement pursuant to Rule 430(A)(b) and have
found such amounts, percentages and financial information to
be in agreement with the relevant accounting and financial
records of the Company and its Subsidiaries identified in
such letter.

(g) At Closing Time the Securities shall have been
approved for listing on the New York Stock Exchange, subject
only to official notice of issuance.

(h) At the time of the execution of this Agreement, the
Company shall have furnished to the U.S. Representatives
"lock-up" letters (or other agreements or instruments
acceptable to the U.S. Representatives), in form and
substance reasonably satisfactory to the U.S.
Representatives, signed by each of the persons designated in
the Prospectuses as an executive officer or director of the
Company, pursuant to which each such person shall agree not
to sell, offer to sell, grant an option for the sale of, or
otherwise dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or
exchangeable into or exercisable for Common Stock for a
period of 180 days from the U.S. Representation Date without
the prior written consent of the U.S. Representatives (which
consent shall not be unreasonably withheld), except for a
bona fide transaction entered into in good faith by such
person with a member of such person's family or by the
executor of such person's estate, provided that the recipient
of such shares (unless such recipient is the executor or
administrator of the estate of a deceased transferor) agrees
in writing to be bound by the terms of the transferor's
lock-up letter.

(i) At Closing Time and at each Date of Delivery, if
any, counsel for the U.S. Underwriters shall have been
furnished with such certificates, documents and opinions as
they may reasonably require for the purpose of enabling them
to pass upon the sale or issuance of the Securities as herein
contemplated and related proceedings, or in order to evidence
the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained.

(j) At Closing Time and at each Date of Delivery, if
any, all actions, proceedings, instruments, opinions and
documents required in connection with the consummation of the
transactions contemplated by this Agreement and the
International Purchase Agreement at or prior to Closing Time
or such Date of Delivery, as the case may be, shall be
reasonably satisfactory to the U.S. Representatives.

(k) In the event the U.S. Underwriters exercise their
option provided in Section 2(b) hereof to purchase all or any
part of the U.S. Option Securities and the Date of Delivery
specified by the U.S. Underwriters for any such purchase is a
date other than the Closing Time, the obligation of the U.S.
Underwriters to purchase all or any such portion of the U.S.
Option Securities shall be subject, in addition to the
foregoing conditions, to the accuracy of the representations
and warranties of the Company and the Selling Stockholder
herein contained at each Date of Delivery, to the performance
by the Company and the Selling Stockholder of its obligations
hereunder required to be performed prior to or at each Date
of Delivery, and to the receipt by the U.S. Underwriters of
the following:

(1) A certificate, dated such Date of Delivery, of
the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the
Company confirming that the certificate delivered at
Closing Time pursuant to Section 5(c) hereof remains
true as of such Date of Delivery.

(2) A certificate, dated such Date of Delivery, of
the President or a Vice President of the Selling
Stockholder and of the chief financial or chief
accounting officer of the Selling Stockholder confirming
that the certificate delivered at Closing Time pursuant
to Section 5(d) hereof remains true as of such Date of
Delivery.

(3) The favorable opinion of Fried, Frank, Harris,
Shriver & Jacobson, counsel for the Company, in form and
substance reasonably satisfactory to the U.S.
Representatives, dated such Date of Delivery, relatingto
the Option Securities and otherwise to the same effect
as the opinion required by Section 5(b)(1) hereof.

(4) The favorable opinion of Frederick W. Padden,
General Counsel of the Selling Stockholder, in form and
substance reasonably satisfactory to the U.S.
Representatives, dated such Date of Delivery, relating
to the Option Securities and otherwise to the same
effect as the opinion required by Section 5(b)(2)
hereof.

(5) The favorable opinion of Rowland H. Geddie,
III, Vice President, General Counsel and Secretary of
the Company, in form and substance reasonably
satisfactory to the U.S. Representatives, dated such
Date of Delivery, relating to the Option Securities and
otherwise to the same effect as the opinion required by
Section 5(b)(3) hereof.

(6) The favorable opinion of Baker & Botts,
L.L.P., counsel for the U.S. Underwriters, dated such
Date of Delivery, relating to the Option Securities and
otherwise to the same effect as the opinion required by
Section 5(b)(4) hereof.

(7) A letter, dated as of such Date of Delivery,
from Price Waterhouse, in form and substance reasonably
satisfactory to the U.S. Representatives, substantially
the same in scope and substance as the letter furnished
pursuant to Section 5(f) hereof, except that the
"specified date" in such letter shall be a date not more
than five days prior to such Date of Delivery.

If any condition specified in this Section shall
not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the U.S. Representatives
by notice to the Company and the Selling Stockholder at any
time at or prior to Closing Time or (insofar as the
provisions hereof relate to the Option Securities) any Date
of Delivery and such termination shall be without liability
of any party to any other party. Notwithstanding the
foregoing, the provisions of Sections 4(a), 4(b), 6 and 7
hereof shall remain in effect following any such termination.

SECTION 6. Indemnification.

(a) The Company and the Selling Stockholder
jointly and severally agree to indemnify and hold harmless
each U.S. Underwriter, each officer and director of any U.S.
Underwriter and each person, if any, who controls any U.S.
Underwriter within the meaning of Section 15 of the 1993 Act
as follows:

(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out
of any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement
(or any amendment thereto), including the information
deemed to be part of the Registration Statement pursuant
to Rule 430A(b) of the 1933 Act Regulations, if
applicable, or the omission or alleged omission
therefrom of a material fact required to be stated
therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in
any preliminary prospectus or the Prospectuses (or any
amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary
in order to make the statements therein, in the light of
the circumstances under which they were made, not
misleading;

(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to theextent
of the aggregate amount paid in settlement of any
litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue
statement or omission, if such settlement is effected
with the written consent of the Company and the Selling
Stockholder; and

(iii) against any and all expense whatsoever, as
incurred (including the fees and expenses of counsel
chosen by the U.S. Representatives), reasonablyincurred
in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue
statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;

provided, however, that this indemnity agreement shall not
apply to any loss, liability, claim, damage or expense to the
extent arising out of any untrue statement or omission or
alleged untrue statement or omission made in reliance upon
and conformity with written information furnished to the
Company by any U.S. Underwriter through Merrill Lynch
expressly for use in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the U.S.
Prospectus (or any amendment or supplement thereto); and
provided, further, that this indemnity agreement with respect
to any preliminary prospectus shall not inure to the benefit
of any U.S. Underwriter from whom the person asserting any
such losses, liabilities, claims, damages or expenses
purchased Securities, any officer or director of such U.S.
Underwriter or any person controlling such Underwriter, if a
copy of the U.S. Prospectus (as then amended or supplemented
if the Company shall have furnished any such amendments or
supplements thereto) was not sent or given by or on behalf of
such Underwriter to such person, if such is required by law,
at or prior to the written confirmation of the sale of such
Securities to such person and if the U.S. Prospectus (as so
amended or supplemented) would have corrected the defect
giving rise to such loss, liability, claim, damage or
expense.

(b) Each U.S. Underwriter agrees, severally and
not jointly, to indemnify and hold harmless the Company, its
directors and each of its officers who signed the
Registration Statement, the Selling Stockholder and each of
its officers and directors and each person, if any, who
controls the Company or the Selling Stockholder within the
meaning of Section 15 of the 1933 Act against any and all
loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, but
only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including
the information deemed to be part of the Registration
Statement pursuant to Rule 430A(b) of the 1933 Act
Regulations, if applicable, or any preliminary prospectus or
the Prospectuses (or any amendment or supplement thereto) in
reliance upon and in conformity with written information
furnished to the Company by such U.S. Underwriter through
Merrill Lynch expressly for use in the Registration Statement
(or any amendment thereto) or the Prospectuses (or any
amendment or supplement thereto).

(c) Each indemnified party shall give notice as
promptly as reasonably practicable to each indemnifying party
of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify
any indemnifying party shall not relieve such indemnifying
party from any liability which it may have otherwise than on
account of this indemnity agreement. An indemnifying party
may participate at its own expense in the defense of such
action. In no event shall the indemnifying parties be liable
for the fees and expenses of more than one counsel (in
addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any
one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations
or circumstances.

SECTION 7. Contribution. In order to provide for
just and equitable contribution in circumstances in which the
indemnity agreement provided for in Section 6 hereof is for
any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the
Company, the Selling Stockholder and the U.S. Underwriters
shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by
said indemnity agreement incurred by the Company, the Selling
Stockholder and one or more of the U.S. Underwriters, as
incurred, in such proportions that the U.S. Underwriters are
responsible for that portion represented by the percentage
that the underwriting discount appearing on the cover page of
the Prospectuses bears to the initial public offering price
appearing thereon and the Company and the Selling Stockholder
will be jointly and severally responsible for the balance;
provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For
purposes of this Section, each person, if any, who controls a
U.S. Underwriter within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as such U.S.
Underwriter, each director of the Company, each officer of
the Company who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act shall have the same rights to
contribution as the Company, and each person who controls the
Selling Stockholder within the meaning of Section 15 of the
Securities Act shall have the same rights to contribution as
the Selling Stockholder.

SECTION 8. Representations, Warranties and
Agreements to Survive Delivery. All representations,
warranties, agreements and indemnities contained in this
Agreement and the U.S. Pricing Agreement, or contained in
certificates of officers of the Company or the Selling
Stockholder submitted pursuant hereto, shall remain operative
and in full force and effect, regardless of any investigation
made by or on behalf of any U.S. Underwriter or controlling
person, or by or on behalf of the Company or the Selling
Stockholder, and shall survive delivery of and payment for
the U.S. Securities to or by the U.S. Underwriters.

SECTION 9. Termination of Agreement.

(a) The U.S. Representatives may terminate this
Agreement, by notice to the Company and the Selling
Stockholder, at any time at or prior to Closing Time (i) if
there has been, since the date of this Agreement or since the
respective dates as of which information is given in the
Prospectuses, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its Subsidiaries
considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred
any material adverse change in the financial markets in the
United States or elsewhere or any outbreak of hostilities or
escalation thereof or other calamity or crisis, the effect of
which is such as to make it, in the reasonable judgment of
the U.S. Representatives, impracticable to market the
Securities or enforce contracts for the sale of the
Securities, or (iii) if trading in the Common Stock has been
suspended by the Commission or the New York Stock Exchange,
or if trading generally on either the New York Stock Exchange
or the American Stock Exchange has been suspended, or minimum
or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by
either of said exchanges or by order of the Commission or any
other governmental authority, or if a banking moratorium has
been declared by either federal or New York authorities. As
used in this Section 9(a), the term "Prospectuses" means the
Prospectuses in the form first used to confirm sales of the
Securities.

(b) If this Agreement is terminated pursuant to
this Section, such termination shall be without liability of
any party to any other party. Notwithstanding the foregoing,
the provisions of Sections 4(a), 4(b), 6 and 7 shall remain
in effect.

(c) This Agreement may also terminate pursuant to
the provisions of Section 2(a)(ii) hereof, with the effect
stated in such Section.

SECTION 10. Default by one or more U.S.
Underwriters. If any one or more of the U.S. Underwriters
shall fail at Closing Time to purchase and pay for any of the
Initial U.S. Securities pursuant to this Agreement and the
U.S. Pricing Agreement and such failure to purchase shall
constitute a default in the performance of its or their
obligations hereunder and thereunder, the U.S.
Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-
defaulting U.S. Underwriters or any other underwriters to
purchase all, but not less than all, of the Initial U.S.
Securities not so purchased in such amounts as may be agreed
upon and upon the terms herein set forth; if, however, the
U.S. Underwriters shall not have completed such arrangements
within said 24-hour period, then:

(a) if the number of Initial U.S. Securities not
so purchased does not exceed 10% of the Initial U.S.
Securities, the non-defaulting U.S. Underwriters shall be
obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting
obligations of all non- defaulting U.S. Underwriters, or

(b) if the number of Initial U.S. Securities not
so purchased equals or exceeds 10% of the Initial U.S.
Securities, this Agreement shall terminate without liability
on the part of any non-defaulting U.S. Underwriter.

No action taken pursuant to this Section shall
relieve any defaulting U.S. Underwriter from any liability it
may have hereunder in respect of its default.

In the event of any such default which does not
result in a termination of this Agreement, the U.S.
Representatives shall have the right to postpone Closing Time
for such period, not exceeding seven days, as they shall
determine, after consultation with the Company, in order that
the required changes in the Registration Statement and the
Prospectuses or in any other documents or arrangements may be
effected.

SECTION 11. Information Furnished by U.S.
Underwriters. The U.S. Underwriters acknowledge that the
statements contained in (i) the last paragraph of text on the
outside front cover page of the U.S. Prospectus, (ii) the
legend regarding stabilization activities on the inside front
cover page of the U.S. Prospectus and (iii) the fourth,
sixth, seventh, eighth, tenth and thirteenth paragraphs under
the caption "Underwriting" in the U.S. Prospectus were
included in the Registration Statement, the preliminary U.S
prospectus and the U.S. Prospectus in reliance upon and in
conformity with written information furnished to the Company
by the U.S. Underwriters through Merrill Lynch expressly for
use therein, and the Company and the Selling Stockholder
acknowledge and agree that such statements constitute the
only information so furnished to the Company by the U.S.
Underwriters.

SECTION 12. Notices. All notices and other
communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the U.S. Representatives in
care of Merrill Lynch at World Financial Center, North Tower,
250 Vesey Street, New York, New York 10281, to the attention
of the Syndicate Department; notices to the Company shall be
directed to it at 1900 Gulf Street, Lamar, Missouri 64759, to
the attention of the General Counsel; and notices to the
Selling Stockholder shall be directed to it at TE Electronics
Technology Center, 200 Taylor Street, Suite 700, Fort Worth,
Texas 76102, to the attention of the General Counsel.

SECTION 13. Parties. This Agreement and the U.S.
Pricing Agreement shall each inure to the benefit of and be
binding upon the U.S. Underwriters, the Company and the
Selling Stockholder and their respective successors. Nothing
expressed or mentioned in this Agreement or the U.S. Pricing
Agreement is intended or shall be construed to give any
person, firm or corporation, other than the U.S.
Underwriters, the Company and the Selling Stockholder and
their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 hereof
and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this
Agreement or the U.S. Pricing Agreement or any provision
herein or therein contained. This Agreement and the U.S.
Pricing Agreement and all conditions and provisions hereof
and thereof are intended to be for the sole and exclusive
benefit of the U.S. Underwriters, the Company and the Selling
Stockholder and their respective successors, and said
controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of
Securities from any U.S. Underwriter shall be deemed to be a
successor by reason merely of such purchase.

SECTION 14. Certain Actions; Authority of U.S.
Representatives. Any action required or permitted to be
taken by the U.S. Underwriters under or in connection with
this Agreement may be taken by them jointly or by Merrill
Lynch. The U.S. Representatives represent that they have
been authorized by the other U.S. Underwriters to execute
this Agreement and the U.S. Pricing Agreement on behalf of
the other U.S. Underwriters.

SECTION 15. Governing Law and Time. This
Agreement and the U.S. Pricing Agreement shall be governed by
and construed in accordance with the laws of the State of New
York applicable to agreements made and to be performed in
said state. Except where otherwise provided, specified times
of day refer to New York City time.

SECTION 16. Counterparts. This Agreement may be
executed in one or more counterparts and, when a counterpart
has been executed by each party, all such counterparts taken
together shall constitute one and the same agreement.

If the foregoing is in accordance with your
understanding of our agreement, please sign and return to the
Company a counterpart hereof, whereupon this instrument along
with all counterparts will become a binding agreement among
the Company, the Selling Stockholder and each of the U.S.
Underwriters.

Very truly yours,

O'SULLIVAN INDUSTRIES
HOLDINGS, INC.

By:_______________________________
Name:_____________________________
Title:____________________________

TE ELECTRONICS INC.

By:_______________________________
Name:_____________________________
Title:____________________________

<PAGE>

CONFIRMED AND ACCEPTED,
as of the date first above written:

MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
WHEAT FIRST BUTCHER & SINGER
Wheat, First Securities, Inc.
THE CHICAGO DEARBORN COMPANY
RAUSCHER PIERCE REFSNES, INC.

By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated

By:/s/ M. David White
M. David White
Vice President

For themselves and as U.S. Representatives
of the several other U.S. Underwriters named
in Schedule A hereto.<PAGE>

SCHEDULE A

Number of Initial U.S.
Name of U.S. Underwriter Securities

Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . 2,353,500
Wheat, First Securities, Inc . . . . . . . . 1,513,500
The Chicago Dearborn Company . . . . . . . . 1,513,500
Rauscher Pierce Refsnes, Inc . . . . . . . . 763,500
UBS Securities Inc . . . . . . . . . . . . . 190,000
A.G. Edwards & Sons, Inc. . . . . . . . . . 190,000
Morgan Stanley & Co. Incorporated . . . . . 190,000
CS First Boston Corporation . . . . . . . . 190,000
Bear, Stearns & Co. Inc. . . . . . . . . . 190,000
Alex. Brown & Sons Incorporated . . . . . . 190,000
Commerzbank Capital Markets Corporation . . 190,000
Credit Lyonnais Securities (USA) Inc. . . . 190,000
Dean Witter Reynolds Inc. . . . . . . . . . 190,000
Dillon, Read & Co. Inc. . . . . . . . . . . 190,000
Donaldson, Lufkin & Jenrette Securities
Corporation . . . . . . . . . . . . . . 190,000
Kidder, Peabody & Co. Incorporated . . . . . 190,000
PaineWebber Incorporated . . . . . . . . . . 190,000
Prudential Securities Incorporated . . . . . 190,000
Salomon Brothers Inc. . . . . . . . . . . . 190,000
Smith Barney Shearson Inc. . . . . . . . . 190,000
Wertheim Schroder & Co. Incorporated . . . . 190,000
Janney Montgomery Scott Inc. . . . . . . . 190,000
The Principal/Eppler, Guerin & Turner, Inc. 190,000
Robert W. Baird & Co. Incorporated . . . . . 110,000
William Blair & Company . . . . . . . . . . 110,000
J.C. Bradford & Co. . . . . . . . . . . . . 110,000
Dain Bosworth Incorporated . . . . . . . . . 110,000
First of Michigan Corporation . . . . . . . 110,000
Interstate/Johnson Lane Corporation . . . . 110,000
Edward D. Jones & Co. . . . . . . . . . . . 110,000
Kemper Securities, Inc. . . . . . . . . . . 110,000
C.J. Lawrence/Deutsche Bank Securities
Corporation . . . . . . . . . . . . . . 110,000
Legg Mason Wood Walker, Incorporated . . . . 110,000
McDonald & Company Securities, Inc. . . . . 110,000
Piper Jaffray Inc. . . . . . . . . . . . . . 110,000
Ragen MacKenzie. . . . . . . . . . . . . . . 110,000
Raymond James & Associates, Inc. . . . . . . 110,000
The Robinson-Humphrey Company, Inc. . . . . 110,000
Scott & Stringfellow, Inc. . . . . . . . . . 110,000
Tucker Anthony Incorporated . . . . . . . . 110,000
Gilford Securities Corporation . . . . . . . 30,000
George K. Baum & Company . . . . . . . . . . 30,000
Mesirow Financial, Inc. . . . . . . . . . . 30,000
Rothschild Inc. . . . . . . . . . . . . . . 30,000
Auerbach, Pollack & Richardson, Inc. . . . 20,000
_________
Total . . . . . . . . . . . . . . . . .. 11,764,000

<PAGE>

EXHIBIT A

11,764,000 Shares
O'SULLIVAN INDUSTRIES HOLDINGS, INC.
(a Delaware corporation)

Common Stock
(Par Value $1.00 Per Share)

U.S. PRICING AGREEMENT

January __, 1994

MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
WHEAT FIRST BUTCHER & SINGER
Wheat, First Securities, Inc.
THE CHICAGO DEARBORN COMPANY
RAUSCHER PIERCE REFSNES, INC.
as U.S. Representatives of the several
U.S. Underwriters named in the within
mentioned U.S. Purchase Agreement
c/o MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
250 Vesey Street
New York, New York 10281

Dear Sirs:

Reference is made to the U.S. Purchase Agreement,
dated January __, 1994 (the "U.S. Purchase Agreement"), with
respect to (i) the sale by the Selling Stockholder and the
purchase by the several U.S. Underwriters named in Schedule A
thereto, acting severally and not jointly, of an aggregate of
11,764,000 shares (the "Initial U.S. Securities") of Common
Stock, par value $1.00 per share ("Common Stock"), of
O'Sullivan Industries Holdings, Inc. (the "Company"),
together with the Preferred Stock Purchase Rights of the
Company (the "Rights") associated with such shares, and (ii)
the grant by the Company to the U.S. Underwriters, acting
severally and not jointly, of the option to purchase all or
any part of the U.S. Underwriters' pro rata portion of up to
an additional 1,800,000 shares of Common Stock, together with
the Rights associated with such shares, to cover over-
allotments. Capitalized terms used herein and not otherwise
defined shall have the respective meanings assigned to them
in the U.S. Purchase Agreement.

Pursuant to Section 2(a) of the U.S. Purchase
Agreement, the Company and the Selling Stockholder agree with
each U.S. Underwriter as follows:

(a) The initial public offering price per share of
the U.S. Securities shall be $_______.

(b) The purchase price per share for the U.S.
Securities to be paid by the several U.S. Underwriters shall
be $______, being an amount equal to the initial public
offering price set forth above less $_______ per share.

Very truly yours,

O'SULLIVAN INDUSTRIES
HOLDINGS, INC.

By:_______________________________
Name:_____________________________
Title:____________________________

TE ELECTRONICS, INC.

By:_______________________________
Name:_____________________________
Title:____________________________

<PAGE>
CONFIRMED AND ACCEPTED,
as of the date first above written:

MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
WHEAT FIRST BUTCHER & SINGER
Wheat, First Securities, Inc.
THE CHICAGO DEARBORN COMPANY
RAUSCHER PIERCE REFSNES, INC.

By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated

By:/s/ M. David White
M. David White
Vice President

For themselves and as U.S. Representatives
of the several other U.S. Underwriters named
in Schedule A to the U.S. Underwriting Agreement.
<PAGE>

Exhibit 2d
_____________________________________________________________

O'SULLIVAN INDUSTRIES HOLDINGS, INC.

3,000,000 Shares
Common Stock

INTERNATIONAL PURCHASE AGREEMENT

MERRILL LYNCH INTERNATIONAL LIMITED
UBS LIMITED

_____________________________________________________________

<PAGE>

3,000,000 Shares
O'SULLIVAN INDUSTRIES HOLDINGS, INC.
(a Delaware corporation)

Common Stock
(Par Value $1.00 Per Share)

INTERNATIONAL PURCHASE AGREEMENT

January 26, 1994
<PAGE>
MERRILL LYNCH INTERNATIONAL LIMITEDUBS LIMITED
as Lead Managers of the
several Managers
c/o Merrill Lynch International Limited
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY ENGLAND

Dear Sirs:

O'Sullivan Industries Holdings, Inc., a Delaware
corporation (the "Company"), and TE Electronics Inc., a
Delaware corporation (the "Selling Stockholder"), confirm
their agreement with you and each of the other underwriters
named in Schedule A hereto (collectively, the "Managers,"
which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Merrill
Lynch International Limited ("MLI") and UBS Limited are
acting as representatives (in such capacity, MLI and UBS
Limited being hereinafter collectively referred to as the
"Lead Managers"), with respect to (i) the sale by the Selling
Stockholder and the purchase by the Managers, acting
severally and not jointly, of the respective number of shares
of Common Stock, par value $1.00 per share ("Common Stock"),
of the Company set forth in Schedule A hereto, together with
the Preferred Stock Purchase Rights of the Company (the
"Rights") associated with such shares, and (ii) the grant by
the Company to the Managers, acting severally and not
jointly, of the option described in Section 2(b) hereof to
purchase all or any part of the Managers' pro rata portion of
up to an additional 1,800,000 shares of Common Stock,
together with the Rights associated with such shares, to
cover over-allotments, in each case except as may otherwise
be provided in the International Pricing Agreement (as
hereinafter defined). The 3,000,000 shares of Common Stock,
together with the Rights associated with such shares, to be
purchased by the Managers from the Selling Stockholder (the
"Initial International Securities") and all or any part of
the Managers' pro rata portion of 1,800,000 shares of Common
Stock, together with the Rights associated with such shares,
subject to the option described in Section 2(b) hereof (the
"International Option Securities") are hereinafter
collectively referred to as the "International Securities."

It is understood that the Company and the Selling
Stockholder are concurrently entering into a U.S. Purchase
Agreement of even date herewith (the "U.S. Purchase
Agreement") with respect to (i) the sale by the Selling
Stockholder of 11,764,000 shares of Common Stock, together
with the Rights associated with such shares (the "Initial
U.S. Securities"), through arrangements with certain
underwriters in the United States and Canada (the "U.S.
Underwriters"), for whom Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), Wheat, First
Securities, Inc., The Chicago Dearborn Company and Rauscher
Pierce Refsnes, Inc. are acting as representatives (the "U.S.
Representatives"), and (ii) the grant by the Company to the
U.S. Underwriters of an option to purchase all or any part of
the U.S. Underwriters' pro rata portion of up to an
additional 1,800,000 shares of Common Stock, together with
the Rights associated with such shares (the "U.S. Option
Securities"), to cover over-allotments, in each case except
as may otherwise be provided in the U.S. Pricing Agreement
(as hereinafter defined). The Initial U.S. Securities and
the U.S. Option Securities are hereinafter collectively
referred to as the "U.S. Securities." It is understood that
the Managers are not obligated to purchase, any Initial
International Securities unless all of the Initial U.S.
Securities are contemporaneously purchased by the U.S.
Underwriters.

The Managers and the U.S. Underwriters are hereinafter
collectively referred to as the "Underwriters." The Initial
International Securities and the Initial U.S. Securities are
hereinafter collectively referred to as the "Initial
Securities." The International Option Securities and the
U.S. Option Securities are hereinafter collectively referred
to as the "Option Securities." The International Securities
and the U.S. Securities are hereinafter collectively referred
to as the "Securities." Unless the context otherwise
requires, all references contained herein to the Initial
International Securities, the International Option
Securities, the International Securities, the Initial U.S.
Securities, the U.S. Option Securities, the U.S. Securities,
the Initial Securities, the Option Securities and the
Securities shall include the respective numbers of shares of
Common Stock set forth above, together with the Rights
associated with such shares.

The Company and the Selling Stockholder understand that
the Underwriters are concurrently entering into an
Intersyndicate Agreement of even date herewith providing for
the coordination of certain transactions among the
Underwriters under the direction of the Lead Managers and the
U.S. Representatives.

Prior to the purchase and public offering of the
International Securities by the several Managers, the
Company, the Selling Stockholder and the Lead Managers,
acting on behalf of the several Managers, shall enter into an
agreement substantially in the form of Exhibit A hereto (the
"International Pricing Agreement"). The International
Pricing Agreement may take the form of an exchange of any
standard form of written telecommunication among the Company,
the Selling Stockholder and the Lead Managers and shall
specify such applicable information as is indicated in
Exhibit A hereto. The offering of the International
Securities will be governed by this Agreement, as
supplemented by the International Pricing Agreement. From
and after the date of the execution and delivery of the
International Pricing Agreement, this Agreement shall be
deemed to incorporate, and all references to "this Agreement"
or "herein" shall be deemed to include, the International
Pricing Agreement, unless the context requires otherwise.
The initial public offering price and the purchase price with
respect to the U.S. Securities shall be set forth in a
separate instrument (the "U.S. Pricing Agreement"), the form
of which is attached to the U.S. Purchase Agreement. The
price per share for the U.S. Securities to be purchased by
the U.S. Underwriters pursuant to the U.S. Purchase Agreement
shall be identical to the price per shares for the
International Securities to be purchased by the Managers
hereunder.

The Company has filed with the United States Securities
and Exchange Commission (the "Commission") a registration
statement on Form S-1 (Commission File No. 33-72120) to
effect the registration of the Securities under the
Securities Act of 1933, as amended (the "1933 Act"), has
filed such amendments thereto, if any, as may have been
required to the date hereof, and will file such additional
amendments thereto as may hereafter be required. Such
registration statement includes two forms of prospectus for
use in connection with the offering and sale of the
Securities: the international prospectus, for use in
connection with the offering and sale of Securities outside
the United States and Canada to persons other than United
States and Canadian persons and the U.S. prospectus, for use
in connection with the offering and sale of Securities in the
United States and Canada to United States and Canadian
persons. The international prospectus and U.S. prospectus
are identical except that they contain different outside
front and outside back cover pages and different sections
under the caption "Underwriting" and the international
prospectus contains an additional section under the caption
"Certain United States Tax Consequences to Non-United States
Holders." Such registration statement also includes a third
form of prospectus relating to a separate offering of 236,000
shares of Common Stock, together with the Rights associated
with such shares, to certain members of the Company's
management and their affiliates. Such registration statement
(as amended, if applicable) and the prospectuses constituting
a part thereof at the time such registration statement
becomes effective (including in each case the information, if
any, deemed to be part thereof pursuant to Rule 430A(b) of
the rules and regulations of the Commission under the 1933
Act (the "1933 Act Regulations")), as from time to time
amended or supplemented pursuant to the 1933 Act or
otherwise, is hereinafter referred to as the "Registration
Statement." The international prospectus and the U.S.
prospectus in the respective forms included in the
Registration Statement are hereinafter referred to as the
"International Prospectus" and the "U.S. Prospectus," except
that if any revised prospectuses shall be provided to the
Managers or the U.S. Underwriters by the Company for use in
connection with the offering of the Securities which differ
from the prospectuses on file at the Commission at the time
the Registration Statement becomes effective (whether or not
such revised prospectuses are required to be filed by the
Company pursuant to Rule 424(b) of the 1933 Act Regulations),
the terms "International Prospectus" and "U.S. Prospectus"
shall refer to such revised prospectuses from and after the
time they are first provided to the Managers or the U.S.
Underwriters for such use. The International Prospectus and
the U.S. Prospectus are hereinafter referred to collectively
as the "Prospectuses" and, each individually, as a
"Prospectus." The prospectus relating to the separate
offering of 236,000 shares of Common Stock and associated
Rights to certain members of the Company's management and
their affiliates in the form included in the Registration
Statement is hereinafter referred to as the "Management
Prospectus."

The Company and the Selling Stockholder understand that
the Managers propose to make a public offering of the
International Securities as soon as the Lead Managers deem
advisable after the Registration Statement becomes effective
and the International Pricing Agreement has been executed and
delivered.

SECTION 1. Representations and Warranties.

(a) The Company and the Selling Stockholder jointly and
severally represent and warrant to each of the Managers
(except that the Selling Stockholder does not make any
representation or warranty with respect to the matters
addressed by clauses (xii), (xvi), (xvii), (xviii) and (xxi)
below) as of the date hereof and as of the date of the
International Pricing Agreement (such latter date being
hereinafter referred to as the "International Representation
Date") as follows:

(i) At the time the Registration Statement becomes
effective and at the International Representation Date,
the Registration Statement will comply in all material
respects with the requirements of the 1933 Act and the
1933 Act Regulations and will not contain an untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make
the statements therein not misleading. The
Prospectuses, at the International Representation Date
(unless the term "Prospectuses" refers to prospectuses
which have been provided to the Managers and the U.S.
Underwriters by the Company for use in connection with
the offering of the Securities which differ from the
prospectuses on file at the Commission at the time the
Registration Statement becomes effective, in which case
at the time such prospectuses are first provided to the
Managers and the U.S. Underwriters for such use) and at
Closing Time (as hereinafter defined) will not include
an untrue statement of a material fact or omit to state
a material fact necessary in order to make the
statements therein, in the light of the circumstances
under which they were made, not misleading; provided,
however, that the representations and warranties in this
subsection shall not apply to statements in or omissions
from the Registration Statement or Prospectuses made in
reliance upon and in conformity with information
furnished to the Company in writing by any Manager
through Merrill Lynch expressly for use in the
Registration Statement or the Prospectuses.

(ii) Price Waterhouse, the accountants who
reported on the combined financial statements included
in the Registration Statement and the Prospectuses are
independent public accountants with respect to the
Company and its Subsidiaries (as hereinafter defined) as
required by the 1933 Act and the 1933 Act Regulations.

(iii) The combined financial statements, including
the notes thereto, included in the Registration
Statement and the Prospectuses present fairly the
combined financial position of the Company and its
Subsidiaries as at the dates indicated and the combined
results of operations and cash flows for the Company and
its Subsidiaries for the periods specified; such
financial statements have been prepared in conformity
with generally accepted accounting principles applied on
a consistent basis throughout the periods involved;
there are no supporting schedules required to be
included in the Registration Statement pursuant to the
1933 Act or the 1933 Act Regulations (other than
schedules which have been omitted therefrom because the
required information is included in the combined
financial statements, including the notes thereto,
included in the Registration Statement and the
Prospectuses).

(iv) The pro forma financial information included
in the Registration Statement and the Prospectuses has
been prepared in all material respects in accordance
with the applicable rules and regulations of the
Commission with respect to pro forma financial
statements, presents fairly the information included
therein and has been properly compiled on the pro forma
basis described therein; in the opinion of the Company
and the Selling Stockholder, the assumptions used in the
preparation of such pro forma financial information are
reasonable and the adjustments made thereto are
appropriate to give effect to the transactions and
events referred to therein.

(v) Since the respective dates as of which
information is given in the Registration Statement and
the Prospectuses, except as otherwise stated therein, or
expressly contemplated thereby, (A) there has been no
material adverse change in the condition, financial or
otherwise, or the earnings, business affairs or business
prospects of the Company and its Subsidiaries considered
as one enterprise, whether or not arising in the
ordinary course of business, (B) there have been no
transactions entered into by the Company or any of its
Subsidiaries, other than the reorganization transactions
to be consummated prior to or at Closing Time as
described in the Prospectuses under the caption "Certain
Transactions Reorganization Transactions" and other
transactions entered into in the ordinary course of
business, which are material with respect to the Company
and its Subsidiaries considered as one enterprise and
(C) except for (1) the dividend in the amount of $40
million to be paid to the Selling Stockholder by Old
O'Sullivan (as hereinafter defined) prior to Closing
Time as described in the Prospectuses under the caption
"Certain Transactions Reorganization Transactions," (2)
the final adjusting payment, if any, to be made by the
Company to Tandy as a result of the accounting of the
stockholders' equity of the Company at Closing Time
described in the Prospectuses under the caption "Certain
Transactions Reorganization Transactions" and (3) the
dividend of one Right to be issued with respect to each
share of Common Stock as described in the Prospectuses
under the caption "Description of Capital Stock
Stockholder Rights Plan," there has been no dividend or
distribution of any kind declared, paid or made by the
Company or any of its Subsidiaries on any class of their
capital stock.

(vi) The Company has been duly incorporated and is
validly existing as a corporation in good standing under
the laws of the State of Delaware and has all necessary
corporate power to own, lease and operate its properties
and to conduct its business as described in the
Prospectuses, and the Company is duly qualified as a
foreign corporation to transact business and is in good
standing in each jurisdiction in which such
qualification is required, whether by reason of the
ownership or leasing of property or the conduct of
business, except where the failure to have such
corporate power or to be so qualified would not have a
material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or
business prospects of the Company and its Subsidiaries
considered as one enterprise.

(vii) Each Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its
incorporation and has all necessary corporate power to
own, lease and operate its properties and to conduct its
business as described in the Prospectuses, and each
Subsidiary of the Company is duly qualified as a foreign
corporation to transact business and is in good standing
in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing
of property or the conduct of business, except where the
failure to have such corporate power or to be so
qualified would not have a material adverse effect on
the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one
enterprise; all of the issued and outstanding capital
stock of each such Subsidiary has been duly authorized
and, at Closing Time, will be validly issued, fully paid
and nonassessable and will be owned by the Company,
directly or indirectly, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or
equity, except any such security interest, mortgage,
pledge, lien, encumbrance, claim or equity that is
disclosed in the Prospectuses.

(viii) At Closing Time, the authorized, issued and
outstanding capital stock of the Company will be as set
forth in the Prospectuses under the column entitled "As
Adjusted" under the caption "Capitalization;" the 100
shares of Common Stock heretofore issued by the Company
to the Selling Stockholder have been duly authorized and
are validly issued, fully paid and nonassessable; the
14,999,900 shares of Common Stock to be issued by the
Company to the Selling Stockholder in accordance with
the Stock Exchange Agreement (as hereinafter defined)
have been duly authorized and, when issued and delivered
by the Company in accordance with said agreement, will
be validly issued, fully paid and nonassessable; the
Option Securities have been duly authorized for issuance
and sale to the Underwriters pursuant to this Agreement
and the U.S. Purchase Agreement and, when issued and
delivered by the Company in accordance with this
Agreement and the U.S. Purchase Agreement against
payment of the consideration set forth herein and
therein, will be validly issued, fully paid and
nonassessable; the issuance of the Securities is not
subject to any preemptive or other similar rights to
subscribe for or purchase the same arising by operation
of law, under the charter or bylaws of the Company or
otherwise; the Common Stock conforms in all material
respects to all statements relating thereto contained in
the Prospectuses; at Closing Time, the Rights associated
with the shares of Common Stock to be sold or issued
pursuant to this Agreement and the U.S. Purchase
Agreement will have been duly and validly authorized
and, when the shares of Common Stock with which they are
associated are sold or issued and delivered in
accordance with this Agreement and the U.S. Purchase
Agreement, will be validly issued in accordance with the
terms of the Rights Agreement, dated as of February 1,
1994, between the Company and The First National Bank of
Boston, as Rights Agent, as amended; the Rights conform
in all material respects to the statements relating
thereto contained in the Prospectuses.

(ix) This Agreement has been duly authorized,
executed and delivered by the Company and, at the
International Representation Date, the International
Pricing Agreement will be duly authorized, executed and
delivered by the Company.

(x) Neither the Company nor any of its
Subsidiaries is in violation of its charter or bylaws or
is in default in the performance or observance of any
obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which the Company or
any of its Subsidiaries is a party or by which any of
them is bound or to which any of the property or assets
of any of them is subject, except as disclosed in the
Prospectuses and except for any such violations or
defaults which would not have a material adverse effect
on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one
enterprise; the execution, delivery and performance by
the Company of this Agreement, the U.S. Purchase
Agreement, the International Pricing Agreement and the
U.S. Pricing Agreement and the consummation by the
Company of the transactions contemplated herein and
therein will not conflict with or constitute a breach or
violation of, or default under, or result in the
creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company
or any of its Subsidiaries pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or
other agreement or instrument to which the Company or
any of its Subsidiaries is a party or by which any of
them is bound or to which any of the property or assets
of any of them is subject, nor will such action result
in any breach or violation of, or default under, the
provisions of the charter or bylaws of the Company or
any of its Subsidiaries or of any existing applicable
law, administrative regulation or administrative or
court decree, except for such conflicts, breaches,
violations, defaults, liens, charges or encumbrances
that would not affect in any material respect the
transactions contemplated by this Agreement or the U.S.
Purchase Agreement and would not have a material adverse
effect on the condition, financial or otherwise, or on
the earnings, business affairs or business prospects of
the Company and its Subsidiaries considered as one
enterprise.

(xi) No authorization, approval or consent of, or
registration or filing with, any court or governmental
authority or agency is required for the execution,
delivery or performance by the Company of this
Agreement, the U.S. Purchase Agreement, the
International Pricing Agreement or the U.S. Pricing
Agreement or the consummation by the Company of the
transactions contemplated herein and therein, except
such as may be required under the 1933 Act, the 1933 Act
Regulations, the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and the rules and regulations
of the Commission under the 1934 Act (the "1934 Act
Regulations") or under the securities laws of any state
or other jurisdiction.

(xii) No labor dispute with the employees of the
Company or any of its Subsidiaries exists or, to the
knowledge of the Company, is imminent, which could
reasonably be expected to result in any material adverse
change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of
the Company and its Subsidiaries considered as one
enterprise.

(xiii) There is no action, suit or proceeding
before or by any court or governmental agency or body,
domestic or foreign, now pending or, to the knowledge of
the Company or the Selling Stockholder, threatened
against or affecting the Company or any of its
Subsidiaries, except as disclosed in the Prospectuses,
which (A) is required to be disclosed in the
Registration Statement and the Prospectuses, (B) might
reasonably be expected to result in any material adverse
change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of
the Company and its Subsidiaries considered as one
enterprise or to materially and adversely affect their
properties or assets or (C) might reasonably be expected
to materially and adversely affect the consummation of
the transactions contemplated by this Agreement or the
U.S. Purchase Agreement; all pending legal or
governmental proceedings to which the Company or any of
its Subsidiaries is a party or of which any of their
respective property or assets is the subject which are
not described in the Registration Statement and the
Prospectuses, including ordinary routine litigation
incidental to their business, are, considered in the
aggregate, not material.

(xiv) There are no contracts or documents which
are required to be described in the Registration
Statement or the Prospectuses or to be filed as exhibits
to the Registration Statement by the 1933 Act or the
1933 Act Regulations which have not been so described or
filed.

(xv) Each of the Company and its Subsidiaries has
filed all federal, state, local and foreign income and
franchise tax returns required to be filed through the
date hereof, except insofar as the failure to file any
such returns would not have a material adverse effect on
the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one
enterprise, and has paid all taxes due as shown thereon,
and except for such taxes, if any, as are being
contested in good faith and as to which adequate
reserves have been provided, there is no tax deficiency
asserted against the Company or any of its Subsidiaries
which, if determined adversely to the Company or any of
its Subsidiaries, would have a material adverse effect
on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one
enterprise.

(xvi) The Company and its Subsidiaries have good
and marketable title to all material properties and
assets described in the Prospectuses as owned by them
and valid, subsisting and enforceable leases for all of
the material properties and assets, real or personal,
described in the Prospectuses as leased by them, in each
case free and clear of any security interests,
mortgages, pledges, liens, encumbrances or charges of
any kind, other than those which (A) are described in
the Prospectuses or (B) could not materially impair or
interfere with the use currently made by the Company or
its Subsidiaries of the properties or assets to which it
applies or otherwise have a material adverse effect on
the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one
enterprise.

(xvii) The Company and its Subsidiaries own or
possess, or can acquire on reasonable terms, adequate
rights to use the patents, patent rights, licenses,
inventions, copyrights, know-how (including trade
secrets and other unpatented or unpatentable proprietary
or confidential information, systems or procedures),
trademarks, service marks and trade names (collectively,
"patent and proprietary rights") necessary to conduct
the business now conducted by them, and neither the
Company nor any of its Subsidiaries has received any
notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to
any patent and proprietary rights, except where such
infringement or conflict, if the subject of an
unfavorable decision, ruling or finding, would not
result in a material adverse change in the condition,
financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its
Subsidiaries considered as one enterprise.

(xviii) The Company and its Subsidiaries possess
such licenses, permits, consents, orders, certificates
or authorizations issued by appropriate federal, state,
foreign or local regulatory agencies or bodies as are
necessary to conduct the business now operated by them
as described in the Prospectuses, except as disclosed in
the Prospectuses and except where the failure to possess
such licenses, permits, consents, orders, certificates
or authorizations would not have a material adverse
effect on the condition, financial or otherwise, or on
the earnings, business affairs or business prospects of
the Company and its Subsidiaries considered as one
enterprise; and neither the Company nor any of its
Subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such
licenses, permits, consents, orders, certificates or
authorizations which, if the subject of an unfavorable
decision, ruling or finding, would have a material
adverse effect on the condition, financial or otherwise,
or on the earnings, business affairs or business
prospects of the Company and its Subsidiaries considered
as one enterprise.

(xix) Neither the Company nor any of its
Subsidiaries is in violation of any existing applicable
law, ordinance, governmental rule or regulation or court
decree to which the Company or any of its Subsidiaries
or any of their respective properties and assets are
subject, except where such violation would not have a
material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or
business prospects of the Company and its Subsidiaries
considered as one enterprise; without limiting the
generality of the foregoing, neither the Company nor any
of its Subsidiaries has violated (A) any existing
applicable foreign, federal, state or local law or
regulation relating to the protection of human health
and the environment, including but not limited to, any
such law pertaining to hazardous or toxic substances or
wastes, pollutants or contaminants (collectively,
"Environmental Laws"), (B) the terms of any licenses,
permits, consents, orders, certificates or
authorizations required of them under applicable
Environmental Laws, (C) any federal or state law
relating to discrimination in the hiring, promotion or
pay of employees or any applicable federal or state
wages and hours laws, or (D) any provisions of the
Employee Retirement Income Security Act or the rules and
regulations promulgated thereunder, except as disclosed
in the Prospectus and except for any such violations
which would not have a material adverse effect on the
condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company
and its Subsidiaries considered as one enterprise.

(xx) The Company has reasonably concluded that,
except as disclosed in the Prospectus, the costs and
liabilities associated with compliance with
Environmental Laws are not likely to have a material
adverse effect on the condition, financial or otherwise,
or the earnings, business affairs or business prospects
of the Company and its Subsidiaries considered as one
enterprise.

(xxi) The Company and its Subsidiaries maintain
books and records and internal accounting controls which
provide reasonable assurance that (A) transactions are
executed all material respects in accordance with
management's general or specific authorization, (B)
transactions are recorded in all material respects as
necessary to permit preparation of their financial
statements and to maintain accountability for their
assets and (C) access to assets that are material to the
Company or its Subsidiaries is permitted only in
accordance with management's general or specific
authorization.

(xxii) At Closing Time, each of the Reorganization
Agreements (as hereinafter defined) to which the Company
or any of its Subsidiaries are or are proposed to be
parties will be duly authorized, executed and delivered
by the Company and each of its Subsidiaries (to the
extent that each of them is proposed to be a party
thereto). Substantially all of the assets to be
transferred by Tandy Marketing Canada (as hereinafter
defined) to Old O'Sullivan as described
in the Prospectus have been transferred to Old
O'Sullivan.

(xxiii) The execution, delivery and performance by
the Company and each of its Subsidiaries of the
Reorganization Agreements to which each of them is a
party or is proposed to be a party and the consummation
by the Company and each of its Subsidiaries of the
transactions contemplated therein will not conflict with
or constitute a breach or violation of, or default
under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets
of the Company or any of its Subsidiaries pursuant to,
any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by
which it or any of them is bound, or to which any of the
property or assets of the Company or any of its
Subsidiaries is subject, nor will such action result in
any breach or violation of, or default under, the
provisions of the charter or bylaws of the Company or
any of its Subsidiaries or of any existing applicable
law, administrative regulation or administrative or
court decree, in each case, except as disclosed in the
Prospectuses and except for such conflicts, breaches,
violations, defaults, liens, charges or encumbrances
that would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Company
and its Subsidiaries considered as one enterprise.

(xxiv) Neither the Company nor any of its
Subsidiaries is an "investment company" or a company
"controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as
amended.

(xxv) The Company and its Subsidiaries have
complied with all provisions of Section 517.075, Florida
Statutes (Chapter 92-198, Laws of Florida) relating to
doing business with the Government of Cuba or any person
or affiliate located in Cuba.

(b) The Selling Stockholder further represents and
warrants to each of the Managers as of the date hereof and as
of the International Representation Date as follows:

(i) At Closing Time, the Selling Stockholder will
be the sole record and beneficial owner of the Initial
Securities, and will have valid and marketable title to
the Initial Securities, free and clear of any claim,
lien, security interest, encumbrance, restriction on
transfer or other defect in title; upon delivery of and
payment for the Initial Securities pursuant to this
Agreement and the U.S. Purchase Agreement, the
Underwriters will acquire valid and marketable title to
the Initial Securities, free and clear of any claim,
lien, security interest, encumbrance, restriction on
transfer or other defect in title.

(ii) This Agreement has been duly authorized,
executed and delivered by the Selling Stockholder and,
at the International Representation Date, the
International Pricing Agreement will be duly authorized,
executed and delivered by the Selling Stockholder.

(iii) The execution, delivery and performance of
this Agreement, the U.S. Purchase Agreement, the
International Pricing Agreement and the U.S. Pricing
Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the
transactions contemplated herein and therein will not
conflict with or constitute a breach or violation of, or
default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or
assets of the Selling Stockholder pursuant to, any
contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument to which the
Selling Stockholder is a party or by which it is bound,
or to which any of the property or assets of the Selling
Stockholder is subject, nor will such action result in
any breach or violation of, or default under, the
provisions of the charter or bylaws of the Selling
Stockholder or of any existing applicable law,
administrative regulation or administrative or court
decree.

(iv) No authorization, approval or consent of, or
registration or filing with, any court or governmental
authority or agency is required for the execution,
delivery or performance by the Selling Stockholder of
this Agreement, the U.S. Purchase Agreement, the
International Pricing Agreement or the U.S. Pricing
Agreement or the consummation by the Selling Stockholder
of the transactions contemplated herein and therein,
except such as may be required under the 1933 Act, the
1933 Act Regulations, the 1934 Act or the 1934 Act
Regulations or under the securities laws of any state or
other jurisdiction.

(v) At Closing Time, each of the Reorganization
Agreements to which the Selling Stockholder is proposed
to be a party will be duly authorized, executed and
delivered by the Selling Stockholder; at Closing Time,
each of the Reorganization Agreements to which the
Selling Stockholder is proposed to be a party will
constitute a valid and binding obligation of the
Selling Stockholder, enforceable against the Selling
Stockholder in accordance with its terms (except to the
extent that the enforceability thereof is subject to (i)
applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors'
rights generally and (ii) general principles of equity,
whether such principles are considered in a proceeding
at law or in equity).

(vi) The execution, delivery and performance by
the Selling Stockholder of the Reorganization Agreements
to which the Selling Stockholder is or is proposed to be
a party and the consummation by the Selling Stockholder
of the transactions contemplated therein will not
conflict with or constitute a breach or violation of, or
a default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or
assets of the Selling Stockholder pursuant to, any
contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument to which the
Selling Stockholder is a party or by which it is bound,
or to which any of the property or assets of the Selling
Stockholder is subject, nor will such action result in
any breach or violation of, or default under, the
provisions of the charter or bylaws of the Selling
Stockholder or of any existing applicable law,
administrative regulation or administrative or court
decree, in each case, except as disclosed in the
Prospectuses and except for such conflicts, breaches,
violations, defaults, liens, charges or encumbrances
that would not affect in any material respect the
transactions contemplated by this Agreement or the U.S.
Purchase Agreement and would not have a material adverse
effect on the condition, financial or otherwise, or on
the earnings, business affairs or business prospects of
the Selling Stockholder and its subsidiaries considered
as one enterprise.

(c) Any certificate signed by any officer of the
Company delivered to the Lead Managers or to counsel for the
Managers under or in connection with this Agreement or at
Closing Time or any Date of Delivery (as hereinafter defined)
shall be deemed a representation and warranty by the Company
to each Manager as to the matters covered thereby; and any
certificate signed by any officer of the Selling Stockholder
and delivered to the Lead Managers or to counsel for the
Managers under or in connection with this Agreement or at
Closing Time or any Date of Delivery shall be deemed a
representation and warranty by the Selling Stockholder to
each Manager as to the matters covered thereby.

SECTION 2. Sale and Delivery to Managers;
Reorganization Transactions; Closing.

(a) On the basis of the representations and warranties
herein contained and subject to the terms and conditions
herein set forth, the Selling Stockholder agrees to sell to
each Manager, severally and not jointly, and each Manager,
severally and not jointly, agrees to purchase from the
Selling Stockholder, at the price per share set forth in the
International Pricing Agreement, the number of Initial
International Securities set forth in Schedule A opposite the
name of such Manager (except as otherwise provided in the
International Pricing Agreement), plus any additional number
of Initial International Securities which such Manager may
become obligated to purchase pursuant to the provisions of
Section 10 hereof, subject, in each case, to such adjustments
as the Lead Managers in their discretion shall make to
eliminate any sales or purchases of fractional securities.

(i) If the Company has elected not to rely upon
Rule 430A of the 1933 Act Regulations, the initial
public offering price of the Securities and the purchase
price per share to be paid by the several Managers for
the International Securities have each been determined
and set forth in the International Pricing Agreement,
dated the date hereof, and an amendment to the
Registration Statement and the Prospectuses will be
filed before the Registration Statement becomes
effective.

(ii) If the Company has elected to rely upon Rule
430A of the 1933 Act Regulations, the purchase price per
share to be paid by the several Managers for the
International Securities shall be an amount equal to the
initial public offering price, less an amount per share
to be determined by agreement among the Company, the
Selling Stockholder and the Lead Managers. The initial
public offering price per share of the Securities shall
be a fixed price to be determined by agreement among the
Company, the Selling Stockholder and the Lead Managers.
The initial public offering price per share and the
purchase price, when so determined, shall be set forth
in the International Pricing Agreement. In the event
that such prices have not been agreed upon and the
International Pricing Agreement has not been executed
and delivered by the parties thereto by the close of
business on the fourth business day following the date
of this Agreement, this Agreement shall terminate
forthwith, without liability of any party to any other
party, unless otherwise agreed to by the Company, the
Selling Stockholder and the Lead Managers.
Notwithstanding the foregoing, the provisions of
Sections 4(a), 6 and 7 hereof shall remain in effect
following any such termination.

(b) In addition, on the basis of the representations
and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an
option to the Underwriters, severally and not jointly, to
purchase from the Company an aggregate of up to an additional
1,800,000 shares of Common Stock, together with the Rights
associated with such shares, at the price per share set forth
in the International Pricing Agreement and the U.S. Pricing
Agreement, of which 360,000 shares and associated Rights
shall be the pro rata portion for the Managers and 1,440,000
shares and associated Rights shall be the pro rata portion
for the U.S. Underwriters. The option hereby granted will
expire on the 30th day after the date the Registration
Statement becomes effective or, if the Company has elected to
rely on Rule 430A of the 1933 Act Regulations, the 30th day
after the International Representation Date, and may be
exercised in whole or in part from time to time only for the
purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial
Securities upon notice by the Lead Managers and the U.S.
Representatives to the Company setting forth the aggregate
number of Option Securities as to which the several
Underwriters are then exercising said option and the time and
date of payment and delivery for such Option Securities. Any
such time and date of delivery for the International Option
Securities (a "Date of Delivery") shall be determined by the
Lead Managers but shall be not earlier than two nor later
than seven full business days after the exercise of said
option, nor in any event prior to Closing Time, unless
otherwise agreed upon by the Lead Managers and the Company.
If the option is exercised as to all or any portion of the
International Option Securities, each of the Managers, acting
severally and not jointly, will purchase from the Company
that proportion of the number of International Option
Securities then being purchased which the number of Initial
International Securities set forth in Schedule A opposite the
name of such Manager (plus any additional number of Initial
International Securities which such Manager may become
obligated to purchase pursuant to the provisions of Section
10 hereof) bears to the total number of Initial International
Securities (except as otherwise provided in the International
Pricing Agreement), subject, in each case, to such
adjustments as the Lead Managers in their discretion shall
make to eliminate any sales or purchases of fractional
securities. For purposes of this Agreement, the term
"business day" means a day on which the New York Stock
Exchange is open for trading.

(c) The Selling Stockholder and the Company agree with
the several Underwriters that, immediately prior to Closing
Time, (i) the Selling Stockholder will transfer to the
Company, in exchange for the issuance by the Company of
14,999,900 shares of Common Stock, together with the Rights
associated with such shares (the receipt of which shares and
associated Rights shall be subject to the obligations of the
Selling Stockholder to sell the Initial Securities to the
Underwriters pursuant to this Agreement and the U.S. Purchase
Agreement), all the issued and outstanding shares of capital
stock of O'Sullivan Industries, Inc., a Delaware corporation
and a wholly owned subsidiary of the Selling Stockholder
("Old O'Sullivan"), and (ii) the Company will accept such
transfer and will issue such shares of Common Stock and
associated Rights to the Selling Stockholder. The foregoing
transactions will be effected in accordance with a Stock
Exchange Agreement (the "Stock Exchange Agreement") to be
entered into between the Selling Stockholder and the Company
after the execution and delivery of this Agreement but prior
to Closing Time. In addition, (i) Tandy Marketing (Canada)
Ltd., an Alberta corporation ("Tandy Marketing Canada"), has
transferred to Old O'Sullivan certain assets located in
Canada that are used in connection with the business
conducted by Old O'Sullivan, (ii) Tandy Corporation, the
Selling Stockholder and the Company will enter into a Cross
Indemnification Agreement (the "Cross Indemnification
Agreement") prior to Closing Time pursuant to which the
parties will agree to indemnify each other for certain claims
and liabilities as specified therein, (iii) Tandy
Corporation, the Selling Stockholder and the Company will
enter into a Tax Sharing and Tax Benefit Reimbursement
Agreement (the "Tax Agreement") prior to Closing Time
pursuant to which (A) the parties will agree upon the
allocation of certain federal, state and local taxes of Old
O'Sullivan (including any adjustments to such taxes), (B) Old
O'Sullivan and Tandy Corporation will agree to make elections
under Sections 338(g) and 338(h)(10) of the Internal Revenue
Code of 1986, as amended, and (C) Old O'Sullivan will agree
to pay to the Selling Stockholder, as additional purchase
price under the Stock Exchange Agreement, amounts
approximately equal to certain federal tax benefits related
to the increase in the tax basis of Old O'Sullivan's assets
resulting from the consummation of the transactions
contemplated by the Stock Exchange Agreement and the Sections
338(g) and 338(h)(10) elections. The Stock Exchange
Agreement and Tax Agreement will be substantially in the
respective forms filed as exhibits to the Registration
Statement. The Stock Exchange Agreement, Asset Transfer
Agreement, Cross Indemnification Agreement and Tax Agreement
are hereinafter collectively referred to as the
"Reorganization Agreements." Old O'Sullivan and each other
direct or indirect subsidiary of the Company as of the
Closing Time are hereinafter collectively referred to as the
"Subsidiaries."

(d) Payment of the purchase price for, and delivery of
certificates evidencing the Initial International Securities
to be purchased by the Managers shall be made at the office
of Baker & Botts, L.L.P., 2001 Ross Avenue, Dallas, Texas
75201, or at such other place as shall be agreed upon by the
Lead Managers, the Company and the Selling Stockholder, at
9:00 a.m., Dallas, Texas time, on the fifth business day
(unless postponed in accordance with the provisions of
Section 10 hereof) following the date of the execution of the
International Pricing Agreement or such other time not later
than ten business days after such date as shall be agreed
upon by the Lead Managers, the Company and the Selling
Stockholder (such time and date of payment and delivery being
hereinafter referred to as "Closing Time"). In addition, in
the event that any or all of the International Option
Securities are purchased by the Managers, payment of the
purchase price for, and delivery of certificates for, such
International Option Securities shall be made at the
above-mentioned office of Baker & Botts, L.L.P., or at such
other place as shall be mutually agreed upon by the Lead
Managers and the Company, on each Date of Delivery as
specified in the notice from the Lead Managers to the
Company. Payment shall be made to the Selling Stockholder,
with respect to the Initial International Securities, and to
the Company, with respect to any International Option
Securities, by certified or official bank check or checks
drawn in New York Clearing House funds or similar next-day
funds payable to the order of the Selling Stockholder or the
Company, as the case may be, against delivery to the Lead
Managers for the respective accounts of the Managers of
certificates for the International Securities to be purchased
by them. Certificates evidencing the Initial International
Securities and the International Option Securities, if any,
shall be in such denominations and registered in such names
as the Lead Managers may request in writing at least two
business days before Closing Time or the Date of Delivery, as
the case may be. It is understood that each Manager has
authorized the Lead Managers, for its account, to accept
delivery of, receipt for, and make payment of the purchase
price for, the International Securities which it has agreed
to purchase. The Lead Managers, individually and not as
representatives of the Managers, may (but shall not be
obligated to) make payment of the purchase price for the
International Securities to be purchased by any Manager whose
check has not been received by Closing Time or the Date of
Delivery, as the case may be, but such payment shall not
relieve such Manager from its obligations hereunder. The
certificates evidencing the Initial International Securities
and the International Option Securities to be purchased by
the Managers will be made available in New York City for
examination and packaging by the Lead Managers not later than
10:00 a.m. on the last business day prior to Closing Time or
the Date of Delivery, as the case may be.

SECTION 3. Certain Covenants of the Company. The
Company covenants with each of the Managers as follows:

(a) If the Company has elected not to rely upon Rule
430A of the 1933 Act Regulations, the Company will promptly
prepare and file with the Commission an amendment to the
Registration Statement that sets forth the information
specified in Section 2(a)(i) hereof and will make every
reasonable effort to cause the Registration Statement to
become effective as promptly as practicable. If the Company
has elected to rely upon Rule 430A of the 1933 Act
Regulations, the Company will promptly prepare and file with
the Commission pursuant to Rule 424 of the 1933 Act
Regulations Prospectuses that comply in all material respects
with the 1933 Act and the 1933 Act Regulations and that set
forth the information specified in Section 2(a)(ii) hereof
and all other information omitted from the prospectuses
included in the Registration Statement as permitted by Rule
430A.

(b) The Company will notify the Lead Managers
immediately, and confirm the notice in writing, (i) of the
effectiveness of the Registration Statement and any amendment
thereto (including any post-effective amendment), (ii) of the
mailing or delivery to the Commission for filing of any
revised prospectus which the Company proposes for use by the
Managers or the U.S. Underwriters in connection with the
offering of the Securities which differs from the
prospectuses on file at the Commission at the time the
Registration Statement becomes effective, (iii) of the
receipt of any comments from the Commission with respect to
the Registration Statement or the Prospectuses, (iv) of any
request by the staff of the Commission for any amendment to
the Registration Statement or any amendment or supplement to
the Prospectuses or for additional information, and (v) of
the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement, the
suspension of the registration or qualification of the
Securities for offering or sale under the securities laws of
any state or jurisdiction or the initiation or threat of any
proceedings for any such purpose. The Company will make
every reasonable effort to prevent the issuance of any such
stop order or of any order suspending such registration or
qualification and, if any such order is issued, to obtain the
lifting thereof as promptly as practicable.

(c) The Company will give the Lead Managers notice of
its intention to file or prepare any amendment to the
Registration Statement (including any post-effective
amendment) or any amendment or supplement to the Prospectuses
(including any revised prospectus which the Company proposes
for use by the Managers or the U.S. Underwriters in
connection with the offering of the Securities which differs
from the prospectuses on file at the Commission at the time
the Registration Statement becomes effective, whether or not
such revised prospectus is required to be filed pursuant to
Rule 424(b) of the 1933 Act Regulations), will furnish the
Lead Managers with copies of any such amendment or supplement
a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file any such amendment
or supplement to which the Lead Managers shall reasonably
object unless the Company shall have (i) otherwise fully
complied with its obligations contained in this subsection
(c) and (ii) received a written opinion of counsel to the
effect that such amendment or supplement is legally required
under the 1933 Act and the 1933 Act Regulations.

(d) The Company has delivered or will deliver to the
Lead Managers five signed copies of the Registration
Statement as originally filed and each amendment thereto
(including exhibits filed therewith) and has delivered or
will deliver to the Lead Managers as many conformed copies of
the Registration Statement as originally filed and of each
amendment thereto (without exhibits) as the Lead Managers may
reasonably request for delivery to each of the Managers.

(e) The Company will furnish to each Manager, from time
to time during the period when the International Prospectus
is required to be delivered under the 1933 Act or the 1934
Act, such number of copies of the International Prospectus
(as amended or supplemented) as such Manager may reasonably
request for the purposes contemplated by the 1933 Act, the
1933 Act Regulations, the 1934 Act or the 1934 Act
Regulations.

(f) If at any time when a prospectus relating to the
Securities is required to be delivered, any event shall occur
as a result of which it is necessary, in the reasonable
judgment of the Lead Managers based on the advice of their
counsel, to amend or supplement the International Prospectus
in order to ensure that the International Prospectus does not
contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances
existing at the time it is delivered to a purchaser, not
misleading, the Company will forthwith amend or supplement
the International Prospectus (and will provide drafts thereof
to the Managers and provide them a reasonable opportunity to
review such drafts and provide comments with respect thereto)
so that, as so amended or supplemented, the International
Prospectus will not contain such an untrue statement or
omission, and the Company will furnish to the Managers a
reasonable number of copies of any such amendment or
supplement to the International Prospectus.

(g) The Company will endeavor, in cooperation with the
Managers, to qualify the Securities for offering and sale
under the applicable securities laws of such other
jurisdictions as the Lead Managers may designate; provided,
however, that the Company shall not be obligated (i) to
qualify as a foreign corporation in any jurisdiction in which
it is not so qualified, (ii) to take any action that would
subject it to income or franchise taxation in any
jurisdiction in which would not otherwise be subject to such
taxation, (iii) to execute a consent to service of process
under the laws of any jurisdiction (except service of process
with respect to the offering and sale of the Securities). In
each jurisdiction in which the Securities have been qualified
as above provided, the Company will file such statements and
reports as may be required by the laws of such jurisdiction
to continue such qualification in effect for so long as it
may be required to complete the distribution of such
Securities.

(h) The Company will make generally available to its
security holders as soon as practicable, but not later than
90 days after the close of the period covered thereby, an
earnings statement (which need not be audited, but in form
complying with the provisions of Rule 158 of the 1933 Act
Regulations) covering a twelve-month period beginning not
later than the first day of the Company's fiscal quarter next
following the "effective date" (as defined in said Rule 158)
of the Registration Statement.

(i) The Company will use the net proceeds, if any,
received by it from the sale of the Option Securities in the
manner specified in the Prospectus under "Use of Proceeds."

(j) The Company will file with the Commission such
reports on Form SR as may be required pursuant to Rule 463 of
the 1933 Act Regulations.

(k) The Company will use every reasonable effort to
cause the Securities to be listed on the New York Stock
Exchange.

SECTION 4. Certain Covenants of the Company and the
Selling Stockholder. The Company and the Selling Stockholder
covenant with each of the Managers as follows:

(a) The Company and Selling Stockholder will be jointly
and severally responsible for and will pay all expenses
incident to the performance of the obligations of the Company
and the Selling Stockholder under this Agreement, including
(i) the printing and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the
printing of this Agreement and the International Pricing
Agreement, (iii) the preparation, sale or issuance and
delivery of the certificates evidencing the International
Securities to the Managers, (iv) the reasonable fees and
disbursements of the Company's counsel and accountants, (v)
the expenses in connection with the qualification of the
Securities under securities laws in accordance with the
provisions of Section 3(g) hereof, including filing fees and
the fees and disbursements of counsel for the Managers in
connection therewith and in connection with the preparation
of the Blue Sky Survey, (vi) the printing and delivery to the
Managers as provided in this Agreement of copies of the
Registration Statement as originally filed and of each
amendment thereto, of each of the preliminary prospectuses,
and of the Prospectuses and any amendments or supplements
thereto, (vii) the printing and delivery to the Managers of
copies of the Blue Sky Survey, (viii) the fees and expenses
incurred in connection with any filings required to be made
by the Managers with the National Association of Securities
Dealers, Inc. in connection with the offering and sale of the
Securities and (ix) the fees and expenses incurred in
connection with the listing of the Securities on the New York
Stock Exchange.

(b) If this Agreement is terminated by the Lead
Managers in accordance with the provisions of Section 5
hereof or Section 9(a)(i) hereof, the Company and the Selling
Stockholder will be jointly and severally responsible for and
will reimburse the Managers for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of
counsel for the Managers.

(c) During the period of 180 days from the date of the
International Pricing Agreement, the Company and the Selling
Stockholder will not, without the prior written consent of
the Lead Managers (which consent will not be unreasonably
withheld), directly or indirectly, sell, offer to sell, grant
any option for the sale of, or otherwise dispose of any
shares of Common Stock or any security convertible into or
exchangeable or exercisable for any shares of Common Stock,
except for (i) the issuance and sale by the Company to the
Selling Stockholder of 14,999,900 shares of Common Stock and
associated Rights in accordance with the Stock Exchange
Agreement, (ii) the sale by the Selling Stockholder of the
Initial Securities to the Underwriters in accordance with
this Agreement and the U.S. Purchase Agreement, (iii) the
sale by the Selling Stockholder of 236,000 shares of Common
Stock, together with the Rights associated with such shares,
to certain members of the Company's management and their
affiliates as contemplated by the Management Prospectus, (iv)
the issuance by the Company of the Option Securities to the
Underwriters in accordance with this Agreement and the U.S.
Purchase Agreement and (v) the grant by the Company of
options to purchase shares of Common Stock or the issuance by
the Company of shares of Common Stock pursuant to the
O'Sullivan Incentive Stock Plan and other benefit plans as
disclosed in the Prospectuses.

(d) Prior to the time at which the distribution of the
Securities is completed, neither the Company nor the Selling
Stockholder shall, directly or indirectly, (i) take any
action designed to cause or result in, or that constitutes or
might reasonably be expected to constitute, stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities or (ii) bid
for, purchase or pay anyone any compensation for soliciting
purchases of, the Securities.

SECTION 5. Conditions to Obligations of the Managers.
The obligations of the several Managers hereunder are subject
to the accuracy of the representations and warranties of the
Company and the Selling Stockholder herein contained at the
date hereof and at Closing Time, to the performance by the
Company and the Selling Stockholder of their respective
obligations hereunder required to be performed prior to or at
Closing Time, and to the following further conditions:

(a) The Registration Statement shall have become
effective not later than 5:30 p.m. on the date hereof or at
such later time and date as may be approved by the Lead
Managers; and at Closing Time and any Date of Delivery, as
the case may be, no stop order suspending the effectiveness
of the Registration Statement shall have been issued under
the 1933 Act or proceedings therefor initiated or threatened
by the Commission. If the Company has elected to rely upon
Rule 430A of the 1933 Act Regulations, Prospectuses that set
forth the initial public offering price per share of the
Securities, the purchase price per share to be paid by the
Managers, and any other information previously omitted from
the effective Registration Statement pursuant to such Rule
430A shall have been transmitted to the Commission for filing
pursuant to Rule 424(b) of the 1933 Act Regulations within
the prescribed time period, and prior to Closing Time the
Company shall have provided evidence reasonably satisfactory
to the Lead Managers of such timely filing, or a
post-effective amendment providing such information shall
have been promptly filed and declared effective in accordance
with the requirements of Rule 430A of the 1933 Act
Regulations.

(b) At Closing Time the Lead Managers shall have
received:

(i) The Company has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of the State of Delaware.

(ii) The Company has corporate power and
authority to own, lease and operate its properties
and to conduct its business substantially as
described in the Prospectuses.

(iv) Each of the Subsidiaries of the Company
is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation.

(v) The authorized, issued and outstanding
capital stock of the Company is as set forth in the
Prospectuses under the column entitled "As
Adjusted" under the caption "Capitalization."

(vi) The 15,000,000 shares of Common Stock
heretofore issued by the Company to the Selling
Stockholder have been duly authorized and are
validly issued, fully paid and nonassessable; the
1,800,000 shares of Common Stock subject to the
option granted pursuant to Section 2(b) hereof have
been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and the
U.S. Purchase Agreement and, when issued and
deliverd by the Company in accordance with this
Agreement and the U.S. Purchase Agreement against
payment of the consideration set forth herein and
therein, will be validly issued, fully paid and
nonassessable.

(viii) Assuming that the Underwriters have
taken physical possession of the Initial Securities
to be sold by the Selling Stockholder at the
Closing Time in good faith without notice of any
adverse claim as such term is used in Section 8-302
of the Uniform Commercial Code in effect in the
State of New York, upon delivery of such Securities
in registered form issued to the Underwriters and
payment for such Securities as contemplated in this
Agreement and the U.S. Purchase Agreement, the
Underwriters will acquire such Securities free and
clear of all security interests, liens,
encumbrances, equities or other adverse claims.

(xi) The Company has all necessary corporate
power and authority to execute and deliver this
Agreement, the U.S. Purchase Agreement, the
International Pricing Agreement and the U.S.
Pricing Agreement and to perform its obligations
hereunder and thereunder; this Agreement, the U.S.
Purchase Agreement, the International Pricing
Agreement and the U.S. Pricing Agreement have each
been duly authorized, executed and delivered by the
Company, and each constitutes a valid and binding
agreement of the Company, enforceable in accordance
with its terms (except to the extent that
enforceability hereof or thereof is subject to (i)
applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafterin
effect affecting creditors' rights generally and
(ii) general principles of equity (including,
without limitation, standards of materiality, good
faith, fair dealing and reasonableness), whether
such principles are considered in a proceeding at
law or in equity, and except that the rights to
indemnification and contribution granted hereunder
and thereunder may be limited by applicable federal
and state securities laws or the public policy
underlying such laws).

(xii) The Selling Stockholder has all
necessary corporate power and authority to
execute and deliver this Agreement, the U.S.
Purchase Agreement, the International Pricing
Agreement and the U.S. Pricing Agreement and to
perform its obligations hereunder and thereunder;
this Agreement, the U.S. Purchase Agreement, the
International Pricing Agreement and the U.S.
Pricing Agreement have each been duly authorized,
executed and delivered by the Selling Stockholder,
and each constitutes a valid and binding agreement
of the Selling Stockholder, enforceable in
accordance with its terms (except to the extentthat
enforceability hereof or thereof is subject to (i)
applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter
in effect affecting creditors' rights generally and
(ii) general principles of equity (including,
without limitation, standards of materiality, good
faith, fair dealing and reasonableness, whether
such principles are considered in a proceeding at
law or in equity), and except that the rights to
indemnification and contribution granted hereunder
and thereunder may be limited by applicable federal
and state securities laws or the public policy
underlying such laws).

(xiii) The execution, delivery and
performance by the Company of this Agreement, the
U.S. Purchase Agreement, the International Pricing
Agreement and the U.S. Pricing Agreement and the
consummation by the Company of the transactions
herein and therein contemplated (i) will not
violate (A) any law or present regulation of any
governmental agency or authority of the United
States of America or the State of New York or the
Delaware General Corporation Law (the "DGCL") or
(B) any agreement binding upon the Company or any
of its Subsidiaries or their respective properties
or any court decree or order binding upon the
Company or any of its Subsidiaries (such opinion
being limited to the decrees or orders that are set
forth on Annex B to the opinion of such counsel and
the agreements, contracts and instruments filed as
Exhibits 10.1 through 10.14 to the Registration
Statement (collectively, the "Covered Decrees,
Orders, and Agreements")), (ii) will not result in
a breach or violation of the terms or provisions of
the Certificate of Incorporation or By-laws of the
Company or any of its Subsidiaries, and (iii) will
not result in or require the creation or imposition
of any security interest or lien upon any of their
properties pursuant to the provisions of any
agreement binding upon the Company or any of its
Subsidiaries or their respective properties (such
opinion being limited to the Covered Decrees,
Orders and Agreements) (except for purposes of
clause (i) and (iii), where such a violation or
breach or resulting security interest or lien would
not affect in any material respect the transactions
contemplated by this Agreement or the International
Purchase Agreement or have a material adverse
effect on the condition (financial or otherwise),
business, properties or results of operation of the
Company, Old O'Sullivan and their respective
subsidiaries, taken as a whole).

(xiv) The execution, delivery and performance
by the Selling Stockholder of this Agreement, the
International Purchase Agreement, the U.S. Pricing
Agreement and the International Pricing Agreement
and the consummation by the Selling Stockholder of
the transactions herein and therein contemplated
(i) will not violate (A) any law or present
regulation of any governmental agency or authority
of the United States of America or the State of New
York or the DGCL or (B) any agreement binding upon
the Selling Stockholder or its properties or any
court decree or order binding upon the Selling
Stockholder (such opinion being limited to (1) the
Covered Decrees, Orders, and Agreements and (2) the
agreements, contracts and instruments to which the
Selling Stockholder or its subsidiaries are parties
or by which they are bound set forth on Annex C to
the opinion of such counsel), (ii) will not result
in a breach or violation of the terms or provisions
of the Certificate of Incorporation or By-laws of
the Selling Stockholder, and (iii) will not result
in or require the creation or imposition of any
security interest or lien upon any of itsproperties
pursuant to the provisions of any agreement binding
upon the Selling Stockholder or its properties(such
opinion being limited to (1) the Covered Decrees,
Orders and Agreements and (2) the agreements,
contracts and instruments to which the Selling
Stockholder or its subsidiaries are parties or by
which they are bound set forth on Annex C to the
opinion of such counsel) (except for purposes of
clause (i) and (iii), where such a violation or
breach or resulting security interest or lien would
not affect in any material respect the transactions
contemplated by this Agreement or the U.S. Purchase
Agreement or have a material adverse effect on the
condition (financial or otherwise), business,
properties or results of operations of the Selling
Stockholder and its subsidiaries, taken as a
whole).

(xv) No authorization, approval or consent
of, or registration or filing with, any court or
governmental authority or agency of the United
States or the State of New York or under the DGCL
is required for the execution, delivery or
performance by the Company of this Agreement, the
U.S. Purchase Agreement, the International Pricing
Agreement or the U.S. Pricing Agreement or the
consummation by the Company of the transactions
contemplated herein and therein, except such as
have been obtained or made under the 1933 Act, the
1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations.

(xvi) No authorization, approval or consent
of, or registration or filing with, any court or
governmental authority or agency of the United
States or the State of New York or under the DGCL
is required for the execution, delivery or
performance by the Selling Stockholder of this
Agreement, the U.S. Purchase Agreement, the
International Pricing Agreement or the U.S. Pricing
Agreement or the consummation by the Selling
Stockholder of the transactions contemplated herein
and therein, except such as have been obtained or
made under the 1933 Act, the 1933 Act Regulations,
the 1934 Act and the 1934 Act Regulations.

(xxi) Each of the Company and Old O'Sullivan
has all necessary corporate power and authority to
execute and deliver each of the Reorganization
Agreements to which it is a party and to performits
obligations thereunder. Each of the Reorganization
Agreements to which the Company or Old O'Sullivan
is a party has been duly authorized, executed and
delivered by each of them (to the extent each of
them is a party thereto) and constitutes a valid
and binding obligation of each of them (to the
extent each of them is a party thereto),
enforceable in accordance with its terms (except to
the extent that enforceability thereof is subject
to (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws
now or hereafter in effect affecting creditors'
rights generally and (ii) general principles of
equity (including, without limitation, standards of
materiality, good faith, fair dealing and
reasonableness), whether such principles are
considered in a proceeding at law or in equity.

(xxii) The Selling Stockholder has all
necessary corporate power and authority to execute
and deliver each of the Reorganization Agreements
to which it is a party and to perform its
obligations thereunder. Each of the Reorganization
Agreements to which the Selling Stockholder is a
party has been duly authorized, executed and
delivered by the Selling Stockholder and
constitutes a valid and binding obligation of the
Selling Stockholder, enforceable in accordance with
its terms (except to the extent that enforceability
thereof is subject to (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting
creditors' rights generally and (ii) general
principles of equity (including, without
limitation, standards of materiality, good faith,
fair dealing and reasonableness), whether such
principles are considered in a proceeding at law or
in equity).

(xxiv) The execution, delivery and
performance by the Selling Stockholder of the
Reorganization Agreements to which it is a party
and the consummation by the Selling Stockholder of
the transactions contemplated therein (i) will not
violate (A) any law or present regulation of any
governmental agency or authority of the United
States of America or the State of New York or the
DGCL or (B) any agreement binding upon the Selling
Stockholder or its properties or any court decree
or order binding upon the Selling Stockholder (such
opinion being limited (x) to (1) the Covered
Decrees, Orders and Agreements and (2) the
agreements, contracts and instruments to which the
Selling Stockholder or its subsidiaries are parties
or by which they are bound set forth on Annex C to
the opinion of such counsel) and (y) in that such
counsel need not express an opinion with respect to
any violation arising under or based upon any
cross-default provision insofar as such violation
relates to a default under an agreement not filed
as an exhibit to the Registration Statement or such
violation arises under or is based upon any
covenant of a financial or numerical nature or
requires arithmetic computation), (ii) will not
result in a breach or violation of the terms or
provisions of the Certificate of Incorporation
or By-laws of the Selling Stockholder, and (iii)
will not result in or require the creation or
imposition of any security interest or lien upon
any of its properties pursuant to the provisions of
any agreement binding upon the Selling Stockholder
or its properties (such opinion being limited to
(1) the Covered Decrees, Orders and Agreements and
(2) the agreements, contracts and instruments to
which the Selling Stockholder or its subsidiaries
are parties or by which they are bound set forth on
Annex C hereto) (except, for purposes of clauses
(i) and (iii), where such a violation or breach or
resulting security interest or lien would not
affect in any material respect the transactions
contemplated by this Agreement or the U.S. Purchase
Agreement or have a material adverse effect on the
condition (financial or otherwise), business,
properties or results of operation of the Selling
Stockholder and its subsidiaries, taken as a
whole).

In addition, such opinion will contain the following
statements: In the course of the preparation by the Company
and its counsel of the Registration Statement and
Prospectuses, such counsel attended conferences with certain
of the officers of the Company and the Selling Stockholder
and representatives of the independent public accountants for
the Company, the Underwriters and counsel to the
Underwriters, at which the Registration Statement and the
Prospectuses were discussed. In addition, between the date
of the effectiveness of the Registration Statement and the
time of delivery of this opinion, such counsel attended
additional conferences with certain of the officers of the
Company and the Selling Stockholder and representatives of
the independent public accountants for the Company, at which
the contents of the Registration Statement and Prospectuses
were discussed to a limited extent. Given the limitations
inherent in the independent verification of factual matters
and the character of determinations involved in the
registration process, such counsel is not passing upon and
does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement and the Prospectuses (other than as
set forth in paragraphs (ix), (x) and (xx) above). Subject
to the foregoing and on the basis of the information such
counsel gained in the performance of the services referred to
above, including information obtained from officers and other
representatives of the Company and the Selling Stockholder,
no facts have come to such counsel's attention that cause
such counsel to believe that the Registration Statement, at
the time of the Registration Statement was declared effective
by the Commission, contained any untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statement therein
not misleading. Also, subject to the foregoing, no facts
have come to such counsel's attention that cause such counsel
to believe that the Prospectuses, as of the date thereof, at
Closing Time or at any Date of Delivery, contained or
contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading, except in each case
that such counsel need not express a view or belief with
respect to financial statements, notes or schedules thereto
or other financial and statistical information included in
the Registration Statement or Prospectuses.

In rendering the foregoing opinion, such counsel shall
be entitled to state that such counsel expresses no opinion
regarding the laws of any jurisdiction other than the federal
laws of the United States, the laws of the State of New York
and the DGCL. In addition, such counsel shall be entitled to
state that such counsel expresses no opinion regarding the
securities or "blue sky" laws of any state or other
non-federal jurisdiction in which the Securities are offered
or sold.

(2) The favorable opinion, dated as of Closing
Time, of Rowland H. Geddie, III, Vice President,
General Counsel and Secretary of the Company, in form
and substance reasonably satisfactory to the Lead
Managers, to the effect that:

(i) Each of the Subsidiaries of the Company
has been duly incorporated and is validly existing
as a corporation in good standing under the laws of
the jurisdiction of its incorporation.

(ii) Each of the Subsidiaries of the Company
has all the necessary corporate power and authority
to own, lease and operate its properties and to
conduct its business as described in the
Prospectuses.

(v) To the knowledge of such counsel, there
is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or
foreign, now pending or threatened against the
Company or any of its Subsidiaries, which (A) is
required to be disclosed in the Registration
Statement and the Prospectuses (other than as
disclosed therein) or (B) might reasonably be
expected to result in any material adverse change
in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of
the Company and its Subsidiaries considered as one
enterprise.

(vii) The execution, delivery and performance
by the Company of this Agreement, the U.S. Purchase
Agreement, the International Pricing Agreement and
the U.S. Pricing Agreement and the consummation by
the Company of the transactions herein and therein
contemplated (i) will not violate (A) any law or
present regulation of any governmental agency or
authority of the State of Texas or Missouri or (B)
any agreement or court decree or order known to
such counsel and binding upon the Company or any of
its Subsidiaries or their respective properties
(such opinion being limited to the Covered Decrees,
Orders, and Agreements) and (ii) will not result in
or require the creation or imposition of any
security interest or lien upon any of their
properties pursuant to the provisions of any
agreement known to such counsel and binding upon
the Company or any of its Subsidiaries or their
respective properties.

(viii) The execution, delivery and
performance by the Company and Old O'Sullivan of
the Reorganization Agreements to which each of them
is a party and the consummation by the Company and
Old O'Sullivan of the transactions contemplated
therein (i) will not violate (A) any law or present
regulation of any governmental agency or authority
of the State of Texas or Missouri or (B) any
agreement or court decree or order known to such
counsel and binding upon the Company or Old
O'Sullivan or their respective subsidiaries or
properties and (ii) will not result in or require
the creation or imposition of any security interest
or lien upon any of their properties pursuant to
the provisions of any agreement known to such
counsel and binding upon the Company or Old
O'Sullivan or their respective subsidiaries or
properties (such opinion being limited to the
Covered Decrees, Orders and Agreements) (except
in each case where such a violation or breach or
resulting security interest or lien would not have
a material adverse effect on the condition
(financial or otherwise), business, properties or
results of operations of the Company, Old
O'Sullivan and their respective subsidiaries, taken
as a whole).

(3) The favorable opinion, dated as of Closing
Time, of Frederick W. Padden, General Counsel of the
Selling Stockholder, in form and substance reasonably
satisfactory to the Lead Manager, to the effect that:

(i) The Selling Stockholder is the sole
record owner and, to the knowledge of such counsel,
beneficial owner of the Initial Securities; to the
knowledge of such counsel, the Selling Stockholder
has valid and marketable title to the Initial
Securities, free and clear of any claim, lien,
security interest, encumbrance, restriction on
transfer or other defect in title.

(ii) To the knowledge of such counsel, there
are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments
required to be described or referred to in the
Registration Statement or to be filed as exhibits
thereto other than those described or referred to
therein or filed as exhibits thereto as required.

(iii) The information set forth in the
Prospectuses under the captions "Management Company
Compensation and Benefits" and "Certain
Transactions," to the extent that such information
constitutes summaries of legal matters, documents or
proceedings, fairly summarizes in all material
respects such legal matters, documents or
proceedings.

(iv) The execution, delivery and performance
by the Selling Stockholder of this Agreement, the
U.S. Purchase Agreement, the International Pricing
Agreement and the U.S. Pricing Agreement and the
consummation by the Selling Stockholder of the
transactions herein and therein contemplated (i)
will not violate (A) any law or present regulation
of any governmental agency or authority of the
State of Texas or (B) any agreement or court decree
or order known to such counsel and binding upon the
Selling Stockholder or its properties and (ii) will
not result in or require the creation or imposition
of any security interest or lien upon any of its
properties pursuant to the provisions of any
agreement known to such counsel and binding upon
the Selling Stockholder or its properties.

(v) The execution, delivery and performance
by the Selling Stockholder of the Reorganization
Agreements to which it is a party and the
consummation by the Selling Stockholder of the
transactions contemplated therein (i) will not
violate (A) any law or present regulation of any
governmental agency or authority of the State of
Texas or (B) any agreement or court decree or
order known to such counsel and binding upon the
Selling Stockholder or its properties and (ii)
will not result in or require the creation or
imposition of any security interest or lien upon
any of its properties pursuant to the provisions
of any agreement known to such counsel and binding
upon the Selling Stockholder or its properties
(except in each case where such a violation or
breach or resulting security interest or lien
would not have a material adverse effect on the
condition (financial or otherwise), business,
properties or results of operation of the Selling
Stockholder and its subsidiaries, taken as a
whole).

(4) The favorable opinion, dated as of Closing
Time, of Baker & Botts, L.L.P., counsel for the
Underwriters, with respect to the matters set forth in
clauses (i), (vi), (vii) (solely as to preemptive rights
arising by operation of law or under the Certificate of
Incorporation and By-laws of the Company), (ix) (solely
as to the matters addressed in the first sentence
thereof), (xi) (solely as to the due authorization,
execution and delivery of the International Purchase
Agreement and the U.S. Purchase Agreement), (xii)
(solely as to the due authorization, execution and
delivery of the International Purchase Agreement and the
U.S. Purchase Agreement), (xvii) and (xviii) of
subsection (b)(1) of this Section.

Such opinion of Baker & Botts, L.L.P. shall further
state that nothing has come to the attention of such
counsel that causes them to believe that the
Registration Statement (other than the financial
statements and schedules contained therein, including
the notes thereto and the auditors' reports thereon, and
the other financial and statistical data contained
therein, as to which such counsel need not comment), at
the time it became effective, contained an untrue
statement of a material fact or omitted to state a
material fact required to be stated therein or necessary
to make the statements therein not misleading or that
the Prospectus (other than the financial statements and
schedules contained therein, including the notes thereto
and the auditors' reports thereon, and the other
financial and statistical data contained therein, as to
which such counsel need not comment), at the
Representation Date (unless the term "Prospectus" refers
to a prospectus which has been provided to the
Underwriters by the Company for use in connection with
the offering of the Offered Securities which differs
from the prospectus on file at the Commission at the
Representation Date, in which case at the time it is
first provided to the Underwriters for such use), included
an untrue statement of a material fact or omitted to state
a material fact necessary in order to make the
statements therein, in the light of the circumstances
under which they were made, not misleading.

(c) At Closing Time there shall not have been, since
the date hereof or since the respective dates as of which
information is given in the Prospectuses, any material
adverse change in the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business,
and the Lead Managers shall have received a certificate of
the President or a Vice President of the Company and of the
chief financial or chief accounting officer of the Company,
dated as of Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) the
representations and warranties of the Company contained in
Section 1(a) of this Agreement are true and correct with the
same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all
covenants and agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and, to the
knowledge of each such officer, no proceedings for that
purpose have been initiated or threatened by the Commission.
As used in this Section 5(c), the term "Prospectuses" shall
mean the Prospectuses in the form first used to confirm sales
of the Securities.

(d) At Closing Time the Lead Managers shall have
received a certificate from the President or a Vice President
of the Selling Stockholder and of the chief financial officer
or chief accounting officer of the Selling Stockholder, dated
as of Closing Time, to the effect that (i) the
representations and warranties of the Selling Stockholder
contained in Sections 1(a) and 1(b) of this Agreement are
true and correct with the same force and effect as though
expressly made at and as of Closing Time and (ii) the Selling
Stockholder has complied with all covenants and agreements
and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time.

(e) At the time of the execution of this Agreement, the
Lead Managers shall have received from Price Waterhouse a
letter dated such date, in form and substance satisfactory to
the Lead Managers, to the effect that:

(i) they are independent public accountants with
respect to the Company and its Subsidiaries within the
meaning of the 1933 Act and the 1933 Act Regulations;

(iii) on the basis of procedures (but not an audit
in accordance with generally accepted auditing
standards) consisting of (A) reading the minutes of
meetings of the stockholders, the Board of Directors,
and of the Company and its Subsidiaries since the date
of the latest audited balance sheet as set forth in the
minute books through a specified date not more than five
business days prior to the date of this Agreement, (B)
performing the procedures specified by the American
Institute of Certified Public Accountants for a review
of interim financial information as described in SAS No.
71, Interim Financial Information, on the unaudited
condensed interim financial statements of the Company
included in the Registration Statement and reading the
unaudited interim financial statements of the Company
for the period from December 31, 1993 to the date of
latest available interim financial statements, and (C)
making inquiries of certain officials of the Company who
have responsibility for financial and accounting matters
regarding the specific financial statement items
referred to below, nothing has come to their attention
that causes them to believe that (1) the unaudited
condensed combined financial statements of the Company
and its Subsidiaries included the Registration Statement
do not comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act
and the 1933 Act Regulations or that any material
modifications should be made to the unaudited condensed
combined interim financial statements, included in the
Registration Statement, for them to be in conformity
with generally accepted accounting principles, or (2) at
a specified date not more than five business days prior
to the date of this Agreement, there was any change in
the capital stock or any increase in the combined
long-term debt of the Company and its Subsidiaries as
compared with the amounts shown in the December 31,
1993 combined balance sheet included in the Registration
Statement or, during the period from January 1, 1994 to
a specified date not more than five business days prior
to the date of this Agreement, there were any decreases,
as compared with the corresponding period in the
preceding year, in the combined net sales, the total or
per share amounts of income before cumulative effect of
change in accounting principle, or the net income of the
Company and its Subsidiaries, except in all instances
for changes, increases or decreases which the
Registration Statement discloses have occurred or may
occur, or except as specifically stated in such letter;

(iv) although they are unable to and do not
express an opinion on the Pro Forma Combined Statements
of Operations and Pro Forma Combined Balance Sheet
(collectively, the "Pro Forma Financial Statements")
included in the Registration Statement, they have (A)
read the Pro Forma Financial Statements, (B) made
inquiries of certain officials of the Company who have
responsibility for financial and accounting matters
about the basis for their determination of the pro forma
adjustments to the historical amounts in the Pro Forma
Financial Statements and whether the Pro Forma Financial
Statements comply in form in all material respects with
the applicable accounting requirements of Rule 11-02 of
Regulation S-X; and (C) proved the arithmetic accuracy
of the application of the pro forma adjustments to the
historical amounts in the Pro Forma Financial
Statements; on the basis of such procedures, and such
other inquiries and procedures as may be specified in
such letter, nothing came to their attention that caused
them to believe that the Pro Forma Financial Statements
do not comply in form in all material respects with the
applicable requirements of Rule 11-02 of Regulation S-X
and that the pro forma adjustments have not been
properly applied to the historical amounts in the
compilation of such statements; and

(v) they have read, with respect to certain
amounts, percentages and financial information which are
included in the Registration Statement and Prospectuses
and which have been specified by the Lead Managers, and
have found such amounts, percentages and financial
information to be in agreement with the relevant
accounting and financial records of the Company and its
Subsidiaries identified in such letter.

(f) At Closing Time the Lead Managers shall have
received from Price Waterhouse a letter, dated as of Closing
Time, to the effect that they confirm the statements made in
the letter furnished pursuant to subsection (e) of this
Section, except that the "specified date" referred to in such
letter shall be a date not more than five days prior to
Closing Time and, if the Company has elected to rely on Rule
430A of the 1933 Act Regulations, to the further effect that
they have carried out procedures as specified in clause (v)
of subsection (e) of this Section with respect to certain
amounts, percentages and financial information specified by
the Lead Managers and deemed to be a part of the Registration
Statement pursuant to Rule 430(A)(b) and have found such
amounts, percentages and financial information to be in
agreement with the relevant accounting and financial records
of the Company and its Subsidiaries identified in such
letter.

(g) At Closing Time the Securities shall have been
approved for listing on the New York Stock Exchange, subject
only to official notice of issuance.

(h) At the time of the execution of this Agreement, the
Company shall have furnished to the Lead Managers "lock-up"
letters (or other agreements or instruments acceptable to the
Lead Managers), in form and substance reasonably satisfactory
to the Lead Managers, signed by each of the persons
designated in the Prospectuses as an executive officer or
director of the Company, pursuant to which each such person
shall agree not to sell, offer to sell, grant an option for
the sale of, or otherwise dispose of, directly or indirectly,
any shares of Common Stock or any securities convertible into
or exchangeable into or exercisable for Common Stock for a
period of 180 days from the International Representation Date
without the prior written consent of the Lead Managers (which
consent shall not be unreasonably withheld), except for a
bona fide transaction entered into in good faith by such
person with a member of such person's family or by the
executor of such person's estate, provided that the recipient
of such shares (unless the recipient is the executor or
administrator of the estate of a deceased transferor) agrees
in writing to be bound by the terms of the transferor's
lock-up letter.

(i) At Closing Time and at each Date of Delivery, if
any, counsel for the Managers shall have been furnished with
such certificates, documents and opinions as they may
reasonably require for the purpose of enabling them to pass
upon the sale or issuance of the Securities as herein
contemplated and related proceedings, or in order to evidence
the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained.

(j) At Closing Time and at each Date of Delivery, if
any, all actions, proceedings, instruments, opinions and
documents required in connection with the consummation of the
transactions contemplated by this Agreement and the U.S.
Purchase Agreement at or prior to Closing Time or such Date
of Delivery, as the case may be, shall be reasonably
satisfactory to the Lead Managers.

(k) In the event the Managers exercise their option
provided in Section 2(b) hereof to purchase all or any part
of the International Option Securities and the Date of
Delivery specified by the Managers for any such purchase is a
date other than the Closing Time, the obligation of the
Managers to purchase all or any such portion of the
International Option Securities shall be subject, in addition
to the foregoing conditions, to the accuracy of the
representations and warranties of the Company and the Selling
Stockholder herein contained at each Date of Delivery, to the
performance by the Company and the Selling Stockholder of its
obligations hereunder required to be performed prior to or at
each Date of Delivery, and to the receipt by the Managers of
the following:

(3) The favorable opinion of Fried, Frank, Harris,
Shriver & Jacobson, counsel for the Company, in form and
substance reasonably satisfactory to the Lead Managers,
dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the
opinion required by Section 5(b)(1) hereof.

(4) The favorable opinion of Frederick W. Padden,
General Counsel of the Selling Stockholder, in form and
substance reasonably satisfactory to the Lead Managers,
dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the
opinion required by Section 5(b)(2) hereof.

(5) The favorable opinion of Rowland H. Geddie,
III, Vice President, General Counsel and Secretary of
the Company, in form and substance reasonably
satisfactory to the Lead Managers, dated such Date of
Delivery, relating to the Option Securities and
otherwise to the same effect as the opinion required by
Section 5(b)(3) hereof.

(6) The favorable opinion of Baker & Botts,
L.L.P., counsel for the Managers, dated such Date of
Delivery, relating to the Option Securities and
otherwise to the same effect as the opinion required by
Section 5(b)(4) hereof.

(7) A letter, dated as of such Date of Delivery,
from Price Waterhouse, in form and substance reasonably
satisfactory to the Lead Managers, substantially the
same in scope and substance as the letter furnished
pursuant to Section 5(f) hereof, except that the
"specified date" in such letter shall be a date not more
than five days prior to such Date of Delivery.

If any condition specified in this Section shall not
have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the Lead Managers by
notice to the Company and the Selling Stockholder at any time
at or prior to Closing Time or (insofar as the provisions
hereof relate to the Option Securities) any Date of Delivery
and such termination shall be without liability of any party
to any other party. Notwithstanding the foregoing, the
provisions of Sections 4(a), 4(b), 6 and 7 hereof shall
remain in effect following any such termination.

SECTION 6. Indemnification.

(a) The Company and the Selling Stockholder jointly and
severally agree to indemnify and hold harmless each Manager,
each officer and director of any Manager and each person, if
any, who controls any Manager within the meaning of Section
15 of the 1933 Act as follows:

(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the
extent of the aggregate amount paid in settlement of any
litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue
statement or omission, if such settlement is effected
with the written consent of the Company and the Selling
Stockholder; and

(iii) against any and all expense whatsoever,
as incurred (including the fees and expenses of counsel
chosen by the Lead Managers), reasonably incurred in
investigating, preparing or defending against any
litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue
statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;

provided, however, that this indemnity agreement shall not
apply to any loss, liability, claim, damage or expense to the
extent arising out of any untrue statement or omission or
alleged untrue statement or omission made in reliance upon
and conformity with written information furnished to the
Company by any Manager through Merrill Lynch expressly for
use in the Registration Statement (or any amendment thereto)
or any preliminary prospectus or the International Prospectus
(or any amendment or supplement thereto); and provided,
further, that this indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any
Manager from whom the person asserting any such losses,
liabilities, claims, damages or expenses purchased
Securities, any officer or director of such Manager or any
person controlling such Manager, if a copy of the
International Prospectus (as then amended or supplemented if
the Company shall have furnished any such amendments or
supplements thereto) was not sent or given by or on behalf of
such Manager to such person, if such is required by law, at
or prior to the written confirmation of the sale of such
Securities to such person and if the International Prospectus
(as so amended or supplemented) would have corrected the
defect giving rise to such loss, liability, claim, damage or
expense.

(b) Each Manager agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors and
each of its officers who signed the Registration Statement,
the Selling Stockholder and each of its officers and
directors and each person, if any, who controls the Company
or the Selling Stockholder within the meaning of Section 15
of the 1933 Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in
subsection (a) of this Section, but only with respect to
untrue statements or omissions, or alleged untrue statements
or omissions, made in the Registration Statement (or any
amendment thereto), including the information deemed to be
part of the Registration Statement pursuant to Rule 430A(b)
of the 1933 Act Regulations, if applicable, or any
preliminary prospectus or the Prospectuses (or any amendment
or supplement thereto) in reliance upon and in conformity
with written information furnished to the Company by such
Manager through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto) or the
Prospectuses (or any amendment or supplement thereto).

SECTION 7. Contribution. In order to provide for just
and equitable contribution in circumstances in which the
indemnity agreement provided for in Section 6 hereof is for
any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the
Company, the Selling Stockholder and the Managers shall
contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Company, the Selling
Stockholder and one or more of the Managers, as incurred, in
such proportions that the Managers are responsible for that
portion represented by the percentage that the underwriting
discount appearing on the cover page of the Prospectuses
bears to the initial public offering price appearing thereon
and the Company and the Selling Stockholder will be jointly
and severally responsible for the balance; provided, however,
that no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall
be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of
this Section, each person, if any, who controls a Manager
within the meaning of Section 15 of the 1933 Act shall have
the same rights to contribution as such Manager, and each
director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as
the Company, and each person who controls the Selling
Stockholder within the meaning of Section 15 of the
Securities Act shall have the same rights to contribution as
the Selling Stockholder.

SECTION 8. Representations, Warranties and Agreements
to Survive Delivery. All representations, warranties,
agreements and indemnities contained in this Agreement and
the International Pricing Agreement, or contained in
certificates of officers of the Company or the Selling
Stockholder submitted pursuant hereto, shall remain operative
and in full force and effect, regardless of any investigation
made by or on behalf of any Manager or controlling person, or
by or on behalf of the Company or the Selling Stockholder,
and shall survive delivery of and payment for the
International Securities to or by the Managers.

SECTION 9. Termination of Agreement.

(a) The Lead Managers may terminate this Agreement, by
notice to the Company and the Selling Stockholder, at any
time at or prior to Closing Time (i) if there has been, since
the date of this Agreement or since the respective dates as
of which information is given in the Prospectuses, any
material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business
prospects of the Company and its Subsidiaries considered as
one enterprise, whether or not arising in the ordinary course
of business, or (ii) if there has occurred any material
adverse change in the financial markets in the United States
or elsewhere or any outbreak of hostilities or escalation
thereof or other calamity or crisis, the effect of which is
such as to make it, in the reasonable judgment of the Lead
Managers, impracticable to market the Securities or enforce
contracts for the sale of the Securities, or (iii) if trading
in the Common Stock has been suspended by the Commission or
the New York Stock Exchange, or if trading generally on
either the New York Stock Exchange or the American Stock
Exchange has been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said exchanges or
by order of the Commission or any other governmental
authority, or if a banking moratorium has been declared by
either federal or New York authorities. As used in this
Section 9(a), the term "Prospectuses" means the Prospectuses
in the form first used to confirm sales of the Securities.

(b) If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any
party to any other party. Notwithstanding the foregoing, the
provisions of Sections 4(a), 4(b), 6 and 7 shall remain in
effect.

(c) This Agreement may also terminate pursuant to the
provisions of Section 2(a)(ii) hereof, with the effect stated
in such Section.

SECTION 10. Default by one or more Managers. If any
one or more of the Managers shall fail at Closing Time to
purchase and pay for any of the Initial International
Securities pursuant to this Agreement and the International
Pricing Agreement and such failure to purchase shall
constitute a default in the performance of its or their
obligations hereunder and thereunder, the Lead Managers shall
have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Managers
or any other underwriters to purchase all, but not less than
all, of the Initial International Securities not so purchased
in such amounts as may be agreed upon and upon the terms
herein set forth; if, however, the Managers shall not have
completed such arrangements within said 24-hour period, then:

(a) if the number of Initial International Securities
not so purchased does not exceed 10% of the Initial
International Securities, the non-defaulting Managers shall
be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting
obligations of all non- defaulting Managers, or

(b) if the number of Initial International Securities
not so purchased equals or exceeds 10% of the Initial
International Securities, this Agreement shall terminate
without liability on the part of any non-defaulting Manager.

No action taken pursuant to this Section shall relieve
any defaulting Manager from any liability it may have
hereunder in respect of its default.

In the event of any such default which does not result
in a termination of this Agreement, the Lead Managers shall
have the right to postpone Closing Time for such period, not
exceeding seven days, as they shall determine, after
consultation with the Company, in order that the required
changes in the Registration Statement and the Prospectuses or
in any other documents or arrangements may be effected.

SECTION 11. Information Furnished by Managers. The
Managers acknowledge that the statements contained in (i) the
last paragraph of text on the outside front cover page of the
International Prospectus, (ii) the legend regarding
stabilization activities on the inside front cover page of
the International Prospectus and (iii) the fourth, sixth,
seventh, eighth, tenth and thirteenth paragraphs under the
caption "Underwriting" in the International Prospectus were
included in the Registration Statement, the preliminary
International prospectus and the international Prospectus in
reliance upon and in conformity with written information
furnished to the Company by the Managers through Merrill
Lynch expressly for use therein, and the Company and the
Selling Stockholder acknowledge and agree that such
statements constitute the only information so furnished to
the Company by the Managers.

SECTION 12. Notices. All notices and other
communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the
Managers shall be directed to the Lead Managers c/o Merrill
Lynch International Limited, Ropemaker Place, 25 Ropemaker
Street, London EC2Y 9LY, England, to the attention of the
Syndicate Department; notices to the Company shall be
directed to it at 1900 Gulf Street, Lamar, Missouri 64759, to
the attention of the General Counsel; and notices to the
Selling Stockholder shall be directed to it at TE Electronics
Technology Center, 200 Taylor Street, Suite 700, Fort Worth,
Texas 76102, to the attention of the General Counsel.

SECTION 13. Parties. This Agreement and the
International Pricing Agreement shall each inure to the
benefit of and be binding upon the Managers, the Company and
the Selling Stockholder and their respective successors.
Nothing expressed or mentioned in this Agreement or the
International Pricing Agreement is intended or shall be
construed to give any person, firm or corporation, other than
the Managers, the Company and the Selling Stockholder and
their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 hereof
and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this
Agreement or the International Pricing Agreement or any
provision herein or therein contained. This Agreement and
the International Pricing Agreement and all conditions and
provisions hereof and thereof are intended to be for the sole
and exclusive benefit of the Managers, the Company and the
Selling Stockholder and their respective successors, and said
controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of
Securities from any Manager shall be deemed to be a successor
by reason merely of such purchase.

SECTION 14. Certain Actions; Authority of Managers.
Any action required or permitted to be taken by the Managers
under or in connection with this Agreement may be taken by
them jointly or by Merrill Lynch. The Lead Managers
represent that they have been authorized by the other
Managers to execute this Agreement and the International
Pricing Agreement on behalf of the other Managers.

SECTION 15. Governing Law and Time. This Agreement and
the International Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New
York applicable to agreements made and to be performed in
said state. Except where otherwise provided, specified times
of day refer to New York City time.

If the foregoing is in accordance with your understanding
of our agreement, please sign and return to the Company a
counterpart hereof, whereupon this instrument along with
all counterparts will become a binding agreement between
the Company and each of the Managers in accordance with its
terms.

Very truly yours,

O'SULLIVAN INDUSTRIES HOLDINGS, INC.

By:_________________________________
Name:_______________________________
Title:______________________________

TE ELECTRONICS INC.

By:_________________________________
Name:_______________________________
Title:______________________________

<PAGE>

CONFIRMED AND ACCEPTED,
as of the date first above written:

MERRILL LYNCH INTERNATIONAL LIMITED
UBS LIMITED

By: MERRILL LYNCH INTERNATIONAL LIMITED

By:________________________________
Name:______________________________
Title:_____________________________

For themselves and as Lead Managers of the
several other Managers named in Schedule A hereto.
<PAGE>

SCHEDULE A

Number of Initial International
Name of Manager Securities

Merrill Lynch International Limited . . 1,075,000
UBS Limited . . . . . . . . . . . . . . 1,075,000
Wheat First Butcher & Singer. . . . . . 150,000
The Chicago Dearborn Company. . . . . . 150,000
Rauscher Pierce Refsnes, Inc. . . . . . 150,000
Barclays de Zoete Wedd Limited . . . . 80,000
Cazenove & Co. . . . . . . . . . . . . 80,000
Commerzbank Aktiengesellschaft . . . . 80,000
Credit Lyonnais Securities . . . . . . 80,000
Nomura International plc . . . . . . . 80,000
__________
Total . . . . . . . . . . . . . . 3,000,000
__________
__________

<PAGE>

EXHIBIT A

3,000,000 Shares

O'SULLIVAN INDUSTRIES HOLDINGS, INC.
(a Delaware corporation)

Common Stock
(Par Value $1.00 Per Share)

INTERNATIONAL PRICING AGREEMENT

January __, 1994

MERRILL LYNCH INTERNATIONAL LIMITEDUBS LIMITED
as Lead Managers of the several
Managers named in the within-
mentioned International Purchase Agreement
c/o MERRILL LYNCH INTERNATIONAL LIMITED
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY England

Dear Sirs:

Reference is made to the International Purchase
Agreement, dated January __, 1994 (the "International
Purchase Agreement"), with respect to (i) the sale by the
Selling Stockholder and the purchase by the several Managers
named in Schedule A thereto, acting severally and not
jointly, of an aggregate of 3,000,000 shares (the "Initial
International Securities") of Common Stock, par value $1.00
per share ("Common Stock"), of O'Sullivan Industries
Holdings, Inc. (the "Company"), together with the Preferred
Stock Purchase Rights of the Company (the "Rights")
associated with such shares, and (ii) the grant by the
Company to the Managers, acting severally and not jointly, of
the option to purchase all or any part of the Managers' pro
rata portion of up to an additional 1,800,000 shares of
Common Stock, together with the Rights associated with such
shares, to cover over-allotments. Capitalized terms used
herein and not otherwise defined shall have the respective
meanings assigned to them in the International Purchase
Agreement.

Pursuant to Section 2(a) of the International Purchase
Agreement, the Company and the Selling Stockholder agree with
each Manager as follows:

(i) The initial public offering price per share of the
International Securities shall be $_______.

(ii) The purchase price per share for the International
Securities to be paid by the several Managers shall be
$______, being an amount equal to the initial public offering
price set forth above less $_______ per share.

<PAGE>

Very truly yours,

O'SULLIVAN INDUSTRIES HOLDINGS, INC.

By:_________________________________
Name:_______________________________
Title:______________________________

TE ELECTRONICS INC.

By:_________________________________
Name:_______________________________
Title:______________________________

<PAGE>

CONFIRMED AND ACCEPTED,
as of the date first above written:

MERRILL LYNCH INTERNATIONAL LIMITED
UBS LIMITED

By: MERRILL LYNCH INTERNATIONAL LIMITED

By:___________________________
Name:_________________________
Title:________________________

For themselves and as Lead Managers of the
several other Managers named in Schedule A
to the International Purchase Agreement.
<PAGE>

Exhibit 4a
TANDY CORPORATION

AND

THE FORT WORTH NATIONAL BANK,
TRUSTEE

Indenture

Dated as of June 30, 1974

$58,000,000

10% Subordinated Debentures Due 1994

<PAGE>

TABLE SHOWING REFLECTION IN INDENTURE OF
CERTAIN PROVISIONS OF TRUST INDENTURE ACT OF 1939

TIA Reflected in Indenture Section

303(1) .............................. 101(6)
(4) .............................. 608(d)(1)
(5) .............................. 608(d)(2)
(6) .............................. 608(d)(6)
(10) .............................. 101
(12) .............................. 608(d)(5), 613(c)(5)
(13) .............................. 101
(16) .............................. 608(d)(4), 608(e)(1)
310(a)(1) ........................... 609
(a)(2) ........................... 609
(a)(3) ........................... Not Applicable
(a)(4) ........................... Not Applicable
(b) .............................. 608
311(a) .............................. 613(a)
(b) .............................. 613(b)
(b)(2) ........................... 703(a)(2), 703(b)
312(a) .............................. 701, 702(a)
(b) .............................. 702(b)
(c) .............................. 702(c)
313(a) .............................. 703(a)
(b) .............................. 703(b)
(c) .............................. 703(a), 703(b)
(d) .............................. 703(c)
314(a) .............................. 704
(b) .............................. Not Applicable
(c)(1) ........................... 102
(c)(2) ........................... 102
(c)(3) ........................... Not Applicable
(d) .............................. Not Applicable
(e) .............................. 102
315(a) .............................. 601(a), 601(c)
(b) .............................. 602, 703(a)(6)
(c) .............................. 601(b)
(d) .............................. 601
(d)(1) ........................... 601(a)
(d)(2) ........................... 601(c)(2)
(d)(3) ........................... 601(c)(3)
(e) .............................. 514
316(a) .............................. 101
(a)(1)(A) ........................ 502, 512
(a)(1)(B) ........................ 513
(a)(2) ........................... Not Applicable
(b) .............................. 508
317(a)(1) ........................... 503
(a)(2) ........................... 504
(b) .............................. 1003
318(a) .............................. 107

<PAGE>

TABLE OF CONTENTS

PAGE

PARTIES ............................................... 1

RECITALS OF THE COMPANY ............................... 1

ARTICLE 100

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 101. Definitions .............................. 1
Act ...................................... 2
accountant ............................... 2
Affiliate; control ....................... 2
Authenticating Agent ..................... 3
Authorized Newspaper ..................... 3
Board of Directors ....................... 3
Board Resolution ......................... 3
Business Day ............................. 3
Commission ............................... 3
Company .................................. 3
Company Request, Company Order, Company
Consent ................................. 4
Corporate Trust Office ................... 4
corporation .............................. 4
Debenture ................................ 4
Debentureholder .......................... 4
Debenture Register; Debenture Registrar .. 4
Defaulted Interest ....................... 4
Event of Default ......................... 4
Holder ................................... 4
indebtedness ............................. 4
Independent .............................. 5
Interest Payment Date .................... 6
long-term indebtedness ................... 6
Maturity ................................. 6
Officers' Certificate .................... 6
Opinion of Counsel ....................... 6
Outstanding .............................. 6
Paying Agent ............................. 7
Person ................................... 7
Place of Payment ......................... 7
Predecessor Debentures ................... 7
Redemption Date .......................... 7
Redemption Price ......................... 8
Regular Record Date ...................... 8
Responsible Officer ...................... 8
Special Record Date ...................... 8
Stated Maturity .......................... 8
Subsidiary ............................... 8
successor; successor corporation ......... 8
Superior Debt ............................ 9
Trustee .................................. 9
Trustee Indenture Act, TIA ............... 9
Vice President ........................... 9

SECTION 102. Compliance Certificates and Opinions ..... 9

SECTION 103. Form of Documents Delivered to Trustee ... 10

SECTION 104. Acts of Debentureholders ................. 11

SECTION 105. Notices, etc., to Trustee and Company .... 12

SECTION 106. Notices to Debentureholders; Waiver ...... 12

SECTION 107. Conflict with Trust Indenture Act ........ 13

SECTION 108. Effect of Headings and Table of Contents . 13

SECTION 109. Successors and Assigns ................... 13

SECTION 110. Separability Clause ...................... 13

SECTION 111. Benefits of Indenture .................... 13

SECTION 112. Governing Law ............................ 14

SECTION 113. Immunity of Incorporators, Stockholders,
Directors, and Officers .................. 14

SECTION 114. Payment and Redemption Dates ............. 14

ARTICLE 200

DEBENTURE FORM

SECTION 201. Forms Generally .......................... 15

SECTION 202. Form of Debenture ........................ 15

SECTION 203. Form of Trustee's Certificate of
Authentication ........................... 20

ARTICLE 300

THE DEBENTURES

SECTION 301. Title and Terms .......................... 20

SECTION 302. Denominations ............................ 21

SECTION 303. Execution, Authentication, Delivery and
Dating ................................... 21

SECTION 304. Temporary Debentures ..................... 22

SECTION 305. Registration, Transfer and Exchange ...... 22

SECTION 306. Mutilated, Destroyed, Lost and Stolen
Debentures ............................... 24

SECTION 307. Payment of Interest; Interest Rights
Preserved ................................ 25

SECTION 308. Persons Deemed Owners .................... 27

SECTION 309. Cancellation ............................. 27

SECTION 310. Authentication and Delivery of Original
Issue .................................... 27

ARTICLE 400

SATISFACTION AND DISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture .. 28

SECTION 402. Application of Trust Money ............... 29

ARTICLE 500

REMEDIES

SECTION 501. Events of Default ........................ 29

SECTION 502. Acceleration of Maturity; Rescission and
Annulment ................................ 31
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee ................... 32

SECTION 504. Trustee May File Proofs of Claim ......... 33

SECTION 505. Trustee May Enforce Claims Without
Possession of Debentures.................. 34

SECTION 506. Application of Money Collected ........... 34

SECTION 507. Limitation on Suits ...................... 35

SECTION 508. Unconditional Right of Debentureholders
to Receive Principal, Premium and
Interest ................................. 35

SECTION 509. Restoration of Rights and Remedies ....... 36

SECTION 510. Rights and Remedies Cumulative ........... 36

SECTION 511. Delay or Omission Not Waiver ............. 36

SECTION 512. Control by Debentureholders .............. 37

SECTION 513. Waiver of Past Defaults .................. 37

SECTION 514. Undertaking for Costs .................... 38

SECTION 515. Waiver of Stay or Extension Laws ......... 38

ARTICLE 600

THE TRUSTEE

SECTION 601. Certain Duties and Responsibilities ...... 38

SECTION 602. Notice of Defaults ....................... 40

SECTION 603. Certain Rights of Trustee ................ 40

SECTION 604. Not Responsible for Recitals or Issuance
of Debentures ............................ 41

SECTION 605. May Hold Debentures ...................... 42

SECTION 606. Money Held in Trust ...................... 42

SECTION 607. Compensation and Reimbursement ........... 42

SECTION 608. Disqualification; Conflicting Interests .. 43
(a) Elimination of Conflicting Interest
or Resignation........................ 43
(b) Notice of Failure to Eliminate
Conflicting Interest or Resign ....... 43
(c) "Conflicting Interest" Defined ....... 43
(d) Definitions of Certain Terms Used in
this Section.......................... 47
(e) Calculation of Percentages of
Securities ........................... 48

SECTION 609. Corporate Trustee Required; Eligibility .. 49

SECTION 610. Resignation and Removal; Appointment of
Successor ................................ 50

SECTION 611. Acceptance of Appointment by Successor ... 51

SECTION 612. Merger, Conversion, Consolidation or
Succession to Business ................... 52

SECTION 613. Preferential Collection of Claims Against
Company .................................. 52
(a) Segregation and Apportionment of
Certain Collections by Trustee;
Certain Exceptions.................... 52
(b) Certain Creditor Relationships
Excluded From Segregation and
Apportionment ........................ 55
(c) Definitions of Certain Terms Used in
this Section ......................... 56

SECTION 614. Appointment of Authenticating Agent ...... 57

ARTICLE 700

DEBENTUREHOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 701. Company to Furnish Trustee Names and
Addresses of Debentureholders ............ 59
SECTION 702. Preservation of Information;
Communications to Debentureholders ....... 59

SECTION 703. Reports by Trustee ....................... 61

SECTION 704. Reports by Company ....................... 63

ARTICLE 800

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 801. Company may Consolidate, etc., only on
Certain Terms ............................ 64

SECTION 802. Successor Corporation Substituted ........ 64

SECTION 803. Limitation on Lease of Properties as
Entirety ................................. 65

ARTICLE 900

SUPPLEMENTAL INDENTURES

SECTION 901. Supplemental Indentures Without Consent
of Debentureholders ...................... 65

SECTION 902. Supplemental Indentures With Consent of
Debentureholders ......................... 66

SECTION 903. Execution of Supplemental Indentures ..... 67

SECTION 904. Effect of Supplemental Indentures ........ 67

SECTION 905. Conformity with Trust Indenture Act ...... 67

SECTION 906. Reference in Debentures to Supplemental
Indentures ............................... 68

SECTION 907. Officers' Certificate With Respect to
Supplemental Indentures .................. 68

ARTICLE 1000
COVENANTS

SECTION 1001. Payment of Principal, Premium and
Interest ................................ 68

SECTION 1002. Maintenance of Office or Agency ......... 68

SECTION 1003. Money for Debenture Payments to be Held
in Trust ................................ 69

SECTION 1004. Payment of Taxes and Other Claims ....... 70

SECTION 1005. Maintenance of Properties ............... 71

SECTION 1006. Statement as to Compliance .............. 71

SECTION 1007. Corporate Existence ..................... 72

SECTION 1008. Restrictions on Merger, Sale of Assets,
etc. .................................... 72

ARTICLE 1100

REDEMPTION OF DEBENTURES

SECTION 1101. Right of Redemption ..................... 72

SECTION 1102. Election to Redeem; Notice to Trustee ... 72

SECTION 1103. Selection by Trustee of Debentures to
be Redeemed ............................. 73

SECTION 1104. Notice of Redemption .................... 73

SECTION 1105. Deposit of Redemption Price ............. 74

SECTION 1106. Debentures Payable on Redemption Date ... 74

SECTION 1107. Debentures Redeemed in Part ............. 74

ARTICLE 1200

SUBORDINATION OF DEBENTURES

SECTION 1201. Debentures Subordinate to Superior Debt . 75

SECTION 1202. Payment Over of Proceeds Upon
Dissolution, etc. ....................... 75

SECTION 1203. Trustee to Effectuate Subordination ..... 79

SECTION 1204. Trustee Not Charged with Knowledge of
Prohibition ............................. 79

SECTION 1205. Rights of Trustee as Holder of Superior
Debt .................................... 80

SECTION 1206. Article Applicable to Paying Agents ..... 80

TESTIMONIUM ........................................... 81

SIGNATURES AND SEALS .................................. 81

ACKNOWLEDGMENTS ....................................... 82
<PAGE>

THIS INDENTURE dated as of June 30, 1974, between TANDY
CORPORATION, a Delaware corporation (hereinafter called the
"Company") having its principal office at 2727 West Seventh
Street, Fort Worth, Texas 76107, and THE FORT WORTH NATIONAL
BANK, a national banking association duly incorporated under
the national banking laws of the United States of America
having its principal office at Fort Worth, Texas (hereinafter
called the "Trustee").

RECITALS OF THE COMPANY

The Company has duly authorized the creation of an issue
of its Debentures (hereinafter called the "Debentures") of
substantially the tenor and amount hereinafter set forth, and
to provide therefor the Company has duly authorized the
execution and delivery of this Indenture.

All things necessary to make the Debentures, when
executed by the Company and authenticated and delivered
hereunder and duly issued by the Company, the valid
obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and
its terms, have been done.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the
purchase of the Debentures by the Holders thereof, it is
mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Debentures, as
follows:

ARTICLE 100

DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION

SECTION 101. Definitions.

For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:

(1) "Indenture" means this instrument as
originally executed or as it may from time to time be
supplemented or amended by one or more indentures
supplemental thereto entered into pursuant to the
applicable provisions hereof;

(2) all references in this Indenture to the
designated "Articles", "Sections" and other subdivisions
are to the designated Articles, Sections and other
subdivisions of this Indenture as originally executed;

(3) the words "herein", "hereof" and "hereunder"
and other words of similar import refer to this
Indenture as a whole and not to any particular Article,
Section or other subdivision;

(4) the words "the date hereof" shall mean the
date of the execution and delivery of this Indenture;

(5) the terms defined in this Article have the
meanings assigned to them in this Article, and include
the plural as well as the singular;

(6) all other terms used herein which are defined
in the Trust Indenture Act, either directly or by
reference therein, have the meanings assigned to them
therein;

(7) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance
with generally accepted accounting principles; and

(8) all computations provided for herein shall be
made in accordance with generally accepted accounting
principles, and, subject to the provisions of Section
601, a certificate of an Independent accountant shall
be conclusive evidence as to the amount of Consolidated
Net Income.

Certain terms, used principally in Article 600, are
defined in that Article.

"Act" when used with respect to any Debentureholder has
the meaning specified in Section 104.

"accountant" means a Person engaged in the practice of
accounting whether or not employed by, or in any way
affiliated with, the Company.

"Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified
Person. For the purposes of this definition, "control" when
used with respect to any specified Person means the power to
direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to
the foregoing.

"Authenticating Agent" has the meaning specified in
Section 614.

"Authorized Newspaper" means a newspaper of general
circulation in the Borough of Manhattan, The City of New
York, New York, printed in the English language and
customarily published on each Business Day, whether or not
published on Saturdays, Sundays or holidays. Whenever
successive weekly publications in an Authorized Newspaper are
required hereunder they may be made (unless otherwise
expressly provided herein) on the same or different days of
the week and in the same or in different Authorized
Newspapers.

"Board of Directors" means either the board of directors
of the Company or any duly authorized committee of that
board.

"Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

"Business Day" means each Monday, Tuesday, Wednesday,
Thursday and Friday, which is not a legal holiday for banking
institutions in The City of Fort Worth, Texas nor a day on
which such banking institutions are authorized to remain
closed.

"Commission" means the Securities and Exchange
Commission, as from time to time constituted, created under
the Securities Exchange Act of 1934, or if at any time after
the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties
on such date.

"Company" means Tandy Corporation, the Delaware
corporation named in the first paragraph of this Indenture
until a successor corporation shall have become such pursuant
to the applicable provisions of this Indenture, and
thereafter, subject to the provisions of Section 802,
"Company" shall mean successor corporation.

"Company Request", "Company Order" and "Company Consent"
mean, respectively, a written request, order or consent
signed in the name of the Company by its Chairman of the
Board, President or a Vice President, and by its Treasurer,
an Assistant Treasurer, Controller, an Assistant Controller,
Secretary or an Assistant Secretary, and delivered to the
Trustee.

"Corporate Trust Office" means the principal office of
the Trustee in The City of Fort Worth, Texas, at which at any
particular time its corporate trust business shall be
administered, which office is at the date of execution of
this Indenture located at 500 Throckmorton Street, Fort
Worth, Texas.

"corporation" means and includes corporations, voluntary
associations, joint stock companies, business trusts or other
similar organizations.

"Debenture" means any of the debentures referred to in
the Recitals of the Company and authenticated and delivered
hereunder.

"Debentureholder" means a Person in whose name a
Debenture is registered in the Debenture Register.

"Debenture Register" and "Debenture Registrar" have the
respective meanings specified in Section 305.

"Defaulted Interest" has the meaning specified in
Section 307.

"Event of Default" has the meaning specified in Section
501.

"Holder" when used with respect to any Debenture means a
Debentureholder.

"indebtedness" means and includes with respect to any
corporation

(i) all items which would be included on the
liability side of a balance sheet of such corporation as
of the date on which indebtedness is to be determined,
excluding capital stock, surplus, capital and earned
surplus reserves which in effect were appropriations of
surplus or offsets to asset values (other than reserves
in respect of obligations, the amount, applicability or
validity of which is at such date being contested by
such corporation), deferred credits and any amounts
representing capitalization of leases;

(ii) guarantees, other than endorsements, and
other contingent obligations in respect of, or any
obligations to purchase or otherwise acquire,
indebtedness of others;

(iii) indebtedness secured by any mortgage,
pledge, security interest or lien existing on property
owned subject to such mortgage, pledge, security
interest or lien whether or not the indebtedness secured
thereby shall have been assumed;

(iv) all proper accruals for Federal and other
taxes based on or measured by income or profits and
other proper accruals as required by good accounting
practice; and

(v) all indebtedness guaranteed, directly or
indirectly, in any manner by such corporation or in
effect guaranteed or supported, directly or indirectly,
by such corporation through an agreement, contingent or
otherwise (A) to purchase the indebtedness or (B) to
purchase, sell, transport or lease (as lessee or lessor)
property or to purchase or sell services at prices or in
amounts designed to enable the debtor to make payment of
the indebtedness or to assure the owner of the
indebtedness against loss or (C) to supply funds to or
in any other manner invest in the debtor;

provided, however, that such term shall not mean and include
any indebtedness in respect to which moneys sufficient to pay
and discharge the same in full shall be deposited with a
depositary, agency or trustee in trust for the payment
thereof.

"Independent" when used with respect to any specified
Person means such a Person who (i) is in fact independent,
(ii) does not have any direct financial interest or any
material indirect financial interest in the Company or in any
other obligor upon the Debentures or in any Affiliate of the
Company or of such other obligor, and (iii) is not connected
with the Company or such other obligor or any Affiliate of
the Company or of such other obligor, as an officer,
employee, promoter, underwriter, trustee, partner, director
or person performing similar functions. Whenever it is
herein provide that any Independent Person's opinion or
certificate shall be furnished to the Trustee, such Person
shall be appointed by a Company Order and not disapproved by
the Trustee, and such opinion or certificate shall state that
the signer has read this definition and that the signer is
independent within the meaning hereof.

"Interest Payment Date" means the Stated Maturity of an
instalment of interest on the Debentures.

"long-term indebtedness" means any indebtedness which by
its terms matures more than one year after the date it was
incurred.

"Maturity" when used with respect to any Debentures
means the date on which the principal of such Debenture
becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.

"Officers' Certificate" means a certificate signed by
the Chairman of the Board, the President or a Vice President,
and by the Treasurer, an Assistant Treasurer, the Controller,
an Assistant Controller, the Secretary or an Assistant
Secretary of the Company, and delivered to the Trustee.
Wherever this Indenture requires that an Officers'
Certificate be signed also by an engineer or an accountant or
other expert, such engineer, accountant or other expert
(except as otherwise expressly provided in this Indenture)
may be in the employ of the Company, and shall be acceptable
to the Trustee.

"Opinion of Counsel" means a written opinion of counsel,
who may (except as otherwise expressly provided in this
Indenture) be counsel for the Company, and shall be
acceptable to the Trustee.

"Outstanding" when used with respect to Debentures
means, as of the date of determination, all Debentures
theretofore authenticated and delivered under this Indenture,
except:

(i) Debentures theretofore cancelled by the
Trustee or delivered to the Trustee for cancellation;

(ii) Debentures for whose payment or redemption
money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent in trust
for the Holders of such Debentures, provided that, if
such Debentures are to be redeemed, notice of such
redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the
Trustee has been made; and

(iii) Debentures in exchange for or in lieu of
which other Debentures have been authenticated and
delivered pursuant to Section 306 of this Indenture;

provided, however, that in determining whether the Holders of
the requisite principal amount of Debentures Outstanding have
given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Debentures owned by the Company
or any other obligor upon the Debentures or any Affiliate of
the Company or such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice,
consent or waiver, only Debentures which the Trustee knows to
be so owned shall be so disregarded. Debentures so owned
which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to
such Debentures and that the pledgee is not the Company or
any other obligor upon the Debentures or any Affiliate of the
Company or such other obligor.

"Paying Agent" means any Person authorized by the
Company to pay the principal of (and premium, if any) or
interest on any Debentures on behalf of the Company.

"Person" means any individual, corporation, partnership,
joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or
political subdivision thereof.

"Place of Payment" means a city or any political
subdivision thereof designated as such in Section 301.

"Predecessor Debentures" of any particular Debenture
means every previous Debenture evidencing all or a portion of
the same debt as that evidenced by such particular Debenture;
and, for the purposes of this definition, any Debenture
authenticated and delivered under Section 306 in lieu of a
lost, destroyed or stolen Debenture shall be deemed to
evidence the same debt as the lost, destroyed or stolen
Debenture.

"Redemption Date" when used with respect to any
Debenture to be redeemed means the date fixed for such
redemption by or pursuant to this Indenture.

"Redemption Price" when used with respect to any
Debenture to be redeemed means the price at which it is to be
redeemed pursuant to this Indenture.

"Regular Record Date" for the interest payable, and
punctually paid or duly provided for, on any Interest Payment
Date shall be the close of business on the 15th day (whether
or not a Business Day) of the calendar month next preceding
such Interest Payment Date.

"Responsible Officer" when used with respect to the
Trustee means the chairman or vice-chairman of the board of
directors, the chairman or vice-chairman of the executive
committee of the board of directors, the chairman of the
trust committee,the president, any vice president, the
secretary, any assistant secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any
trust officer or assistant trust officer, the controller and
any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed
by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.

"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to
Section 307.

"Stated Maturity" when used with respect to any
Debenture or any instalment of interest thereon means the
date specified in such Debenture as the fixed date on which
the principal of such Debenture or such instalment of
interest is due and payable.

"Subsidiary" means any corporation of which the Company
and/or one or more of its Subsidiaries own more than 50% of
the outstanding stock having by its terms ordinary voting
power to elect a majority of the board of directors of such
corporation, irrespective of whether at the time stock of any
other class or classes of such corporation shall have or
might have voting power by reason of the happening of any
contingency.

"successor," or "successor corporation," when used with
respect to a particular corporation, means the corporation
successor to such corporation by consolidation or merger or
which shall have acquired the property of such corporation as
an entirety or substantially as an entirety.

"Superior Debt" means any long-term indebtedness of the
Company, any indebtedness of the Company evidenced by a bond,
debenture, note or similar evidence of indebtedness or
incurred under an agreement pursuant to which any such
security was issued, and all indebtedness, obligations and
liabilities of others in respect of which the Company is
liable contingently or otherwise to pay or advance money or
property or as guarantor, endorser or otherwise or which the
Company has agreed to purchase or otherwise acquire, in any
case either outstanding on the date of execution of this
Indenture as originally executed, or thereafter created,
incurred or assumed, other than (i) indebtedness or liability
as to which, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is
provided that such indebtedness or liability is not superior
in right of payment to the Debentures, (ii) the Company's 6-%
subordinated debentures due January 1, 1978 (which shall rank
on a parity with the Debentures) and (iii) the Debentures.

"Trustee" means The Fort Worth National Bank, the
national banking association named as the "Trustee" in the
first paragraph of this Indenture, until any successor
Trustee shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Trustee" shall
mean such successor Trustee.

"Trust Indenture Act" or "TIA" means the Trust Indenture
Act of 1939, as in force at the date as of which this
Indenture was executed except as otherwise specified herein.

"Vice President" when used with respect to the Company
or the Trustee means any vice president, whether or not
designated by a number or a word or words added before or
after the title "vice president".

SECTION 102. Compliance Certificates and Opinions.

Upon any application or request by the Company to the
Trustee to take any action under any provision of this
Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent,
if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of
Counsel stating that in the opinion of such Counsel all such
conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to
which the furnishing of such documents is specifically
required by any provision of this Indenture relating to such
particular application or request, no additional certificate
or opinion need be furnished.

Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture
shall include

(1) a statement that each individual signing such
certificate or opinion has read such covenant or
condition and the definitions herein relating thereto;

(2) a brief statement as to the nature and scope
of the examination or investigation upon which the
statements or opinions contained in such certificate or
opinion are based;

(3) a statement that, in the opinion of each such
individual, he has made such examination or
investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant
or condition has been complied with; and

(4) a statement as to whether, in the opinion of
each such individual, such covenant or condition has
been complied with.

SECTION 103. Form of Documents Delivered to Trustee.

In any case where several matters are required to be
certified by, or covered by an opinion of, any specified
Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion
with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several
documents.

Any certificate or opinion of an officer of the Company
may be based, in so far as it relates to legal matters, upon
a certificate or opinion of, or representations by, counsel,
unless such officer knows, or in the exercise of reasonable
care should know, that the certificate or opinion or
representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such
certificate or Opinion of Counsel may be based, in so far as
it relates to factual matters, upon a certificate or opinion
of, or representations by, an officer or officers of the
Company stating that the information with respect to such
factual matters is in the possession of the Company, unless
such Counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or
representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates,
statements, opinions or other instruments under this
Indenture, they may, but need not, be consolidated and form
one instrument.

SECTION 104. Acts of Debentureholders.

(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Indenture to be given or taken by Debentureholders may be
embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Debentureholders
in person or by agent duly appointed in writing; and, except
as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are
delivered to the Trustee, and, where it is hereby expressly
required, to the Company. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the
Debentureholders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose
of this Indenture and (subject to Section 601) conclusive in
favor of the Trustee and the Company, if made in the manner
provided in this Section.

(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved by the affidavit
of a witness of such execution or by the certificate of any
notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by an officer of
a corporation or a member or a partnership, on behalf of such
corporation or partnership, such certificate or affidavit
shall also constitute sufficient proof of his authority. The
fact and date of the execution of any such instrument or
writing, or the authority of the person executing the same,
may also be proved in any other manner which the Trustee
deems sufficient.

(d) Any request, demand, authorization, direction,
notice, consent, waiver or other action by the Holder of any
Debenture shall bind the Holder of every Debenture issued
upon the transfer thereof or in exchange therefor or in lieu
thereof, in respect of anything done or suffered to be done
by the Trustee or the Company in reliance thereon, whether or
not notation of such action is made upon such Debenture.

(e) The Trustee may require such additional proof of
any matter referred to in this Section as it shall deem
necessary.

SECTION 105. Notices, etc., to Trustee and Company.

Any request, demand, authorization, direction, notice,
consent, waiver or Act of Debentureholders or other document
provided or permitted by this Indenture to be made upon,
given or furnished to, or filed with,

(1) the Trustee by any Debentureholder or by the
Company shall be sufficient for every purpose hereunder
if made, given, furnished or filed in writing to or with
the Trustee at its Corporate Trust Office, or

(2) the Company by the Trustee or by any
Debentureholder shall be sufficient for every purpose
hereunder if in writing and, except as provided in
Section 501 hereof, mailed, first-class postage prepaid,
to the Company addressed to it at the address of its
principal office specified in the first paragraph of
this Indenture or at any other address previously
furnished in writing to the Trustee by the Company.

SECTION 106. Notices to Debentureholders; Waiver.

Where this Indenture provides for notice to
Debentureholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage
prepaid, to each Debentureholder affected by such event, at
his address as it appears in the Debenture Register, not
later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case
where notice to Debentureholders is given by mail, neither
the failure to mail such notice, nor any defect in any notice
so mailed, to any particular Debentureholder shall affect the
sufficiency of such notice with respect to other
Debentureholders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or
after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Debentureholders shall be
filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in
reliance upon such waiver.

In case, by reason of the suspension of publication of
any Authorized Newspaper, or by reason of any other cause, it
shall be impossible to make publication of any notice in an
Authorized Newspaper or Authorized Newspapers as required by
this Indenture, then such method of publication or
notification as shall be made with the approval of the
Trustee shall constitute a sufficient publication of such
notice.

SECTION 107. Conflict with Trust Indenture Act.

If this Indenture is qualified under TIA and any
provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this
Indenture by any of the provisions of TIA, such required
provision shall control.

SECTION 108. Effect of Headings and Table of Contents.

The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the
construction hereof.

SECTION 109. Successors and Assigns.

All covenants and agreements in this Indenture by the
Company shall bind its successors and assigns, whether so
expressed or not.

SECTION 110. Separability Clause.

In case any provision in this Indenture or in the
Debentures shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired
thereby.

SECTION 111. Benefits of Indenture.

Nothing in this Indenture or in the Debentures, expressor
implied, shall give to any Person, other than the parties
hereto and their successors hereunder and the Holders of
Debentures, any benefit or any legal or equitable right,
remedy or claim under this Indenture, except as provided in
Article 1200.

SECTION 112. Governing Law.

This Indenture shall be construed in accordance with and
governed by the laws of the State of Texas.

SECTION 113. Immunity of Incorporators, Stockholders,
Directors and Officers.

No recourse under or upon any obligation, covenant or
agreement contained in this Indenture or in any Debenture, or
because of any indebtedness evidenced thereby, shall be had
against any incorporator, or against any past, present or
future stockholder, officer or director, as such, of the
Company, the Trustee or of any successor corporation, either
directly or through the Company or the Trustee, whether by
virtue of any constitution or statute or rule of law, or by
the enforcement of any assessment or penalty or otherwise.
It is expressly understood and agreed that this Indenture and
the Debentures are solely corporate obligations, that no
personal liability whatever shall attach to, or is or shall
be incurred by, the incorporators, stockholders, officers or
directors of the Company, the Trustee, or of any successor
corporation, or any of them, because of the creation of the
indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this
Indenture or in any of the Debentures, or implied therefrom,
and that any and all such personal liability of, and any and
all such rights and claims against, every such incorporator,
stockholder, officer or director, are hereby expressly waived
as a condition of, and as a consideration for, the execution
of this Indenture and the issue of the Debentures.

SECTION 114. Payment and Redemption Dates.

In any case where an Interest Payment Date, a Redemption
Date or the date of Maturity of principal of any Debenture
shall not be a Business Day, then payment of interest or
principal (and premium, if any) shall be made on the next
succeeding Business Day with the same force and effect as if
made on the nominal date and no interest shall accrue for the
period after said date.

ARTICLE 200

DEBENTURE FORM

SECTION 201. Forms Generally.

The Debentures and the certificates of authentication
thereon shall be in substantially the forms set forth in this
Article, with such appropriate insertions, omissions,
substitutions and other variations as are required or
permitted by this Indenture and may have such letters,
numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with
the rules of any securities exchange, or as may, consistently
herewith, be determined by the officers executing such
Debentures, as evidenced by their execution of the
Debentures. Any portion of the text of any Debenture may be
set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Debenture.

The definitive Debentures shall be printed, lithographed
or engraved or produced by any combination of these methods
on steel engraved borders or may be produced in any other
manner permitted by the rules of any securities exchange, all
as determined by the officers executing such Debentures, as
evidenced by their execution of such Debentures.

SECTION 202. Form of Debenture.

[FORM OF FACE OF DEBENTURE]

TANDY CORPORATION

10% SUBORDINATED DEBENTURE

DUE 1994

NO. ............. $.............

TANDY CORPORATION, a Delaware corporation (hereinafter
called the "Company", which term includes any successor
corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to ,
or registered assigns, the sum of Dollars,
on June 30, 1994 and to pay interest thereon from July 1,
1974, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, on January 1,
1975 and semi-annually thereafter on July 1 and January 1
in each year, and at the Stated Maturity of the principal
hereof, at the rate of 10% per annum until the principal
hereof becomes due and payable, and at the rate of 11%
per annum on any overdue principal and premium and
(to the extent that the payment of such interest shall be
legally enforceable) on any overdue instalment of interest.
The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as
provided in said Indenture, be paid to the Person in whose
name this Debenture (or one or more Predecessor Debentures,
as defined in said Indenture) is registered at the close of
business on the Regular Record Date for such interest, which
shall be the 15th day (whether or not a Business Day) of the
calendar month next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for
shall forthwith cease to be payable to the registered Holder
on such Regular Record Date, and may be paid to the Person in
whose name this Debenture (or one or more Predecessor
Debentures) is registered at the close of business on a
Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be
given to Debentureholders not less than 10 days prior to such
Special Record Date, or may be paid, at any time in any other
lawful manner not inconsistent with the requirements of any
securities exchange on which the Debentures may be listed,
and upon such notice as may be required by such exchange, all
as more fully provided in said Indenture. Payment of the
principal of (and premium, if any) and interest on this
Debenture will be made at the office or agency of the Company
in the Borough of Manhattan, The City of New York, New York;
provided, however, that payment of interest may be made at
the option of the Company (a) by check mailed to the address
of the Person entitled thereto as such address shall appear
on the Debenture Register or (b) in such other manner
acceptable to the Trustee as the Person entitled thereto may
have requested. All such payments shall be made in such coin
or currency of the United States of America as at the time of
payment is legal tender for payment of public and private
debts.

Reference is hereby made to the further provisions of
this Debenture set forth on the reverse hereof, and such
further provisions shall, for all purposes, have the same
effect as if fully set forth in this place.

Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Debenture
shall not be entitled to any benefit under the Indenture, or
be valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Company has caused this
Debenture to be duly executed under its corporate seal.

Dated .................

TANDY CORPORATION

By...........................
Chairman of the Board

Attest:

.........................
Secretary

[FORM OF REVERSE OF DEBENTURE]

TANDY CORPORATION

This Debenture is one of a duly authorized issue of
Debentures of the Company designated as its 10% Subordinated
Debentures Due 1994 (herein called the "Debentures"), limited
in aggregate principal amount to $58,000,000 issued and to be
issued under an Indenture dated as of June 30, 1974 (herein
called the "Indenture") between the Company and The Fort
Worth National Bank, as Trustee (herein called the "Trustee",
which term includes any successor Trustee under the
Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement
of the respective rights and duties thereunder of the
Company, the Trustee and the Holders of the Debentures, and
the terms upon which the Debentures are, and are to be,
authenticated and delivered.

The Debentures are subject to redemption on not less
than 30 nor more than 60 days' prior notice given as provided
in the Indenture at any time on or after July 1, 1976 and
prior to maturity as a whole or in part, at the option of the
Company, at the applicable percentage of the principal amount
set forth below:

If redeemed during If redeemed during
12 months' period 12 months' period
beginning beginning
July 1 Percentage July 1 Percentage
___________________ __________ _________________ __________
1976 ........ 105.00% 1985 ........ 102.75%
1977 ........ 104.75 1986 ........ 102.50
1978 ........ 104.50 1987 ........ 102.25
1979 ........ 104.25 1988 ........ 102.00
1980 ........ 104.00 1989 ........ 101.75
1981 ........ 103.75 1990 ........ 101.50
1982 ........ 103.50 1991 ........ 101.25
1983 ........ 103.25 1992 ........ 101.00
1984 ........ 103.00 1993 ........ 100.00

together in the case of any such redemption with accrued
interest to the Redemption Date.

The indebtedness evidenced by the Debentures is, to the
extent and in the manner set forth in the Indenture,
expressly subordinated and subject in right of payment to the
prior payment in full of all Superior Debt, and this
Debenture is issued subject to such provisions of the
Indentures, and each Holder of this Debenture, by accepting
the same, agrees to and shall be bound by such provisions and
authorizes the Trustee in his behalf to take such action as
may be necessary or appropriate to effectuate the
subordination as provided in the Indenture and appoints the
Trustee his attorney-in-fact for any and all such purposes.

If an Event of Default shall occur, the principal of all
the Debentures may be declared due and payable in the manner
and with the effect provided in the Indenture.

The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification
of the rights and obligations of the Company and rights of
the Holders of the Debentures under the Indenture at any time
by the Company with the consent of the Holders of 66 2/3% in
aggregate principal amount of Debentures at the time
Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate
principal amount of the Debentures at the time Outstanding,
on behalf of the Holders of all the Debentures, to waive
compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder
of this Debenture shall be conclusive and binding upon such
Holder and upon all future Holders of this Debenture and of
any Debenture issued upon the transfer hereof or in exchange
herefore or in lieu hereof whether or not notation of such
consent or waiver is made upon this Debenture.

No reference herein to the Indenture and no provision of
this Debenture or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and
unconditional, to pay the principal of (and premium, if any)
and interest on this Debenture at the times, place, and rate,
and in the coin or currency, herein prescribed.

As provided in the Indenture and subject to certain
limitations therein set forth, this Debenture is transferable
on the Debenture Register of the Company, upon surrender of
this Debenture for registration of transfer at the office or
agency of the Company in the Borough of Manhattan, The City
of New York, New York, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the
Company and the Debenture Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Debentures, of authorized
denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.

The Debentures are issuable only as registered
Debentures without coupons in denominations of $1,000 or such
integral multiples, if any, of $1,000 as the company may from
time to time authorize. As provided in the Indenture and
subject to certain limitations therein set forth, Debentures
are exchangeable for a like aggregate principal amount of
Debentures of any authorized denomination, as requested by
the Holder surrendering the same.

No service charge will be made for any such registration
of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.

The Company, the Trustee and any agent of the Company or
the Trustee may treat the Person in whose name this Debenture
is registered as the owner hereof for the purpose of
receiving payment as herein provided and for all other
purposes whether or not this Debenture be overdue, and
neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.

All terms used in this Debenture which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture.

SECTION 203. Form of Trustee's Certificate of
Authentication.

This is one of the Debentures referred to in the within-
mentioned Indenture.

THE FORT WORTH NATIONAL BANK, THE CHASE MANHATTAN BANK
as Trustee or (National Association)
as Authenticating Agent
By ....................... for the Trustee
Authorized Officer
BY ......................
Authorized Officer

ARTICLE 300

THE DEBENTURES

SECTION 301. Titles and Terms.

The aggregate principal amount of Debentures which may
be authorized and delivered under this Indenture is limited
to $58,000,000 except for Debentures authenticated and
delivered upon registration of transfer of, or in exchange
for, or in lieu of other Debentures as provided herein.

The Debentures shall be known and designated as the "10%
Subordinated Debentures Due 1994" of the Company. Their
Stated Maturity shall be June 30, 1994 and they shall bear
interest from July 1, 1974, or from the most recent Interest
Payment Date to which interest has been paid or duly provided
for, payable on January 1, 1975 and semi-annually thereafter
on July 1 and January 1 in each year and at the Stated
Maturity of the principal hereof, at the rate of 10% per
annum until the principal hereof becomes due and payable, and
at the rate of 11% per annum on any overdue principal and
premium and (to the extent that the payment of such interest
shall be legally enforceable) on any overdue installment of
interest.

The principal (and premium, if any) and interest on the
Debentures shall be payable at the office or agency of he
Company in the Borough of Manhattan, The City of New York,
New York provided for in Section 1002 (herein called the
"Place of Payment"); provided, however, that payment of
interest may be made at the option of the Company (a) by
check mailed to the address of the Person entitled thereto at
such address as shall appear on the Debenture Register or (b)
in such other manner acceptable to the Trustee as the Person
entitled thereto may have requested.

The Debentures shall be redeemable as provided in
Article 1100.

The Debentures shall be subordinated in right of payment
to Superior Debt as provided in Article 1200.

SECTION 302. Denominations.

The Debentures may be issued in denominations of $1,000
and any integral multiple of $1,000.

SECTION 303. Execution, Authentication, Delivery and
Dating.

The Debentures shall be executed on behalf of the
Company by its Chairman of the Board, its President or one of
its Vice Presidents under its corporate seal reproduced
thereon and attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the
Debentures may be manual or facsimile.

Debentures bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices
prior to the authentication and delivery of such Debentures
or did not hold such offices at the date of such Debentures.

At any time and from time to time after the execution
and delivery of this Indenture, the Company may deliver
Debentures executed by the Company to the Trustee for
authentication; and the Trustee shall authenticate and
deliver such Debentures as in this Indenture provided and not
otherwise.

All Debentures shall be dated the date of their
authentication.

No Debenture shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless
there appears on such Debenture a certificate of
authentication substantially in the form provided for herein
executed by the Trustee or on behalf of the Trustee by the
Authenticating Agency by manual signature, and such
certificate upon any Debenture shall be conclusive evidence,
and the only evidence, that such Debenture has been duly
authenticated and delivered hereunder.

SECTION 304. Temporary Debentures.

Pending the preparation of definitive Debentures, the
Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Debentures which are
printed, lithographed, typewritten, mimeographed or otherwise
produced, in any domination, substantially of the tenor of
the definitive Debentures in lieu of which they are issued
and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing
such Debentures may determine, as evidenced by their
execution of such Debentures.

If temporary Debentures are issued, the Company will
cause definitive Debentures to be prepared without
unreasonable delay. After the preparation of definitive
Debentures, the temporary Debentures shall be exchangeable
for definitive Debentures upon surrender of the temporary
Debentures at the office or agency of the Company in the
Place of Payment, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary
Debentures, the Company shall execute and the Trustee or the
Authenticating Agent shall authenticate and deliver in
exchange therefore a like principal amount of definitive
Debentures of authorized denominations. Until so exchanged,
the temporary Debentures shall in all respects be entitled to
the same benefits under this Indenture as definitive
Debentures.

SECTION 305. Registration, Transfer and Exchange.

The Company shall cause to be kept at the Corporate
Trust Office of the Trustee a register (herein sometimes
referred to as the "Debenture Register") in which, subject to
such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Debentures and the
registration of transfers of Debentures. The Trustee is
hereby appointed "Debenture Registrar" for the purpose of
registering Debentures and transfers of Debentures as herein
provided.

Upon surrender for registration of transfer of any
Debenture at the office or agency of the Company in the
Borough of Manhattan, The City of New York, New York, the
Company shall execute, and the Trustee or the Authenticating
Agent on behalf of the Trustee shall authenticate and
deliver, in the name of the designated transferee or
transferees, one or more new Debentures of any authorized
denominations, of a like aggregate principal amount.

At the option of the Holder, Debentures may be exchanged
for other Debentures of any authorized denominations, of a
like aggregate principal amount, upon surrender of the
Debentures to be exchanged at such office or agency.
Whenever any Debentures are so surrendered for exchange, the
Company shall execute, and the Trustee or the Authenticating
Agent shall authenticate and deliver, the Debentures which
the Debentureholder making the exchange is entitled to
receive.

All Debentures issued upon any registration of transfer
or exchange of Debentures shall be the valid obligations of
the Company, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Debentures
surrendered upon such registration of transfer or exchange.

Every Debenture presented or surrendered for
registration of transfer or exchange shall (if so required by
the Company or the Trustee or the Authenticating Agent) be
duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the
Debenture Registrar duly executed by he Holder thereof or his
attorney duly authorized in writing.

No service charge shall be made for any registration of
transfer or exchange of Debentures, but the Company may
require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with
any registration of transfer or exchange of Debentures, other
than exchanges pursuant to Section 304 or 906 not involving
any transfer.

The Company shall not be required (i) to issue, register
the transfer of or exchange any Debenture during a period
beginning at the opening of business 15 days before the day
of the mailing of a notice of redemption of Debentures
selected for redemption and ending at the close of business
on the day of such mailing, or (ii) to register the transfer
of or exchange any Debenture so selected for redemption in
whole or in part.

SECTION 306. Mutilated, Destroyed, Lost and Stolen
Debentures.

If (i) any mutilated Debenture is surrendered to the
Trustee, or the Company and the Trustee receive evidence to
their satisfaction of the destruction, loss or theft of any
Debenture, and (ii) there is delivered to the Company and the
Trustee such security or indemnity as may be required by them
to save each of them harmless, then, in the absence of notice
to the Company or the Trustee that such Debenture has been
acquired by a bona fide purchaser, the Company shall execute
and upon its request the Trustee or the Authenticating Agent
shall authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Debenture, a
new Debenture of like tenor and principal amount, bearing a
number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen
Debenture has become or is about to become due and payable,
the Company in its discretion may, instead of issuing a new
Debenture, pay such Debenture without surrender thereof
except in the case of a mutilated Debenture, if the applicant
for such payment shall furnish to the Company and to the
Trustee or the Authenticating Agent such security or
indemnity as may be required by them to save each of them
harmless and evidence to the satisfaction of the Company and
the Trustee of the destruction, loss or theft of such
Debenture and of the ownership thereof.

Upon the issuance of any new Debenture under this
Section, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee) connected
therewith.

Every new Debenture issued pursuant to this Section in
lieu of any destroyed, lost or stolen Debenture shall
constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen
Debenture shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Debentures
duly issued hereunder.

The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Debentures.

SECTION 307. Payment of Interest; Interest Rights
Preserved.

Interest on any Debenture which is payable, and is
punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Debenture
(or one or more Predecessor Debentures) is registered at the
close of business on the Regular Record Date for such
interest; provided, however, if any Debenture or portion
thereof is called for redemption and is payable on a date
after the close of business on a Regular Record Date next
preceding any Interest Payment Date and before the opening of
business on such Interest Payment Date, and notice of such
redemption has been mailed and funds for such redemption have
been duly provided, interest accrued to the date fixed for
the redemption of such Debenture or portion so called shall
be paid only against surrender of the Debenture.

Any interest on any Debenture which is payable, but is
not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder; and
such Defaulted Interest may be paid by the Company, at its
option in each case, as provided in Clause (1) or Clause (2)
below:

(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the
Debentures (or their respective Predecessor Debentures)
are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each
Debenture and the date of the proposed payment, and at
the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount
proposed to be paid i respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such
Defaulted Interest as in this Clause provided.
Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall
be not more than 15 nor less than 10 days prior to the
date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and
at the expense of the company, shall cause notice of the
proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first class
postage prepaid, to each Debentureholder at his address
as it appears in the Debenture Register, not less than
10 days prior to such Special Record Date. The Trustee
may, in its discretion, in the name and at the expense
of the Company, cause a similar notice to be published
at least once in an Authorized Newspaper in each Place
of Payment, but such publication shall not be a
condition precedent to the establishment of such Special
Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefore
having been mailed as aforesaid, such Defaulted interest
shall be paid to the Persons in whose names the
Debentures (or their respective Predecessor Debentures)
are registered on such Special Record Date and shall no
longer be payable pursuant to the following Clause (2).

(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent
with the requirements of any securities exchange on
which the Debentures may be listed, and upon such notice
as may be required by such exchange, if, after notice
given by the Company to the Trustee of the proposed
payment pursuant to this Clause, such payment shall be
deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section,
each Debenture delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of
any other Debenture shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such
other Debenture.

SECTION 308. Persons Deemed Owners.

The Company, the Trustee and any agent of the Company or
the Trustee may treat the Person in whose name any Debenture
is registered as the owner of such Debenture for the purpose
of receiving payment of principal of (and premium, if any)
and (subject to Section 307) interest on such Debenture and
for all other purposes whatsoever, whether or not such
Debenture be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected
by notice to the contrary.

SECTION 309. Cancellation.

All Debentures surrendered for payment, redemption,
registration of transfer or exchange shall, if surrendered to
any Person other than the Trustee, be delivered to the
Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any
Debentures previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever,
and all Debentures so delivered shall be promptly cancelled
by the Trustee. No Debentures shall be authenticated in lieu
of or in exchange for any Debentures cancelled as provided in
this Section, except as expressly permitted by this
Indenture. All cancelled Debentures held by the Trustee
shall be disposed of as directed by a Company Order.

SECTION 310. Authentication and Delivery of Original
Issue.

Forthwith upon the execution and delivery of this
Indenture, or from time to time thereafter, Debentures up to
the aggregate principal amount of $58,000,000 may be executed
by the Company and delivered to the Trustee for
authentication upon the original issue, and shall thereupon
be authenticated and delivered by the Trustee upon Company
Order, without any further action by the Company.

ARTICLE 400

SATISFACTION AND DISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture.

This Indenture shall cease to be of further effect
(except as to any surviving rights of transfer or exchange of
Debentures and as to the application of any funds deposited
for the payment of principal (and premium, if any) and
interest on the Debentures herein expressly provided for) and
the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging satisfaction
and discharge of this Indenture, when

(1) either

(A) all Debentures theretofore authenticated and
delivered (other than (i) Debentures which have been
destroyed, lost or stolen and which have been replaced
or paid as provided in Section 306, and (ii) Debentures
for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company
and thereafter repaid to the Company or discharged from
such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or

(B) all such Debentures not theretofore delivered
to the Trustee for cancellation

(i) have become due and payable, or

(ii) will become due and payable at their
Stated Maturity within one year, or

(iii) are to be called for redemption within 1
year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the
Company,

and the Company, in the case of (i), (ii) or (iii)
above, has deposited or caused to be deposited with the
Trustee as trust funds in trust for the purpose an
amount sufficient to pay and discharge the entire
indebtedness on such Debentures not theretofore
delivered to the Trustee for cancellation, for principal
(and premium, if any) and interest to the date of such
deposit (in the case of Debentures which have become due
and payable), or to the Stated Maturity or Redemption
Date, as the case may be;

(2) the Company has paid or caused to be paid all
other sums payable hereunder by the Company;

(3) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel each
stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this
Indenture have been complied with; and

(4) payment of such monies is not prohibited by
the provisions of Section 1204.

Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee
under Section 607 shall survive.

SECTION 402. Application of Trust Money.

Subject to the provisions of Article 1200, all money
deposited with the Trustee pursuant to Section 401 shall be
held in trust and applied by it, in accordance with the
provisions of the Debentures and this Indenture, to the
payment, either directly or through any Paying Agent
(including the Company acting as its owns Paying Agent) as
the Trustee may determine, to Persons entitled thereto, of
the principal (and premium, if any) and interest for whose
payment such money has been deposited with the Trustee; but
such money need not be segregated from other funds except to
the extent required by law.

ARTICLE 500

REMEDIES

SECTION 501. Events of Default.

"Event of Default", wherever used herein means any one
of the following events (whatever the reason for such Event
of Default and whether it shall be voluntary or involuntary
or be effected by operation of law pursuant to any judgment,
decree or order of any court or any order, rule or regulation
of any administrative or governmental body):

(1) default in the payment, whether or not prohibited
by Article 1200, of any interest upon any Debenture when it
becomes due and payable, and continuance of such default for
a period of 30 days; or

(2) default in the payment, whether or not prohibited
by Article 1200, of the principal of (or premium, if any, on)
any Debenture at its Maturity, except any Maturity occurring
by reason of a call for redemption; or

(3) default in the performance, or breach, of any
covenant or warranty of the Company in this Indenture (other
than a covenant or warranty a default in whose performance or
whose breach is elsewhere in this Section specifically dealt
with), and continuance of such default or breach for a period
of 30 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 10% in
principal amount of the Outstanding Debentures, a written
notice specifying such default or breach and requiring it to
be remedied and stating that such notice is a "Notice of
Default" hereunder; or

(4) the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Company a bankrupt
or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under the Federal
Bankruptcy Act or any other applicable Federal or State law,
or appointing a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Company or of
any substantial part of its property, or ordering the winding
up or liquidation of its affairs, and the continuance of any
such decree or order unstayed and in effect for a period of
60 consecutive days; or

(5) the institution by the Company of proceedings to be
adjudicated a bankrupt, or insolvent, or the consent by it to
the institution of bankruptcy or insolvency proceedings
against it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under the Federal
Bankruptcy Act or any other applicable Federal or State law,
or the consent by it to the filing of any such petition or to
the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Company or of
any substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the admission
by it in writing of its inability to pay its debts generally
as they become due, or the taking of corporate action by the
Company in furtherance of any such action.

SECTION 502. Acceleration of Maturity; Rescission and
Annulment.

If an Event of Default occurs and is continuing, then
and in every such case the Trustee or the Holders of not less
than 25% in principal amount of the Debentures Outstanding
may declare the principal of all the Debentures to be due and
payable immediately, by a notice in writing to the Company
(and to the Trustee if given by Debentureholders), and upon
any such declaration such principal shall become immediately
due and payable.

At any time after such a declaration of acceleration has
been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in principal
amount of the Debentures Outstanding, by written notice to
the Company and the Trustee, may rescind and annul such
declaration and its consequences if

(1) the Company has paid or deposited with the
Trustee a sum sufficient to pay

(A) all overdue installments of interest on
all Debentures,

(B) the principal of (and premium, if any,
on) any Debentures which have become due otherwise
than by such declaration of acceleration and
interest thereon at the rate borne by the
Debentures,

(C) to the extent that payment of such
interest is lawful, interest upon overdue
installments of interest at the rate borne by the
Debentures, and

(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation,
expenses, disbursements and advances of the
Trustee, its agents and counsel;

and

(2) all Events of Default, other than the
non-payment of the principal of Debentures which have
become due solely by such acceleration, have been cured
or waived as provided in Section 513.

No such rescission shall affect any subsequent default or
impair any right consequent thereon.

SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee.

The Company covenants that if

(1) default is made in the payment of any
instalment of interest on any Debenture when such
interest becomes due and payable and such default
continues for a period of 30 days, or

(2) default is made in the payment of the
principal of (or premium, if any, on) any Debenture at
the Maturity thereof, except any Maturity occurring by
reason of a call for redemption,

the Company will, upon demand of the Trustee, pay to it, for
the benefit of the Holders of such Debentures, the whole
amount then due and payable on such Debentures for principal
(and premium, if any) and interest, with interest upon the
overdue principal (and premium, if any) and, to the extent
that payment of such interest shall be legally enforceable,
upon overdue instalments of interest, at the rate specified
in the Debentures; and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses
of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its
agents and counsel.

If the Company fails to pay such amount forthwith upon
such demand, the Trustee, in its own name and as trustee of
an express trust, may institute a judicial proceeding for the
collection of the sums so due and unpaid, and may prosecute
such proceeding to judgment or final decree, and may enforce
the same against the Company or any other obligor upon the
Debentures and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of
the Company or any other obligor upon the Debentures,
wherever situated.

If an Event of Default occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Debentureholders by such
appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.

SECTION 504. Trustee May File Proofs of Claim.

In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative
to the Company or any other obligor upon the Debentures or
the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal
of the Debentures shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company
for the payment of overdue principal or interest) shall be
entitled and empowered, by intervention in such proceeding or
otherwise,

(1) to file and prove a claim for the whole amount
of principal (and premium, if any) and interest owing
and unpaid in respect of the Debentures and to file such
other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Debentureholders allowed
in such judicial proceeding, and

(2) to collect and receive any moneys or other
property payable or deliverable on any such claims and
to distribute the same;

and any receiver, assignee, trustee, liquidator, sequestrator
(or other similar official) in any such judicial proceeding
is hereby authorized by each Debentureholder to make such
payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to the
Debentureholders, to pay to the Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 607.

Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on
behalf of any Debentureholder any plan or reorganization,
arrangement, adjustment or composition affecting the
Debentures or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any
Debentureholder in any such proceeding.

SECTION 505. Trustee May Enforce Claims Without
Possession of Debentures.

All rights of action and claims under this Indenture or
the Debentures may be prosecuted and enforced by the Trustee
without the possession of any of the Debentures or the
production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Holders of the
Debentures in respect of which such judgment has been
recovered.

SECTION 506. Application of Money Collected.

Subject to the provisions of Article 1200, any money
collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by
the Trustee and, in case of the distribution of such money on
account of principal (or premium, if any) or interest, upon
presentation of the Debentures and the notation thereon of
the payment if only partially paid and upon surrender thereof
if fully paid:

FIRST: To the payment of all amounts due the
Trustee under Section 607;

SECOND: To the payment of the amounts then due and
unpaid upon the Debentures for principal (and premium,
if any) and interest, in respect of which or for the
benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to
the amounts due and payable on such Debentures for
principal (and premium, if any) and interest,
respectively.

SECTION 507. Limitation on Suits.

No Holder of any Debentures shall have any right to
institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless

(1) such Holder has previously given written
notice to the Trustee of a continuing Event of Default;

(2) the Holders of not less than 25% in principal
amount of the Outstanding Debentures shall have made
written request to the Trustee to institute proceedings
in respect of such Event of Default in its own name as
Trustee hereunder;

(3) such Holder or Holders have offered to the
Trustee reasonable indemnity against the costs
(including reasonable counsel fees), expenses and
liabilities to be incurred in compliance with such
request;

(4) the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed
to institute any such proceeding; and

(5) no direction inconsistent with such written
request has been given to the Trustee during such 60 day
period by the Holders of a majority in principal amount
of the Outstanding Debentures;

it being understood and intended that no one or more Holders
of Debentures shall have any rights in any manner whatever by
virtue of, or by availing of, any provision of this Indenture
to affect, disturb or prejudice the rights of any other
Holders of Debentures, or to obtain or to seek to obtain
priority or preference over any other Holders or to enforce
any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the
Holders of Debentures.

SECTION 508. Unconditional Right of Debentureholders to
Receive Principal, Premium and Interest.

Notwithstanding any other provision in this Indenture,
the Holder of any Debenture shall have the right which is
absolute and unconditional to receive payment of the
principal of (and premium, if any) and (subject to Section
307) interest on such Debenture on the respective Stated
Maturities expressed in such Debenture (or, in the case of
redemption, on the Redemption Date) and to institute suit for
the enforcement of any such rights, and such rights shall not
be impaired without the consent of such Holder.

SECTION 509. Restoration of Rights and Remedies.

If the Trustee or any Debentureholder has instituted any
proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to
the Trustee or to such Debentureholder, then and in every
such case the Company, the Trustee an the Debentureholders
shall, subject to any determination in such proceeding, be
restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the
Trustee an the Debentureholders shall continue as though no
such proceeding had been instituted.

SECTION 510. Rights and Remedies Cumulative.

No right or remedy herein conferred upon or reserved to
the Trustee or to the Debentureholders is intended to be
exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate
right or remedy.

SECTION 511. Delay or Omission Not Waiver.

No delay or omission of the Trustee or of any Holder of
any Debenture to exercise any right or remedy accruing upon
any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Debentureholders
may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Debentureholders,
as the case may be.

SECTION 512. Control by Debentureholders.

The Holders of a majority in principal amount of the
Outstanding Debentures shall have the right to direct the
time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or
power conferred on the Trustee, provided that

(1) such direction shall not be in conflict with
any rule of law or with this Indenture, and

(2) subject to the provisions of Section 601, the
Trustee shall have the right to decline to follow any
such direction if the Trustee, being advised by counsel,
determines that the action so directed may not lawfully
be taken or may involve the Trustee in personal
liability, or if the Trustee in good faith shall
determine that the action so directed would be unjustly
prejudicial to the Holders of the Debentures not taking
part in such direction; and provided, further, that
nothing in this Indenture contained shall impair the
right of the Trustee in its discretion to take any
action deemed proper by the Trustee which is not
inconsistent with such direction by the Holders of
Debentures.

SECTION 513. Waiver of Past Defaults.

The Holders of not less than 66 2/3% in principal amount
of the Outstanding Debentures may on behalf of the Holders of
all the Debentures waive any past default hereunder and its
consequences, except a default

(1) in the payment of the principal of (or
premium, if any) or interest on any Debenture, or

(2) in respect of a covenant or provision hereof
which under Article 900 cannot be modified or amended
without the consent of the Holder of each Outstanding
Debenture affected.

Upon any such waiver, such default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other default
or impair any right consequent thereon.

SECTION 514. Undertaking for Costs.

All parties to this Indenture agree, and each Holder of
any Debenture by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any
part litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion
assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Debentureholder, or
group of Debentureholders, holding in the aggregate more than
10% in principal amount of the Outstanding Debentures, or to
any suit instituted by any Debentureholder for the
enforcement of the payment of the principal of (or premium,
if any) or interest on any Debenture on or after the
respective Stated Maturities expressed in such Debenture (or,
in the case of redemption, on or after the Redemption Date).

SECTION 515. Waiver of Stay or Extension Laws.

The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the
Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law,
and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as
though no such law had been enacted.

ARTICLE 600

THE TRUSTEE

SECTION 601. Certain Duties and Responsibilities.

(a) Except during the continuance of an Event of
Default,

(1) the Trustee undertakes to perform such duties
and only such duties as are specifically set forth in
this Indenture, and no implied covenants or obligations
shall be read into this Indenture against the Trustee;
and

(2) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Indenture.

(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct
of his own affairs.

(c) No provision of this Indenture shall be construed
to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act, or its own wilful
misconduct, except that

(1) this Subsection shall not be construed to
limit the effect of Subsection (a) of this Section;

(2) the Trustee shall not be liable for any error
of judgement made in good faith by a Responsible
Officer, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;

(3) the Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of
a majority in principal amount of the Outstanding
Debentures relating to the time, method and place of
conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture; and

(4) no provision of this Indenture shall require
the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not
reasonably assured to it.

(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section.

SECTION 602. Notice of Defaults.

Within 90 days after the occurrence of any default
hereunder, the Trustee shall transmit by mail to all
Debentureholders, as their names and addresses appear in the
Debenture Register, notice of such default hereunder known to
the Trustee, unless such default shall have been cured or
waived; provided, however, that, except in the case of a
default in the payment of the principal of (or premium, if
any) or interest on any Debenture, the Trustee shall be
protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the
Trustee in good faith determine that the withholding of such
notice is in the interests of the Debentureholders; and
provided, further, that in the case of any default of the
character specified in Section 501(3) no such notice to
Debentureholders shall be given until at least 30 days after
the occurrence thereof. For the purpose of this Section, the
term "default" means any event which is, or after notice or
lapse of time or both would become, an Event of Default.

SECTION 603. Certain Rights of Trustee.

Except as otherwise provided in Section 601:

(1) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture or other
paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;

(2) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request
or Company Order and any resolution of the Board of Directors
may be sufficiently evidenced by a Board Resolution;

(3) whenever in the administration of this Indenture
the Trustee shall deem it desirable that a matter be proved
or established prior to taking, suffering or omitting any
action hereunder, the Trustee (unless other evidence be
herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;

(4) the Trustee may consult with counsel and the
written advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;

(5) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the
Debentureholders pursuant to this Indenture, unless such
Debentureholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with
such request or direction;

(6) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture or other paper or document, but the Trustee, in its
discretion may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent
or attorney; and

(7) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or
by or through agents or attorneys and the Trustee shall not
be responsible for any misconduct or negligence on the part
of any agent or attorney appointed with due care by it
hereunder.

SECTION 604. Not Responsible for Recitals or Issuance
of Debentures.

The recitals contained herein and in the Debentures,
except the certificates of authentication, shall be taken as
the statements of the Company, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this
Indenture or of the Debentures. The Trustee shall not be
accountable for the use or application by the Company of
Debentures or the proceeds thereof.

SECTION 605. May Hold Debentures.

The Trustee, any Paying Agent, Debenture Registrar or
any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Debentures
and, subject to Sections 608 and 613, if operative, may
otherwise deal with the Company with the same rights it would
have if it were not Trustee, Paying Agent, Debenture
Registrar or such other agent.

SECTION 606. Money Held in Trust.

Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by
law. The Trustee shall be under no liability for interest on
any money received by it hereunder except as otherwise agreed
with the Company.

SECTION 607. Compensation and Reimbursement.

The Company agrees

(1) to pay to the Trustee from time to time
reasonable compensation for all services rendered by it
hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a
trustee of an express trust);

(2) except as otherwise expressly provided herein,
to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred
or made by the Trustee in accordance with any provision
of this Indenture including the reasonable compensation
and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or
advances as may be attributable to its negligence or bad
faith; and

(3) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expenses
incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or
administration of this trust, including the costs and
expenses of defending itself against any claim or
liability in connection with the exercise or performance
of any of its powers or duties hereunder.

As security for the performance of the obligations of
the Company under this Section the Trustee shall have a lien
prior to the Debentures upon all property and funds held or
collected by the Trustee as such, except funds held in trust
for the payment of principal of (and premium, if any) or
interest on Debentures.

SECTION 608. Disqualification; Conflicting Interests.

(a) If the Trustee has or shall acquire any conflicting
interest, as defined in this Section, it shall, within 90
days after ascertaining that it has such conflicting
interest, either eliminate such conflicting interest or
resign in the manner and with the effect hereinafter
specified in this Article.

(b) In the event that the Trustee shall fail to comply
with the provisions of Subsection (a) of this Section the
Trustee shall, within 10 days after the expiration of such
90-day period, transmit by mail to all Debentureholders, as
their names and addresses appear in the Debenture Register,
notice of such failure.

(1) the Trustee is trustee under another indenture
under which any other securities, or certificates of
interest or participation in any other securities, of
the Company are outstanding, unless such other indenture
is a collateral trust indenture under which the only
collateral consists of Debentures issued under this
Indenture, provided that there shall be excluded from
the operation of this paragraph any indenture or
indentures under which other securities, or certificates
of interest or participation in other securities, of the
Company are outstanding, if

(i) this Indenture and such other indenture
or indentures are wholly unsecured and such other
indenture or indentures are hereafter qualified
under TIA, as then in force, unless the Commission
shall have found and declared by order pursuant to
Section 305(b) or Section 307(c) of TIA that
differences exist between the provisions of this
Indenture and the provisions of such other
indenture or indentures which are so likely to
involve a material conflict of interest as to make
it necessary in the public interest or for the
protection of investors to disqualify the Trustee
from acting as such under this Indenture and such
other indenture or indentures, or

(ii) the Company shall have sustained the
burden of proving, on application to the Commission
and after opportunity for hearing thereon, that
trusteeship under this Indenture and such other
indenture or indentures is not so likely to involve
a material conflict of interest as to make it
necessary in the public interest or for the
protection of investors to disqualify the Trustee
from acting as such under one of such indentures;

(2) the Trustee or any of its directors or
executive officers is an obligor upon the Debentures or
an underwriter for the Company;

(3) the Trustee directly or indirectly controls or
is directly or indirectly controlled by or is under
direct or indirect common control with the Company or an
underwriter for the Company;

(4) the Trustee or any of its directors or
executive officers is a director, officer, partner,
employee, appointee or representative of the Company, or
of an underwriter (other than the Trustee itself) for
the Company who is currently engaged in the business of
underwriting, except that (i) one individual may be a
director or an executive officer, or both, of the
Trustee and a director or an executive officer, or both,
of the Company but may not be at the same time an
executive officer of both the Trustee and the Company;
(ii) if and so long as the number of directors of the
Trustee in office is more than nine, one additional
individual may be a director or an executive officer, or
both, of the Trustee and a director of the Company; and
(iii) the Trustee may be designated by the Company or by
any underwriter for the Company to act in the capacity
of transfer agent, registrar, custodian, paying agent,
fiscal agent, escrow agent, or depositary, or in any
other similar capacity, or, subject to the provisions of
paragraph (1) of this Subsection, to act as trustee,
whether under an indenture or otherwise;

(5) 10% or more of the voting securities of the
Trustee is beneficially owned either by the Company or
by any director, partner, or executive officer thereof,
or 20% or more of such voting securities is beneficially
owned, collectively, by any two or more of such persons;
or 10% or more of the voting securities of the Trustee
is beneficially owned either by an underwriter for the
Company or by any director, partner or executive officer
thereof, or is beneficially owned, collectively, by any
two or more such persons;

(6) the Trustee is the beneficial owner of, or
holds as collateral security for an obligation which is
in default (as hereinafter in this Subsection defined),
(i) 5% or more of the voting securities, or 10% or more
of any other class of security of the Company not
including the Debentures issued under this Indenture and
securities issued under any other indenture under
which the Trustee is also trustee, or (ii) 10% or more
of any class of security of an underwriter for the
Company;

(7) the Trustee is the beneficial owner of, or
holds as collateral security for an obligation which is
in default (as hereinafter in this Subsection defined),
5% or more of the voting securities of any person who,
to the knowledge of the Trustee, owns 10% or more of the
voting securities of, or controls directly or indirectly
or is under direct or indirect common control with, the
Company;

(8) the Trustee is the beneficial owner of, or
holds as collateral security for an obligation which is
in default (as hereinafter in this Subsection defined),
10% or more of any class of security of any person who,
to the knowledge of the Trustee, owns 50% or more of the
voting securities of the Company; or

(9) the Trustee owns, on May 15 in any calendar
year, in the capacity of executor, administrator,
testamentary or inter vivos trustee, guardian, committee
or conservator, or in any other similar capacity, an
aggregate of 25% or more of the voting securities, or of
any class of security, of any person, the beneficial
ownership of a specified percentage of which would have
constituted a conflicting interest under paragraphs (6),
(7) or (8) of this Subsection. As to any such
securities of which the Trustee acquired ownership
through becoming executor, administrator, or
testamentary trustee of an estate which included them,
the provisions of the preceding sentence shall not
apply, for a period of two years from the date of such
acquisition, to the extent that such securities included
in such estate do not exceed 25% of such voting
securities or 25% of any such class of security.
Promptly after May 15 in each calendar year, the Trustee
shall make a check of its holdings of such securities in
any of the above-mentioned capacities as of such May 15.
If the Company fails to make payment in full of the
principal of, or the premium , if any, or interest on,
any of the Debentures when and as the same becomes due
and payable, and such failure continues for 30 days
thereafter, the Trustee shall make a prompt check of its
holdings of such securities in any of the
above-mentioned capacities as of the date of the
expiration os such 30 day period, and after such date,
notwithstanding the foregoing provisions of this
paragraph, all such securities so held by the Trustee,
with sole or joint control over such securities vested
in it, shall, but only so long as such failure shall
continue, be considered as though beneficially owned by
the Trustee for the purposes of paragraphs (6), (7) and
(8) of this Subsection.

The specification of percentages in paragraphs (5) to
(9) inclusive, of this Subsection, shall not be construed as
indicating that the ownership of such percentages of the
securities of a person is or is not necessary or sufficient
to constitute direct or indirect control for the purposes of
paragraph (3) or (7) of this Subsection.

For the purposes of paragraphs (6), (7), (8) and (9) of
this Subsection only, (i) the terms "security" and
"securities" shall include only such securities as are
generally known as corporate securities, but shall not
include any note or other evidence of indebtedness issued to
evidence an obligation to repay monies lent to a person by
one or more banks, trust companies or banking firms, or any
certificate of interest or participation in any such note or
evidence of indebtedness; (ii) an obligation shall be deemed
to be "in default" when a default in payment of principal
shall have continued for 30 days or more and shall not have
been cured; and (iii) the Trustee shall not be deemed to be
the owner or holder of (A) any security which it holds as
collateral security, as trustee or otherwise, for an
obligation which is not in default as defined in clause (ii)
above, or (B) any security which it holds as collateral
security under this Indenture, irrespective of any default
hereunder, or (C) any security which it holds as agent for
collection, or as custodian, escrow agent, or depositary, or
in any similar representative capacity.

(d) For the purposes of this Section:

(1) The term "underwriter" when used with
reference to the Company means every person who, within
three years prior to the time as of which the
determination is made, has purchased from the Company
with a view to, or has offered or sold for the Company
in connection with, the distribution of any security of
the Company outstanding at such time, or has
participated or has had a direct or indirect
participation in any such undertaking, or has
participated or has had a participation in the direct or
indirect underwriting of any such undertaking, but such
term shall not include a person whose interest was
limited to a commission from an underwriter or dealer
not in excess of the usual and customary distributors'
or sellers' commission.

(2) The term "director" means any director of a
corporation, or any individual performing similar
functions with respect to any organization whether
incorporated or unincorporated.

(3) The term "person" means an individual, a
corporation, a partnership, an association, a
joint-stock company, a trust, an unincorporated
organization, or a government or political subdivision
thereof. As used in this paragraph, the term "trust"
shall include only a trust where the interest or
interests of the beneficiary or beneficiaries are
evidenced by a security.

(4) The term "voting security" means any security
presently entitling the owner or holder thereof to vote
in the direction or management of the affairs of a
person, or any security issued under or pursuant to any
trust, agreement or arrangement whereby a trustee or
trustees or agent or agents for the owner or holder of
such security are presently entitled to vote in the
direction or management of the affairs of a person.

(5) The term "Company" means any obligor upon the
Debentures.

(6) The term "executive officer" means the
president, every vice president, every trust officer,
the cashier, the secretary, and the treasurer of a
corporation, and any individual customarily performing
similar functions with respect to any organization
whether incorporated or unincorporated, but shall not
include the chairman of the board of directors.

(e) The percentages of voting securities and other
securities specified in this Section shall be calculated in
accordance with the following provisions:

(1) A specified percentage of the voting
securities of the Trustee, the Company or any other
person referred to in this Section (each of whom is
referred to as a "person" in this paragraph) means such
amount of the outstanding voting securities of such
person as entitles the holder or holders thereof to cast
such specified percentage of the aggregate votes which
the holders of all the outstanding voting securities of
such person are entitled to cast in the direction or
management of the affairs of such person.

(2) A specified percentage of a class of
securities of a person means such percentage of the
aggregate amount of securities of the class outstanding.

(3) The term "amount", when used in regard to
securities, means the principal amount if relating to
evidences of indebtedness, the number of shares if
relating to capital shares, and the number of units if
relating to any other kind of security.

(4) The term "outstanding" means issued and not
held by or for the account of the issuer. The following
securities shall not be deemed outstanding within the
meaning of this definition:

(i) securities of an issuer held in a sinking
fund relating to securities of the issuer of the
same class;

(ii) securities of an issuer held in a
sinking fund relating to another class of
securities of the issuer, if the obligation
evidenced by such other class of securities is not
in default as to principal or interest or
otherwise;

(iii) securities pledged by the issuer
thereof as security for an obligation of the issuer
not in default as to principal or interest or
otherwise; and

(iv) securities held in escrow if placed in
escrow by the issuer thereof.

provided, however, that any voting securities of an
issuer shall be deemed outstanding if any person other
than the issuer is entitled to exercise the voting
rights thereof.

(5) A security shall be deemed to be of the same
class as another security if both securities confer upon
the holder or holders thereof substantially the same
rights and privileges; provided, however, that, in the
case of secured evidences of indebtedness, all of which
are issued under a single indenture, differences in the
interest rates or maturity dates of various series
thereof shall not be deemed sufficient to constitute
such series different classes and provided, further,
that, in the case of unsecured evidences of
indebtedness, differences in the interest rates or
maturity dates thereof shall not be deemed sufficient to
constitute them securities of different classes, whether
or not they are issued under a single indenture.

SECTION 609. Corporate Trustee Required; Eligibility.

There shall at all times be a Trustee hereunder which
shall be a corporation organized and doing business under the
laws of the United States of America or of any State,
authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least
$5,000,000, subject to supervision or examination by Federal
or State authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. If at any
time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter
specified in this Article.

SECTION 610. Resignation and Removal; Appointment of
Successor.

(a) No resignation or removal of the Trustee and no
appointment of a succesor Trustee pursuant to this Article
shall become effective until the acceptance of appointment by
the successor Trustee under Section 611.

(b) the Trustee may resign at any time by giving
written notice thereof to the Company. If an instrument of
acceptance by a successor Trustee shall not have been
delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the
appointment of a successor Trustee.

(c) The Trustee may be removed at any time by Act of
the Holders of a majority in principal amount of the
Outstanding Debentures, delivered to the Trustee and to the
Company.

(d) If at any time:

(1) the Trustee, after this Indenture shall have
been qualified under TIA, shall fail to comply with
Section 608(a) after written request therefor by the
Company or by any Debentureholder who has been a bona
fide Holder of a Debenture for at least 6 months, or

(2) the Trustee shall cease to be eligible under
Section 609 and shall fail to resign after written
request therefor by the Company or by any such
Debentureholder, or

(3) the Trustee shall become incapable of acting
or shall be adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or
liquidation.

then, in any such case, (i) the Company by a Board Resolution
may remove the Trustee, or (ii) subject to Section 514, any
Debentureholder who has been a bona fide Holder of a
Debenture for at least 6 months may, on behalf of himself and
all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.

(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the
office of Trustee for any cause, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee. If,
within 1 year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor
Trustee shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Debentures
delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee
and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the
Company or the Debentureholders and accepted appointment in
the manner hereinafter provided, any Debentureholder who has
been a bona fide Holder of a Debenture for at least 6 months
may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the
appointment of a successor Trustee.

(f) The Company shall give notice of each resignation
and each removal of the Trustee and each appointment of a
successor Trustee by mailing written notice of such event by
first-class mail, postage prepaid, to the Holders of
Debentures as their names and addresses appear in the
Debenture Register. Each notice shall include the name of
the successor Trustee and the address of its principal
corporate trust office.

SECTION 611. Acceptance of Appointment by Successor.

Every successor Trustee appointed hereunder shall
execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the
retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment
of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers
and trusts of the retiring Trustee, and shall duly assign,
transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder, subject
nevertheless to its lien, if any, provided for in Section
607. Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more full and
certainly vesting in and confirming to such successor Trustee
all such rights, powers and trusts.

No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall
be qualified and eligible under this Article, to the extent
operative.

SECTION 612. Merger, Conversion, Consolidation or
Succession to Business.

Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article,
to the extent operative, without the execution or filing of
any paper or any further act on the part of any of the
parties hereto. In case any Debentures shall have been
authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation
to such authenticating Trustee may adopt such authentication
and deliver the Debentures so authenticated with the same
effect as if such successor Trustee had itself authenticated
such Debentures.

SECTION 613. Preferential Collection of Claims against
Company.

(a) Subject to Subsection (b) of this Section, if the
Trustee shall be or shall become a creditor, directly or
indirectly, secured or unsecured, of the Company within 4
months prior to a default, as defined in Subsection (c) of
this Section, or subsequent to such a default, then, unless
and until such default shall be cured, the Trustee shall set
apart, and hold in a special account for the benefit of the
Trustee individually, the Holders of the Debentures and the
holders of other indenture securities (as defined in
Subsection (c) of the Section):

(1) an amount equal to any and all reductions in
the amount due and owing upon any claim as such creditor
in respect of principal or interest, effected after the
beginning of such 4 months period and valid as against
the Company and its other creditors, except any such
reduction resulting from the receipt or disposition of
any property described in paragraph (2) of this
Subsection, or from the exercise of any right of set-off
which the Trustee could have exercised if a petition in
bankruptcy had been filed by or against the Company upon
the date of such default; and

(2) all property received by the Trustee in
respect of any claim as such creditor, either as
security therefor, or in satisfaction or composition
thereof, or otherwise, after the beginning of such 4
months period, or an amount equal to the proceeds of any
such property, if disposed of, subject, however, to the
rights, if any, of the Company and its other creditors
in such property or such proceeds.

Nothing herein contained, however, shall affect the right of
the Trustee

(A) to retain for its own account (i) payments
made on account of any such claim by any Person (other
than the Company) who is liable thereon, and (ii) the
proceeds of the bona fide sale of any such claim by the
Trustee to a third person, and (iii) distributions made
in cash, securities or other property in respect of
claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization
pursuant to the Federal Bankruptcy Act or applicable
State law;

(B) to realize, for its own account, upon any
property held by it as security for any such claim, if
such property was so held prior to the beginning of such
4 months period;

(C) to realize, for its own account, but only to
the extent of the claim hereinafter mentioned, upon any
property held by it as security for any such claim, if
such claim was created after the beginning of such 4
months period and such property was received as security
therefor simultaneously with the creation thereof, and
if the Trustee shall sustain the burden of proving that
at the time such property was so received the Trustee
had no reasonable cause to believe that a default as
defined in Subsection (c) of this Section would occur
within 4 months; or

(D) to receive payment on any claim referred to in
paragraph (B) or (C), against the release of any
property held as security for such claims as provided in
paragraph (B) or (C), as the case may be, to the extent
of the fair value of such property.

For the purposes of paragraphs (B), (C) and (D),
property substituted after the beginning of such 4 months
period for property held as security at the time of such
substitution shall, to the extent of the fair value of the
property released, have the same status as the property
released, and, to the extent that any claim referred to in
any of such paragraphs is created in renewal of or in
substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such
claim shall have the same status as such pre-existing claim.

If the Trustee hall be required to account, the funds
and property held in such special account and the proceeds
thereof shall be apportioned between the Trustee, the
Debentureholders and the holders of other indenture
securities in such manner that the Trustee, the
Debentureholders and the holders of other indenture
securities realize, as a result of payments from such special
account and payments of dividends on claims filed against the
Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or
applicable State law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Company of
the funds and property in such special account and before
crediting to the respective claims of the Trustee and the
Debentureholders and the holders of other indenture
securities dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or
applicable State law, but after crediting thereon receipts on
account of the indebtedness represented by their respective
claims from all sources other than from such dividends and
from the funds and property so held in such special account.
As used in this paragraph, with respect to any claim, the
term "dividends" shall include any distribution with respect
to such claim, in bankruptcy or receivership or proceedings
for reorganization pursuant to the Federal Bankruptcy Act or
applicable State law, whether such distribution is made in
cash, securities, or other property, but shall not include
any such distribution with respect to the secure portion, if
any, of such claim. The court in which such bankruptcy,
receivership or proceedings for reorganization is pending
shall have jurisdiction (i) to apportion between the Trustee
and the Debentureholders and the holders of other indenture
securities, in accordance with the provisions of this
paragraph, the funds and property held in such special
account and proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions
of this paragraph due consideration in determining the
fairness of the distributions to be made to the Trustee and
the Debentureholders and the holders of other indenture
securities with respect to their respective claims, in which
event it shall not be necessary to liquidate or to appraise
the value of any securities or other property held in such
special account or as security for any such claim, or to make
a specific allocation of such distributions as between the
secured and unsecured portions of such claims, or otherwise
to apply the provisions of this paragraph as a mathematical
formula.

Any Trustee which has resigned or been removed after the
beginning of such 4 months period shall be subject to the
provisions of this Subsection as though such resignation or
removal had not occurred. If any Trustee has resigned or
been removed prior to the beginning of such 4 months period,
it shall be subject to the provisions of this Subsection if
and only if the following conditions exist:

(i) the receipt of property or reduction of claim,
which would have given rise to the obligation to
account, if such Trustee had continued as Trustee,
occurred after the beginning of such 4 months period;
and

(ii) such receipt of property or reduction of
claim occurred with 4 months after such resignation or
removal.

(b) There shall be excluded from the operation of
Subsection (a) of this Section a creditor relationship
arising from

(1) the ownership or acquisition of securities
issued under any indenture, or any security or
securities having a maturity of one year or more at the
time of acquisition by the Trustee;

(2) advances authorized by a receivership or
bankruptcy court of competent jurisdiction, or by this
Indenture, for the purpose of preserving any property
which shall at any time be subject to the lien of this
Indenture or of discharging tax liens or other prior
liens or encumbrances thereon, if notice of such
advances and of the circumstances surrounding the making
thereof is given to the Debenture holders at the time
and in the manner provided in this Indenture;

(3) disbursements made in the ordinary course of
business in the capacity of trustee under an indenture,
transfer agent, registrar, custodian, paying agent,
fiscal agent or depositary, or other similar capacity;

(4) an indebtedness created as a result of
services rendered or premises rented; or an indebtedness
created as a result of goods or securities sold in a
cash transaction as defined in Subsection (c) of this
Section;

(5) the ownership of stock or of other securities
of a corporation organized under the provisions of
Section 25(a) of the Federal Reserve Act, as amended,
which is directly or indirectly a creditor of the
Company; or

(6) the acquisition, ownership, acceptance or
negotiation of any drafts, bills of exchange,
acceptances or obligations which fall within the
classification of self-liquidating paper as defined in
Subsection (c) of this Section.

(1) The term "default" means any failure to make
payment in full of the principal or of interest on any
of the Debentures or upon the other indenture securities
when and as such principal or interest becomes due and
payable.

(2) The term "other indenture securities" means
securities upon which the Company is an obligor
outstanding under any other indenture (i) under which
the Trustee is also trustee, (ii) which contains
provisions substantially similar to the provisions of
this Section, and (iii) under which a default exists at
the time of the apportionment of the funds and property
held in such special account.

(3) The term "cash transaction" means any
transaction in which full payment for goods or
securities sold is made within 7 days after delivery of
the goods or securities in currency or in checks or
other orders drawn upon banks or bankers and payable
upon demand.

(4) The term "self-liquidating paper" means any
draft, bill of exchange, acceptance or obligation which
is made, drawn, negotiated or incurred by the Company
for the purpose of financing the purchase, processing,
manufacturing, shipment, storage or sale of goods, wares
or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon, the
goods, wares or merchandise or the receivables or
proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security,
provided the security is received by the Trustee
simultaneously with the creation of the creditor
relationship with the Company arising from the making,
drawing, negotiating or incurring of the draft, bill
of exchange, acceptance or obligation.

(5) The term "Company" means any obligor upon the
Debentures.

SECTION 614. Appointment of Authenticating Agent.

At any time when any of the Debentures remain
Outstanding, the Trustee will appoint an Authenticating Agent
in the Borough of Manhattan, The City of New York, which
shall be authorized to act on behalf of the Trustee to
authenticate Debentures issued upon exchange, transfer or
partial redemption thereof or pursuant to Section 306, and
Debentures so authenticated shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the
authentication and delivery of Debentures by the Trustee or
the Trustee's certificate of authentication, such reference
shall be deemed to include authentication and delivery on
behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the
Trustee by an Authenticating Agent. Each Authenticating
Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the
laws of the United States of America or of any State,
authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus of not less than
$1,500,000 and subject to supervision or examination by
Federal or State authorities. If such corporation publishes
reports of condition at least annually, pursuant to law or to
the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 614, the
combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. In case at
any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section 614, such
Authenticating Agent shall resign immediately in the manner
and with the effect specified in this Section 614.

The Trustee hereby initially appoints The Chase
Manhattan Bank (National Association) as its Authenticating
Agent in the Borough of Manhattan, The City of New York.

Any corporation into which an Authenticating Agent may
be merged or converted or with which it may be consolidated,
or any corporation resulting from any merger, conversion or
consolidation to which such Authenticating Agent shall be a
party, or any corporation succeeding to the corporate agency
or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent without the execution
or filing of any paper or any further act on the part of the
Trustee or the Authenticating Agent.

An Authenticating Agent may at any time resign by giving
written notice of resignation to the Trustee and to the
Company. The Trustee may at any time terminate the agency of
an Authenticating Agent by giving written notice of
termination to such authenticating Agent an to the Company.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time such Authenticating Agent
shall cease to be eligible in accordance with the provisions
of this Section 614, the Trustee promptly shall appoint a
successor Authenticating Agent which shall be acceptable to
the Company and shall mail notice of such appointment to all
Holders, as their names and addresses appear on the Debenture
Register. Any successor Authenticating Agent upon acceptance
of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an authenticating Agent
herein. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section 614.

The Trustee agrees to pay to each Authenticating Agent
from time to time reasonable compensation for its services
under this Section 614, and the Trustee shall be entitled to
be reimbursed for such payments, subject to the provisions of
Section 607.

ARTICLE 700

DEBENTUREHOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 701. Company to Furnish Trustee Names and
Addresses of Debentureholders.

The Company will furnish or cause to be furnished to the
Trustee

(a) semi-annually, not more than 15 days after
each Regular Record Date, a list, in such form as the
Trustee may reasonably require, of the names and
addresses of the Holders of Debentures as of such
Regular Record Date, and

(b) at such other times as the Trustee may request
in writing, within 30 days after the receipt by the
Company of any such request, a list of similar form and
content as of a date not more than 15 days prior to the
time such list is furnished.

provided, however, so long as the Trustee is the Debenture
Registrar, no such list need be furnished.

SECTION 702. Preservation of Information;
Communications to Debentureholders.

(a) The Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of Holders
of Debentures contained in the most recent list furnished to
the Trustee as provided in Section 701 and the names and
addresses of Holders of Debentures received by the Trustee in
its capacity as Debenture Registrar. The Trustee may destroy
any list furnished to it as provided in Section 701 upon
receipt of a new list so furnished.

(b) If 3 or more Holders of Debentures (hereinafter
referred to as "applicants") apply in writing to the Trustee,
and furnish to the Trustee reasonable proof that each such
applicant has owned a Debenture for a period of at least six
months preceding the date of such application, and such
application states that the applicants desire to communicate
with other Holders of Debentures with respect to their rights
under this Indenture or under the Debentures and is
accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then
the Trustee shall, within five business days after the
receipt of such application, at its election, either

(1) afford such applicants access to the
information preserved at the time by the Trustee in
accordance with Section 702(a), or

(2) inform such applicants as to the approximate
number of Holders of Debentures whose names and
addresses appear in the information preserved at the
time by the Trustee in accordance with Section 702(a),
and as to the approximate cost of mailing to such
Debentureholders the form of proxy or other
communication, if any, specified in such application.

If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the
written request of such applicants, mail to each
Debentureholder whose name and address appear in the
information preserved at the time by the Trustee in
accordance with Section 702(a), a copy of the form of proxy
or other communication which is specified in such request,
with reasonable promptness after a tender to the Trustee of
the material to be mailed and of payment, or provision for
the payment, of the reasonable expenses of mailing, unless
within five days after such tender, the Trustee shall mail to
such applicants and file with the Commission, together with a
copy of the material to be mailed, a written statement to the
effect that, in the opinion of the Trustee, such mailing
would be contrary to the best interests of the Holders of
Debentures or would be in violation of applicable law. Such
written statement shall specify the basis of such opinion.
If the Commission, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or
if, after the entry of an order sustaining one or more of
such objections, the Commission shall find, after notice and
opportunity for hearing, that all the objections so sustained
have been met and shall enter an order so declaring, the
Trustee shall mail copies of such material to all such
Debentureholders with reasonable promptness after the entry
of such order and the renewal of such tender; otherwise the
Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.

(c) Every Holder of debentures, by receiving and
holding the same, agrees with the Company and the Trustee
that neither the Company nor the Trustee shall be held
accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders of
Debentures in accordance with Section 702(b), regardless of
the source from which such information was derived, and that
the Trustee shall not be held accountable by reason of
mailing any material pursuant to a request made under Section
702(b).

SECTION 703. Reports by Trustee.

(a) The term "reporting date", as used in this Section,
means June 30 in each year commencing with June 30, 1975.
Within 60 days after the reporting date in each year, the
Trustee shall transmit by mail to all Debentureholders, as
their names and addresses appear in the Debenture Register, a
brief report dated as of such reporting date with respect to:

(1) its eligibility under Section 609 and its
qualifications under Section 608, or in lieu thereof, if
to the best of its knowledge it has continued to be
eligible and qualified under said Sections, a written
statement to such effect;

(2) the character and amount of any advances (and
if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee (as
such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Debentures,
on any property or funds held or collected by it as
Trustee, except that the Trustee shall not be required
(but may elect) to report such advances if such advances
so remaining unpaid aggregate not more than - of 1% of
the principal amount of the Debentures Outstanding on
the date of such report;

(3) the amount, interest rate and maturity date of
all other indebtedness owing by the Company (or by any
other obligor on the Debentures) to the Trustee in its
individual capacity, on the date of such report, with a
brief description of any property held as collateral
security therefor, except an indebtedness based upon a
creditor relationship arising in any manner described in
Section 613(b)(2), (3), (4) or (6);

(4) the property and funds, if any, physically
in the possession of the Trustee as such on the date of
such report;

(5) any additional issue of Debentures which the
Trustee has not previously reported; and

(6) any action taken by the Trustee in the
performance of its duties hereunder which it has
not previously reported and which in its opinion
materially affects the Debentures, except action in
respect of a default, notice of which has been or is to
be withheld by the Trustee in accordance with Section
602.

(b) The Trustee shall transmit by mail to all
Debentureholders, as their names and addresses appear in the
Debenture Register, a brief report with respect to the
character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding he making
hereof) made by the Trustee (as such) since the date of the
last report transmitted pursuant to Subsection (a) of this
Section (or if no such report has yet been so transmitted,
since the date of execution of this instrument) for the
reimbursement of which it claims or may claim a lien or
charge, prior to that of the Debentures, on property or funds
held or collected by it as Trustee, and which it has not
previously reported pursuant to this Subsection, except that
the Trustee shall not be required (but may elect) to report
such advances if such advances remaining unpaid at any time
aggregate 10% or less of the principal amount of the
Debentures Outstanding at such time, such report to be
transmitted within 90 days after such time.

(c) A copy of each such report shall, at the time of
such transmission to Debentureholders, to be filed by the
Trustee with each stock exchange upon which the Debentures
are listed, and also with the Commission. The Company will
notify the Trustee when the Debentures are listed on any
stock exchange.

SECTION 704. Reports by Company

The Company will

(1) file with the Trustee, within 15 days after
the Company is required to file the same with the
Commission, copies of the annual reports and of the
information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission
may from time to time by rules and regulations
prescribe) which the Company may be required to file
with the Commission pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934; or, if the
Company is not required to file information, documents
or reports pursuant to either of said Sections, then it
will file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from
time to time by the Commission, such of the
supplementary and periodic information, documents and
reports which may be required pursuant to Section 13 of
the Securities Exchange Act of 1934 in respect to a
security listed and registered on a National Securities
Exchange as may be prescribed from time to time in such
rules and regulations;

(2) file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from
time to time by the Commission, such additional
information, documents and reports with respect to
compliance by the Company with the conditions and
covenants of this Indenture as may be required from time
to time by such rules and regulations; and

(3) transmit by mail to all Debentureholders, as
their names and addresses appear in the Debenture
Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information,
documents and reports required to be filed by the
Company pursuant to paragraphs (1) and (2) of this
Section as may be required by rules and regulations
prescribed from time to time by the Commission.

ARTICLE 800

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 801. Company May Consolidate, etc., only on
Certain Terms.

The Company shall not consolidate with or merge into any
other corporation or convey or transfer its properties and
assets substantially as an entirety to any Person, unless;

(1) the corporation formed by such consolidation
or into which the Company is merged or the Person which
acquires by conveyance or transfer the properties and
assets of the Company substantially as an entirety shall
be a corporation organized and existing under the laws
of the United States of America or any state or the
District of Columbia, and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to
the Trustee, in form satisfactory to the Trustee, the
due and punctual payment of the principal of (and
premium, if any) and interest on all the Debentures and
the performance of every covenant of this Indenture on
the part of the Company to be performed or observed;

(2) immediately after giving effect to such
transaction, no Event of Default, and no event which,
after notice or lapse of time, or both, would become an
Event of Default, shall have happened and be continuing;
and

(3) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger, conveyance or
transfer and such supplemental indenture comply with
this Article and that all conditions precedent herein
provided for relating to such transaction have been
complied with.

SECTION 802. Successor Corporation Substituted.

Upon any consolidation or merger, or any conveyance or
transfer of the properties and assets of the Company
substantially as an entirety in accordance with Section 801,
the successor corporation formed by such consolidation or
into which the Company is merged or to which such conveyance
or transfer is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor
corporation had been named as the Company herein; provided,
however, that no such conveyance or transfer shall have the
effect of releasing the Person named as the "Company" in the
first paragraph of this instrument or any successor
corporation which shall theretofore have become such in the
manner prescribed in this Article from its liability as
obligor and maker on any of the Debentures.

SECTION 803. Limitation on Lease of Properties as
Entirety.

The Company shall not lease its properties and assets
substantially as an entirety to any Person.

ARTICLE 900

SUPPLEMENTAL INDENTURES

SECTION 901. Supplemental Indentures Without Consent of
Debentureholders.

Without the consent of the Holders of any Debentures,
the Company, when authorized by a Board Resolution, and the
Trustee, at any time, and from time to time, may enter into
one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following
purposes;

(1) to evidence the succession of another
corporation to the Company, and the assumption by any
such successor of the covenants of the Company herein
and in the Debentures contained; or

(2) to add to the covenants of the Company, for
the benefit of the Holders of the Debentures, or to
surrender any right or power herein conferred upon the
Company; or

(3) to cure any ambiguity, to correct or
supplement any provision herein which may be
inconsistent with any other provision herein, or to make
any other provisions with respect to matters or
questions arising under this Indenture which shall not
be inconsistent with the provisions of this Indenture,
provided such action shall not adversely affect the
interest of the Holders of the Debentures; or

(4) to modify, eliminate or add to the provisions
of this Indenture to such extent as shall be necessary
to effect the qualification of this Indenture under TIA,
as then in force, or under any similar federal statute
hereafter enacted, and to add to this Indenture such
other provisions as may be expressly permitted by TIA,
excluding however, the provisions referred to in Section
316(a)(2) of TIA or any corresponding provision in any
similar federal statute hereafter enacted.

SECTION 902. Supplemental Indentures With Consent of
Debentureholders.

With the consent of the Holders of not less than 66 2/3%
in principal amount of the Outstanding Debentures, by Act of
said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions
to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner
the rights of the Holders of the Debentures under this
Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each
Outstanding Debenture affected thereby,

(1) change the Stated Maturity of the Principal
of, or any instalment of interest on, any Debenture, or
reduce the principal amount thereof or the interest
thereon or any premium payable upon the redemption
thereof, or change any Place of Payment where, or the
coin or currency in which, any Debenture or the interest
thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after
the State Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or

(2) reduce the percentage in principal amount of
the Outstanding Debentures, the consent of whose Holders
is required for any such supplemental indenture, or the
consent of whose Holders is required for any waiver (of
compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences)
provided for in this Indenture, or

(3) modify any of the provisions of this Section
or Section 513, except to increase any such percentage
or to provide that certain other provisions of this
Indenture cannot be modified or waived without the
consent of the Holder of each Debenture affected
thereby.

It shall not be necessary for any Act of
Debentureholders under this Section to approve the particular
form of any proposed supplemental indenture, but it shall be
sufficient if such Act shall approve the substance thereof.

SECTION 903. Execution of Supplemental Indentures.

In executing, or accepting the additional trusts created
by, any supplemental indenture permitted by this Article or
the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be full protected in relying
upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not (except to
the extent required in the case of a supplemental indenture
entered into under Section 901(4) be obligated to, enter into
any such supplemental indenture which affects the Trustee's
own rights, duties or immunities under this Indenture or
otherwise.

SECTION 904. Effect of Supplemental Indentures.

Upon the execution of any supplemental indenture under
this Article, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a part
of this Indenture for all purposes; and every Holder of
Debentures theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.

SECTION 905. Conformity with Trust Indenture Act.

Every supplemental indenture executed pursuant to this
Article shall conform to the requirements of TIA as then in
effect if this Indenture shall then be qualified under TIA.

SECTION 906. Reference in Debentures to Supplemental
Indentures.

Debentures authenticated and delivered after the
execution of any supplemental indenture pursuant to this
Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company
shall so determine, new Debentures so modified as to conform,
in the opinion of the Trustee and the Board of Directors, to
any such supplemental indenture may be prepared and executed
by the Company and authenticated and delivered by the Trustee
in exchange for Outstanding Debentures.

SECTION 907. Officers' Certificate With Respect to
Supplemental Indentures.

The Trustee shall not be obliged to join in the
execution of any supplemental indenture unless it shall
receive an Officers' Certificate stating that no consent to
the execution thereof is required of any holder of any
Superior Debt outstanding at the time.

ARTICLE 1000

COVENANTS

SECTION 1001. Payment of Principal, Premium and
Interest.

The Company will duly and punctually pay the principal
of (and premium, if any) and interest on the Debentures in
accordance with the terms of the Debentures and this
Indenture.

SECTION 1002. Maintenance of Office or Agency.

The Company will maintain an office or agency in the
Borough of Manhattan, The City of New York, New York, where
Debentures may be presented or surrendered for payment, where
Debentures may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company
in respect of the Debentures and this Indenture may be
served. The Company initially appoints The Chase Manhattan
Bank (National Association) as agent for such purposes. The
Company will give prompt written notice to the Trustee of the
location, and of any change in the location, of such office
or agency. If at any time the Company shall fail to maintain
such office or agency or shall fail to furnish the Trustee
with the address thereof, such presentation, surrenders,
notices and demands may be made or served at the Corporate
Trust Office of the Trustee, and the Company hereby appoints
the Trustee its agent to receive all such presentations,
surrenders, notices and demands.

SECTION 1003. Money for Debenture Payments to be Held
in Trust.

If the Company shall at any time act as its own Paying
Agent, it will, on or before each due date of the principal
of (and premium, if any) or interest on any of the
Debentures, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay the
principal (and premium, if any) or interest so becoming due
until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the
Trustee of its action or failure so to act.

Whenever the Company shall have one or more Paying
Agents, it will, prior to each due date of the principal of
(and premium, if any) or interest on, any Debentures, deposit
with a Paying Agent a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due, such sum
to be held in trust for the benefit of the Persons entitled
to such principal, premium or interest, and (unless such
Paying Agent is the Trustee) the Company will promptly notify
the Trustee of its action or failure so to act.

The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument
in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section, that such Paying
Agent will

(1) hold all sums held by it for the payment of
principal of (and premium, if any) or interest on
Debentures in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;

(2) give the Trustee notice of any default by the
Company (or any other obligor upon the Debentures) in
the making of any such payment of principal (and
premium, if any) or interest; and

(3) at any time during the continuance of any such
default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust
by such Paying Agent.

The Company may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or
for any other purpose, pay, or by Company Order direct any
Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums
were held by the Company or such Paying Agent; and, upon such
payment by any Paying Agent to the Trustee, such Paying Agent
shall be released from all further liability with respect to
such money.

Any money deposited with the Trustee or any Paying
Agent, or then held by the Company, in trust for the payment
of the principal of (and premium, if any) or interest on any
Debenture and remaining unclaimed for 6 years after such
principal (and premium, if any) or interest has become due
and payable shall be paid to the Company on Company Request,
or (if then held by the Company) shall be discharged from
such trust; and the Holder of such Debenture shall
thereafter, as an unsecured general creditor, look only to
the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof,
shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being require to make any such
repayment, may at the expense of the Company cause to be
published once, in an Authorized Newspaper in the Place of
Payment, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the
Company.

SECTION 1004. Payment of Taxes and Other Claims.

The Company will, and will cause each Subsidiary to, pay
or discharge or cause to be paid or discharged, before the
same shall become delinquent; (1) all taxes, assessments and
governmental charges levied or imposed upon it or upon its
income, profits or property, and (2) all lawful claims for
labor, materials and supplies which, if unpaid, might by law
become a lien upon its property; provided, however, that
neither the Company nor any Subsidiary be required to pay or
discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or
validity is being contested in good faith by appropriate
proceedings.

SECTION 1005. Maintenance of Properties.

The Company will, and will cause each Subsidiary to,
cause all its properties used or useful in the conduct of its
business to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in
the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly
and advantageously conducted at all times; provided, however,
that nothing in this Section shall prevent the Company from
discontinuing the operation and maintenance of any of its
properties if such discontinuance is, in the judgment of the
Company, desirable in the conduct of its business and not
disadvantageous in any material respect to the
Debentureholders.

SECTION 1006. Statement as to Compliance.

The Company will deliver to the Trustee, within 120 days
after the end of each fiscal year commencing with the fiscal
year ending June 30, 1975, a written statement signed by the
Chairman of the Board or President or a Vice President and by
the Treasurer, an Assistant Treasurer, the Controller or an
Assistant Controller of the Company, stating, as to each
signer thereof, that

(1) a review of the activities of the Company
during such year and of performance under this Indenture
has been made under his supervision and

(2) to the best of his knowledge, based on such
review, the Company has fulfilled all its obligations
under this Indenture throughout such year, or, if there
has been a default in the fulfillment of any such
obligation, specifying each such default known to him
and the nature and status thereof.

SECTION 1007. Corporate Existence.

Subject to Article 800, the Company will, and will cause
each Subsidiary to, do or cause to be done all things
necessary to preserve and keep in full force and effect its
corporate existence, rights (charter and statutory) and
franchise; provided, however, that the Company shall not be
required to preserve any right or franchise if the Board of
Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the
Company or such Subsidiary and that the loss thereof is not
disadvantageous in any material respect to the
Debentureholders.

SECTION 1008. Restrictions on Merger, Sale of Assets,
etc.

The Company will not sell or transfer its property as an
entirety or substantially as an entirety, or consolidate with
or merge into any other corporation, or permit any other
corporation to merge into it, in any manner which is
prohibited by Article 800.

ARTICLE 1100

REDEMPTION OF DEBENTURES

SECTION 1101. Right of Redemption.

The Company may, at its option, redeem all or any part
of the Debentures at any time on and after July 1, 1976 and
prior to Maturity by payment of the applicable percentages of
the principal amount thereof set forth in the form of
Debenture contained in Section 202 hereof, together with
accrued interest to the Redemption Date.

SECTION 1102. Election to Redeem; Notice to Trustee.

The determination of the Company to exercise its option
to redeem any Debentures shall be evidenced by a Board
Resolution. In case of any redemption at the option of the
Company of less than all of the Debentures, the Company
shall, at least 45 days prior to the Redemption Date fixed by
the Company (unless a shorter notice shall be satisfactory to
the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Debentures to be redeemed.

SECTION 1103. Selection by Trustee of Debentures to be
Redeemed.

If less than all the Debentures are to be redeemed, the
particular Debentures or portions thereof to be redeemed
shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding
Debentures not previously called for redemption, by such
method as the Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of
portions of the principal of Debentures of a denomination
larger than $1,000. The portions of the principal of
Debentures so selected for partial redemption shall be equal
to $1,000 or an integral multiple thereof.

The Trustee shall promptly notify the Company in writing
of the Debentures selected for redemption and, in the case of
any Debenture selected for partial redemption, the principal
amount thereof to be redeemed.

For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption
of Debentures shall relate, in the case of any Debenture
redeemed or to be redeemed only in part, to the portion of
the principal of such Debenture which has been or is to be
redeemed.

SECTION 1104. Notice of Redemption.

Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60
days prior to the Redemption Date, to each Holder of
Debentures to be redeemed, at his address appearing in the
Debenture Register.

All notices of redemption shall state:

(1) the Redemption Date,

(2) the Redemption Price,

(3) if less than all Outstanding Debentures are to
be redeemed, the identification (and, in the case of
partial redemption, the respective principal amounts) of
the Debentures to be redeemed.

(4) that on the Redemption Date the Redemption
Price will become due and payable upon each such
Debenture, together with interest accrued thereon to
such date, and that interest thereon shall cease to
accrue from and after said date, and

(5) the place where such Debentures are to be
surrendered for payment of the Redemption Price, which
shall be the office or agency of the Company in each
Place of Payment.

Notice of redemption of Debentures shall be given by the
Company or, at the Company's request, by the Trustee in the
name and at the expense of the Company.

SECTION 1105. Deposit of Redemption Price.

Prior to any Redemption Date, the Company shall deposit
with the Trustee or with a Paying Agent (or, if the Company
is acting as its own Paying Agent, segregate and hold in
trust as provided in Section 1003) an amount of money
sufficient to pay the Redemption Price of and accrued
interest, if any, on all the Debentures which are to be
redeemed on that date.

SECTION 1106. Debentures Payable on Redemption Date.

Notice of redemption having been given as aforesaid, the
Debentures so to be redeemed shall, on the Redemption Date,
become due and payable at the Redemption Price therein
specified and on and after such date (unless the Company
shall default in the payment of the Redemption Price and
accrued interest, if any) such Debentures shall cease to bear
interest. Upon surrender of such Debentures for redemption
in accordance with said notice, such Debentures shall be paid
by the Company at the Redemption Price. Instalments of
interest whose Stated Maturity is on or prior to the
Redemption Date shall be payable to the Holders of such
Debentures registered as such on the relevant Record Dates
according to their terms and the provisions of Section 307.

SECTION 1107. Debentures Redeemed in Part.

Any Debenture which is to be redeemed only in part shall
be surrendered at a Place of Payment (with, if the Company or
the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company
and the Trustee duly executed by, the Holder thereof or his
attorney duly authorized in writing) and the Company shall
execute and the Trustee shall authenticate and deliver to the
Holder of such Debenture, without service charge, a new
Debenture or Debentures, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal
to and in exchange for the unredeemed portion of the
principal of the Debenture so surrendered.

ARTICLE 1200

SUBORDINATION OF DEBENTURES

SECTION 1201. Debentures Subordinate to Superior Debt.

The Company, for itself, its successors and assigns,
covenants and agrees, and each Holder of Debentures, by his
acceptance thereof, likewise covenants and agrees, that the
indebtedness evidenced by the Debentures, including the
principal thereof (and premium, if any) and interest thereon,
shall be subordinated and subject, to the extent and in the
manner herein set forth, in right of payment to the prior
payment in full of all Superior Debt. The provisions of this
Article are made for the benefit of all holders of Superior
Debt and any such holder may proceed to enforce such
provisions.

SECTION 1202. Payment Over of Proceeds Upon
Dissolution, etc.

In the event of any insolvency or bankruptcy
proceedings, and any receivership, liquidation,
reorganization or other similar proceedings in connection
therewith, relative to the Company or to its creditors, as
such, or to its property, and in the event of any proceedings
for voluntary liquidation, dissolution or other winding up of
the Company, whether or not involving insolvency or
bankruptcy, then the holders of Superior Debt shall be
entitled to receive payment in full of all principal of (and
premium, if any) and interest on all Superior Debt before the
Holders are entitled to receive any payment on account of
principal of (or premium, if any) or interest on the
Debentures, and to that end the holders of Superior Debt or
the trustee or trustees under any indenture pursuant to which
any instrument evidencing any of such Superior Debt may have
been issued, as their respective interests may appear, shall
be entitled to receive directly from the trustee in
bankruptcy, receiver, assignee for benefit or creditors or
other liquidating agent or person making such payment or
distribution, any payment or distribution of any kind or
character, whether in cash or property or securities which
may be payable or deliverable in any such proceedings with
respect of the Debentures (other than securities which are
subordinate and junior in right of payment, at least to the
extent provided in this Article with respect to the
Debentures, to the payment of all Superior Debt then
outstanding, provided that the rights of the holders of
Superior Debt are not altered by such proceedings) for the
application to the pro rata payment of all Superior Debt
remaining unpaid.

In the event and during the continuation of any default
by the Company in the payment of the principal of (or
premium, if any) or interest on any Superior Debt, or any
default which with notice or the passage of time, or both,
would permit any holder or holders of the Superior Debt to
accelerate the maturity thereof, of which such default
written notice shall have been given to the Company by any
holder of Superior Debt, the Company shall not make any
payments on account of the principal of (or premium, if any)
or interest on the Debentures.

In the event that the Debentures are declared due and
payable before their Stated Maturity because of the
occurrence of an Event of Default (under circumstances when
the provisions of the preceding paragraphs shall not be
applicable), the holders of the Superior Debt outstanding at
the time the Debentures so become due and payable because of
such occurrence of such an Event of Default shall be entitled
to receive payment in full of all principal of (and premium,
if any) and interest on all Superior Debt before the Holders
of the Debentures are entitled to receive any payment on
account of the principal of (or premium, if any) or interest
on the Debentures.

In the event any payment or distribution (other than
securities provided for in any proceeding referred to in the
first paragraph of this Section, the payment of which are
subordinate and junior, at least to the extent provided for
in this Article with respect to the Debentures, to the
payment of all Superior Debt then outstanding, provided that
the rights of the holders of Superior Debt are not altered by
such proceeding) prohibited by this Section shall be received
by the Trustee or the Holders of Debentures before all
Superior Debt is paid in full, such payment and distribution
shall be held in trust for the benefit of, and shall be paid
over or delivered to, the holders of such Superior Debt or
their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instrument
evidencing any of such Superior Debt may have been issued, as
their respective interests may appear, for application to the
pro rat payment of all Superior Debt remaining unpaid to the
extent necessary to pay all such Superior Debt in full after
giving effect to any concurrent payment or distribution to
the holders of such Superior Debt.

The restrictions in this Section on payments on account
of the principal of the Debentures shall include, but without
limitation, purchases of Debentures by the Company.

Subject to the payment in full of all Superior Debt, the
Holders of Debentures shall be subrogated (equally and
ratably with the holders of all indebtedness of the Company
which by its express terms ranks on a parity with the
Debentures and is entitled to like rights of subrogation) to
the rights of the holders of Superior Debt to receive
payments or distributions of assets of the Company applicable
to the Superior Debt until the Debentures shall be paid in
full, and no payments or distributions on the Superior Debt
pursuant to this Section shall, as between the Company, its
creditors other than the holders of Superior Debt, and the
Holders of the Debentures, be deemed to be a payment by the
Company to or on account of the Debentures, it being
understood that the provisions of this Article are and are
intended solely for the purpose of defining the relative
rights of the Holders of the Debentures, on the one hand, and
the holders of Superior Debt, on the other hand, and nothing
contained in this Article or elsewhere in this Indenture or
in the Debentures is intended to or shall impair, as between
the Company, its creditors other than the holders of Superior
Debt, and the Holders of the Debentures, the obligation of
the Company, which is unconditional and absolute, to pay the
principal of (and premium, if any) and interest on the
Debentures as and when the same shall become due and payable
in accordance with their terms, or affect the relative rights
of the Holders of the Debentures and creditors of the Company
other than the holders of Superior Debt, nor shall anything
herein or therein prevent the Trustee or the Holder of any
Debenture from exercising all remedies otherwise permitted by
applicable law or upon default under this Indenture, subject
to the rights, if any, under this Article, of the holders of
Superior Debt in respect of cash, property or securities of
the Company otherwise payable or delivered to the Trustee or
such Holder upon the exercise of any such remedy.

The Company shall give prompt written notice to the
Trustee of any dissolution, winding-up, liquidation or
reorganization of the Company within the meaning of this
Article. The Trustee, subject to the provisions of Section
601, shall be entitled to assume that no such event has
occurred unless the Company or any one or more holders of
Superior Debt or any trustee therefor or representative
thereof has given notice thereof to the Trustee at its
Corporate Trust Office. Upon any payment or distribution
pursuant to this Section, the Trustee shall be entitled to
rely upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred
to in this Section are pending, and the Trustee, subject as
between the Trustee and the Holders to the provisions of
Section 601, shall be entitled to rely upon a certificate of
the liquidating trustee or agent or other person making such
payment or distribution to the Trustee or to the holders for
the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of
the Superior Debt and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto
or to this Article. In the event that the Trustee
determines, in good faith, that further evidence is required
with respect to the right of any Person as a holder of
Superior Debt to participate in any payment or distribution
pursuant to this section, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Superior Debt held by such
Person, as to the extent to which such Person is entitled to
participate in such payment or distribution, and as to other
facts pertinent to the rights of such Person under this
Article, and if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such
payment. The trustee, subject to the provisions of Section
601, shall not be deemed to owe any fiduciary duty to the
holders of Superior Debt, and shall not be liable to any such
holders if it shall mistakenly pay over or distribute to
Holders of Debentures or the Company or any other person,
monies or assets to which any holder of Superior Debt shall
be entitled by virtue of this Article or otherwise.

Nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 607.

SECTION 1203. Trustee to Effectuate Subordination.

The Holder of each Debenture by his acceptance thereof
authorizes the Trustee in his behalf to take such action as
may be necessary or appropriate to acknowledge or effectuate
the subordination as provided in this Article and appoints
the Trustee as attorney-in-fact for any and all such
purposes.

SECTION 1204. Trustee Not Charged with Knowledge of
Prohibition.

Notwithstanding the provisions of this Article or any
other provision of this Indenture, but subject as between the
Trustee and the Holders to the provisions of Section 601, the
Trustee shall not be charged with knowledge of the existence
of any Superior Debt, or of any facts which would prohibit
the making of any payment of monies to or by the Trustee
unless and until the Trustee shall have received written
notice thereof at its Corporate Trust Office from the Company
or from one or more holders of Superior Debt or from any
trustee therefor or representative thereof who shall have
been certified to be such by the Company or who shall have
otherwise established to the reasonable satisfaction of the
Trustee that he is such a holder, trustee or representative;
and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Section 601, shall be
entitled in all respect to assume that no such facts exist;
provided, that, if on a date not less than three Business
Days prior to the date upon which by the terms hereof any
such monies may become payable for any purpose (including,
without limitation, the payment of either the principal,
premium, if any, or interest on any Debenture), or if on a
date not less than three Business Days prior to the date of
the execution of an instrument pursuant to Section 401
acknowledging satisfaction and discharge of this Indenture,
the Trustee shall not have received the notice provided for
in this Section, then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power
and authority to receive such monies and to apply the same to
the purpose for which they were received, and, in the case of
such instrument, to execute the same, and shall not be
affected by any notice to the contrary, which may be received
by it on or after such prior date; nor shall the Trustee be
charged with knowledge of the curing of any such default or
of the elimination of the act or condition preventing any
such default or of the elimination of the act or condition
preventing any such payment unless and until the Trustee
shall have received an Officers' Certificate to such effect.

SECTION 1205. Rights of Trustee as Holder of Superior
Debt.

The Trustee shall be entitled to all the rights set
forth in this Article with respect to any Superior Debt which
may at any time be held by it in its individual capacity, to
the same extent as any other holder of Superior Debt; and
nothing in Section 613, or elsewhere in this Indenture, shall
deprive the Trustee of any of its rights as such holder.

SECTION 1206. Article Applicable to Paying Agents.

In case at any time any Paying Agent other than the
Trustee shall have been appointed by the Company and be then
acting hereunder, the term "Trustee" as used in this Article
shall in such case (unless the context shall otherwise
require) be construed as extending to and including such
Paying Agent within its meaning as fully for all intents and
purposes as if such Paying Agent were named in this Article
in addition to or in place of the Trustee; provided, however,
that Sections 1204 and 1205 shall not apply to the Company or
any Affiliate of the Company if it or such Affiliate acts as
Paying Agent.

* * * *

This Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together
constitute but one and the same Indenture.

IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed and acknowledged, and their
respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

TANDY CORPORATION
By /s/ C. D. Tandy
Chairman of the Board

Attest:

/s/ W. H. Michero
Secretary

THE FORT WORTH NATIONAL BANK

By /s/ J. D. Buckman
Vice President and Trust
Officer

Attest:

/s/
Assistant Cashier

<PAGE>

STATE OF TEXAS
} SS.:
COUNTY OF TARRANT

On the 28th day of June, 1974, before me personally came
CHARLES D. TANDY, to me known, who, being by me duly sworn,
did depose and say that he resides at 1400 Shady Oaks Lane,
Fort Worth, Texas; that he is the Chairman of the Board of
TANDY CORPORATION, one of the corporations described in and
which executed the foregoing instrument; that he knows the
seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation, and that
he signed his name thereto by like order.

/s/ Janet Small
[NOTARIAL SEAL]

STATE OF TEXAS
} SS.:
COUNTY OF TARRANT

On the 28th day of June, 1974, before me personally came
J. D. Buckman, to me known, who, being by me duly sworn, did
depose and say that he resides at 1805 Martel Ave., Fort
Worth, Texas; that he is a Vice President and Trust Officer
of the FORT WORTH NATIONAL BANK, one of the corporations
described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it
was so affixed by order of the Board of Directors of said
corporation, and that he signed his name thereto by like
order.

/s/ Ruth Ragon Mayo
[NOTARIAL SEAL] Ruth Ragon Mayo, Notary Public
Tarrant County, Texas

My Commission Expires June 1, 1975
<PAGE>

Exhibit 4b
AMENDED AND RESTATED
RIGHTS AGREEMENT

Amended and Restated Rights Agreement, dated as of June
22, 1990 between Tandy Corporation, a Delaware corporation
(the "Company"), and The First National Bank of Boston, a
national banking association (the "Rights Agent").

Whereas, on August 15, 1986, the Board of Directors of
the Company authorized and declared a dividend of one
preferred share purchase right (a "Right") for each Common
Share (as hereinafter defined) of the Company outstanding as
of the close of business on August 29, 1986, each Right
representing the right to purchase one one-thousandth of a
share of Series A Junior Participating Preferred Stock,
without par value, of the Company having the rights and
preferences set forth in the form of the Certificate of
Designation, Preferences and Rights attached hereto as
Exhibit A, upon the terms and subject to the conditions
herein set forth, and further authorized the issuance of one
Right with respect to each Common Share that shall become
outstanding between August 29, 1986 and the earliest of the
Distribution Date, the Redemption Date and the Final
Expiration Date (as such terms are in defined in Sections 3
and 7 hereof);

Whereas, on June 24, 1988, the Board of Directors of the
Company resolved to amend this Agreement and such amendments
became effective by agreement with the Rights Agent;

Whereas, on June 22, 1990, the Board of Directors of the
Company resolved further to amend and to restate in its
entirety this Agreement, and such amendments became effective
by agreement with the Rights Agent (the "Second Amendment
Date").

Accordingly, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree
as follows:

Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:

(a) "Acquiring Person" shall mean any Person who
or which, together with all Affiliates and Associates of such
Person, without the prior approval of at least a majority of
the Disinterested Directors (as hereinafter defined), shall
be the Beneficial Owner of 15% or more of the Common Shares
then outstanding (other than as a result of a Permitted Offer
(as hereinafter defined)) or was such a Beneficial Owner at
any time after the date hereof, whether or not such person
continues to be the Beneficial Owner of 15% or more of the
then outstanding Common Shares. Notwithstanding the
foregoing, (A) the term "Acquiring Person" shall not include
(i) the Company, (ii) any Subsidiary of the Company, (iii)
any employee benefit plan of the Company or of any Subsidiary
of the Company, or (iv) any Person or entity organized,
appointed or established by the Company for or pursuant to
the terms of any such plan, and (B) no Person shall be deemed
to be an "Acquiring Person" (X) as a result of the
acquisition of Common Shares by the Company which, by
reducing the number of Common Shares outstanding, increases
the proportional number of shares beneficially owned by such
Person together with all Affiliates and Associates of such
Person, provided, that if (i) a Person would become an
Acquiring Person (but for the operation of this sentence) as
a result of the acquisition of Common Shares by the Company,
and (ii) after such share acquisition by the Company, such
Person, or an Affiliate of such Person becomes the Beneficial
Owner of any additional Common Shares, then such Person shall
be deemed an Acquiring Person, or (Y) if (i) within 8 days
after such Person would otherwise have become an Acquiring
Person, such Person notifies the Board of Directors that such
person did so inadvertently and (ii) within 2 days after such
notification, such Person is the Beneficial Owner of less
than 15% of the outstanding Common Shares.

(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.

(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly;

(ii) which such Person or any of such
Person's Affiliates or Associates has (A) the right to
acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement,
arrangement or understanding, or upon the exercise of
conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, securities tendered
pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange; or (B) the right to vote pursuant to
any agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, any security if the
agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent given to
such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable rules and regulations of the Exchange Act and (2)
is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or

(iii) which are beneficially owned, directly
or indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person or any of such
Person's Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with
respect to a bona fide public offering of securities)
relating to the acquisition, holding, voting (except to the
extent permitted by subparagraph (ii)(B) of this paragraph
(c)) or disposing of any securities of the Company.

Notwithstanding anything in this definition of
Beneficial Ownership to the contrary, the phrase "then
outstanding," when used with reference to a Person's
Beneficial Ownership of securities of the Company, shall mean
the number of such securities then issued and outstanding
together with the number of such securities not then actually
issued and outstanding which such Person would be deemed to
own beneficially hereunder.

(d) "Business Day" shall mean any day other than a
Saturday, Sunday, or Federal holiday.

(e) "Close of Business" on any given date shall
mean 5:00 P.M., Boston time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00
P.M., Boston time, on the next succeeding Business Day.

(f) "Common Shares" when used with reference to
the Company shall mean shares of Common Stock, par value
$1.00 per share, of the Company. "Common Shares" when used
with reference to any Person other than the Company shall
mean the capital stock (or equity interest) with the greatest
voting power of such Person or, if such Person is a
Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.

(g) "Disinterested Directors" shall mean the
members of the Board of Directors who are not officers of the
Company and who are not Acquiring Persons or their
Affiliates, Associates or representatives of any of them, or
any Person who was directly or indirectly proposed or
nominated as a director of the Company by a Transaction
Person.

(h) "Distribution Date" shall have the meaning set
forth in Section 3 hereof.

(i) "Final Expiration Date" shall have the meaning
set forth in Section 7 hereof.

(j) "Interested Stockholder" shall mean any
Acquiring Person or any Affiliate or Associate of an
Acquiring Person or any other Person in which any such
Acquiring Person, Affiliate or Associate has an interest, or
any other Person acting directly or indirectly on behalf of
or in concert with any such Acquiring Person, Affiliate or
Associate.

(k) "Permitted Offer" shall mean a tender or
exchange offer which is for all outstanding Common Shares at
a price and on terms determined, prior to the purchase of
shares under such tender or exchange offer, by at least a
majority of the Disinterested Directors to be adequate
(taking into account all factors that such Disinterested
Directors deem relevant including, without limitation, prices
that could reasonably be achieved if the Company or its
assets were sold on an orderly basis designed to realize
maximum value) and otherwise in the best interests of the
Company and its stockholders (other than the Person or any
Affiliate or Associate thereof on whose behalf the offer is
being made) taking into account all factors that such
Disinterested Directors may deem relevant.

(l) "Person" shall mean any individual, firm,
partnership, corporation, trust, association, joint venture
or other entity, and shall include any successor (by merger
or otherwise) of such entity.

(m) "Preferred Shares" shall mean shares of Series
A Junior Participating Preferred Stock, without par value, of
the Company having the relative rights, preferences and
limitations set forth in the Form of Certificate of Amendment
attached to this Agreement as Exhibit A.

(n) "Redemption Date" shall have the meaning set
forth in Section 7 hereof.

(o) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.

(p) "Section 13 Event" shall mean any event
described in clause (i), (ii) or (iii) of Section 13(a)
hereof.

(q) "Shares Acquisition Date" shall mean the first
date of public announcement (which, for purposes of this
definition shall include, without limitation, a report filed
pursuant to the Exchange Act) by the Company or an Acquiring
Person that an Acquiring Person has become such.

(r) "Subsidiary" of any Person shall mean any
corporation or other entity of which a majority of the voting
power of the voting equity securities or equity interests is
owned, directly or indirectly, by such Person.

(s) "Transaction" shall mean any merger,
consolidation or sale of assets described in Section 13(a)
hereof or any acquisition of Common Shares of the Company
which would result in a Person becoming a Transaction Person.

(t) "Transaction Person" with respect to a
Transaction shall mean (x) any Person who (i) is or will
become an Acquiring Person if the Transaction were to be
consummated, and (ii) directly or indirectly proposed or
nominated a director of the Company which director is in
office at the time of consideration of the Transaction, or
(y) an Affiliate or Associate of such a Person.

(u) "Triggering Event" shall mean any Section
11(a)(ii) Event or any Section 13 Event.

Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance
with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common Shares) in accordance with
the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time
appoint such Co-Rights Agents as it may deem necessary or
desirable. In the event the Company appoints one or more
Co-Rights Agents, the respective duties of the Rights Agent
and any Co-Rights Agents shall be as the Company shall
determine.

Section 3. Issuance of Right Certificates.

(a) Until the earlier of (i) the Shares
Acquisition Date or (ii) the Close of Business on the tenth
day (or such later date as may be determined by action of the
Company's Board of Directors), after the date of the
commencement by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any Person or
entity organized, appointed or established by the Company for
or pursuant to the terms of any such plan) of, or of the
first public announcement of the intention of any Person
(other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of
the Company or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of
any such plan) to commence (which intention to commence
remains in effect for five Business Days after such
announcement), a tender or exchange offer the consummation of
which would result in any Person becoming an Acquiring
Person, the earlier of such dates being herein referred to as
the "Distribution Date," (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section
3) by the certificates for Common Shares registered in the
names of the holders thereof (which certificates shall also
be deemed to be Right Certificates) and not by separate Right
Certificates, and (y) the right to receive Right Certificates
will be transferable only in connection with the transfer of
Common Shares; provided, however, that if a tender offer is
terminated prior to the occurrence of a Distribution Date,
then no Distribution Date shall occur as a result of such
tender offer. As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent
will countersign, and the Company will send or cause to be
sent, by first-class, postage-prepaid mail, to each record
holder of Common Shares as of the Close of Business on the
Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate substantially in
the form of Exhibit B hereto (a "Right Certificate"),
evidencing one Right for each Common Share so held. As of
and after the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.

(b) As soon as practicable after the Second
Amendment Date, the Company will send a copy of an amended
Summary of Rights to Purchase Preferred Shares, in
substantially the form attached hereto as Exhibit C (the
"Summary of Rights"), by first-class, postage-prepaid mail,
to each record holder of Common Shares as of the Close of
Business on the Second Amendment Date, at the address of such
holder shown on the records of the Company. With respect to
certificates for Common Shares outstanding as of the Second
Amendment Date, until the Distribution Date, the Rights will
be evidenced by such certificates registered in the names of
the holders thereof (together with a copy of the Summary of
Rights). Until the Distribution Date (or the earlier of the
Redemption Date or the Final Expiration Date), the surrender
for transfer of any certificates for Common Shares
outstanding on the Second Amendment Date, with or without a
copy of the Summary of Rights attached thereto, shall also
constitute a transfer of the Rights associated with the
Common Shares represented thereby.

(c) Certificates for Common Shares which become
outstanding (including, without limitation, reacquired Common
Shares referred to in the last sentence of this paragraph
(c)) after the Second Amendment Date but prior to the
earliest of the Distribution Date, the Redemption Date or the
Final Expiration Date, shall be deemed also to be
certificates for Rights, and shall bear the following legend:

This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in an
Amended and Restated Rights Agreement between Tandy
Corporation and The First National Bank of Boston,
dated as of June 22, 1990 (the "Rights Agreement"),
the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the
principal executive offices of Tandy Corporation
Under certain circumstances set forth in the Rights
Agreement, such Rights will be evidenced by
separate certificates and will no longer be
evidenced by this certificate. Tandy Corporation
will mail to the holder of this certificate a copy
of the Rights Agreement without charge promptly
following receipt of a written request therefor.
Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person
who is, was or becomes an Acquiring Person or an
Affiliate or Associate thereof (as defined in the
Rights Agreement) and certain related persons,
whether currently held by or on behalf of such
Person or by any subsequent holder, may become null
and void.

With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated
with the Common Shares represented by such certificates shall
be evidenced by such certificates alone, and the surrender
for transfer of any such certificate shall also constitute
the transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Company purchases
or acquires any Common Shares after the Record Date but prior
to the Distribution Date, any Rights associated with such
Common Shares shall be deemed canceled and retired so that
the Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer
outstanding.

Section 4. Form of Right Certificates.

(a) The Right Certificates (and the forms of
election to purchase and of assignment to be printed on the
reverse thereof) shall be substantially in the form set forth
in Exhibit B hereto and may have such marks of identification
or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as
are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage.
Subject to the provisions of Sections 11 and 22 hereof, the
Rights Certificate shall entitle the holders thereof to
purchase such number of one one-thousandths of a Preferred
Share as shall be set forth therein at the price per one
one-thousandth of a Preferred Share set forth therein (the
"Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase
Price thereof shall be subject to adjustment as provided
herein.

(b) Any Right Certificate issued pursuant to
Section 3(a) or Section 22 hereof that represents Rights
which are null and void pursuant to Section 7(e) of this
Agreement and any Right Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Right Certificate
referred to in this sentence, shall contain (to the extent
feasible) the following legend:

The Rights represented by this Right Certificate
are or were beneficially owned by a Person who was
or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly,
this Right Certificate and the Rights represented
hereby are null and void.

Provisions of Section 7(e) of this Rights Agreement shall be
operative whether or not the foregoing legend is contained on
any such Right Certificate.

Section 5. Countersignature and Registration. The
Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its President or any Vice
President, either manually or by facsimile signatue, and
have affixed thereto the Company's seal or a facsimile
thereof, and shall be attested by the Secretary, or an
Assistant Secretary, of the Company, either manually or by
facsimile signature. The Right Certificates shall be
countersigned by the Rights Agent and shall not be valid for
any purpose unless so countersigned. In case any officer of
the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, and
issued and delivered by the Company with the same force and
effect as though the person who signed such Right
Certificates had not ceased to be such officer of the
Company; and any Right Certificate may be signed on behalf of
the Company by any person who, at the actual date of the
execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate,
although at the date of the execution of this Rights
Agreement any such person was not such an officer.

Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at the office of the Rights Agent
designated for such purposes, books for registration and
transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights
evidenced on its face by each of the Right Certificates and
the date and certificate number of each of the Right
Certificates.

Section 6. Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates. Subject to the provisions of Sections
4(b), 7(e), 11 and 14 hereof, at any time after the Close of
Business on the Distribution Date, and at or prior to the
Close of Business on the earlier of the Redemption Date or
the Final Expiration Date, any Right Certificate or Right
Certificates may be transferred, split up, combined or
exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a
like number of one one- thousandths of a Preferred Share (or,
following a Triggering Event, other securities, as the case
may be) as the Right Certificate or Right Certificates
surrendered then entitled such holder (or its transferor in
the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be
transferred, split-up, combined or exchanged, with the form
of assignment and certificate appropriately executed, at the
principal office or offices of the Rights Agent designated
for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect
to the transfer of any such surrendered Right Certificate
until the registered holder shall have completed and signed
the certificate contained in the form of assignment on the
reverse side of such Right Certificate and shall have
provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably
request. Thereupon the Rights Agent shall, subject to the
provisions of Sections 4(b), 7(e), 11 and 14 hereof,
countersign and deliver to the person entitled thereto a
Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer, split-up,
combination or exchange of Right Certificates.

Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in
case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will make and deliver a
new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu
of the Right Certificate so lost, stolen, destroyed or
mutilated.

Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.

(a) Subject to Section 7(e) hereof, the registered
holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in
whole or in part at any time after the Distribution Date upon
surrender of the Right Certificate, with the form of election
to purchase and the certificate on the reverse side thereof
duly executed, to the Rights Agent at the principal office or
offices of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price for the
total number of one one-thousandths of a Preferred Share (or
other securities as the case may be) as which such
surrendered Rights are exercised, at or prior to the earlier
of (i) the Close of Business on June 22, 2000 (the "Final
Expiration Date"), or (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption
Date").

(b) The Purchase Price for each one one-thousandth
of a Preferred Share pursuant to the exercise of a Right
shall initially be $140, shall be subject to adjustment from
time to time as provided in Sections 11 and 13(a) hereof and
shall be payable in accordance with paragraph (c) below.
Anything in this Agreement to the contrary notwithstanding,
in the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company
shall (i) declare or pay any dividend on the Common Shares
payable in Common Shares or (ii) effect a subdivision,
combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in
Common Shares) into a greater or lesser number of Common
Shares, then in any such case, the number of Rights shall be
similarly adjusted such that each Common Share outstanding
thereafter shall carry with it one Right, and the Purchase
Price following any such event shall be proportionately
adjusted to equal the result obtained by multiplying the
Purchase Price immediately prior to such event by a fraction
the numerator of which shall be the total number of Common
Shares outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number
of Common Shares outstanding immediately following the
occurrence of such event. The adjustment provided for in the
preceding sentence shall be made successively whenever such a
dividend is declared or paid or such a subdivision,
combination or consolidation is effected.

(c) Upon receipt of a Right Certificate
representing exercisable Rights, with the form of election to
purchase and the certificate duly executed, accompanied by
payment of the Purchase Price for the Preferred Shares (or
other securities, as the case may be) and an amount equal to
any applicable transfer tax required to be paid by the holder
of such Right Certificate in accordance with Section 6 and
Section 9 hereof by certified check, cashier's check or money
order payable to the order of the Company, the Rights Agent
shall thereupon promptly (i) (A) requisition from any
transfer agent of the Preferred Shares certificates for the
number of Preferred Shares to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply
with all such requests, or (B) if the Company, in its sole
discretion, shall have elected to deposit the Preferred
Shares issuable upon exercise of the Rights hereunder into a
depositary, requisition from the depositary agent depositary
receipts representing such number of one one-thousandths of a
Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such
receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the
depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional interests in
shares in accordance with Section 14 hereof, (iii) promptly
after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder and
(iv) when appropriate, after receipt thereof, promptly
deliver such cash to or upon the order of the registered
holder of such Right Certificate.

In the event that the Company is obligated to issue
other securities (including Common Shares) of the Company
pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities are
available for distribution by the Rights Agent, if and when
appropriate.

In addition, in the case of an exercise of the Rights by
a holder pursuant to Section 11(a)(ii), the Rights Agent
shall return such Right Certificate to the registered holder
thereof after imprinting, stamping or otherwise indicating
thereon that the Rights represented by such Right Certificate
no longer include the rights provided by Section 11(a)(ii) of
the Rights Agreement and if less than all the Rights
represented by such Right Certificate were so exercised, the
Rights Agent shall indicate on the Right Certificate the
number of Rights represented thereby which continue to
include the rights provided by Section 11(a)(ii).

(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof, or an appropriate notation
shall be put on the Right Certificate with respect to those
Rights exercised.

(e) Notwithstanding anything in this Agreement to
the contrary, from and after the first occurrence of a
Section 11(a)(ii) Event, any Rights beneficially owned by (i)
an Acquiring Person or an Affiliate or Associate of an
Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any Affiliate or Associate thereof) who becomes a
transferee after the Acquiring Person becomes such, or (iii)
a transferee of an Acquiring Person (or of any Affiliate or
Associate thereof) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person
to holders of equity interest in such Acquiring Person or to
any Person with whom the Acquiring Person has a continuing
agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of
Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose
or effect the avoidance of this Section 7(e), shall become
null and void without any further action and no holder of
such Rights shall have any rights whatsoever with respect to
such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to
insure that the provisions of this Section 7(e) and Section
4(b) hereof are complied with, but shall have no liability to
any holder of Right Certificates or other Person as a result
of its failure to make any determinations with respect to an
Acquiring Person or its Affiliates, Associates or transferees
hereunder.

(f) Notwithstanding anything in this Agreement to
the contrary, neither the Rights Agent nor the Company shall
be obligated to undertake any action with respect to a
registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such
registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase set
forth on the reverse side of the Right Certificate
surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.

Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the
purpose of exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation
or in canceled form, or if surrendered to the Rights Agent,
shall be canceled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by any
of the provisions of this Rights Agreement. The Company
shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire,
any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Right Certificates to the
Company, or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case
shall deliver a certificate of destruction thereof to the
Company.

Section 9. Reservation and Availability of Preferred
Shares. The Company covenants and agrees that it will cause
to be reserved and kept available out of its authorized and
unissued Preferred Shares, or any authorized and issued
Preferred Shares held in its treasury, the number of
Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights and, after the
occurrence of a Section 11(a)(ii) Event, shall to the extent
reasonably practicable so reserve and keep available a
sufficient number of Common Shares (and/or other securities)
which may be required to permit the exercise in full of the
Rights pursuant to this Agreement.

So long as the Preferred Shares (and, after the
occurrence of a Section 11(a)(ii) event, Common Shares or any
other securities) issuable upon the exercise of Rights may be
listed on any national securities exchange, the Company shall
use its best efforts to cause, from and after such time as
the Rights become exercisable, all shares reserved for such
issuance to be listed on such exchange upon official notice
of issuance upon such exercise.

The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Preferred
Shares (or Common Shares and/or other securities, as the case
may be) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares or other
securities (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and
nonassessable shares or securities.

The Company further covenants and agrees that it will
pay when due and payable any and all U.S. federal and state
transfer taxes and charges that may be payable in respect of
the issuance or delivery of the Right Certificates or of any
Preferred Shares (or Common Shares and/or other securities,
as the case may be) upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax that
may be payable in respect of any transfer or delivery of
Right Certificates to a person other than, or the issuance or
delivery of certificates or depositary receipts for the
Preferred Shares (or Common Shares and/or other securities,
as the case may be) in a name other than that of, the
registered holder of the Right Certificate evidencing Rights
surrendered for exercise, or to issue or deliver any
certificates or depositary receipts for Preferred Shares (or
Common Shares and/or other securities as the case may be)
upon the exercise of any Rights, until any such tax shall
have been paid (any such tax being payable by the holder of
such Right Certificate at the time of surrender) or until it
has been established to the Company's satisfaction that no
such tax is due.

The Company shall use its best efforts to (i) file, as
soon as practicable following the Shares Acquisition Date, a
registration statement under the Securities Act of 1933 (the
"Act"), with respect to the securities purchasable upon
exercise of the Rights on an appropriate form, (ii) cause
such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act and the
rules and regulations thereunder) until the date of the
expiration of the rights provided by Section 11(a)(ii). The
Company will also take such action as may be appropriate
under the blue sky laws of the various states.

Section 10. Record Date. Each person in whose name any
certificate for Preferred Shares (or Common Shares and/or
other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Preferred Shares (or
Common Shares and/or other securities, as the case may be)
represented thereby on, and such certificate shall be dated
the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a
date upon which the Preferred Shares (or Common Shares and/or
other securities, as the case maybe) transfer books of the
Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day
on which the Preferred Shares (or Common Shares and/or other
securities, as the case may be) transfer books of the Company
are open.

Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights. The Purchase Price, the number
and kind of shares covered by each Right and the number of
Rights outstanding are subject to adjustment from time to
time as provided in this Section 11.

(a) (i) In the event the Company shall at any
time after the date of this Agreement (A) declare a dividend
on the Preferred Shares payable in Preferred Shares, (B)
subdivide the outstanding Preferred Shares, (C) combine the
outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of its capital stock
in a reclassification of the Preferred Shares (including any
such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
11(a) and Section 7(e) hereof, the Purchase Price in effect
at the time of the record date for such dividend or of the
effective date of such subdivision, combination or
reclassification, and the number and kind of shares of
capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and
kind of shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when
the Preferred Shares transfer books of the Company were open,
such holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in
no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise
of one Right. If an event occurs which would require an
adjustment under both Section 11(a)(i) and Section 11(a)(ii),
the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii).

(ii) In the event any Person, alone or
together with its Affiliates and Associates, shall become an
Acquiring Person, then proper provision shall be made so that
each holder of a Right (except as provided below and in
Section 7(e) hereof) shall, for a period of 60 days after the
later of the occurrence of any such event or the effective
date of an appropriate registration statement under the Act
pursuant to Section 9 hereof, have a right to receive, upon
exercise thereof at a price equal to the then current
Purchase Price, in accordance with the terms of this
Agreement, such number of Common Shares (or, in the
discretion of the Board of Directors, one one-thousandths of
a Preferred Share) as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then
number of one one-thousandths of a Preferred Share for which
a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and dividing that
product by (y) 50% of the then current per share market price
of the Company's Common Shares (determined pursuant to
Section 11(d) hereof) on the date of such first occurrence
(such number of shares being referred to as the "Adjustment
Shares"); provided, however, that if the transaction that
would otherwise give rise to the foregoing adjustment is also
subject to the provisions of Section 13 hereof, then only the
provisions of Section 13 hereof shall apply and no adjustment
shall be made pursuant to this Section 11(a)(ii);

(iii) In the event that there shall not be
sufficient treasury shares or authorized but unissued (and
unreserved) Common Shares to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (ii)
and the Rights become so exercisable (and the Board has
determined to make the Rights exercisable into fractions of a
Preferred Share), notwithstanding any other provision of this
Agreement, to the extent necessary and permitted by
applicable law, each Right shall thereafter represent the
right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this
Agreement, (x) a number of (or fractions of) Common Shares
(up to the maximum number of Common Shares which may
permissibly be issued) and (y) a number of (or fractions of)
one one-thousandths of a Preferred Share or a number of, or
fractions of other equity securities of the Company (or, in
the discretion of the Board of Directors, debt) which the
Board of Directors of the Company has determined to have the
same aggregate current market value (determined pursuant to
Section 11(d)(i) and (ii) hereof, to the extent applicable),
as one Common Share (such number of, or fractions of,
Preferred Shares, debt, or other equity securities or debt of
the Company being referred to as a "capital stock
equivalent"), equal in the aggregate to the number of
Adjustment Shares; provided, however, if sufficient Common
Shares and/or capital stock equivalents are unavailable, then
the Company shall, to the extent permitted by applicable law,
take all such action as may be necessary to authorize
additional Common Shares or capital stock equivalents for
issuance upon exercise of the Rights, including the calling
of a meeting of stockholders; and provided, further, that if
the Company is unable to cause sufficient Common Shares
and/or capital stock equivalents to be available for issuance
upon exercise in full of the Rights, within thirty (30) days
following the date of occurrence of the first to occur of the
events listed in the foregoing clause (ii) of this Section
11(a) (such date being referred to herein as the "Section
11(a)(ii) Trigger Date"), then the Company (A) shall
determine the excess of (1) the value of the Common Shares
issuable upon the exercise of a Right pursuant to the
foregoing clause (ii) of this Section 11(a) (the "Current
Value") over (2) the then current Purchase Price (such excess
being referred to herein as the "Spread") and (B) shall be
obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price,
Common Shares (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate
value equal to the Spread. Notwithstanding the immediately
preceding sentence, if the Board of Directors of the Company
shall determine in good faith that it is likely that
sufficient additional Common Shares could be authorized for
issuance upon exercise in full of the Rights, the thirty (30)
day period set forth above may be extended to the extent
necessary, but not to more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may
seek shareholder approval for the authorization of such
additional shares (such period, as it may be extended, being
referred to herein as the "Substitution Period"). To the
extent that the Company determines that some action need be
taken pursuant to the first and/or second sentences of this
Section 11(a)(iii), the Company (x) shall provide, subject to
the foregoing clause (ii) of this Section 11(a), that such
action shall apply uniformly to all outstanding Rights
(except that, to the extent reasonably necessary to avoid the
issuance of fractional Common Shares, such action may provide
for the issuance of Common Shares upon the exercise of more
than a specified number of Rights, and issuance of other
equity or debt securities upon the exercise of such specified
number (or any lesser number) of Rights) and (y) may suspend
the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and
to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect.

(b) In case the Company shall fix a record date
for the issuance of rights (other than the Rights), options
or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Preferred Shares
(or shares having the same rights, privileges and preferences
as the Preferred Shares ("equivalent preferred shares")) or
securities convertible into Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a
security convertible into Preferred Shares or equivalent
preferred shares) less than the current per share market
price of the Preferred Shares (as defined in Section 11(d))
on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the
number of Preferred Shares outstanding on such record date
plus the number of Preferred Shares which the aggregate
offering price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (and/or the
aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current
market price and the denominator of which shall be the number
of Preferred Shares outstanding on such record date plus the
number of additional Preferred Shares and/or equivalent
preferred shares to be offered for subscription or purchase
(or into which the convertible securities so to be offered
are initially convertible); provided, however, that in no
event shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the shares
of capital stock of the Company issuable upon exercise of one
Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on
the Rights Agent. Preferred Shares owned by or held for the
account of the Company shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall
be made successively whenever such a record date is fixed;
and in the event that such rights, options or warrants are
not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record
date had not been fixed.

(c) In case the Company shall fix a record date
for the making of a distribution to all holders of the
Preferred Shares (including any such distribution made in
connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular
quarterly cash dividend or a dividend payable in Preferred
Shares) or subscription rights or warrants (excluding those
referred to in Section 11(b)), the Purchase Price to be in
effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall
be the then current per share market price (as determined
pursuant to Section 11(d)) of the Preferred Shares on such
record date, less the fair market value (as determined in
good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent) of
the portion of the assets or evidences of indebtedness so to
be distributed or of such subscription rights or warrants
applicable to one Preferred Share and the denominator of
which shall be such current per share market price of the
Preferred Shares; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of capital
stock of the Company to be issued upon exercise of one Right.
Such adjustments shall be made successively whenever such a
record date is fixed; and in the event that such distribution
is not so made, the Purchase Price shall again be adjusted to
be the Purchase Price that would then be in effect if such
record date had not been fixed.

(d) (i) For the purpose of any computation
hereunder, the "current per share market price" of any
security (a "Security" for the purpose of this Section
11(d)(i)) on any date shall be deemed to be the average of
the daily closing prices per share of such Security for the
thirty (30) consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date;
provided, however, that in the event that the current per
share market price of the Security is determined during a
period following the announcement by the issuer of such
Security of (1) a dividend or distribution on such Security
payable in shares of such Security or securities convertible
into such Security, or (2) any subdivision, combination or
reclassification of such Security, and prior to the
expiration of thirty (30) Trading Days after the ex-dividend
date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, then,
and in each such case, the current per share market price
shall be appropriately adjusted to reflect the current market
price per share equivalent of such Security. The closing
price for each day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average
of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction
reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the
Security is not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities
listed on the principal national securities exchange on which
the Security is listed or admitted to trading or, if the
Security is not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations
System ("NASDAQ") or such other system then in use, or, if on
any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market
in the Security selected by the Board of Directors of the
Company. If on any such date no such market maker is making
a market in the Security, the fair value of the Security on
such date as determined in good faith by the Board of
Directors of the Company shall be used. The term "Trading
Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or
admitted to trading is open for the transaction of business
or, if the Security is not listed or admitted to trading on
any national securities exchange, a Business Day.

(ii) For the purpose of any computation
hereunder, the "current per share market price" of the
Preferred Shares shall be determined in the same manner as
set forth in clause (i) of this Section 11(d). If the
Preferred Shares are not publicly traded, the "current per
share market price" of the Preferred Shares shall be
conclusively deemed to be the current per share market price
of the Common Shares as determined pursuant to Section
11(d)(i) (appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the
date hereof), multiplied by one thousand. If neither the
Common Shares nor the Preferred Shares are publicly held or
so listed or traded, "current per share market price" shall
mean the fair value per share as determined in good faith by
the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent.

(e) Anything herein to the contrary
notwithstanding, no adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in the Purchase Price; provided,
however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the
nearest cent or to the nearest ten-thousandth of a Common
Share or other share or one-millionth of a Preferred Share as
the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three (3)
years from the date of the transaction that requires such
adjustment or (ii) the Final Expiration Date.

(f) If as a result of an adjustment made pursuant
to Section 11(a)(ii) or Section 13(a) hereof, the holder of
any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than
Preferred Shares, thereafter the number of such other shares
so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with
respect to the shares contained in Section 11(a) through (c),
inclusive, and the provisions of Sections 7, 9, 10, 13 and 14
with respect to the Preferred Shares shall apply on like
terms to any such other shares.

(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of Preferred Shares
purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.

(h) The Company may elect on or after the date of
any adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and (c) to adjust the
number of Rights, in lieu of any adjustment in the number of
Preferred Shares purchasable upon the exercise of a Right.
Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of one
one-thousandths of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the
nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the
number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on
which the Purchase Price is adjusted or any date thereafter,
but, if the Right Certificates have been issued, shall be at
least ten (10) days later than the date of the public
announcement. If Right Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this
Section 11(h), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held
by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates
so to be distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right
Certificates on the record date specified in the public
announcement.

(i) Irrespective of any adjustment or change in
the Purchase Price or the number of one one-thousandths of a
Preferred Share issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one
one-thousandths of Preferred Shares which were expressed in
the initial Right Certificates issued hereunder.

(j) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par
value, if any, of one one-thousandths of Preferred Shares,
Common Shares or other securities issuable upon exercise of
the Rights, the Company shall take any corporate action which
may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue such number of
fully paid and nonassessable one one-thousandths of Preferred
Shares, Common Shares or other securities at such adjusted
Purchase Price.

(k) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made
effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event
the issuance to the holder of any Right exercised after such
record date the Preferred Shares, Common Shares, or other
securities of the Company, if any, issuable upon such
exercise over and above the Preferred Shares, Common Shares,
or other securities of the Company, if any, issuable upon
such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company
shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring
such adjustment.

(l) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to
be advisable in order that (i) any consolidation or
subdivision of the Preferred Shares, (ii) issuance wholly for
cash of Preferred Shares at less than the current market
price, (iii) issuance wholly for cash of Preferred Shares or
securities which by their terms are convertible into or
exchangeable for Preferred Shares, (iv) stock dividends or
(v) issuance of rights, options or warrants referred to in
this Section 11, hereafter made by the Company to holders of
its Preferred Shares shall not be taxable to suchshareholders.

(m) The Company covenants and agrees that it shall
not, at any time after the Distribution Date, (i) consolidate
with any other Person (other than a Subsidiary of the Company
in a transaction which does not violate Section 11(n)
hereof), (ii) merge with or into any other Person (other than
a Subsidiary of the Company in a transaction which does not
violate Section 11(n) hereof), or (iii) sell or transfer (or
permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company
and/or any of its Subsidiaries in one or more transactions
each of which does not violate Section 11(n) hereof), if (x)
at the time of or immediately after such consolidation,
merger, sale or transfer there are any charter or by-law
provisions or any rights, warrants or other instruments or
securities outstanding or agreements in effect or other
actions taken, which would materially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights
or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the stockholders of the
Person who constitutes, or would constitute, the "Principal
Party" for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates. The Company
may not consummate any such consolidation, merger, sale or
transfer unless prior thereto the Company and such other
Person shall have executed and delivered to the Rights Agent
a supplemental agreement evidencing compliance with this
Section 11(m).

(n) The Company covenants and agrees that, after
the Distribution Date, it will not, except as permitted by
Section 23 or Section 26 hereof, take (or permit any
Subsidiary to take) any action the purpose of which is to, or
if at the time such action is taken it is reasonably
foreseeable that the effect of such action is to, materially
diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.

(o) The exercise of rights under Section 11(a)(ii)
shall only result in the loss of rights under Section11(a)(ii)
to the extent so exercised and shall not otherwise
affect the rights represented by the Rights under this Rights
Agreement, including the rights represented by Section 13.

Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided
in Sections 11 and 13 hereof, the Company shall promptly (a)
prepare a certificate setting forth such adjustment, and a
brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent
for the Common Shares and the Preferred Shares a copy of such
certificate and (c) mail a brief summary thereof to each
holder of a Right Certificate in accordance with Section 25
hereof. The Rights Agent shall be fully protected in relying
on any such certificate and on any adjustment therein
contained and shall not be deemed to have knowledge of any
adjustment unless and until it shall have received such
certificate.

Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power. (a) In the event that, on or
following the Shares Acquisition Date, directly or
indirectly, (i) the Company shall consolidate with, or merge
with and into, any Interested Stockholder or, if in such
merger or consolidation all holders of Common Stock are not
treated alike, any other Person, (ii) the Company shall
consolidate with, or merge with, any Interested Stockholder
or, if in such merger or consolidation all holders of Common
Stock are not treated alike, any other Person, and the
Company shall be the continuing or surviving corporation of
such consolidation or merger (other than, in a case of any
transaction described in (i) or (ii), a merger or
consolidation which would result in all of the securities
generally entitled to vote in the election of directors
("voting securities") of the Company outstanding immediately
prior thereto continuing to represent (either by remaining
outstanding or by being converted into securities of the
surviving entity) all of the voting securities of the Company
or such surviving entity outstanding immediately after such
merger or consolidation and the holders of such securities
not having changed as a result of such merger or
consolidation), or (iii) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one transaction or a series of
related transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Interested Stockholder
or Stockholders or, if in such transaction all holders of
Common Stock are not treated alike, any other Person (other
than the Company or any Subsidiary of the Company in one or
more transactions each of which does not violate Section
11(n) hereof), then, and in each such case, proper provision
shall be made so that (A) each holder of a Right (except as
provided in Section 7(e) hereof), shall thereafter have the
right to receive, upon the exercise thereof at a price equal
to the then current Purchase Price, in accordance with the
terms of this Agreement and in lieu of Preferred Shares, such
number of freely tradeable Common Shares of the Principal
Party (as hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal, or other adverse
claims, as shall equal the result obtained by (x) multiplying
the then current Purchase Price by the number of one
one-thousandths of a Preferred Share for which a Right is
then exercisable (without taking into account any adjustment
previously made pursuant to Section 11(a)(ii)) and dividing
that product by (y) 50% of the current per share market price
of the Common Shares of such Principal Party (determined
pursuant to Section 11(d) hereof) on the date of consummation
of such Section 13 Event; (B) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such
Section 13 Event, all the obligations and duties of the
Company pursuant to this Agreement; (C) the term "Company"
shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of Section
11 hereof shall apply only to such Principal Party following
the first occurrence of a Section 13 Event; and (D) such
Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of its
Common Shares) in connection with the consummation of any
such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly
as reasonably may be, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights.

(b) "Principal Party" shall mean

(i) in the case of any transaction described
in clause (i) or (ii) of the first sentence of Section 13(a),
the Person that is the issuer of any securities into which
Common Shares of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person
that is the other party to such merger or consolidation
(including, if applicable, the Company if it is the surviving
corporation ); and

(ii) in the case of any transaction described
in clause (iii) of the first sentence of Section 13(a), the
Person that is the party receiving the greatest portion of
the assets or earning power transferred pursuant to such
transaction or transactions;

provided, however, that in any of the foregoing cases, (1) if
the Common Shares of such Person are not at such time and
have not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange Act,
and such Person is a direct or indirect Subsidiary of another
Person the Common Shares of which are and have been so
registered, "Principal Party" shall refer to such other
Person; (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two
or more of which are and have been so registered, "Principal
Party" shall refer to whichever of such Persons is the issuer
of the Common Shares having the greatest aggregate market
value; and (3) in case such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same
Person, the rules set forth in (1) and (2) above shall apply
to each of the chains of ownership having an interest in such
joint venture as if such party were a "Subsidiary" of both or
all of such joint venturers and the Principal Parties in each
such chain shall bear the obligations set forth in this
Section 13 in the same ratio as their direct or indirect
interests in such Person bear to the total of such interests.

(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal
Party shall have a sufficient number of its authorized Common
Shares which have not been issued or reserved for issuance to
permit the exercise in full of the Rights in accordance with
this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the
Right Agent a supplemental agreement providing for the terms
set forth in paragraphs (a) and (b) of this Section 13 and
further providing that, as soon as practicable after the date
of any consolidation, merger, sale or transfer mentioned in
paragraph (a) of this Section 13, the Principal Party at its
own expense shall:

(i) prepare and file a registration statement
under the Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with
a prospectus at all times meeting the requirements of the
Act) until the Final Expiration Date;

(ii) use its best efforts to qualify or
register the Rights and the securities purchasable upon
exercise of the Rights under the blue sky laws of such
jurisdictions as may be necessary or appropriate; and

(iii) deliver to holders of the Rights
historical financial statements for the Principal Party which
comply in all respects with the requirements for registration
on Form 10 under the Exchange Act.

The provisions of this Section 13 shall similarly apply
to successive mergers or consolidations or sales or other
transfers. The rights under this Section 13 shall be in
addition to the rights to exercise Rights and adjustments
under Section 11(a)(ii) and shall survive any exercise
thereof.

Section 14. Fractional Rights and Fractional Shares.

(a) The Company shall not be required to issue
fractions of Rights or to distribute Right Certificates which
evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal
to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of
the Rights for the Trading Day immediately prior to the date
on which such fractional Rights would have been otherwise
issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York
Stock Exchange, or, if the Rights are not listed or admitted
to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with
respect to securities listed on the principal national
securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market,
as reported by NASDAQ or such other system then is use or, if
on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors of the
Company. If on any such date no such market maker is making
a market in the Rights, the fair value of the Rights on such
date as determined in good faith by the Board of Directors of
the Company shall be used.

(b) The Company shall not be required to issue
fractions of Preferred Shares (other than fractions that are
one one-thousandth or integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the
Rights or to issue certificates which evidence fractional
Preferred Shares (other than fractions that are one
one-thousandth or integral multiples of one one-thousandth of
a Preferred Share). Fractions of Preferred Shares in
integral multiples of one one-thousandth of a Preferred Share
may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it; provided
that such agreement shall provide that the holders of such
depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as Beneficial Owners
of the Preferred Shares represented by such depositary
receipts. In lieu of fractional Preferred Shares that are
not one one-thousandth or integral multiples of one
one-thousandth of a Preferred share, the Company shall pay to
the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one
Preferred Share. For purposes of this Section 14(b), the
current market value of a Preferred Share shall be the
closing price of a Preferred Share (as determined pursuant to
Section 11(d) hereof) for the Trading Day immediately prior
to the date of such exercise.

(c) Following the occurrence of one of the
transactions or events specified in Section 11 giving rise to
the right to receive Common Shares, capital stock equivalents
(other than Preferred Shares) or other securities upon the
exercise of a Right, the Company shall not be required to
issue fractions of shares or units of such Common Shares,
capital stock equivalents or other securities upon exercise
of the Rights or to distribute certificates which evidence
fractions of such Common Shares, capital stock equivalents or
other securities. In lieu of fractional shares or units of
such Common Shares, capital stock equivalents or other
securities, the Company may pay to the registered holders of
Right Certificates at the time such Rights are exercised as
herein provided an amount in cash equal to the same fraction
of the current market value of a share or unit of such Common
Shares, capital stock equivalents or other securities. For
purposes of this Section 14(c), the current market value
shall be determined in the manner set forth in Section 11(d)
hereof for the Trading Day immediately prior to the date of
such exercise, and if such capital stock equivalent is not
traded, each such capital stock equivalent shall have the
value of one one-thousandth of a Preferred Share.

(d) The holder of a Right by the acceptance of the
Rights expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right
(except as provided above).

Section 15. Rights of Action. All rights of action in
respect of this Agreement, excepting the rights of action
given to the Rights Agent under Section 18 hereof, are vested
in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the
registered holders of the Common Shares); and any registered
holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Shares), without the consent
of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the
Common Shares), may in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate in the manner provided in
such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the
holders of the Rights would not have an adequate remedy at
law for any breach of this Agreement and will be entitled to
specific performance of the obligations under, and injunctive
relief against actual or threatened violations of, the
obligations of any Person subject to this Agreement.

Section 16. Agreement of Right Holders. Every holder
of a Right, by accepting the same, consents and agrees with
the Company and the Rights Agent and with every other holder
of a Right that:

(a) prior to the Distribution Date, the Rights
will be transferable only in connection with the transfer of
the Common Shares;

(b) after the Distribution Date, the Right
Certificates are transferable only on the registry books of
the Rights Agent if surrendered at the principal office or
offices of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer
and with the appropriate form fully executed;

(c) Subject to Section 6 and Section 7(f) hereof,
the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate)
is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership
or writing on the Right Certificates or the associated Common
Shares certificate made by anyone other than the Company or
the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last
sentence of Section 7(e) hereof, shall be affected by any
notice to the contrary; and

(d) Notwithstanding anything in this Agreement to
the contrary, neither the Company nor the Rights Agent shall
have any liability to any holder of a Right or a beneficial
interest in a Right or other Person as a result of its
inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court
of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the
Company must use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as
possible.

Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate
shall be entitled to vote, receive dividends or be deemed for
any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate,
as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or
to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), or to
receive dividends or other distributions or to exercise any
preemptive or subscription rights, or otherwise, until the
Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.

Section 18. Concerning the Rights Agent. The Company
agrees to pay to the Rights Agent reasonable compensation for
all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense,
incurred without negligence, bad faith or willful misconduct
on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the
premises. The indemnity provided for herein shall survive
the expiratation of the Rights and the termination of this
Agreement.

The Rights Agent shall be protected and shall incur no
liability for, or in respect of, any action taken, suffered
or omitted by it in connection with, its administration of
this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.

Section 19. Merger or Consolidation or Change of Name
of Rights Agent. Any corporation into which the Rights Agent
or any successor Rights Agent may be merged or with which it
may be consolidated, or any corporation resulting from any
merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer or all or substantially all
of the corporate trust business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of
any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time
such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates
shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates
so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either
in the name of the predecessor Rights Agent or in the name of
the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Agreement.

In case at any time the name of the Rights Agent shall
be changed and at such time any of the Right Certificates
shall have been countersigned but not delivered, the Rights
Agent may adopt the countersignature under its prior name and
deliver Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name:
and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this
Agreement.

Section 20. Duties of Rights Agent. The Rights Agent
undertakes only those duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of
which the Company and the holders of Right Certificates, by
their acceptance thereof, shall be bound:

(a) The Rights Agent may consult with legal
counsel (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance
with such opinion.

(b) Whenever in the performance of its duties
under this Agreement the Rights Agent shall deem it necessary
or desirable that any fact or matter (including, without
limitation, the identity of an Acquiring Person and the
determination of the current market price of any Security) be
proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the
Chairman of the Board, the President, any Vice President, the
Treasurer or the Secretary of the Company and delivered to
the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.

(c) The Rights Agent shall be liable hereunder to
the Company and any other Person only for its own negligence,
bad faith or willful misconduct.

(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained
in this Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same,
but all such statements and recitals are and shall be deemed
to have been made by the Company only.

(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement
or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for
any breach by the Company of any covenant or condition
contained in this Agreement or in any Right Certificate; nor
shall it be responsible for any change in the exercisability
of the Rights (including the Rights becoming void pursuant to
Section 7(e) hereof) or any adjustment required under the
provisions of Section 11 or Section 13 hereof or responsible
for the manner, method or amount of any such adjustment, or
the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after receipt of a
certificate described in Section 12 hereof); nor shall it by
any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any
Preferred Shares or Common Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any
Preferred Shares or Common Shares will, when issued, be
validly authorized and issued, fully paid and nonassessable.

(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and
other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this
Agreement.

(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the
performance of its duties hereunder from any one of the
Chairman of the Board, the President, any Vice President, the
Secretary or the Treasurer of the Company, and to apply to
such officers for advice or instructions in connection with
its duties, and it shall not be liable for any action taken
or suffered to be taken by it in good faith in accordance
with instructions of any such officer or for any delay in
actions while waiting for those instructions. Any
application by the Rights Agent for written instructions from
the Company may, at the option of the Rights Agent, set forth
in writing any action proposed to be taken or omitted by the
Rights Agent with respect to its duties or obligations under
this Rights Agreement and the date on or after which such
action shall be taken or omission shall be effective. The
Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date
specified therein (which date shall not be less than five
Business Days after the date any such officer of the Company
actually receives such application, unless any such officer
shall have consented in writing to an earlier date) unless,
prior to taking such action (or the effective date in the
case of an omission), the Rights Agent has received written
instructions in response to such application specifying the
action to be taken or omitted.

(h) The Rights Agent and any shareholder,
director, officer or employee of the Rights Agent may buy,
sell or deal in any of the Rights or other securities of the
Company or become pecuniarily interested in any transaction
in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and
freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Company or for any
other legal entity.

(i) The Rights Agent may execute and exercise any
of the rights or powers hereby vested in it or perform any
duty hereunder either itself or by or through its attorneys
or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and
continued employment thereof.

(j) No provision of this Agreement shall require
the Rights Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of
its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against
such risk or liability is not reasonably assured to it.

(k) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form of
election to purchase, as the case may be, has not been
completed, the Rights Agent shall not take any further action
with respect to such requested exercise of transfer without
first consulting with the Company.

Section 21. Change of Rights Agent. The Rights Agent
or any successor Rights Agent may resign and be discharged
from its duties under this Agreement upon 30 days' notice in
writing mailed to the Company and to each transfer agent of
the Common Shares and Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates
by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the
Common Shares and Preferred Shares by registered or certified
mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If
the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the
laws of the United States (or of any state of the United
States), in good standing, that is authorized under such laws
to exercise stock transfer or corporate trust powers and is
subject to supervision or examination by federal or state
authority and that has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $100
million. After appointment, the successor Rights Agent shall
be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Shares and Preferred Shares, and
mail a notice thereof in writing to the registered holders of
the Right Certificates. Failure to give any notice provided
for in this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.

Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option,
issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or
kind or class of shares or other securities or property
purchasable under the Right Certificates made in accordance
with the provisions of this Agreement.

In addition, in connection with the issuance or sale of
Common Shares following the Distribution Date and prior to
the earlier of the Redemption Date and the Final Expiration
Date, the Company (a) shall with respect to Common Shares so
issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities, notes or debentures
issued by the Company, and (b) may, in any other case, if
deemed necessary or appropriate by the Board of Directors of
the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) the Company shall not be
obligated to issue any such Right Certificates if, and to the
extent that, the Company shall be advised by counsel that
such issuance would create a significant risk of material
adverse tax consequences to the Company or the Person to whom
such Right Certificate would be issued, and (ii) no Right
Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.

Section 23. Redemption and Termination.

(a) (i) The Board of Directors of the Company
may, at its option, redeem all but not less than all the then
outstanding Rights at a redemption price of $.05 per Right,
as such amount may be appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring
after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"), at any
time prior to the earlier of (x) the occurrence of a Section
11(a)(ii) Event, or (y) the Final Expiration Date.

(ii) In addition, the Board of Directors of
the Company may, at its option, at any time following the
occurrence of a Section 11(a)(ii) Event and the expiration of
any period during which the holder of Rights may exercise the
Rights under Section 11(a)(ii) but prior to any Section 13
Event, redeem all but not less than all of the then
outstanding Rights at the Redemption Price (aa) in connection
with any merger, consolidation, or sale or other transfer (in
one transaction or in a series of related transactions) of
assets or earning power aggregating 50% or more of the assets
or earning power of the Company and its Subsidiaries (taken
as a whole), in which all holders of Common Shares are
treated alike and not involving (other than as a holder of
Common Shares being treated like all other such holders) an
Interested Stockholder or (bb) if and for so long as the
Acquiring Person is not thereafter the Beneficial Owner of
15% of the Common Shares, and at the time of redemption there
are no other persons who are Acquiring Persons.

(b) Notwithstanding the provisions of Section
23(a), in the event that a majority of the Board of Directors
of the Company is comprised of (i) persons elected at a
meeting of or by written consent of stockholders and who were
not nominated by the Board of Directors in office immediately
prior to such meeting or action by written consent and/or
(ii) successors of such persons elected to the Board of
Directors for the purpose of either facilitating a
Transaction with a Transaction Person or circumventing
directly or indirectly the provisions of this Section 23(b),
then (I) the Rights may not be redeemed for a period of 180
days following the effectiveness of such election if such
redemption is reasonably likely to have the purpose or effect
of facilitating a Transaction with a Transaction Person and
(II) the Rights may not be redeemed thereafter if (x) during
such 180-day period, the Company enters into any agreement,
arrangement or understanding with any Transaction Person
which is reasonably likely to have the purpose or effect of
facilitating a Transaction with any Transaction Person and
(y) such redemption is reasonably likely to have the purpose
or effect of facilitating a Transaction with any Transaction
Person.

(c) In the case of a redemption permitted under
Section 23(a)(i), immediately upon the date for redemption
set forth (or determined in the manner specified in) in a
resolution of the Board of Directors of the Company ordering
the redemption of the Rights, evidence of which shall have
been filed with the Rights Agent, and without any further
action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price
for each Right so held. In the case of a redemption
permitted only under Section 23(a)(ii), evidence of which
shall have been filed with the Rights Agent, the right to
exercise the Rights will terminate and represent only the
right to receive the Redemption Price upon the later of ten
Business Days following the giving of such notice or the
expiration of any period during which the rights under
Section 11(a)(ii) may be exercised. The Company shall
promptly give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, any such
notice shall not affect the validity of such redemption.
Within ten (10) days after such date for redemption set forth
in a resolution of the Board of Directors ordering the
redemption of the Rights, the Company shall mail a notice of
redemption to all the holders of the then outstanding Rights
at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the transfer agent for the Common
Shares. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates
or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically
set forth in this Section 23 except in connection with the
purchase of Common Shares prior to the Distribution Date.

(d) The Company may, at its option, discharge all
of its obligations with respect to the Rights by (i) issuing
a press release announcing the manner of redemption of the
Rights in accordance with this Agreement and (ii) mailing
payment of the Redemption Price to the registered holders of
the Rights at their last addresses as they appear on the
registry books of the Rights Agent or, prior the Distribution
Date, on the registry books of the Transfer Agent of the
Common Shares, and upon such action, all outstanding Rights
and Right Certificates shall be null and void without any
further action by the Company.

Section 24. Notice of Certain Events.

(a) In case the Company shall propose (i) to pay
any dividend payable in stock of any class to the holders of
its Preferred Shares or to make any other distribution to the
holders of its Preferred Shares (other than a regular
quarterly cash dividend), (ii) to offer to the holders of its
Preferred Shares rights or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of stock
of any class or any other securities, rights or options,
(iii) to effect any reclassification of its Preferred Shares
(other than a reclassification involving only the subdivision
of outstanding Preferred Shares), (iv) to effect any
consolidation or merger into or with any Person (other than a
Subsidiary of the Company in a transaction which does not
violate Section 11(n) hereof), or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to,
any other Person or Persons (other than the Company and/or
any of its Subsidiaries in one or more transactions each of
which does not violate Section 11(n) hereof), or (v) to
effect the liquidation, dissolution or winding up of the
Company, then, in each such case, the Company shall give to
each holder of a Right Certificate, in accordance with
Section 25 hereof, a notice of such proposed action to the
extent feasible and file a certificate with the Rights Agent
to that effect, which shall specify the record date for the
purposes of such stock dividend, or distribution of rights or
warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of
participation therein by the holders of the Preferred Shares,
if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii)
above at least twenty (20) days prior to the record date for
determining holders of the Preferred Shares for purposes of
such action, and in the case of any such other action, at
least twenty (20) days prior to the date of the taking of
such proposed action or the date of participation therein by
the holders of the Preferred Shares, whichever shall be the
earlier.

(b) In case of a Section 11(a)(ii) Event, then (i)
the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate, in accordance with
Section 25 hereof, a notice of the occurrence of such event,
which notice shall describe such event and the consequences
of such event to holders of rights under Section 11(a)(ii)
hereof and (ii) all references in the preceding paragraph (a)
to Preferred Shares shall be deemed thereafter to refer also
to Common Shares and/or, if appropriate, other securities of
the Company.

Section 25. Notices. Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by
the holder of any Right Certificate to or on the Company
shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:

Tandy Corporation
1800 One Tandy Center
Fort Worth, TX 76102

Attention: Secretary

Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by
the Company or by the holder of any Right Certificate to or
on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as
follows:

The First National Bank of Boston
50 Morrissey Boulevard
Dorchester, MA 02125

Attention: Shareholder Services Division

Notices or demands authorized by this Agreement to be given
or made by the Company or the Rights Agent to the holder of
any Right Certificate or, if prior to the Distribution Date,
to the holder of certificates representing Common Shares
shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed to such holder at the
address of such holder as shown on the registry books of the
Company.

Section 26. Supplements and Amendments. The Company
and the Rights Agent may from time to time supplement or
amend any provision of this Agreement without the approval of
any holders of Right Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with
any other provisions herein, or (iii) to make any other
provisions in regard to matters or questions arising
hereunder which the Company and the Rights Agent may deem
necessary or desirable, including but not limited to
extending the Final Expiration Date and providing that at the
time of such amendment there is no Acquiring Person, the
period up to which the Rights may be redeemed, and which
shall not adversely affect the interests of the holders of
the Right Certificates. Upon the delivery of a certificate
from an appropriate officer of the Company which states that
the proposed supplement or amendment is in compliance with
the terms of this Section 26, the Rights Agent shall execute
such supplement or amendment, provided that such supplement
or amendment does not adversely affect the rights or
obligations of the Rights Agent under Section 18 or Section
20 of this Agreement. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident
with the interests of the holders of Common Shares.
Notwithstanding anything contained in this Rights Agreement
to the contrary, in the event that a majority of the Board of
Directors of the Company is comprised of (i) persons elected
at a meeting of or by written consent of stockholders and who
were not nominated by the Board of Directors in office
immediately prior to such meeting or action by written
consent and/or (ii) successors of such persons elected to the
Board of Directors for the purpose of either facilitating a
Transaction with a Transaction Person or circumventing
directly or indirectly the provisions of this Section 26,
then for a period of 180 days following the effectiveness of
such action, this Rights Agreement shall not be amended or
supplemented in any manner reasonably likely to have the
purpose or effect of facilitating a Transaction with a
Transaction Person.

Section 27. Determination and Actions by the Board of
Directors, etc. The Board of Directors of the Company shall
have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically
granted to the Board, or the Company, or as may be necessary
or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i)
interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the
administration of this Agreement (including, without
limitation, a determination to redeem or not redeem the
Rights or to amend the Agreement and whether any proposed
amendment adversely affects the interests of the holders of
Right Certificates). For all purposes of this Agreement, any
calculation of the number of Common Shares or other
securities outstanding at any particular time, including for
purposes of determining the particular percentage of such
outstanding Common Shares or any other securities of which
any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of
the General Rules and Regulations under the Exchange Act as
in effect on the date of this Agreement. All such actions,
calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect
to the foregoing) which are done or made by the Board in good
faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Right
Certificates and all other parties, and (y) not subject the
Board to any liability to the holders of the Right
Certificates.

Section 28. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.

Section 29. Benefits of this Agreement. Nothing in
this Agreement shall be construed to give to any person or
corporation other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares) any legal or
equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of
the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date,
the Common Shares).

Section 30. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court
of competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.

Section 31. Governing Law. This Agreement, each Right
and each Right Certificate issued hereunder shall be deemed
to be a contract made under the laws of the State of Delaware
and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to
contracts to be made and performed entirely within such
State.

Section 32. Counterparts. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute
but one and the same instrument.

Section 33. Descriptive Headings. Descriptive headings
of the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof.

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate
seals to be hereunto affixed and attested, all as of the day
and year first above written.

TANDY CORPORATION
Attest:

By /s/ HC Winn By /s/ John V. Roach
Name: Herschel C. Winn Name: John V. Roach
Chairman of the Board,
Senior Vice President Chief Executive Officer
Title: and Secretary Title: and President

THE FIRST NATIONAL BANK OF BOSTON
as Rights Agent
Attest:
By /s/ Craig A. Alie By /s/ Darlene M. DioDato
Name: Craig A. Alie Name: Darlene M.n DioDato
Title: Account Manager Title: Vice President
<PAGE>

Exhibit 4c(i)
REVOLVING CREDIT AGREEMENT

REVOLVING CREDIT AGREEMENT dated as of June 17, 1991,
among TANDY CORPORATION, a Delaware corporation ("Tandy"),
TANDY CREDIT CORPORATION, a Delaware corporation ("TCC" and
together with Tandy collectively the "Borrowers"), the Banks
listed on the signature pages hereof (the "Banks"), TEXAS
COMMERCE BANK, NATIONAL ASSOCIATION, a national banking
association, as Administrative Agent for the Banks (in such
capacity, the "Administrative Agent"), and TEXAS COMMERCE
BANK NATIONAL ASSOCIATION, as Funds Administrator for the
Banks (in such capacity, the "Funds Administrator").

ARTICLE I

CERTAIN DEFINED TERMS, ACCOUNTING TERMS AND CONSTRUCTION

SECTION 1.01 Certain Defined Terms. As used in this
Agreement, the following terms shall have the following
meanings:

"Account Debtor" shall mean any Person who is or who may
become obligated to TCC under, with respect to, or on account
of, an Account purchased by TCC.

"Accounts" shall mean any and all rights of Tandy, TCC
and the other Subsidiaries of Tandy to payment for goods and
services sold or leased, including any such right evidenced
by chattel paper, whether due or to become due, whether or
not it has been earned by performance, and whether now or
hereafter acquired or arising in the future, including
accounts receivable from Affiliates.

"Adjusted CD Rate" shall mean, with respect to any
Borrowing comprised of Certificate of Deposit Loans for any
Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next higher 1/8 of 1%) equal to the sum
of (a) a rate per annum equal to the product of (i) the Fixed
Certificate of Deposit Rate in effect for such Interest
Period and (ii) Statutory Reserves, plus (b) the Assessment
Rate. For purposes hereof, the term "Fixed Certificate of
Deposit Rate" shall mean the arithmetic average (rounded to
the nearest 1/8 of 1% or, if there is no nearest 1/8 of 1%,
the next higher 1/8 of 1%) of the prevailing rates per annum
bid on or about 10:00 a.m. (New York City time) to the Funds
Administrator on the first Business Day of the Interest
Period for the Certificate of Deposit Loan by three New York
City negotiable certificate of deposit dealers of recognized
standing selected by the Funds Administrator for the purchase
at face value of negotiable certificates of deposit of major
United States money center banks in an amount approximately
equal to the principal amount of such Certificate of Deposit
Loan and with a maturity comparable to such Interest Period.

"Administrative Agent" shall have the meaning assigned
such term in the introduction to this Agreement.

"Administrative Questionnaire" shall mean an
Administrative Questionnaire in the form of Exhibit 1.01-A
hereto, which each Bank shall complete and provide to the
Funds Administrator.

"Affiliate" shall mean any Person (including any member
of the immediate family of any such natural person) who
directly or indirectly beneficially owns or controls 5% or
more of the total voting power of shares of capital stock of
either Borrower having the right to vote for directors under
ordinary circumstances, any person controlling, controlled by
or under common control with any such person (within the
meaning of Rule 405 under the Securities Act of 1933) and any
director or executive officer of such person.

"Agency Fee" shall have the meaning assigned such term
in Section 2.06(c).

"Agent's Letter" shall have the meaning assigned such
term in Section 2.06(c).

"Agents" shall mean the Administrative Agent and the
Funds Administrator.

"Alternate Base Rate" shall mean, for any day, a
fluctuating rate per annum (rounded upwards to the next
highest 1/8 of 1% if not already an integral multiple of 1/8
of 1%) equal to the greatest of (a) the Prime Rate in effect
on such day (b) the Base CD Rate in effect on such day plus
1% and (c) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. "Prime Rate" shall mean as of a
particular date, the prime rate most recently announced by
TCB and thereafter entered in the minutes of TCB's Loan and
Discount Committee, automatically fluctuating upward and
downward with and at the time specified in each such
announcement without notice to either Borrower or any other
Person, which prime rate may not necessarily represent the
lowest or best rate actually charged to a customer. For
purposes of this Agreement any change in the Alternate Base
Rate due to a change in the Prime Rate shall be effective on
the date such change in the Prime Rate is announced. "Base
CD Rate" means the sum of (x) the product of (i) the
Three-Month Secondary CD Rate and (ii) the Statutory Reserves
and (y) the Assessment Rate. "Three-Month Secondary CD Rate"
means, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such
day (or, if such day is not a Business Day, the next
preceding Business Day) by the Board through the public
information telephone line of the Federal Reserve Bank of New
York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release
H.15(519) during the week following such day), or, if such
rate shall not be so reported on such day or such next
preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major
money center banks in New York City received at approximately
9:00 a.m., Houston, Texas time, on such day ) or, if such day
shall not be Business Day, on the next preceding Business
Day) by the Funds Administrator from three New York City
negotiable certificate of deposit dealers of recognized
standing selected by the Funds Administrator. For purposes
of this Agreement any change in the Alternate Base Rate due
to a change in the Three-Month Secondary CD Rate shall be
effective on the effective date of such change in the
Three-Month Secondary CD Rate. "Federal Funds Effective
Rate" shall mean, for any day, an interest rate per annum
equal 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 which is a Business Day, the average of
the quotations for such day on such transactions received by
the Funds Administrator from three Federal funds brokers of
recognized standing selected by it. For purposes of this
Agreement any change in the Alternate Base Rate due to a
change in the Federal Funds Effective Rate shall be effective
on the effective date of such change in the Federal Funds
Effective Rate. If for any reason the Funds Administrator
shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Effective Rate for any reason,
including the inability or failure of the Funds Administrator
to obtain sufficient bids or publications in accordance with
the terms thereof, the Alternate Base Rate shall be the Prime
Rate until the circumstances giving rise to such inability no
longer exist.

"Alternate Base Rate Loan" shall mean any Loan with
respect to which a Borrower shall have selected an interest
rate based on the Alternate Base Rate in accordance with the
provisions of Article II.

"Assessment Rate" shall mean for any date the annual
rate (rounded upwards, if necessary, to the next higher 1/100
of 1%) most recently estimated by the Funds Administrator as
the then current net annual assessment rate that will be
employed for determining amounts payable by the Funds
Administrator to the Federal Deposit Insurance Corporation
(or any successor) for insurance by such Corporation (or such
successor) of time deposits made in dollars at the Funds
Administrator's domestic offices.

"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Bank and an Eligible Assignee,
and accepted by the Agents, in the form of Exhibit 1.01-B
hereto.

"Banks" shall have the meaning assigned such term in the
introduction to this Agreement.

"Base CD Rate" shall have the meaning assigned such term
in the definition of the term Base Rate.

"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.

"Borrowers" shall have the meaning assigned such term in
the introduction to this Agreement.

"Borrowing" shall mean a group of Tranche A Loans or
Tranche B Loans of a single Type made by the Banks on a
single date and as to which a single Interest Period is in
effect.

"Borrowing Base" shall mean an amount equal to 90% of
the aggregate principal amount of all Eligible Accounts
Receivable purchased by TCC pursuant to the Operating
Agreement and at the date of any determination owned by TCC.

"Borrowing Base Certificate" shall mean a certificate in
the form of Exhibit 1.01-C hereto, duly completed and
executed by the chief financial officer or the chief
accounting officer of TCC accompanied by an accounts
receivable aging schedule substantially in the form of
Exhibit 1.01-D hereto.

"Business Day" shall mean a day when the Agents and each
Bank are open for business, and if the applicable Business
Day relates to any Eurodollar Loan, a day on which dealings
are carried on in the London interbank market and commercial
banks are open for domestic or international business in
London, England, in New York City, New York and in Houston,
Texas.

"Capital Lease" shall mean any lease required to be
accounted for as a capital lease under generally accepted
accounting principles.

"Certificate of Deposit Loan" shall mean any Loan with
respect to which a Borrower shall have selected an interest
rate based on the Adjusted CD Rate in accordance with the
provisions of Article II.

"Change of Control" shall mean any of (i) the
acquisition by any Person or two or more Persons (excluding
underwriters in the course of their distribution of voting
stock in an underwritten public offering) acting in concert,
of beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission) of 25% or more of the
outstanding shares of voting stock of Tandy, (ii) a majority
of the members of the Board of Directors of Tandy on any date
shall not have been (x) members of the Board of Directors of
Tandy on the date 12 months prior to such date or (y)
approved by Persons who constitute at least a majority of the
members of the Board of Directors of Tandy as constituted on
the date 12 months prior to such date, (iii) all or
substantially all of the assets of Tandy are sold in a single
transaction or series or related transactions to any Person
or (iv) Tandy merges or consolidates with or into any other
Person, with the effect that immediately after such
transaction the stockholders of Tandy immediately prior to
such transaction hold less than 100% of the total voting
power entitled to vote in the election of directors, managers
or trustees of the Person surviving such transaction.

"Closing Date" shall mean the date of the first
Borrowing under this Agreement.

"Closing Fee" shall have the meaning assigned such term
in Section 2.06(b).

"Code" shall mean the Internal Revenue Code of 1986 and
any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time
to time. References to sections of the Code shall be
construed to also refer to any successor sections.

"Commitment Fees" shall mean, with respect to each Bank,
such Bank's Tranche A Commitment Fees and the Tranche B
Commitment Fees.

"Commitments" shall mean, with respect to each Bank,
such Bank's Tranche A Commitment and Tranche B Commitment.

"Communications" has the meaning assigned such term in
Section 9.01.

"Confidential Information Memorandum" shall mean the
Confidential Information Memorandum dated May 1991 prepared
by Chemical Banking Corporation relating to the revolving
credit facilities evidenced by this Agreement.

"Consolidated Senior Indebtedness" shall mean with
respect to Tandy, all Indebtedness of Tandy and its
Subsidiaries, other than Subordinated Indebtedness,
calculated on a consolidated basis.

"Consolidated Tangible Net Worth" shall mean, with
respect to Tandy, at any time, the total Stockholders Equity
less the total amount of any intangible assets and plus the
total amount of any Subordinated Indebtedness unless already
included in Stockholders' Equity, with all such amounts being
calculated for Tandy and its consolidated Subsidiaries on a
consolidated basis in accordance with generally accepted
accounting principles applied on a consistent basis.
Intangible assets shall include unamortized debt discount and
expense, unamortized deferred charges and goodwill.

"Default" shall mean any event or condition which, with
the lapse of time or giving of notice or both, would
constitute an Event of Default.

"Eligible Accounts Receivable" shall mean at the time of
any determination thereof all Accounts (net of all allowances
and reserves for doubtful or uncollectible accounts and
exclusive of Accounts arising from transactions between
either Borrower or any Affiliate) which met the following
criteria for an eligible account at the time of creation and
continue to meet the same at the time of such determination:
(i) all payments on the Account are due not more than 30 days
after the date of the invoice rendered by TCC; (ii) any
required payment on the Account is not past due more than 60
days (determined with reference to the date which the invoice
rendered to the Account Debtor indicated to be the date on
which such payment with respect to the Account is due or, if
no such date is specified in such invoice, the date of such
invoice); (iii) the Account arose from an outright and lawful
sale of goods by or on behalf of a Borrower or one of its
Affiliates; (iv) the Account is owned by TCC free and clear
of all security interests, liens, charges and encumbrances of
any nature whatsoever other than any security interest deemed
to be held by TCC; (v) the Account constitutes "accounts" or
"chattel paper" within the meaning of the Uniform Commercial
Code of the state (other than Louisiana) where the Account is
located; (vi) the Account is not subject to any setoff,
net-out contract, counterclaim or other defense arising out
of the transactions represented by the Accounts or
independently thereof and the Account Debtor has not
complained as to his liability thereon or returned any of the
goods from the sale out of which the Account arose, except
complaints made or goods returned in the ordinary course of
business for which, in the case of goods returned, goods of
equal or greater value have been shipped in return; (vii) the
Account arose in the ordinary course of business of a
Borrower or one of its Affiliates and no notice of death,
bankruptcy or insolvency of the Account Debtor has been
received; (viii) the Account complies with the requirements
of all applicable laws and regulations, whether federal,
state or local (including usury laws and laws, rules and
regulations relating to truth in lending, fair credit
billing, fair credit reporting, equal credit opportunity,
fair debt collection practices and privacy); (ix) the Account
is in full force and effect and constitutes a legal, valid
and binding obligation of the Account Debtor enforceable in
accordance with its terms; (x) the Account is denominated in
and provides for payment by the Account Debtor in United
States dollars; (xi) the Account has not been charged-off or
written-off as uncollectible in accordance with the customary
business practice of a Borrower and (xii) the Account neither
has been transferred to TRC or to the Tandy Master Trust nor
is subject to any pooling or servicing agreement.

"Eligible Assignee" shall mean (i) any Bank or any
Affiliate of any Bank; (ii) a commercial bank organized under
the laws of the United States, or any state thereof, and
having total assets in excess of $1,000,000,000 and having
deposits that rated in either of the two highest generic
letter rating categories (without regard to subcategories)
from either Standard & Poor's Corporation or Moody's
Investors Service, Inc.; (iii) a commercial bank organized
under the laws of any other country which is a member of the
OECD, or a political subdivision of any such country, and
having total assets in excess of $1,000,000,000, provided
that such bank is acting through a branch or agency located
in the country in which it is organized or another country
which is also a member of the OECD; (iv) the central bank of
any country which is a member of the OECD; and (v) any other
financial institution approved by the Borrowers, the
Administrative Agent and the Funds Administrator.

"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, and any successor statute of similar
import, together with the regulations thereunder, in each
case as in effect from time to time. References to sections
of ERISA shall be construed to also refer to any successor
sections.

"ERISA Affiliate" shall mean any corporation, trade or
business that is, along with Tandy, a member of a controlled
group of corporations or a controlled group of trades or
businesses, as described in sections 414(b) and 414(c),
respectively, of the Code or section 4001 of ERISA.

"Eurodollar Loan" shall mean any Loan with respect to
which a Borrower shall have selected an interest rate based
on the LIBO Rate in accordance with the provisions of Article
II.

"Event of Default" shall have the meaning assigned such
term in Article VII.

"Execution Date" shall mean the earliest date upon which
all of the following shall have occurred: (i) counterparts of
this Agreement shall have been executed by the Borrowers,
each Bank, the Administrative Agent and the Funds
Administrator and when the Administrative Agent shall have
received counterparts hereof which taken together, bear the
signature of each Bank and the Funds Administrator, (ii) the
Revolving Credit Agreement dated as of June 18, 1987 among
TCC, the banks party thereto and Chemical Bank, as agent for
such banks, as amended pursuant to a First Amendment to
Revolving Credit Agreement dated as of June 18, 1989 and a
Second Amendment to Revolving Credit Agreement dated as of
April 1, 1991 shall have been terminated, and (iii) the
Credit Agreement dated as of May 1, 1989 between Tandy, the
banks party thereto and Continental Bank, N.A. as agent for
such banks, as modified by a Waiver to Credit Agreement dated
as of April 1, 1991 shall have been terminated.

"Federal Funds Effective Rate" shall have the meaning
assigned such term in the definition of "Alternate Base
Rate."

"Fixed Certificate of Deposit Rate" shall have the
meaning assigned such term in the definition of "Adjusted CD
Rate."

"Funds Administrator" shall have the meaning assigned
such term in the introduction to this Agreement.

"Guaranties" by any Person shall mean all obligations
(other than endorsements in the ordinary course of business
of negotiable instruments for deposit or collection) of such
Person guaranteeing or, in effect, guaranteeing any
Indebtedness, dividend or other obligation, of any other
Person (the "primary obligor") in any manner, whether
directly or indirectly, including all obligations incurred
through an agreement, contingent or otherwise, by such
Person:

(a) to purchase such Indebtedness or obligation or
any property or assets constituting security therefor,

(b) to advance or supply funds (i) for the
purchase or payment of such Indebtedness or obligation,
(ii) to maintain working capital or other balance sheet
condition or otherwise to advance or make available
funds for the purchase or payment of such Indebtedness
or obligation,

(c) to lease property or to purchase securities or
other property or services primarily for the purpose of
assuring the owner of such Indebtedness or obligation of
the ability of the primary obligor to make payment of
the Indebtedness or obligation, or

(d) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor
against loss in respect thereof.

For the purposes of all computations made under this
Agreement, a Guaranty in respect of any Indebtedness for
borrowed money shall be deemed to be Indebtedness equal to
the principal amount of such Indebtedness for borrowed money
which has been guaranteed, and a Guaranty in respect of any
other obligation or liability or any dividend shall be deemed
to be Indebtedness equal to the maximum aggregate amount of
such obligation, liability or dividend.

"Highest Lawful Rate" shall mean, as to any Bank, at the
particular time in question, the maximum nonusurious rate of
interest which, under applicable law, such Bank is then
permitted to charge the Borrowers on the Loans. If the
maximum rate of interest which, under applicable law, the
Banks are permitted to charge the Borrowers on the Loans
shall change after the date hereof, the Highest Lawful Rate
shall be automatically increased or decreased, as the case
may be, as of the effective time of such change without
notice to the Borrowers.

"HLT Classification" shall have the meaning assigned
such term in Section 2.19.

"Indebtedness" of any Person shall mean, without
duplication:

(a) any obligation of such Person for borrowed
money, including:

(i) any obligation of such Person evidenced
by bonds, debentures, notes or other similar debt
instruments, and

(ii) any obligation for borrowed money which
is non-recourse to the credit of such Person but
which is secured by any asset of such Person,

(b) any obligation of such Person on account of
deposits or advances,

(c) all obligations of such Person under
conditional sale or other title retention agreements
relating to property purchased by such Person,

(d) any obligation of such Person for the deferred
purchase price of any property or services, except
accounts payable arising in the ordinary course of such
Person's business,

(e) rentals in respect of Capital Leases of such
Person, provided, however, except with respect to TCC,
rentals of any such Person shall not constitute
Indebtedness unless such rentals are in excess in the
aggregate of $30,000,000 at any one time outstanding,

(f) Guaranties by such Person to the extent
required pursuant to the definition thereof,

(g) any Indebtedness of another Person secured by
a Lien on any asset of such first Person, whether or not
such Indebtedness is assumed by such first Person, and

(h) any Indirect Indebtedness of such Person.

"Indemnitee" shall have the meaning assigned such term
in Section 9.04.

"Indirect Indebtedness" of a Person shall mean (a) the
Indebtedness of a partnership in which such Person is a
general partner, and (b) the amount of any liability of such
Person created by the Indebtedness of a joint venture in
which such Person is a joint venturer.

"Insignificant Foreign Subsidiary" shall mean a
Subsidiary of Tandy which is not organized under the laws of
a state of the United States and which is not a Significant
Subsidiary of Tandy.

"Interest Payment Date" shall mean, as to any Loan, the
last day of the Interest Period applicable to such Loan (and,
in addition, in the case of any Interest Period of six months
or 180 days duration, the day that would have been the
Interest Payment Date of such Interest Period if such
Interest Period had been of three months or 90 days
duration).

"Interest Period" shall mean: (i) as to any Eurodollar
Loan, the period commencing on the date of such Eurodollar
Loan and ending on the numerically corresponding day (or, if
there is no numerically corresponding day, on the last day)
in the calendar month that is 1, 2, 3 or 6 months thereafter,
as a Borrower may elect, (ii) as to any Certificate of
Deposit Loan, a period of 30, 60, 90 or 180 days duration, as
a Borrower may elect, commencing on the date of such
Certificate of Deposit Loan and (iii) as to any Alternate
Base Rate Loan, a period of 90 days duration, commencing on
the date of such Loan; provided, however, that (i) if any
Interest Period would end on a day that shall not be a
Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless, with respect to
Eurodollar Loans only, such next succeeding Business Day
would fall in the next calendar month, in which case such
Interest Period shall end on the next preceding Business Day,
(ii) no Interest Period with respect to any Tranche A Loan
shall end later than the Tranche A Maturity Date, (iii) no
Interest Period with respect to any Tranche B Loan shall end
later than the Tranche B Maturity Date and (iv) interest
shall accrue from and including the first day of an Interest
Period to but excluding the last day of such Interest Period.

"Investment" shall mean any investment, made by a Person
in any other Person in cash or by delivery of any kind of
property or asset, whether by acquisition of shares of stock
or similar interest, Indebtedness or other obligation or
security, or by loan, advance or capital contribution, or
otherwise.

"LIBO Rate" shall mean the rate (rounded to the nearest
1/8 of 1% or, if there is no nearest 1/8 of 1%, the next
higher 1/8 of 1%) at which dollar deposits approximately
equal in principal amount to the Administrative Agent's
portion of such Borrowing and for a maturity equal to the
applicable Interest Period are offered in immediately
available funds to the principal office of the Funds
Administrator in London, England (or if the Funds
Administrator does not at the time any such determination is
made, maintain an office in London, England, the principal
office of any Affiliate of the Funds Administrator in London,
England) by leading banks in the London Interbank Market for
Eurodollars at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest
Period.

"Lien" shall mean any mortgage, pledge, hypothecation,
judgment lien or similar legal process, title retention lien,
or other lien or security interest, including the interest of
a vendor under any conditional sale or other title retention
agreement and the interest of a lessor under any Capital
Lease.

"Loan" shall mean a Tranche A Loan, a Tranche B Loan, an
Alternate Base Rate Loan, a Certificate of Deposit Loan or a
Eurodollar Loan.

"Loan Documents" means this Agreement, the Notes, the
Agent's Letter, the Operating Agreement, the Support
Agreement and all other documents, instruments executed by a
Borrower or any other Person in connection with this
Agreement and the Loans including the Tandy Guaranty, if
executed and delivered pursuant to Section 7.01(d).

"Margin Stock" shall have the meaning assigned such term
in Regulation U.

"Maximum Permissible Rate" shall have the meaning
assigned such term in Section 9.08.

"Note" or "Notes" shall mean the Tranche A Notes and the
Tranche B Notes or any one thereof.

"Notice of Borrowing" shall have the meaning assigned
such term in Section 2.02(c).

"OECD" shall mean the Organization for Economic
Cooperation and Development.

"Operating Agreement" shall mean the Operating
Agreement, dated as of June 18, 1987, by and between Tandy
and TCC.

"Other Activities" shall have the meaning assigned such
term in Section 8.03.

"Other Financings" shall have the meaning assigned such
term in Section 8.03.

"Other Taxes" shall have the meaning assigned such term
in Section 2.18.

"PBGC" shall mean the Pension Benefit Guaranty
Corporation and any entity succeeding to any or all of its
functions under ERISA.

"Permitted Indebtedness" shall mean with respect to TCC
(i) the Loans, Short-term Indebtedness and commercial paper
borrowings in an aggregate principal amount not in excess of
$400,000,000 and (ii) unsecured Indebtedness (other than
Short-term Indebtedness) and intercompany indebtedness due to
Tandy.

"Person" shall mean any natural person, corporation,
business trust, association, company, joint venture,
partnership or government or any agency or political
subdivision thereof.

"Plan" shall mean a pension plan, as such term is
defined in ERISA, established or maintained by Tandy or any
ERISA Affiliate or as to which Tandy or any ERISA Affiliate
contributes or is a member or otherwise may have any
liability.

"Prime Rate" shall have the meaning assigned such term
in the definition of the term Alternate Base Rate.

"Process Agent" shall have the meaning assigned such
term in Section 9.13.

"Register" shall have the meaning assigned such term in
Section 9.03(d).

"Regulation G" shall mean Regulation G of the Board, as
the same is from time to time in effect, and all official
rulings and interpretations thereunder or thereof.

"Regulation T" shall mean Regulation T of the Board, as
the same is from time to time in effect, and all official
rulings and interpretations thereunder or thereof.

"Regulation U" shall mean Regulation U of the Board, as
the same is from time to time in effect, and all official
rulings and interpretations thereunder or thereof.

"Regulation X" shall mean Regulation X of the Board, as
the same is from time to time in effect, and all official
rulings and interpretations thereunder or thereof.

"Reportable Event" shall mean a Reportable Event as
defined in Section 4043(b) of ERISA.

"Required Banks" shall mean at any time Banks holding
66-2/3% of the aggregate principal amount of the Loans at the
time outstanding, or if no Loans are outstanding, Banks
having 66-2/3% of the Total Commitment.

"Short-term Indebtedness" shall mean, at any date,
Indebtedness which matures one year or less from such date
and which is not directly or indirectly renewable or
extendible, at the option of the obligor, by its terms or the
terms of any instrument or agreement relating thereto, to a
date more than one year from such date.

"Significant Subsidiary" shall mean as to either
Borrower or any Subsidiary of such Borrower which either (i)
has a net worth in excess of 5% of the consolidated net worth
of such Borrower and its other Subsidiaries, or (ii) has
gross revenues in excess of 5% of the consolidated gross
revenues of such Borrower and its other Subsidiaries based,
in each case, on the most recent audited financial statements
of such Borrower. In all events the Significant Subsidiaries
of Tandy shall include O Sullivan Industries Incorporated, a
Delaware corporation, GRID Systems Corporation, a California
corporation, TCC and TRC, and the Significant Subsidiaries of
TCC shall include TRC.

"Statutory Reserves" shall mean a fraction (expressed as
a decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate of
the maximum reserve percentages (including any marginal,
special, emergency, or supplemental reserves) expressed as a
decimal established by the Board and any other banking
authority to which any Bank is subject for new negotiable
time deposits in dollars of over $100,000 with maturities
approximately equal to (a) the applicable Interest Period, in
the case of the Adjusted CD Rate, and (b) three months, with
respect to the Base CD Rate. Statutory Reserves shall be
adjusted automatically on and as of the effective date of any
change in any reserve percentage.

"Stockholders Equity" shall mean in respect of either
Borrower at any date the sum of (a) its capital stock taken
at par value, (b) its capital surplus and (c) its retained
earnings less treasury stock, all computed in accordance with
generally accepted accounting principles applied on a
consistent basis.

"Subordinated Indebtedness" shall mean with respect to
either Borrower, Indebtedness of such Borrower having
maturities and terms, and which is subordinated to payment of
the Notes of such Borrower in a manner, approved in writing
by the Administrative Agent and the Required Banks.

"Subsidiary" shall mean any Person of which or in which
any other Person (the "parent") and the other Subsidiaries of
the parent own directly or indirectly 50% or more of:

(a) the combined voting power of all classes of\
stock having general voting power under ordinary
circumstances to elect a majority of the board of
directors of such Person, if it is a corporation;

(b) the capital interest or profits interest of
such Person, if it is a partnership, joint venture or
similar entity; or

"Support Agreement" shall mean the Amended and Restated
Support Agreement, dated as of the date hereof, by and
between Tandy and TCC substantially in the form of Exhibit
1.01-E hereto.

"Tandy" shall have the meaning assigned such term in the
introduction to this Agreement.

"Tandy Guaranty" shall have the meaning specified in
Section 7.01(d).

"Taxes" shall have the meaning assigned such term in
Section 2.18.

"TCB" shall mean Texas Commerce Bank National
Association.

"TCB-Dallas" shall mean Texas Commerce Bank, National
Association.

"TCC" shall have the meaning assigned such term in the
introduction to this Agreement.

"Three-Month Secondary CD Rate" shall have the meaning
assigned such term in the definition of "Alternate Base
Rate."

"Total Commitment" shall mean at any time the aggregate
amount of the Banks' Commitments, as in effect at such time.

"Total Tranche A Commitment" shall mean, at any time,
the sum of the Tranche A Commitments of each of the Banks.

"Total Tranche B Commitment" shall mean, at any time,
the sum of the Tranche B Commitments of each of the Banks.

"Tranche" shall mean each tranche of Loans determined
with reference to the type of Commitments utilized in making
same, i.e., Tranche A Loans or Tranche B Loans.

"Tranche A Borrowing" shall mean a Borrowing consisting
of simultaneous Tranche A Loans from each of the Banks.

"Tranche A Commitment" shall mean, with respect to each
Bank, the amount set forth opposite such Bank's name on the
signature page hereof directly below the column entitled
"Tranche A Commitment," as the same may be reduced from time
to time pursuant to Section 2.07.

"Tranche A Commitment Fee" shall have the meaning
provided in Section 2.06(a).

"Tranche A Loan" shall have the meaning assigned such
term in Section 2.01(a).

"Tranche A Maturity Date" shall mean June 12, 1992.

"Tranche A Note" shall have the meaning assigned such
term in Section 2.04(a).

"Tranche B Borrowing" shall mean a Borrowing consisting
of simultaneous Tranche B Loans from each of the Banks.

"Tranche B Commitment" shall mean, with respect to each
Bank, the amount set forth opposite such Bank's name on the
signature page hereof below the column entitled "Tranche B
Commitment," as the same may be reduced from time to time
pursuant to Section 2.07.

"Tranche B Commitment Fee" shall have the meaning
assigned such term in Section 2.06(b).

"Tranche B Loan" shall have the meaning assigned such
term in Section 2.01(b).

"Tranche B Maturity Date" shall mean June 12, 1994.

"Tranche B Note" shall have the meaning assigned such
term in Section 2.04(a).

"Transferee" shall have the meaning assigned such term
in Section 2.18.

"TRC" shall mean Tandy Receivables Corporation, a
Delaware corporation.

"Type" shall mean any type of Loan determined with
respect to the interest option applicable thereto, i.e., a
Eurodollar Loan, a Certificate of Deposit Loan or an
Alternate Base Rate Loan.

"Wholly-owned Subsidiary" shall mean any Person of which
Tandy or its other Wholly-owned Subsidiaries own directly or
indirectly 100% of:

(a) the issued and outstanding shares of stock
(except shares required as directors' qualifying shares
and shares constituting less than 2% of the issued and
outstanding shares) and all Indebtedness for borrowed
money;

(b) the capital interest or profits interest of
such Person, if it is a partnership, joint venture or
similar entity; or

SECTION 1.02. Accounting Terms. Except as otherwise
herein specifically provided, each accounting term used
herein shall have the meaning given it under generally
accepted accounting principles in effect from time to time
applied on a consistent basis; provided, however, that each
reference in Article VI and in the definition of any term
used in Article VI to generally accepted accounting
principles shall mean generally accepted accounting
principles in effect on the date hereof.

SECTION 1.03. Interpretation. (a) In this Agreement,
unless a clear contrary intention appears:

(i) the singular number includes the plural number
and vice versa;

(ii) reference to any gender includes each other
gender;

(iii) the words "herein," "hereof" and "hereunder"
and other words of similar import refer to this
Agreement as a whole and not to any particular Article,
Section or other subdivision;

(iv) reference to any Person includes such
Person's successors and assigns but, if applicable,
only if such successors and assigns are permitted by
this Agreement, and reference to a Person in a
particular capacity excludes such Person in any other
capacity or individually, provided that nothing in this
clause (iv) is intended to authorize any assignment not
otherwise permitted by this Agreement;

(v) reference to any agreement, document or
instrument means such agreement, document or instrument
as amended, supplemented or modified and in effect from
time to time in accordance with the terms thereof and,
if applicable, the terms hereof, and reference to any
Note includes any note issued pursuant hereto in
extension or renewal thereof and in substitution or
replacement therefor;

(vi) unless the context indicates otherwise,
reference to any Article, Section, Schedule or Exhibit
means such Article or Section hereof or such Schedule or
Exhibit hereto;

(vii) the words "including" (and with correlative
meaning "include") means including, without limiting the
generality of any description preceding such term;

(viii) with respect to the determination of any
period of time, the word "from" means "from and
including" and the word "to" means "to but excluding;"
and

(ix) reference to any law means such as amended,
modified, codified or reenacted, in whole or in part,
and in effect from time to time.

(b) The Article and Section headings herein and
the Table of Contents are for convenience only and shall not
affect the construction hereof.

(c) No provision of this Agreement shall be
interpreted or construed against any Person solely because
that Person or its legal representative drafted such
provision.

ARTICLE II

THE LOANS

SECTION 2.01. Commitments. (a) Subject to the terms
and conditions and relying upon the representations and
warranties herein set forth, each Bank, severally and not
jointly, agrees to make revolving credit loans (each a
"Tranche A Loan") to the Borrowers at any time and from time
to time on and after the date hereof and until the earlier of
the Tranche A Maturity Date and the termination of the
Tranche A Commitment of such Bank in accordance with the
terms hereof. Notwithstanding the foregoing, (i) the
aggregate principal amount of all Tranche A Loans of a Bank
at any time outstanding shall not exceed such Bank's Tranche
A Commitment, (ii) the aggregate principal amount of all
Tranche A Loans made by all Banks at any time outstanding
shall not exceed the Total Tranche A Commitment of all Banks,
(iii) the sum of the aggregate principal amount of all
Tranche A Loans plus the aggregate principal amount of all
Tranche B Loans made by all Banks at any time outstanding
shall not exceed the Total Commitment and (iv) the sum of the
aggregate principal amount of all Tranche A Loans plus all
Tranche B Loans made by all Banks to TCC at any time
outstanding shall not exceed the Borrowing Base. Within the
foregoing limits, the Borrowers may borrow, repay, prepay and
reborrow Tranche A Loans hereunder on and after the date
hereof and prior to the Tranche A Maturity Date.

(b) Subject to the terms and conditions and
relying upon the representations and warranties herein set
forth, each Bank, severally and not jointly, agrees to make
revolving credit loans (each a "Tranche B Loan") to the
Borrowers at any time and from time to time on and after the
date hereof and until the earlier of the Tranche B Maturity
Date and the termination of the Tranche B Commitment of such
Bank in accordance with the terms hereof. Notwithstanding
the foregoing, (i) the aggregate principal amount of all
Tranche B Loans of a Bank at any time outstanding shall not
exceed such Bank's Tranche B Commitment, (ii) the aggregate
principal amount of all Tranche B Loans made by all Banks at
any time outstanding shall not exceed the Total Tranche B
Commitment of all Banks, (iii) the sum of the aggregate
principal amount of all Tranche B Loans plus the aggregate
principal amount of all Tranche A Loans made by all Banks at
any time outstanding shall not exceed the Total Commitment
and (iv) the sum of the aggregate principal amount of all
Tranche B Loans plus all Tranche A Loans made by all Banks to
TCC at any time outstanding shall not exceed the Borrowing
Base. Within the foregoing limits, the Borrowers may borrow,
repay, prepay and reborrow Tranche B Loans hereunder; on and
after the date hereof and prior to the Tranche B Maturity
Date.

SECTION 2.02. Loans. (a) Each Borrowing made by the
Banks to a Borrower on any one date shall be in a minimum
aggregate principal amount of $5,000,000 and an integral
multiple of $1,000,000, and shall consist of Loans of the
same Tranche made ratably by the Banks in accordance with
their respective Commitments; provided, however, that the
failure of any Bank to make any Loan shall not relieve any
other Bank of its obligation to lend hereunder. The first
Loan by each Bank to a Borrower shall be made against
delivery to such Bank of an appropriate Note, payable to the
order of such Bank, executed by such Borrower, as referred to
in Section 2.04.

(b) Each Borrowing shall be a Tranche A Borrowing
or a Tranche B Borrowing and comprised of Alternate Base Rate
Loans, Certificate of Deposit Loans or Eurodollar Loans as a
Borrower may request pursuant to Section 2.03. Each Bank may
fulfill its Commitment with respect to any Eurodollar Loan or
Certificate of Deposit Loan by causing, at its option, any
domestic or foreign branch or Affiliate of such Bank to make
such Loan, provided that the exercise of such option shall
not affect the obligation of such Borrower, to repay such
Loan in accordance with the terms of the applicable Note.
Subject to the provisions of Section 2.03 and Section 2.10,
Borrowings of more than one Type may be outstanding at the
same time.

(c) Subject to Section 2.15, each Bank shall make
its portion, as determined under Section 2.15, of each
Borrowing to a Borrower hereunder on the proposed date
thereof by paying the amount required to the Funds
Administrator in Houston, Texas in immediately available
funds not later than 1:00 p.m., Houston, Texas time, and,
subject to satisfaction of the conditions set forth in
Article IV, the Funds Administrator shall promptly and in any
event on the same day, credit the amounts so received to the
general deposit account of such Borrower with the Funds
Administrator, or, if a Borrowing shall not occur on such
date because any condition precedent herein specified shall
not have been met, return the amounts so received to the
respective Banks. Loans of each Tranche shall be made by the
Banks pro rata in accordance with Section 2.14. Unless the
Funds Administrator shall have received notice from a Bank
prior to the date of any Borrowing that such Bank will not
make available to the Funds Administrator such Bank's portion
of such Borrowing, the Funds Administrator may assume that
such Bank has made such portion available to the Funds
Administrator on the date of such Borrowing in accordance
with this paragraph (c) and the Funds Administrator may, in
reliance upon such assumption, make available to the relevant
Borrower on such date a corresponding amount. If and to the
extent that such Bank shall not have made such portion
available to the Funds Administrator, such Bank and such
Borrower severally agree to repay to the Funds Administrator
forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is
made available to such Borrower until the date such amount is
repaid to the Funds Administrator at (i) in the case of such
Borrower, the interest rate applicable at the time to the
Loans comprising such Borrowing and (ii) in the case of such
Bank, the Federal Funds Effective Rate. If such Bank shall
repay to the Funds Administrator such corresponding amount,
such amount shall constitute such Bank's Loan as part of such
Borrowing for purposes of this Agreement.

SECTION 2.03. Notice of Borrowings. (a) In order to
effect a Borrowing, a Borrower shall give irrevocable written
or telex notice (or irrevocable telephone notice thereof,
confirmed as soon as practicable by written notice) to the
Funds Administrator (a "Notice of Borrowing") (i) in the case
of an Alternate Base Rate Loan, not later than 11:00 a.m.,
Houston, Texas time, on the day of a proposed Borrowing, (ii)
in the case of a Certificate of Deposit Loan, not later than
10:00 a.m., Houston, Texas time, two Business Days before a
proposed Borrowing, and (iii) in the case of a Eurodollar
Loan, not later than 10:00 a.m., Houston, Texas time, three
Business Days before a proposed Borrowing. Each Notice of
Borrowing shall be irrevocable and shall in each case refer
to this Agreement and specify (i) the name of the Borrower,
(ii) whether the Borrowing then being requested is a Tranche
A Borrowing or a Tranche B Borrowing, (iii) whether the
Borrowing then being requested is to be comprised of
Alternate Base Rate Loans, Certificate of Deposit Loans or
Eurodollar Loans, (iv) the date of such Borrowing (which
shall be a Business Day) and amount thereof (which, in the
case of a Borrowing to be comprised of Alternate Base Rate
Loans, shall not be less than $5,000,000 and shall be in an
integral multiple of $1,000,000, and which, in the case of a
Borrowing to be comprised of Certificate of Deposit Loans or
Eurodollar Loans, shall not be less than $25,000,000 and
shall be in an integral multiple of $5,000,000) and (v) if
such Borrowing is to be comprised of Certificate of Deposit
Loans or Eurodollar Loans, the Interest Period or Interest
Periods with respect thereto. If no election as to the Type
of Loan is specified in any such notice by a Borrower, such
Loan shall be an Alternate Base Rate Loan. If no Interest
Period with respect to any Borrowing comprised of Certificate
of Deposit Loans or Eurodollar Loans is specified in any such
notice by a Borrower, then in the case of a Borrowing
comprised of Certificate of Deposit Loans, a Borrower shall
be deemed to have selected an Interest Period of 30 days
duration and in the case of a Borrowing comprised of
Eurodollar Loans, a Borrower shall be deemed to have selected
an Interest Period of one month's duration. The Funds
Administrator shall promptly advise the Administrative Agent
and the Banks of any notice given by a Borrower pursuant to
this Section 2.03(a) and of each Bank's portion of the
requested Borrowing.

(b) Notwithstanding any provision to the contrary
in this Agreement, with respect to either Tranche, more than
one Borrowing may occur on the same date. For purposes of
the foregoing, Borrowings comprised of Loans having different
Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Borrowings. Each
Borrowing shall be comprised of Loans of the same Tranche.

SECTION 2.04. Notes; Repayment of Loans. (a) The
Tranche A Loans made by each Bank to a Borrower shall be
evidenced by a note (a "Tranche A Note") duly executed on
behalf of such Borrower, dated the Closing Date, in
substantially the form attached hereto as Exhibit 2.04-A,
payable to such Bank in a principal amount equal to its
Tranche A Commitment on such date. The Tranche B Loans made
by each Bank to a Borrower shall be evidenced by a note (a
"Tranche B Note") duly executed on behalf of such Borrower,
dated the Closing Date, in substantially the form attached
hereto as Exhibit 2.04-B, payable to such Bank in a principal
amount equal to its Tranche B Commitment on such date. The
outstanding principal balance of each Tranche A Loan and
Tranche B Loan, as evidenced by the relevant Note, shall be
payable on the last day of the Interest Period applicable to
such Loan or, if earlier, the Tranche A Maturity Date or the
Tranche B Maturity Date, as applicable. Each Note shall bear
interest from its date on the outstanding principal balance
thereof as provided in Section 2.05.

(b) Each Bank, the Administrative Agent or the
Funds Administrator on its behalf, shall, and is hereby
authorized by each Borrower to, endorse on the schedule
attached to the relevant Notes delivered to such Bank (or a
continuation of such schedule attached to such Notes and made
a part thereof), or otherwise record in such Bank's internal
records, an appropriate notation evidencing the date and
amount of each Tranche A Loan or Tranche B Loan, as
applicable from the Bank to a Borrower, as well as the date
and amount of each payment and prepayment with respect
thereto; provided, however, that the failure of any Bank, the
Administrative Agent or the Funds Administrator to make such
a notation or any error in such a notation shall not affect
the obligation of a Borrower hereunder or under the Notes of
such Bank to repay the principal amount of the Loans made by
such Bank thereunder to such Bank together with all interest
accruing thereon.

SECTION 2.05. Interest on Loans. (a) Subject to the
provisions of Section 2.08, each Alternate Base Rate Loan
shall bear interest at a rate per annum, equal to the lesser
of (i) the Highest Lawful Rate and (ii) the Alternate Base
Rate (if the Alternate Base Rate is based on the Prime Rate,
computed on the basis of the actual number of days elapsed
over a year of 365 or 366 days, as the case may be; if the
Alternate Base Rate is based on the Base CD Rate or the
Federal Funds Effective Rate, computed on the basis of the
actual number of days elapsed over a year of 360 days).
Interest on each Alternate Base Rate Loan shall be payable on
each applicable Interest Payment Date.

(b) Subject to the provisions of Section 2.08,
each Certificate of Deposit Loan shall bear interest at a
rate per annum (computed on the basis of the actual number of
days elapsed over a year of 360 days) equal to the lesser of
(i) the Highest Lawful Rate and (ii) the Adjusted CD Rate for
the Interest Period in effect for such Loan plus 1/2 of 1%.
Interest on each Certificate of Deposit Loan shall be payable
on each applicable Interest Payment Date. The applicable
Adjusted CD Rate shall be determined by the Funds
Administrator, and such determination shall be conclusive
absent demonstrable error. The Funds Administrator shall
promptly advise the Borrowers and each Bank of such
determination.

(c) Subject to the provisions of Section 2.08,
each Eurodollar Loan shall bear interest at a rate per annum
(computed on the basis of the actual number of days elapsed
over a year of 360 days) equal to the lesser of (i) the
Highest Lawful Rate and (ii) the LIBO Rate for the Interest
Period in effect for such Loan plus 3/8 of 1%. Interest on
each Eurodollar Loan shall be payable on each applicable
Interest Payment Date. The LIBO Rate shall be determined by
the Funds Administrator, and such determination shall be
conclusive absent demonstrable error. The Funds
Administrator shall promptly advise the Borrowers and each
Bank of such determination.

SECTION 2.06. Fees. (a) Tandy shall pay each Bank,
through the Funds Administrator, on the last day of each
March, June, September and December, and on the Tranche A
Maturity Date, in immediately available funds, a commitment
fee (such Bank's "Tranche A Commitment Fee") of 1/10 of 1%
per annum on the amount of the Tranche A Commitment of such
Bank, whether used or unused, during the quarter (shorter
period commencing with the Execution Date or ending with the
Tranche A Maturity Date) ending on such date. Tandy shall
pay each Bank, through the Funds Administrator, on the last
day of each March, June, September and December, and on the
Tranche B Maturity Date, in immediately available funds, a
commitment fee (such Bank's "Tranche B Commitment Fee") of
3/20 of 1% per annum on the amount of the Tranche B
Commitment of such Bank, whether used or unused, during the
quarter (shorter period commencing with the Execution Date or
ending with the Tranche B Maturity Date) ending on such date.
All Commitmet Fees under this Section 2.06(a) shall be
computed on the basis of the actual number of days elapsed in
a year of 360 days. The Commitment Fee due to each Bank with
respect to each Tranche shall cease to accrue on the earlier
of the Tranche A Maturity Date or Tranche B Maturity Date, as
the case may be, or the termination of the applicable Tranche
A Commitment or Tranche B Commitment of such Bank pursuant to
Section 2.07.

(b) Tandy shall pay to each Bank on the Execution
Date a closing fee (the "Closing Fee") in an amount equal to
1/20 of 1% times the sum of the Commitments of such Bank.

(c) Tandy shall pay the Administrative Agent, an
agency fee (the "Agency Fee") in such amount as may be agreed
between the Borrower and the Agent pursuant to that certain
letter agreement of even date herewith between Tandy and the
Administrative Agent (the "Agent's Letter").

(d) Tandy shall pay to TCB and Chemical Bank, for
their own account, on or before the Execution Date all fees
due to them pursuant to that certain letter agreement dated
April 26, 1991 among Tandy, TCB-Dallas and Chemical Bank.

SECTION 2.07. Termination and Reduction of Commitments;
Subsequent Increases of Commitments. (a) Upon at least ten
Business Days' prior written or telex notice to the Agents,
the Borrowers may at any time in whole permanently terminate,
or from time to time permanently reduce, the Total
Commitment, ratably among the Banks in accordance with their
respective Tranche A Commitment and Tranche B Commitment;
provided, however, that any partial reduction of the Total
Commitment shall be in a minimum aggregate principal amount
of $20,000,000.

(b) At the time the Commitments of any Bank are
terminated or reduced pursuant to Section 2.07(a) or Section
2.10(b) the Borrowers shall pay to the Funds Administrator
for the account of each such Bank, the Commitment Fees on the
amount of the Commitments so terminated or reduced owed
through the date of such termination or reduction.

SECTION 2.08. Interest on Overdue Amounts. If either
Borrower shall default in the payment of the principal of or
interest on any Loan or any other amount due hereunder, by
acceleration or otherwise, such Borrower shall on demand from
time to time pay interest, to the extent permitted by law, on
such defaulted amount up to (but not including) the date of
actual payment (after as well as before judgment) at a rate
per annum (computed on the basis of the actual number of days
elapsed over a period of 360 days) equal to the lesser of (a)
the Highest Lawful Rate and (b) the Alternate Base Rate plus
2% per annum.

SECTION 2.09. Alternate Rate of Interest. (a) In the
event, and on each occasion, that on the day two Business
Days prior to the commencement of any Interest Period for a
Borrowing to be comprised of Eurodollar Loans, the Funds
Administrator shall have determined (which determination
shall be conclusive and binding upon the Borrowers) that
dollar deposits in the amount of the requested principal
amount of such Borrowing are not generally available in the
London Interbank Market, or that the rate at which dollar
deposits are being offered will not adequately and fairly
reflect the cost to any Bank of making or maintaining the
principal amount of its Eurodollar Loan comprising such
Borrowing during such Interest Period, or reasonable means do
not exist for ascertaining the LIBO Rate, the Funds
Administrator shall as soon as practicable thereafter give
written or telex notice of such determination to the
Borrowers, the Administrative Agent and the Banks, and any
request by a Borrower for the making of a Borrowing to be
comprised of Eurodollar Loans shall, until the circumstances
giving rise to such notice no longer exist, be deemed to be a
request for a Borrowing to be comprised of Alternate Base
Rate Loans or, if such Borrower shall so specify in its
notice to the Funds Administrator, a request for a Borrowing
to be comprised of Certificate of Deposit Loans so long as
the circumstances giving rise to a notice under Section
2.09(b) shall not exist. Each determination of the Funds
Administrator hereunder shall be conclusive absent
demonstrable error. In the event of such determination, the
Borrower requesting such Borrowing shall have the right to
withdraw its Notice of Borrowing requesting Eurodollar Loans.

(b) In the event, and on each occasion, that on or before
the day on which the Adjusted CD Rate for a Borrowing to be
comprised of Certificate of Deposit Loans is to be
determined, the Funds Administrator shall have determined
(which determination shall be conclusive and binding upon the
Borrowers absent demonstrable error) that the Adjusted CD
Rate for such Loan cannot be ascertained for any reason,
including the inability or failure of the Funds Administrator
to obtain sufficient bids in accordance with the terms of the
definition of Fixed Certificate of Deposit Rate, or the Funds
Administrator shall determine that the Adjusted CD Rate for
the Certificate of Deposit Loans comprising such Borrowing
will not adequately and fairly reflect the cost to any Bank
of making or maintaining the principal amount of its
Certificate of Deposit Loan during such Interest Period, the
Funds Administrator shall, as soon as practicable thereafter,
give written or telex notice of such determination to the
Borrowers, the Administrative Agent and the Banks, and any
request by a Borrower for the making of a Borrowing to be
comprised of Certificate of Deposit Loans shall, until the
circumstances giving rise to such notice no longer exist, be
deemed to be a request for a Borrowing to be comprised of
Alternate Base Rate Loans, or, if such Borrower shall so
specify in its notice to the Funds Administrator, a request
for a Borrowing to be comprised of Eurodollar Loans so long
as the circumstances giving rise to a notice under Section
2.09(a) shall not exist. Each determination by the Funds
Administrator hereunder shall be conclusive absent
demonstrable error. In the event of such determination, the
Borrower requesting such Borrowing shall have the right to
withdraw its Notice of Borrowing requesting Certificate of
Deposit Loans.

SECTION 2.10. Prepayment of Loans. (a) Each Borrowing
may be prepaid at any time and from time to time, in whole or
in part, subject to the requirements of Section 2.13 but
otherwise without premium or penalty, upon at least five
Business Days' prior written or telex notice to the Funds
Administrator; provided, however, that each such partial
prepayment shall be in an integral multiple of $1,000,000 and
a minimum aggregate principal amount of $5,000,000.

(b) On the date of any termination or reduction of
the Total Tranche A Commitment or the Total Tranche B
Commitment pursuant to Section 2.07(a), each Borrower shall
prepay so much of its Loans of such Tranche (up to the amount
by which the Tranche A Commitment or the Tranche B
Commitment, as the case may be, is so terminated or reduced)
as shall be necessary in order that the aggregate principal
amount of the Loans of such Tranche outstanding will not
exceed the Tranche A Commitment or the Tranche B Commitment,
as the case may be, following such termination or reduction.
All prepayments under this paragraph shall be subject to
Section 2.13.

(c) On any date when the aggregate principal
amount of the outstanding Loans owed by TCC exceeds the
lesser of (i) the Total Commitment and (ii) the then-current
Borrowing Base, TCC shall make a mandatory prepayment of the
Loans in such amount as may be necessary so that the
aggregate amount of outstanding Loans of TCC after giving
effect to such prepayment does not exceed the lesser of (i)
the Total Commitment and (ii) the then-current Borrowing
Base. All prepayments under this paragraph shall be subject
to Section 2.13.

(d) Each notice of prepayment shall specify the
prepayment date and the principal amount of each Borrowing
(or portion thereof) to be prepaid, shall specify whether the
Borrowing to be prepaid is a Tranche A Borrowing or a Tranche
B Borrowing, shall be irrevocable and shall commit the
Borrower making such prepayment to prepay such Loan by the
amount stated therein on the date stated therein. All
prepayments shall be accompanied by accrued interest on the
principal amount being prepaid to the date of prepayment.

SECTION 2.11. Reserve Requirements; Change in
Circumstances. (a) It is understood that the cost of each
Bank of making or maintaining any of the Eurodollar Loans may
fluctuate as a result of the applicability of reserve
requirements imposed by the Board at the ratios provided for
in Regulation D on the date hereof. The Borrowers agree to
pay to each of the Banks from time to time such amounts as
shall be necessary to compensate such Bank for the portion of
the cost of making or maintaining Eurodollar Loans resulting
from any such reserve requirements provided for in Regulation
D as in effect on the date hereof, it being understood that
the rates of interest applicable to Eurodollar Loans have
been determined on the assumption that no such reserve
requirements exist or will exist and that such rates do not
reflect costs imposed on the Banks in connection with such
reserve requirements.

(b) Notwithstanding any other provision herein, if
after the date of this Agreement any change in applicable law
or regulation or in the interpretation or administration
thereof by any governmental authority charged with the
interpretation or administration thereof (whether or not
having the force of law) shall change the basis of taxation
of payments to any Bank of the principal of or interest on
any Certificate of Deposit Loan or Eurodollar Loan made by
such Bank or any other fees or amounts payable hereunder
(other than taxes imposed on the overall net income of such
Bank by the jurisdiction in which such Bank has its principal
office or is located or by any political subdivision or
taxing authority therein), or shall impose, modify or deem
applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, such Bank (except any such
reserve requirement which is reflected in the Adjusted CD
Rate) or shall impose on such Bank or the London Interbank
Market any other condition affecting this Agreement or the
Certificate of Deposit Loans or Eurodollar Loans made by such
Bank and the result of any of the foregoing shall be to
increase the cost to such Bank of making or maintaining any
Certificate of Deposit Loan or Eurodollar Loan or to reduce
the amount of any sum received or receivable by such Bank
hereunder (whether of principal, interest or otherwise) in
respect thereof, by an amount deemed by such Bank in its sole
discretion to be material, then such additional amount or
amounts as will compensate such Bank for such additional
costs or reduction will be paid to such Bank by each Borrower
with respect to its Eurodollar Loans or Certificate of
Deposit Loans, as applicable.

(c) If any Bank shall have determined that the
applicability of any law, rule, regulation or guideline
adopted pursuant to or arising out of the July 1988 report of
the Basle Committee on Banking Regulations and Supervisory
Practices entitled "International Convergence of Capital
Measurement and Capital Standards," or the adoption after the
date hereof of any other law, rule, regulation or guideline
regarding capital adequacy, or any change in any of the
foregoing or in the interpretation or administration of any
of the foregoing by any governmental authority, central bank
or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or any
lending office of such Bank) or any Bank's holding company
with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on such Bank's
capital or on the capital of such Bank's holding company, if
any, as a consequence of this Agreement or the Loans made by
such Bank pursuant hereto to a level below that which such
Bank or such Bank's holding company could have achieved but
for such adoption, change or compliance (taking into
consideration such Bank's policies and the policies of such
Bank's holding company with respect to capital adequacy) by
an amount deemed by such Bank to be material, then from time
to time Tandy shall pay to such Bank such additional amount
or amounts as will compensate such Bank or such Bank's
holding company for any such reduction suffered. Without
limitation of the foregoing and without prejudicing the
rights of any Bank to claim compensation under this Section
2.11(c) with respect to its Tranche B Loans, it is agreed
that the interest rates and fees provided for in this
Agreement have been determined on the understanding that the
Banks will not be required to maintain capital against their
Tranche A Commitments under currently applicable laws,
regulations and regulatory guidelines, and that the Banks
will be entitled to make claims under this paragraph in the
event such understanding proves to be incorrect.

(d) A certificate of each Bank setting forth such
amount or amounts as shall be necessary to compensate such
Bank (or participating banks or other entities pursuant to
Article IX) as specified in paragraph (a), (b) or (c) above
shall be delivered to the Borrower obligated with respect
thereto and shall be conclusive absent demonstrable error.
Each Borrower shall pay each Bank the amount shown as due
from it on any such certificate within 10 days after its
receipt of the same.

(e) Failure on the part of any Bank to demand compensation
for any increased costs or reduction in amounts received or
receivable with respect to any Interest Period shall not
constitute a waiver of such Bank's rights to demand
compensation for any increased costs or reduction in amounts
received or receivable in such Interest Period or in any
other Interest Period. The protection of this Section 2.11
shall be available to each Bank regardless of any possible
contention of the invalidity or inapplicability of any law,
regulation or other condition which shall give rise to any
demand by such Bank for compensation.

(f) Nothing in this Section 2.11 shall entitle any
Bank to receive interest at a rate per annum in excess of the
Highest Lawful Rate.

SECTION 2.12. Change in Legality. (a) Notwithstanding
anything to the contrary herein contained, if any change in
any law or regulation or in the interpretation thereof by any
governmental authority charged with the administration or
interpretation thereof shall make it unlawful for any Bank to
make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby, then, by written notice
to the Borrowers and to the Agents, such Bank may:

(i) declare that Eurodollar Loans will not
thereafter be made by such Bank hereunder, whereupon any
request by a Borrower for a Borrowing to be comprised of
Eurodollar Loans shall, as to such Bank only, be deemed
a request for an Alternate Base Rate Loan unless such
declaration shall be subsequently withdrawn; and

(ii) require that all outstanding Eurodollar Loans
made by it be converted to Alternate Base Rate Loans, in
which event all such Eurodollar Loans shall be
automatically converted to Alternate Base Rate Loans as
of the effective date of such notice as provided in
paragraph (b) below.

In the event any Bank shall exercise its rights under (i) or
(ii) above, all payments and prepayments of principal which
would otherwise have been applied to repay the Eurodollar
Loans that would have been made by such Bank or the converted
Eurodollar Loans of such Bank shall instead be applied to
repay the Alternate Base Rate Loans made by such Bank in lieu
of, or resulting from the conversion of, such Eurodollar
Loans; provided, however, the Alternate Base Rate Loans
resulting from the conversion of such Eurodollar Loans shall
be prepayable only at the times the converted Eurodollar
Loans would have been prepayable, notwithstanding the
provisions of Section 2.10(a).

(b) For purposes of Section 2.12(a), a notice to a
Borrower by any Bank shall be effective as to each Eurodollar
Loan, if lawful, on the last day of the then current Interest
Period or, if there are then two or more current Interest
Periods, on the last day of each such Interest Period,
respectively; otherwise, such notice shall be effective on
the date of receipt by such Borrower.

SECTION 2.13. Indemnity. (a) Each Borrower shall
indemnify each Bank against any loss or expense which such
Bank may sustain or incur as a consequence of (a) any failure
by such Borrower to fulfill on the date of any Borrowing
hereunder the applicable conditions set forth in Article IV,
(b) any failure by such Borrower to borrow hereunder after
delivery of a Notice of Borrowing or a notice of refinancing
or continuation has been given pursuant to Section 2.03, (c)
any payment, prepayment or conversion of a Certificate of
Deposit Loan or Eurodollar Loan required by any other
provision of this Agreement or otherwise made on a date other
than the last day of the applicable Interest Period, (d) any
default in payment or prepayment of the principal amount of
any Loan or any part thereof or interest accrued thereon, as
and when due and payable (at the due date thereof, by
irrevocable notice of prepayment or otherwise), or (e) the
occurrence of any Event of Default, including, but not
limited to, any loss or reasonable expense sustained or
incurred or to be sustained or incurred in liquidating or
employing deposits from third parties acquired to effect or
maintain such Loan or any part thereof as a Certificate of
Deposit Loan or Eurodollar Loan. Such loss or reasonable
expense shall include an amount equal to the excess, if any,
as reasonably determined by each Bank of (i) its cost of
obtaining the funds for the Loan being paid, prepaid or
converted or not borrowed (based on the Adjusted CD Rate or
the LIBO Rate applicable thereto) for the period from the
date of such payment, prepayment or conversion or failure to
borrow to the last day of the Interest Period for such Loan
(or, in the case of a failure to borrow, the Interest Period
for such Loan which would have commenced on the date of such
failure to borrow) over (ii) the amount of interest (as
reasonably determined by such Bank) that could be realized by
such Bank in reemploying during such period the funds so
paid, prepaid or converted or not borrowed. A certificate of
each Bank setting forth any amount or amounts which such Bank
is entitled to receive pursuant to this Section 2.13 shall be
delivered to the Borrowers and shall be conclusive absent
demonstrable error. Nothing in this Section 2.13 shall
entitle any Bank to receive interest at a rate per annum in
excess of the Highest Lawful Rate.

(c) The provisions of this Section 2.13 shall
remain operative and in full force and effect regardless of
the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or
unenforceability of any term or provision of this Agreement
or any Note, or any investigation made by or on behalf of any
Bank. All amounts due under this Section 2.13 shall be
payable on written demand therefor.

SECTION 2.14. Pro Rata Treatment. Except as permitted
under Section 2.11, Section 2.12 and Section 2.13, with
respect to each Tranche, each Borrowing, each payment or
prepayment of principal of the Notes of such Tranche, each
payment of interest on such Notes, each other reduction of
the principal or interest outstanding under such Notes,
however achieved, each payment of the relevant Commitment
Fees and each reduction of the relevant Commitments shall be
made pro rata among the Banks in the proportions that their
respective Tranche A Commitment or Tranche B Commitment bears
to the Total Tranche A Commitment or Total Tranche B
Commitment.

SECTION 2.15. Refinancings. A Borrower may refinance all
or any part of any Borrowing with a Borrowing of the same or
a different Type made pursuant to Section 2.02, subject to
the conditions and limitations set forth herein and elsewhere
in this Agreement, including refinancings of Tranche A
Borrowings with Tranche B Borrowings and Tranche B Borrowings
with Tranche A Borrowings. Any Borrowing or part thereof so
refinanced shall be deemed to be repaid in accordance with
Section 2.07 with the proceeds of a new Borrowing hereunder
and the proceeds of the new Borrowing, to the extent they do
not exceed the principal amount of the Borrowing being
refinanced, shall not be paid by the Banks to the Funds
Administrator or by the Funds Administrator to such Borrower
pursuant to Section 2.02(c).

SECTION 2.16. Payments. (a) The Borrowers shall make
all payments (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder and under
any other Loan Document not later than 1:00 p.m., Houston,
Texas time, on the date when due in dollars to the Funds
Administrator at its offices at 712 Main Street, Houston,
Texas, in immediately available funds.

(b) Whenever any payment (including principal of
or interest on any Borrowing or any Fees or other amounts)
hereunder or under any other Loan Document shall become due,
or otherwise would occur, on a day that is not a Business
Day, such payment may be made on the next succeeding Business
Day, and such extension of time shall in such case be
included in the computation of interest or Fees, if
applicable.

SECTION 2.17. Sharing of Setoffs. With respect to each
Tranche, each Bank agrees that if it shall, in any manner,
including through the exercise of a right of banker's lien,
setoff or counterclaim against a Borrower, or pursuant to a
secured claim under Section 506 of Title 11 of the United
States Code or other security or interest arising from, or in
lieu of, such secured claim, received by such Bank under any
applicable bankruptcy, insolvency or other similar law or
otherwise, obtain payment (voluntary or involuntary) in
respect of a Note of such Borrower of such Tranche held by it
as a result of which the unpaid principal portion of the Note
of such Borrower of such Tranche held by it shall be
proportionately less than the unpaid principal portion of the
Note of such Borrower of such Tranche held by any other Bank,
it shall be deemed to have simultaneously purchased from such
other Bank a participation in the Note of such Borrower of
such Tranche held by such other Bank, so that the aggregate
unpaid principal amount of the Notes of such Borrower and
participations in Notes of such Borrower of such Tranche held
by each Bank shall be in the same proportion to the aggregate
unpaid principal amount of all Notes of such Borrower of such
Tranche then outstanding as the principal amount of the Note
of such Borrower of such Tranche held by it prior to such
exercise of banker's lien, setoff or counterclaim was to the
principal amount of all Notes of such Borrower outstanding
prior to such exercise of banker's lien, setoff or
counterclaim; provided, however, that if any such purchase or
purchases or adjustments shall be made pursuant to this
Section 2.17 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such recovery
and the purchase price or prices or adjustment restored
without interest. Each Borrower expressly consents to the
foregoing arrangements and agrees that any Person holding a
participation in a Note deemed to have been so purchased may
exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by each
Borrower to such Bank as fully as if such Bank had made a
Loan directly to each Borrower in the amount of such
participation.

SECTION 2.18. Payments Free of Taxes. (a) Any and all
payments by a Borrower hereunder shall be made, in accordance
with Section 2.02(c), free and clear of and without deduction
for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with
respect thereto, excluding taxes imposed on either Agent's or
any Bank's (or any transferee's or assignee's, including a
participation holder's (any such entity a "Transferee") net
income and franchise taxes imposed on either Agent or any
Bank (or Transferee) by the United States or any jurisdiction
under the laws of which it is organized or any political
subdivision thereof (all such nonexcluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities
being hereinafter referred to as "Taxes"). If a Borrower
shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to the Banks (or any
Transferee or either Agent, (i) the sum payable shall be
increased by the amount necessary so that after making all
required deductions (including deductions applicable to
additional sums payable under this Section 2.18) such Bank
(or Transferee) or such Agent (as the case may be) shall
receive an amount equal to the sum it would have received had
no such deductions been made, (ii) such Borrower shall make
such deductions and (iii) such Borrower shall pay the full
amount deducted to the relevant taxing authority or other
governmental authority in accordance with applicable law.

(b) In addition, each Borrower agrees to pay any
present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to,
this Agreement or any other Loan Document (hereinafter
referred to as "Other Taxes").

(c) Each Borrower will indemnify each Bank (or
Transferee) and each Agent for the full amount of Taxes and
Other Taxes (including any Taxes or Other Taxes imposed by
any jurisdiction on amounts payable under this Section 2.18)
paid by such Bank (or Transferee or such Agent, as the case
may be, and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether
or not such Taxes or Other Taxes were correctly or legally
asserted by the relevant taxing authority or other
governmental authority. Such indemnification shall be made
within 30 days after the date any Bank (or Transferee) or
either Agent, as the case may be, makes written demand
therefor. If a Bank (or Transferee) or an Agent shall become
aware that it is entitled to receive a refund in respect of
Taxes or Other Taxes, it shall promptly notify the applicable
Borrower of the availability of such refund and shall, within
30 days after receipt of a request by such Borrower, apply
for such refund at such Borrower's expense. If any Bank (or
Transferee) or the Funds Administrator receives a refund in
respect of any Taxes or Other Taxes for which such Bank (or
Transferee) or the Funds Administrator has received payment
from a Borrower hereunder it shall promptly notify such
Borrower of such refund and shall, within 30 days after
receipt of a request by such Borrower (or promptly upon
receipt, if such Borrower has requested application for such
refund pursuant hereto), repay such refund to such Borrower,
net of all out-of-pocket expenses of such Bank and without
interest; provided that such Borrower, upon the request of
such Bank (or Transferee) or the Funds Administrator, agrees
to return such refund (plus penalties, interest or other
charges) to such Bank (or Transferee) or the Funds
Administrator in the event such Bank (or Transferee) or the
Funds Administrator is required to repay such refund.

(d) Within 30 days after the date of any payment
of Taxes or Other Taxes withheld by a Borrower in respect of
any payment to any Bank (or Transferee) or the Funds
Administrator, such Borrower will furnish to the Funds
Administrator, at its address referred to in Section 9.01,
the original or a certified copy of a receipt evidencing
payment thereof.

(e) Without prejudice to the survival of any other
agreement contained herein, the agreements and obligations
contained in this Section 2.18 shall survive the payment in
full of the principal of and interest on all Loans made
hereunder.

(f) Each Bank (or Transferee) which is organized
outside the United States shall promptly notify the Borrowers
of any changes in its funding office and upon written request
of the Borrowers shall, prior to the immediately following
due date of any payment by a Borrower hereunder, deliver to
the Borrowers such certificates, documents or other evidence,
as required by the Code or Treasury Regulations issued
pursuant thereto, including Internal Revenue Service Form
1001 or Form 4224 and any other certificate or statement of
exemption required by Treasury Regulation Section 1.1441-1(a)
or Section 1.1441-6(c) or any subsequent version thereof,
properly completed and duly executed by such Bank (or
Transferee) establishing that such payment is (i) not subject
to withholding under the Code because such payment is
effectively connected with the conduct by such Bank (or
Transferee) of a trade or business in the United States or
(ii) totally exempt from United States tax under a provision
of an applicable tax treaty. Unless the Borrowers and the
Funds Administrator have received forms or other documents
satisfactory to them indicating that payments hereunder or
under the Notes are not subject to United States withholding
tax or are subject to such tax at a rate reduced by an
applicable tax treaty, the Borrowers or the Funds
Administrator shall withhold taxes from such payments at the
applicable statutory rate in the case of payments to or for
any Bank (or Transferee) or assignee organized under the laws
of a jurisdiction outside the United States.

(g) No Borrower shall be required to pay any
additional amounts to any Bank (or Transferee) in respect of
United States withholding tax pursuant to paragraph (a) above
if the obligation to pay such additional amounts would not
have arisen but for a failure by such Bank (or Transferee) to
comply with the provisions of paragraph (f) above unless such
failure results from (i) a change in applicable law,
regulation or official interpretation thereof or (ii) an
amendment, modification or revocation of any applicable tax
treaty or a change in official position regarding the
application or interpretation thereof, in each case after the
Closing Date (and, in the case of a Transferee, after the
date of assignment or transfer).

(h) Any Bank (or Transferee) claiming any
additional amounts payable pursuant to this Section 2.18
shall use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document
requested by a Borrower or to change the jurisdiction of its
applicable lending office if the making of such a filing or
change would avoid the need for or reduce the amount of any
such additional amounts which may thereafter accrue and would
not, in the sole determination of such Bank, be otherwise
disadvantageous to such Bank (or Transferee).

(i) If any Bank (or Transferee) requests
compensation pursuant to this Section 2.18 hereof, the
Borrowers may give notice to such Bank (with a copy to the
Agents) that it wishes to seek one or more Eligible Assignees
(which may be one or more of the Banks) to assume the
Commitments of such Bank and to purchase its outstanding
Loans and Notes. Each Bank (or Transferee) requesting
compensation pursuant to Section 2.18 hereto agrees to sell
all of its Commitments, its Loans and its Notes pursuant to
Section 9.03 to any such Eligible Assignee for an amount
equal to the sum of the outstanding unpaid principal of and
accrued interest on such Loans and Notes plus all Commitment
Fees and other fees and amounts due such Bank (or Transferee)
hereunder calculated, in each case, to the date such
Commitments, Loans and Notes are purchased, whereupon such
Bank (or Transferee) shall have no further Commitments or
other obligation to either Borrower hereunder or under any
Note.

SECTION 2.19. Classification Downgrade. In the event
the facilities available under this Agreement or any Loan or
the Notes shall be classified as a "highly leveraged
transaction" in accordance with published United States
regulations (an "HLT Classification") by (a) either Agent or
(b) any United States governmental authority with supervisory
responsibility over either Agent or any of the Banks, either
Agent or any of the Banks so advised shall forthwith notify
the Borrowers and the Administrative Agent (who shall
forthwith notify each of the Banks and the other Agent).
Upon receipt of such notification, the Borrowers and the
Agents shall forthwith commence discussions and in good faith
negotiate revisions to this Agreement (including interest
rate, fees, term, covenants, representations and any other
items deemed relevant) so as to reflect market terms and
conditions then offered for facilities reasonably similar in
type, term and amount to that under this Agreement and
similarly classified. Any such revisions shall be subject to
the approval of the Agents and the Required Banks. If the
Borrowers and the Required Banks shall fail to agree on such
an increase within 90 days after notice of such HLT
Classification is given to the Agents and the Banks as
provided above, then (i) the Administrative Agent shall, if
requested by the Required Banks, by notice to the Borrowers,
immediately terminate the Commitments of the Banks, and (ii)
upon such termination, the Borrowers shall prepay the Loans
outstanding hereunder in full, together with any interest
accrued thereon to the date of such prepayment and any
amounts payable pursuant to Section 2.13 hereof in connection
therewith. The Banks acknowledge that (without prejudice to
the preceding sentence) an HLT Classification shall not per
se constitute a Default or an Event of Default hereunder.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Each Borrower represents and warrants as to itself and
Tandy represents and warrants as to each of its Subsidiaries
that:

SECTION 3.01. Organization, Corporate Powers. Each
Borrower and each of its Significant Subsidiaries is duly
organized, validly existing and in good standing under the
laws of the state of its incorporation or organization, has
the requisite power and authority to own its property and
assets and to carry on its business as now conducted and is
qualified to do business in every jurisdiction where such
qualification is required, except where the failure so to
qualify would not have a material adverse effect on the
condition, financial or otherwise, of Tandy or TCC. Each of
Tandy and TCC has the corporate power to execute, deliver and
perform its obligations under this Agreement and the other
Loan Documents to which it is a party, to borrow hereunder,
to execute and deliver the Notes to which it is a party and
to comply with the terms of the Operating Agreement and the
Support Agreement. TCC does not and will not have any
Subsidiaries other than TRC.

SECTION 3.02. Authorization. The execution, delivery
and performance of this Agreement, the Operating Agreement
and the Support Agreement, the borrowings hereunder, and the
execution and delivery of the Notes by the Borrowers and the
Tandy Guaranty by Tandy (a) have been duly authorized by all
requisite corporate and, if required, stockholder action on
the part of the Borrowers and (b) will not (i) violate (A)
any provision of law, statute, rule or regulation or the
certificate of incorporation or the bylaws of either
Borrower, (B) any order of any court, or any rule, regulation
or order of any other agency of government binding upon
either Borrower or (C) any provisions of any indenture,
agreement or other instrument to which either Borrower is a
party, or by which either Borrower or Tandy or any of its
properties or assets are or may be bound, (ii) be in conflict
with, result in a breach of or constitute (alone or with
notice or lapse of time or both) a default under any
indenture, agreement or other instrument referred to in
(b)(i)(C) above or (iii) result in the creation or imposition
of any lien, charge or encumbrance of any nature whatsoever
upon any property or assets of either Borrower.

SECTION 3.03. Governmental Approval. No registration
with or consent or approval of, or other action by, any
federal, state or other governmental agency, authority or
regulatory body is or will be required in connection with the
execution, delivery and performance of this Agreement, the
execution and delivery of the Notes, the Borrowings hereunder
or the performance of the Operating Agreement and the Support
Agreement by either Borrower.

SECTION 3.04. Enforceability. This Agreement, the
Operating Agreement and the Support Agreement have been duly
executed and delivered by the Borrowers and constitute legal,
valid and binding obligations of the Borrowers, and the Notes
and the Tandy Guaranty, when duly executed and delivered by
the Borrower signatory thereto, will constitute legal, valid
and binding obligations of such Borrower, in each case
enforceable in accordance with their respective terms
(subject, as to the enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium and
similar laws affecting creditors' rights generally).

SECTION 3.05. Financial Statements. (a) The audited
consolidated financial statements of Tandy and TCC, in each
case, as at June 30, 1990, copies of which have been
furnished to the Banks, have been prepared in conformity with
generally accepted accounting principles applied on a basis
consistent with that of the preceding fiscal year, and
present fairly the financial conditions of Tandy and its
Subsidiaries and TCC, respectively, as at such date and the
results of their operations for the period then ended.

(b) The Forms 10-Q of Tandy and TCC, in each case,
as at each of December 31, 1990 and March 31, 1991, copies of
which have been furnished to the Banks, have been prepared in
accordance with all applicable rules, regulations and
guidelines of the Securities and Exchange Commission and
present fairly the financial condition of Tandy and its
Subsidiaries and TCC, respectively, as at such dates and the
results of their operations for the periods then ended,
subject to year-end audit adjustments.

SECTION 3.06. No Material Adverse Change. There has
been no material adverse change in the businesses, assets,
operations, prospects or condition, financial or otherwise,
of Tandy or TCC since June 30, 1990.

SECTION 3.07. Title to Properties. Each of Tandy and
TCC has good and marketable title to, or valid leasehold
interests in, all its properties and assets, except for such
properties as are no longer used or useful in the conduct of
its businesses or as have been disposed of in the ordinary
course of business and except for minor defects in title that
do not interfere with the ability of Tandy or TCC to conduct
its business as now conducted.

SECTION 3.08. Litigation; Compliance with Laws; etc.
(a) There are not any actions, suits or proceedings at law or
in equity or by or before any governmental instrumentality or
other agency or regulatory authority now pending or, to the
knowledge of Tandy or TCC, threatened against or affecting
Tandy or TCC or any other Subsidiary of Tandy or the
businesses, assets or rights of Tandy or TCC or any other
Subsidiary of Tandy (i) which involve this Agreement, the
Operating Agreement or the Support Agreement or any of the
transactions contemplated hereby or thereby or (ii) as to
which there is a reasonable possibility of an adverse
determination and which, if adversely determined, could,
individually or in the aggregate, materially impair the
ability of Tandy or TCC to conduct business substantially as
now conducted, or materially and adversely affect the
businesses, assets, operations, prospects or condition,
financial or otherwise, of Tandy or TCC, or impair the
validity or enforceability of or the ability of Tandy or TCC
to perform its obligations under this Agreement, the
Operating Agreement, the Support Agreement or any of the
Notes or other Loan Documents.

(b) Neither Tandy nor TCC is in violation of any
law, the breach or consequence of which would materially and
adversely affect the ability of Tandy or TCC to carry on its
business, or in default under any material order, writ,
injunction, award or decree of any court, arbitrator,
administrative agency or other governmental authority binding
upon it or its assets or any material indenture, mortgage,
contract, agreement or other undertaking or instrument to
which it is a party or by which any of its properties may be
bound, and nothing has occurred which would materially and
adversely affect the ability of Tandy or TCC to carry on its
business or perform its obligations under any such order,
writ, injunction, award or decree or any such material
indenture, mortgage, contract, agreement or other undertaking
or instrument.

SECTION 3.09. Agreements; No Default. (a) Neither
Tandy nor TCC is a party to any agreement or instrument or
subject to any corporate restriction that has a present
material and adverse effect on the business, properties,
assets, operations, prospects or condition, financial or
otherwise, of Tandy or TCC, respectively.

(b) Neither Tandy nor TCC is in default in any
manner that would materially and adversely affect the
business, properties, assets, operations, prospects or
condition, financial or otherwise, of Tandy or TCC or the
performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any
material agreement or instrument to which it is a party.

(c) Neither Tandy nor any of its Subsidiaries is
in default under any agreement or instrument to which Tandy
or any Subsidiary is a party or by which any of their
respective properties or assets is bound or affected, which
default might materially and adversely affect the financial
condition or operations of Tandy and its Subsidiaries taken
as a whole. No Event of Default has occurred and is
continuing.

SECTION 3.10. Federal Reserve Regulations.

(a) Neither Tandy nor TCC 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.

(b) No part of the proceeds of the Loans will be
used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, (i) 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 (ii)
for any purpose which entails a violation of, or which is
inconsistent with, the provisions of the Regulations of the
Board, including Regulations G, T, U or X; provided, however,
Tandy may acquire Margin Stock if, upon the acquisition of
such Margin Stock, 25% or less of Tandy's total assets
subject to the restrictions set forth in Section 6.01 would
then be composed of Margin Stock, and furnish to the
Administrative Agent upon its request, a statement in
conformity with the requirements of Federal Reserve Form U-1
referred to in Regulation U.

SECTION 3.11. Taxes. Each Borrower and each of its
Subsidiaries has filed all tax returns which are required to
have been filed and has paid, or made adequate provisions for
the payment of, all of its taxes which are due and payable,
except such taxes, if any, as are being contested in good
faith and by appropriate proceedings and as to which such
reserves or other appropriate provisions as may be required
by generally accepted accounting principles have been
maintained. The federal income tax liability of Tandy and
its Subsidiaries has been audited by the Internal Revenue
Service and has been finally determined and satisfied (or the
time for audit has expired) for all tax years up to and
including the tax year ended June 30, 1979. Tandy deems the
amounts and maximum final judgments from such action to be
immaterial to Tandy. Neither Borrower is aware of any
proposed assessment against it or any of its Subsidiaries for
additional taxes (or any basis for any such assessment) which
might be material to either Borrower and its Subsidiaries
taken as a whole.

SECTION 3.12. Pension and Welfare Plans. Each Plan
complies in all material respects with all applicable
statutes and governmental rules and regulations, and: (a) no
Reportable Event has occurred and is continuing with respect
to any Plan, (b) neither Tandy, TCC nor any ERISA Affiliate
has withdrawn from any Plan or instituted steps to do so, and
(c) except as listed on Exhibit 3.12, no steps have been
instituted to terminate any Plan. No condition exists or
event or transaction has occurred in connection with any Plan
which could result in the incurrence by Tandy, TCC or any
ERISA Affiliate of any material liability, fine or penalty.
Neither Tandy, TCC nor any ERISA Affiliate is a member of, or
contributes to, any multiple employer Plan as described in
section 4064 of ERISA. Neither Borrower nor any of its
Subsidiaries has any contingent liability with respect to any
post-retirement "welfare benefit plans," as such term is
defined in ERISA.

SECTION 3.13. No Material Misstatements. Neither this
Agreement, the other Loan Documents, the Confidential
Information Memorandum nor any other document delivered by or
on behalf of Tandy or any of its Affiliates (including each
Borrower's Annual Report on Form 10-K for 1990 and each
Borrower's Quarterly Report on Form 10-Q for the three fiscal
quarters ended at March 31, 1991) in connection with any Loan
Document or included therein contained or contains any
material misstatement of fact or omitted or omits to state
any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made,
not misleading.

SECTION 3.14. Investment Company Act; Public Utility
Holding Company Act. Neither Tandy nor TCC is an "investment
company" or a company "controlled" by an investment company
as defined in, or subject to regulation under, the Investment
Company Act of 1940. Neither Tandy nor TCC is a "holding
company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.

SECTION 3.15. Business; Liabilities of TCC. TCC has
conducted no business other than the purchase, service and
collection of accounts receivable under the Operating
Agreement and, in September 1987, the one time purchase of
existing Radio Shack customer accounts created under an
agreement with Citibank, N.A.

SECTION 3.16. Compliance with Laws. To the best
knowledge of each Borrower, after due investigation, each
Borrower and its Subsidiaries are in material compliance with
all statutes and governmental rules and regulations
applicable to them.

SECTION 3.17. Maintenance of Insurance. Each Borrower
maintains, and causes each of its Subsidiaries to maintain,
insurance to such extent and against such hazards and
liabilities as is commonly maintained by companies similarly
situated.

SECTION 3.18. Existing Liens. None of the assets of
either Borrower or any of its Subsidiaries is subject to any
Lien, except:

(a) Liens for current taxes not delinquent or
taxes being contested in good faith and by appropriate
proceedings and as to which such reserves or other
appropriate provisions as may be required by generally
accepted accounting principles are being maintained;

(b) carriers', warehousemen's, mechanics',
materialmen's and other like statutory Liens arising in
the ordinary course of business securing obligations
which are not overdue for a period of more than 90 days
or which are being contested in good faith and by
appropriate proceedings and as to which such reserves or
other appropriate provisions as may be required by
generally accepted accounting principles are being
maintained;

(c) pledges or deposits in connection with
workers' compensation, unemployment insurance and other
social security legislation;

(d) deposits to secure the performance of bids,
trade contracts, leases, statutory obligations, and
other obligations of a like nature incurred in the
ordinary course of business, and Liens securing
reimbursement obligations created by open letters of
credit for the purchase of inventory;

(e) Liens granted by a Subsidiary of Tandy (other
than TCC and TRC) to secure such Subsidiary's
Indebtedness to Tandy or to any other Subsidiary of
Tandy;

(f) Liens granted by TRC to the Tandy Master Trust
to secure TRC's Indebtedness to the Tandy Master Trust;

(g) Liens, if any, disclosed in the financial
statements referred to in Section 3.05; and

(h) Liens listed on Exhibit 3.18.

SECTION 3.19. Environmental Matters. Each Borrower and
each of its Subsidiaries has complied in all material
respects with all federal, state, local and other statutes,
ordinances, orders, judgments, rulings and regulations
relating to environmental pollution or to environmental
regulation or control. Neither Borrower nor any of its
Subsidiaries have received notice of any failure so to comply
which alone or together with any other such failure could
result in a material adverse effect on the business, assets,
operations, prospects or condition (financial or otherwise)
of such Borrower or such Subsidiary. None of the facilities
of either Borrower or any of its Subsidiaries manage any
hazardous wastes, hazardous substances, hazardous materials,
toxic substances or toxic pollutants, as those terms are used
in the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response Compensation and
Liability Act, the Hazardous Materials Transportation Act,
the Toxic Substance Control Act, the Clean Air Act or the
Clean Water Act, in violation of any regulations promulgated
pursuant thereto or in any other applicable law where such
violation could result, individually or together with other
violations, in a material adverse effect on the business,
assets, operations, prospects or condition (financial or
otherwise) of such Borrower or such Subsidiary

ARTICLE IV

CONDITIONS OF LENDING

The obligations of the Banks to make Loans hereunder
shall be subject to the following conditions precedent:

SECTION 4.01. All Borrowings. On the date of each
Borrowing hereunder:

(a) The Funds Administrator shall have received a
Notice of Borrowing as required by Section 2.03.

(b) The representations and warranties set forth
in Article III (except, in the case of a Borrowing in
which the aggregate principal amount of Loans
outstanding is not increased, Sections 3.06 and 3.08(a))
hereof shall be true and correct in all material
respects with the same effect as though made on and as
of such date.

(c) Each Borrower shall be in compliance with the
terms and provisions contained herein on its part to be
observed or performed, and at the time of and
immediately after such Borrowing no Event of Default or
Default shall have occurred and be continuing.

Each Borrowing hereunder shall be deemed to be a
representation and warranty by the Borrower on the date of
such Borrowing as to the matters specified in paragraphs (b)
and (c) of this Section 4.01.

SECTION 4.02. All Borrowings to TCC. On the date of
each Borrowing hereunder to TCC, the Banks shall have
received a Borrowing Base Certificate setting forth the
Borrowing Base accompanied by an accounts receivable aging
schedule in the form of Exhibit 1.01-D hereto.

SECTION 4.03. First Borrowing to Either Borrower. The
obligations of the Banks to make Loans hereunder on the
Closing Date to either Borrower are subject to the following
additional conditions precedent:

(a) The Banks shall have received a favorable
written opinion of Rudolph L. Ennis, Staff Attorney of
Tandy, to the effect set forth in Exhibit 4.03 hereto,
dated the Closing Date, addressed to the Banks and
satisfactory to Andrews & Kurth, special counsel for the
Agents; provided, however, it is not a condition
precedent to the Loans to be made to Tandy hereunder
that such opinion address either the Operating Agreement
or the Support Agreement.

(b) All legal matters incident to this Agreement,
the Notes and the Borrowings hereunder shall be
satisfactory to Andrews & Kurth, special counsel for the
Agents.

(c) The Banks shall have received (i) a copy of
the certificate of incorporation, as amended, of each
Borrower, certified by the Secretary of State of
Delaware and a certificate as to the good standing of
and charter documents filed by each Borrower from such
Secretary of State; (ii) a copy of the certificate of
authority to do business in the State of Texas,
certified by the Secretary of State of Texas and a
certificate as to the good standing of each Borrower
from the Comptroller of the State of Texas; (iii) a
certificate of the Secretary or an Assistant Secretary
of each Borrower, dated the Closing Date and certifying
(A) that attached thereto is a true and complete copy of
the bylaws of such Borrower as in effect on the date of
such certificate and at all times since a date prior to
the date of the resolutions described in (B) below, (B)
that attached thereto is a true and complete copy of
resolutions duly adopted by the Board of Directors of
such Borrower authorizing the execution, delivery and
performance of this Agreement, the Operating Agreement,
the Support Agreement and the Notes to be delivered by
such Borrower and the Borrowings by such Borrower
hereunder and that such resolutions have not been
modified, rescinded or amended and are in full force and
effect, (C) that the certificate of incorporation of
such Borrower has not been amended since the date of the
last amendment thereto shown on the good standing
certificate furnished pursuant to (i) above, and (D) as
to the incumbency and specimen signature of each officer
of such Borrower executing this Agreement, the Notes
delivered by such Borrower or any other document
delivered in connection herewith or therewith; (iii) a
certificate of another officer of such Borrower as to
the incumbency and specimen signature of the Secretary
or such Assistant Secretary of such Borrower; and (iv)
such other documents as any Bank or Andrews & Kurth,
special counsel for the Agents, may reasonably request.

(d) The Banks shall have received a certificate,
dated the Closing Date and signed by the chief financial
officer of Tandy, confirming compliance with the
conditions precedent set forth in paragraphs (b) and (c)
of Section 4.01.

(e) The Administrative Agent shall have received
the Notes duly executed by the Borrowers payable to the
order of the respective Banks and otherwise complying
with the provisions of Section 2.04.

(f) The Administrative Agent shall have received a
counterpart of the Agent's Letter duly executed by
Tandy.

SECTION 4.04. First Borrowing to TCC. The obligations
of the Banks to make its initial Loans hereunder to TCC are
subject to the following additional conditions precedent:

(a) Tandy and TCC shall have duly executed and
delivered a certificate certifying that attached thereto
is a true and complete copy of the Operating Agreement
together with all amendments thereto.

(b) Tandy and TCC shall have duly executed and
delivered the Support Agreement.

(c) The Banks shall have received a favorable
written opinion of Rudolph L. Ennis, Staff Attorney of
Tandy, the Borrowers, dated on or prior to the date of
the initial Loan to TCC, covering those matters set
forth in Exhibit 4.03 hereto relating to the Operating
Agreement and the Support Agreement, addressed to the
Banks and satisfactory to Andrews & Kurth, special
counsel for the Agents.

(d) All legal matters incident to the Operating
Agreement and the Support Agreement shall be
satisfactory to Andrews & Kurth, special counsel for the
Agents, including evidence that the agencies that have
rated the commercial paper of TCC have consented to the
Support Agreement.

(e) The Banks shall have received a certificate,
dated the date of the initial borrowing by TCC and
signed by the chief financial officer of TCC, confirming
compliance with the conditions precedent set forth in
paragraphs (b) and (c) of Section 4.01.

ARTICLE V

AFFIRMATIVE COVENANTS

So long as this Agreement shall remain in effect or the
principal of or interest on any Note, any Commitment Fee or
any other expense or amount payable hereunder shall be unpaid
and until the Commitments of the Banks shall expire or
terminate, unless the Required Banks shall otherwise consent
in writing, the Borrowers covenant and agree with each Bank
that:

SECTION 5.01. Existence. Each Borrower will maintain
and preserve, and, subject to the provisions of clauses (w),
(x) and (y) of Section 6.03, will cause each of its
Significant Subsidiaries to maintain and preserve, its
respective existence as a corporation or other form of
business organization, as the case may be, and all rights,
privileges, licenses, patents, patent rights, copyrights,
trademarks, trade names, franchises and other authority to
the extent material and necessary for the conduct of its
respective businesses in the ordinary course as conducted
from time to time, including, in the case of Tandy, its good
standing and qualification to do business in the State of
Texas. TCC is not required to be qualified to do business in
the State of Texas as of the Effective Date.

SECTION 5.02. Repair. Each Borrower will maintain,
preserve and keep, and will cause each of its Significant
Subsidiaries to maintain, preserve and keep, all of its
properties in good repair, working order and condition, and
from time to time make, and each Borrower will make, and will
cause each of its Significant Subsidiaries to make, all
necessary and proper repairs, renewals, replacements,
additions, betterments and improvements thereto so that at
all times the efficiency thereof shall be fully preserved and
maintained; each Borrower will at all times do or cause to be
done all things necessary to preserve, renew and keep in full
force and effect, and will cause each of its Significant
Subsidiaries to do or cause to be done all things necessary
to preserve, renew and keep in full force and effect, the
rights, licenses, permits, franchises, patents, copyrights,
trademarks and trade names material to the conduct of its
businesses; maintain and operate such businesses in
substantially the manner in which they are presently
conducted and operated (subject to changes in the ordinary
course of business); comply in all material respects with all
laws and regulations applicable to the operation of such
businesses whether now in effect or hereafter enacted and
with all other applicable laws and regulations; and take all
action which may be required to obtain, preserve, renew and
extend all licenses, permits and other authorizations which
may be material to the operation of such businesses.

SECTION 5.03. Insurance. The Borrowers will maintain,
on a consolidated basis, insurance to such extent and against
such hazards and liabilities as is commonly maintained by
companies similarly situated or as the Agents or the Required
Banks may reasonably request from time to time.

SECTION 5.04. Obligations and Taxes. Each Borrower
will, pay and discharge, and will cause each of its
Subsidiaries to pay and discharge, when due, all taxes,
assessments and governmental charges or levies imposed upon
such Borrower or such Subsidiary, as the case may be, as well
as all lawful claims for labor, materials and supplies or
otherwise unless and only to the extent that such Borrower or
such Subsidiary, as the case may be, is contesting such
taxes, assessments and governmental changes, levies or claims
in good faith and by appropriate proceedings and such
Borrower or such Subsidiary has set aside on its books such
reserves or other appropriate provisions therefor as may be
required by generally accepted accounting principles.

SECTION 5.05. Financial Statements; Reports. Each
Borrower will furnish to the Agents and each Bank:

(a) Annual Audit Reports. Within 90 days after
the end of each fiscal year of each Borrower, a copy of
the annual audit report of Tandy and its Subsidiaries
prepared on a consolidated basis and of TCC, in each
case, in conformity with generally accepted accounting
principles consistently applied and certified by Price
Waterhouse or another independent certified public
accountant of recognized national standing;

(b) Quarterly Financial Statements. (i) Within 45
days after the end of each quarter (except the last
quarter) of each fiscal year of each Borrower, a copy of
the Form 10-Q of Tandy and of TCC, in each case, for
such quarter, prepared in accordance with the rules,
regulations and guidelines of the Securities and
Exchange Commission, subject to normal year end audit
adjustments and (ii) within 45 days after the end of
each quarter of each fiscal year of TCC, an unaudited
unconsolidated balance sheet and statement of cash
flows, as at the close of such quarter and for such
quarter, together with a certificate of the chief
financial officer or the chief accounting officer of TCC
certifying that such financial statements were prepared
in accordance with generally accepted accounting
principles consistently applied and demonstrating in
reasonable detail compliance by TCC as at the end of
such fiscal quarter with Section 6.05 and setting forth
the tangible net worth on an unconsolidated basis of TCC
as at the end of such fiscal quarter and the Net
Earnings Available for Fixed Charges and the Fixed
Charges (as such terms are defined in, and calculated
pursuant to, the Support Agreement) of TCC for the
twelve-month period ending at the end of such fiscal
quarter.

(c) Officer's Certificate. Together with the
financial statements furnished by the Borrowers under
the preceding clauses (a) and (b), a certificate of each
Borrower's chief financial officer, dated the date of
such annual audit report or such quarterly financial
statement, as the case may be, to the effect that no
Event of Default or Default, has occurred or is
continuing, or if there is any such event, describing it
and the steps, if any, being taken to cure it;

(d) Borrowing Base Certificate of TCC. Within 20
days after the end of each calendar month, a Borrowing
Base Certificate and an accounts receivable aging
schedule substantially in the form of Exhibit 1.01-C
hereto, provided, however, that if no Loans to TCC are
outstanding hereunder, such certificate and schedule
shall be provided concurrently with any delivery under
clauses (a) and (b) above;

(e) SEC and Other Reports. Copies of each filing
and report made by either Borrower or any Subsidiary of
Tandy with or to any securities exchange or the
Securities and Exchange Commission and each
communication from either Borrower or any Subsidiary of
Tandy to shareholders generally, promptly upon the
making thereof; and

(f) Requested Information. Promptly, from time to
time, such other reports or information as the Agents or
any Bank may reasonably request.

SECTION 5.06. Litigation and Other Notices. Each
Borrower will notify the Agents and the Banks in writing of
any of the following immediately upon learning of the
occurrence thereof, describing the same and, if applicable,
the steps being taken by the Person(s) affected with respect
thereto:

(a) Judgment. The entry of any judgment or decree
against TCC if the amount of such judgment or decree
exceeds $10,000,000 or against Tandy and its other
Subsidiaries, taken as a whole, if the amount of such
judgment or decree exceeds $25,000,000, in each case,
after deducting the amount with respect to which TCC,
Tandy or such other Subsidiaries is insured and with
respect to which the insurer has assumed responsibility
in writing;

(b) Suits and Proceedings. The filing or
commencement of any action, suit or proceeding, whether
at law or in equity or by or before any court or any
federal, state, municipal or other governmental agency
or authority as to which there is a reasonable
possibility of an adverse determination and which, if
adversely determined, could materially impair the right
of either Borrower or its Significant Subsidiaries to
carry on business substantially as then conducted or
materially and adversely affect the business, assets,
operations, prospects or condition (financial or
otherwise) of either Borrower or any of its Significant
Subsidiaries;

(d) Material Adverse Change. The occurrence of a
material adverse change in the business, operations or
condition (financial or otherwise) of either Borrower
and its Significant Subsidiaries, taken as a whole;

(e) Pension and Welfare Plans. The occurrence of
a Reportable Event with respect to any Plan; the
institution of any steps by either Borrower, any of its
Subsidiaries or any ERISA Affiliate, the PBGC or any
other Person to terminate any Plan; the institution of
any steps by either Borrower, or any of its Subsidiaries
or any ERISA Affiliate to withdraw from any Plan; or the
incurrence of any material increase in the contingent
liability of either Borrower or any of its Subsidiaries
with respect to any post-retirement welfare benefits;
and

(f) Other Events. The occurrence of such other
events as the Agents or the Required Banks may
reasonably from time to time specify.

SECTION 5.07. ERISA. Each Borrower will comply, and
Tandy will cause each of its other Subsidiaries to comply, in
all material respects with the applicable provisions of
ERISA.

SECTION 5.08. Books, Records and Access. Each Borrower
will maintain, and will cause each of its Significant
Subsidiaries to maintain, complete and accurate books and
records in which full and correct entries in conformity with
generally accepted accounting principles shall be made of all
dealings and transactions in relation to the business and
activities of each Borrower and such Significant
Subsidiaries. Each Borrower will permit, and will cause each
of its Significant Subsidiaries to permit, reasonable access
by the Agents and each Bank, upon reasonable request, to the
books and records relating to each Borrower and its
Significant Subsidiaries during normal business hours, to
permit or cause to be permitted, the Agents and each Bank to
make extracts from such books and records and permit, or
cause to be permitted, upon reasonable request, any
authorized representative designated by any Bank to discuss
the affairs, finances and condition of either Borrower or any
of its Significant Subsidiaries with such Person's principal
financial officers and principal accounting officers and such
other officers as either Borrower shall deem appropriate.

SECTION 5.09. Use of Proceeds. Tandy will use the
proceeds of the Loans only for general corporate purposes
including the repayment of its commercial paper maturing from
time to time. TCC will use the proceeds of its Loans only to
repay its commercial paper maturing from time to time and
will use the proceeds of such commercial paper only (i) to
finance credit card or installment contract sales of Radio
Shack and Tandy Name Brand Divisions and (ii) to repay
Permitted Indebtedness.

SECTION 5.10. Operating Agreement; Support Agreement.
Each Borrower will perform, observe and comply with each of
its covenants and agreements in the Operating Agreement and
the Support Agreement, do or cause to be done all things
necessary to keep the Operating Agreement and the Support
Agreement in full force and effect and the rights of the
Borrowers thereunder unimpaired.

SECTION 5.11. Nature of Business. Each Borrower will
engage in, and will cause each of its other Significant
Subsidiaries to engage in, substantially the same field of
business as they are engaged in on the date hereof.

SECTION 5.12. Compliance. Each Borrower will comply,
and will cause each of its Subsidiaries to comply, in all
material respects with all statutes and governmental rules
and regulations applicable to it including all such statutes
and government rules and regulations relating to
environmental pollution or to environmental regulation and
control.

ARTICLE VI

NEGATIVE COVENANTS

SECTION 6.01. Liens. The Borrowers will not, and will
not permit any of their respective Subsidiaries to, incur,
create, assume or permit to exist any Lien on any of its
property or assets, whether owned at the date hereof or
hereafter acquired, or assign or convey any rights to or
security interests in any future revenues, except:

(a) Liens in connection with the acquisition by
Tandy or such Subsidiary (other than TCC) of property
after the date hereof by way of purchase money,
mortgage, conditional sale or other title retention
agreement, capitalized lease or other deferred payment
contract, and attaching only to the property being
acquired, if the Indebtedness secured thereby does not
exceed 80% (100% in the case of a capitalized lease) of
the fair market value of such property at the time of
acquisition thereof nor $100,000,000 in the aggregate
for Tandy and all Subsidiaries at any one time
outstanding; (b) Liens referred to in Section 3.18;

(c) Other Liens securing obligations of Tandy and
its Subsidiaries (other than TCC and TRC) not to exceed
$50,000,000 in the aggregate and attaching to property
of Tandy or such other Subsidiary whose aggregate fair
market value does not exceed $50,000,000; and

(d) extensions, renewals and replacements of liens
referred to in paragraphs (a) through (d) of this
Section 6.01; provided, that any such extension, renewal
or replacement lien shall be limited to the property or
assets covered by the Lien extended, renewed or replaced
and that the obligations secured by any such extension,
renewal or replacement lien shall be in an amount not
greater than the amount of the obligations secured by
the Lien extended, renewed or replaced.

SECTION 6.02. Sale and Leaseback Transactions. TCC
will not enter into any arrangement, directly or indirectly,
with any person whereby TCC shall sell or transfer any real
or personal property, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease
such property which TCC intends to use for substantially the
same purpose or purposes as the property being sold or
transferred, without the prior written consent of the
Required Banks.

SECTION 6.03. Merger, Purchase and Sale. The Borrowers
will not, and will not permit any of their respective
Subsidiaries, to:

(a) be a party to any merger or consolidation;

(b) sell, transfer, convey, lease or otherwise
dispose of all or any substantial part of its assets;

(d) purchase or otherwise acquire all or
substantially all the assets of any Person.

Notwithstanding the foregoing:

(u) TCC may sell all or substantially all of its
Accounts (including "Customer Obligations" as defined in
the Operating Agreement) for reasonably equivalent value
to TRC;

(v) TRC may transfer and assign all of its right,
title and interest in its credit card receivables to
the Tandy Master Trust pursuant to one or more pooling
and servicing agreements;

(w) any Subsidiary (other than TCC) may merge into
Tandy or into or with any Wholly-owned Subsidiary so
long as Tandy or such Wholly-owned Subsidiary, as the
case may be, shall be the surviving entity, provided,
however, TRC may not merge into TCC;

(x) any Subsidiary (other than TCC) may sell,
transfer, convey, lease or assign all or a substantial
part of its assets to Tandy or any Wholly-owned
Subsidiary;

(y) any Person (other than TCC) may merge into
Tandy and Tandy may acquire all or substantially all the
assets of any Person; and

(z) Tandy and any of its Subsidiaries (other than
TCC) may in the ordinary course of its business sell,
transfer, convey, lease or otherwise dispose of all or
any substantial part of the assets of Tandy and its
Subsidiaries taken as a whole;

provided, in each of the cases described in the preceding
clauses (u), (v), (w), (x), (y) and (z), that immediately
thereafter and after giving effect thereto:

(i) no Event of Default or Default shall have
occurred and be continuing;

(ii) Tandy is a surviving entity;

(iii) the surviving officers of Tandy shall be
substantially the same; and

(iv) Tandy shall at all times own 100% of the
issued and outstanding stock of TCC.

For purposes of this Section 6.03 only, a sale,
transfer, conveyance, lease or other disposition of assets
shall be deemed to be a "substantial part" of the assets of
Tandy and its Subsidiaries only if the value of such assets,
when added to the value of all other assets sold,
transferred, conveyed, leased or otherwise disposed of by
Tandy and its Subsidiaries (other than (i) pursuant to
clauses (x) and (z) of this Section 6.03) during the same
fiscal year, exceeds 15% of Tandy's consolidated total assets
determined as of the end of the immediately preceding fiscal
year. As used in the preceding sentence, the term "value"
shall mean, with respect to any asset disposed of, the
greater of such asset's book or fair market value as of the
date of disposition, with "book value" being the value of
such asset as would appear immediately prior to such
disposition on a balance sheet of the owner of such asset
prepared in accordance with generally accepted accounting
principles.

SECTION 6.04. Disposition of Accounts. TCC will not
sell, transfer, discount or otherwise dispose of any Accounts
unless such sale or other disposition shall be without
recourse to TCC except (a) to the extent of breaches of
customary representations and warranties on sale that do not
relate in any way to creditworthiness of any obligor on such
receivables or the collectibility or payment thereof, (b) as
permitted by the Operating Agreement and (c) as permitted by
Section 6.03.

SECTION 6.05. Stockholders' Equity of TCC. TCC will
not permit (a) its Stockholders' Equity less (b) the sum of
(i) all Indebtedness owed by TRC to TCC plus (ii) the value
of all Investments of TCC in TRC to be less at any time than
15% of the aggregate principal amount of its Indebtedness.

SECTION 6.06. Indebtedness. TCC will not incur,
create, assume or permit to exist any Indebtedness other than
Permitted Indebtedness.

SECTION 6.07. Investments. The Borrowers will not, and
will not permit any of their respective Subsidiaries to, make
or permit to exist any Investment in any Person, except for:

(a) loans or advances constituting Indebtedness of
Subsidiaries (other than TCC and TRC) to Tandy and to
Wholly-owned Subsidiaries, Permitted Indebtedness of TCC
to Tandy; provided, however, TCC may not make any
Investment in Tandy or any Subsidiary of Tandy;

(b) extensions of credit in the nature of accounts
receivable or notes receivable arising from the sale of
goods and services in the ordinary course of business;

(c) shares of stock, obligations or other
securities received in settlement of claims arising in
the ordinary course of business;

(d) Investments in securities maturing within two
years issued or fully guaranteed or insured by the
United States of America or any agency thereof;

(e) Investments in commercial paper maturing in
270 days or less from the date of issuance rated in the
highest or second highest grade by a nationally
recognized credit rating agency;

(f) Investments in United States dollar
denominated time deposits maturing within two years
issued by a bank or trust company having capital,
surplus and undivided profits aggregating at least
500,000,000;

(g) Investments (other than Investments in the
nature of loans or advances) outstanding on the date
hereof in Subsidiaries by Tandy and its Subsidiaries
(other than TCC);

(h) other Investments outstanding on the date
hereof and listed on Exhibit 6.07;

(i) other Investments of Tandy and its
Subsidiaries (other than TCC) not exceeding 7.5% of
Consolidated Tangible Net Worth at any time;

(j) Investments of TCC in Accounts;

(k) Investments of TCC in TRC arising from the
transfer by TCC of Accounts to TRC pursuant to clause
(u) of Section 6.03;

(l) Investments of TRC in the Tandy Master Trust
pursuant to the transactions permitted by clause (v) of
Section 6.03; and

(m) endorsements of negotiable instruments for
deposit or collection in the ordinary course of
business.

SECTION 6.08. Capital Stock. TCC will not issue, sell,
or otherwise dispose of any shares of its capital stock or
any securities convertible into or exchangeable for any such
shares, or any warrants, options, or other rights to
subscribe for or purchase any such shares, other than the
issuance by TCC of additional shares of its capital stock to
Tandy pursuant to Section 6.14.

SECTION 6.09. Transactions with Affiliates. Neither
Borrower will enter into any transaction with any Affiliate
except in the ordinary course of business and upon fair and
reasonable terms no less favorable than such Borrower could
obtain or could become entitled to in an arm s-length
transaction with a person or entity which was not an
Affiliate; provided, however, this Section 6.09 shall not
apply to the purchase of, and payment for, Accounts by TCC
pursuant to the terms and conditions of the Operating
Agreement.

SECTION 6.10. Amendments and Modifications of the
Operating Agreement and Support Agreement. Neither Borrower
will assign, amend, alter the terms of, or surrender, cancel,
or terminate, or permit any such assignment, amendment,
alteration, surrender, cancellation or termination, of the
Operating Agreement or the Support Agreement without the
concurrence of the Required Banks, notwithstanding anything
in either the Operating Agreement or the Support Agreement to
the contrary.

SECTION 6.11. Other Agreements. The Borrowers will
not, and will not permit any of their respective Subsidiaries
to, enter into any agreement containing any provision which
would be violated or breached by such Borrower's performance
of its obligations hereunder or under any instrument or
document delivered or to be delivered by such Borrower
hereunder or in connection herewith.

SECTION 6.12. Fiscal Year; Accounting. Neither
Borrower will change its fiscal year or method of accounting
(other than immaterial changes and methods and changes
authorized by generally accepted accounting principles).

SECTION 6.13. Credit Standards. Neither Tandy nor TCC
will modify in any way the credit standards and procedures,
the collection policies or the loss recognition procedures
with respect to the creation or collection of Accounts if the
modification would have a material adverse effect on the
financial condition of TCC or Tandy.

SECTION 6.14. Dividends. Neither TCC nor TRC will
declare or pay, directly or indirectly, any dividends (other
than in shares of its common stock) or make any other
distribution, whether in cash, property, securities or a
combination thereof, with respect to (whether by reduction of
capital or otherwise) any shares of capital stock, or
directly or indirectly redeem, purchase, retire or otherwise
acquire for consideration, any shares of any class of capital
stock, or set apart any sum for the aforesaid purposes,
except that TRC may pay cash dividends to TCC and, so long as
there shall not have occurred any Event of Default or any
Default after giving effect thereto, TCC may pay cash
dividends to Tandy.

SECTION 6.15 Pension Plans. The Borrowers will not
permit, and will not permit any of their respective
Subsidiaries to permit, any condition to exist in connection
with any Plan which might constitute grounds for the PBGC to
institute proceedings to have such Plan terminated or a
trustee appointed to administer such Plan, and not engage in,
or permit to exist or occur, and will not permit any of their
respective Subsidiaries to engage in, or permit to exist or
occur, any other condition, event or transaction with respect
to any Plan which could result in the incurrence by either
Borrower or any such Subsidiary of any material liability,
fine or penalty.

SECTION 6.16. Senior Indebtedness to Tangible Net Worth
Ratio. Tandy will not permit the ratio of its Consolidated
Senior Indebtedness to its Consolidated Tangible Net Worth to
exceed 1.0 to 1.0.

SECTION 6.17. Tangible Net Worth of Tandy. Tandy will
not permit its Consolidated Tangible Net Worth to be less
than $1,000,000,000.

SECTION 6.18. Guaranties. The Borrowers will not, and
will not permit any of their respective Subsidiaries to,
become or be liable under any Guaranty except Guaranties (a)
which (x) in the case of Guaranties of Indebtedness for
borrowed money, guarantee Indebtedness with a maximum
principal amount, and (y) in all other cases are limited in
amount to a stated maximum dollar exposure, (b) which are
included in Indebtedness, and (c) which are:

(i) Guaranties by Tandy or a Wholly-owned
Subsidiary (other than TCC and TRC) of the Indebtedness
of a Subsidiary of Tandy;

(ii) Guaranties by a Subsidiary of Tandy (other
than TCC and TRC) of Indebtedness of Tandy;

(iii) Guaranties by Tandy of $100,000,000 9.34%
TESOP Notes due June 30, 2000 issued by the plan trustee
to fund the Tandy Employee Stock Ownership Plan; or

(iv) other Guaranties of Indebtedness not
exceeding $50,000,000 in aggregate principal amount at
any time outstanding, and, in the case of TCC, which are
permitted by Section 6.06.

SECTION 6.19. Leases. The Borrowers will not at any
time enter into or permit to exist, and will not permit any
of their respective Subsidiaries to enter into or permit to
exist, any arrangements for the leasing by either Borrower or
any of its Subsidiaries, as lessee, of any real or personal
property (or any interest therein) under leases (other than
capitalized leases); provided, however, the Borrowers and
their respective Subsidiaries (other than TCC) may enter into
and permit to exist such leases which require the payment by
Tandy and such Subsidiaries on a consolidated basis of
minimum rental amounts in the aggregate in any one fiscal
year not in excess of 25% of Consolidated Tangible Net Worth
as of the end of the fiscal year preceding such time.

SECTION 6.20. Certificate of Incorporation of TRC. The
Borrowers will not permit the Restated Certificate of
Incorporation of TRC to be amended without the prior written
consent of the Required Banks if the affect of such amendment
would materially and adversely affect the Banks; provided,
however, so long as the Tandy Guaranty shall be in full force
and effect, the Borrowers shall not be required to comply
with the provisions of this Section 6.20.

ARTICLE VII

EVENTS OF DEFAULT

SECTION 7.01. Events of Default. In case of the
happening of any of the following events (herein called
"Events of Default"):

(a) any representation or warranty made or deemed
made in or in connection with this Agreement, the
Operating Agreement, the Support Agreement or the Notes
or the Borrowings hereunder or in any report,
certificate, financial statement or other instrument
furnished in connection with this Agreement, the
Operating Agreement, the Support Agreement or the
execution and delivery of the Notes or the Borrowings
hereunder shall prove to have been false or misleading
in any material respect when made or deemed made;

(b) default shall be made in the payment of any
principal of, or any installment of principal of, any Note
when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for
prepayment thereof or by acceleration thereof or
otherwise;

(c) default shall be made in the payment of any
interest on any Note or any Commitment Fee or any other
amount due under this Agreement, when and as the same
shall become due and payable, and such default shall
continue unremedied for a period of five days;

(d) default shall be made in the due observance or
performance of any covenant, condition or agreement
contained in Sections 5.01, 5.05 or 5.06 or Article VI;
provided, however, that no Event of Default shall be
deemed to have occurred by reason of any noncompliance
with Section 6.05 if Tandy shall promptly, and in any
event within 30 days after the last Business Day of the
calendar month most recently elapsed at the time such
noncompliance is discovered by the Borrowers furnish to
the Administrative Agent in sufficient counterparts for
each Bank (i) a guaranty in substantially the form of
Exhibit 7.01 (the "Tandy Guaranty") duly executed by
Tandy, (ii) a copy of a resolution of the board of
directors of Tandy, authorizingthe Tandy Guaranty, which
copy shall be certified to be a true and complete copy
by the Secretary or Assistant Secretary of Tandy and
(iii) an opinion of counsel for Tandy in form and
substance satisfactory to the Administrative Agent to
the effect that the Tandy Guaranty has been duly
authorized, executed and delivered on behalf of Tandy
and constitutes the legal, valid and binding obligation
of Tandy enforceable against Tandy in accordance with
its terms; further provided that so long as the Tandy
Guaranty shall be in full force and effect, no Event of
Default shall be deemed to have occurred by reason of
any noncompliance with Section 6.05;

(e) default shall be made in the due observance or
performance of any other covenant, condition or
agreement to be observed or performed pursuant to this
Agreement, the Operating Agreement, the Support
Agreement or the Tandy Guaranty, if delivered, and such
default shall continue unremedied for 15 days;

(f) either Borrower or any of its Subsidiaries
(other than an Insignificant Foreign Subsidiary) shall
(i) voluntarily commence any proceeding or file any
petition seeking relief under Title 11 of the United
States Code or any other federal or state bankruptcy,
insolvency, liquidation or similar law, (ii) consent to
the institution of, or fail to contravene in a timely
and appropriate manner, any such proceeding or the
filing of any such petition, (iii) apply for or consent
to the appointment of a receiver, trustee, custodian,
sequestrator or similar official for such Borrower or
such Subsidiary or for a substantial part of either such
Borrower's or such Subsidiary's property or assets, (iv)
file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors,
(vi) become unable, admit in writing its inability or
fail generally to pay its debts as they become due or
(vii) take any corporate or other action for the purpose
of effecting any of the foregoing;

(g) an involuntary proceeding shall be commenced
or an involuntary petition shall be filed in a court of
competent jurisdiction seeking (i) relief in respect of
either Borrower or any of its Subsidiaries (other than
an Insignificant Foreign Subsidiary), or of a
substantial part of the property or assets of such
Borrower or such Subsidiary, under Title 11 of the
United States Code or any other federal or state
bankruptcy, insolvency, receivership or similar law,
(ii) the appointment of a receiver, trustee, custodian,
sequestrator or similar official for such Borrower or
such Subsidiary or for a substantial part of the
property of such Borrower or such Subsidiary or (iii)
the winding-up or liquidation of such Borrower or such
Subsidiary; and such proceeding or petition shall
continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall
continue unstayed and in effect for 60 days;

(h) default or defaults (other than defaults in
the payment of principal or interest) shall be made with
respect to any Indebtedness of either Borrower, if the
total Indebtedness in default exceeds in the aggregate
for both Borrowers an amount equal to $50,000,000 and if
the effect of such default or defaults shall be to
accelerate, or to permit the holder or obligee of any
Indebtedness (or any trustee on behalf of such holder or
obligee) to accelerate (with or without notice or lapse
of time or both), the maturity of any Indebtedness; or
any payment of principal or interest, regardless of
amount, on any Indebtedness of either Borrower shall not
be paid when due, whether at maturity, by acceleration
or otherwise (after giving effect to any period of grace
as specified in the instrument evidencing or governing
such Indebtedness);

(i) Tandy shall cease legally and beneficially to
own all the issued and outstanding capital stock of TCC;

(j) A Change of Control shall occur;

(k) a Reportable Event or Reportable Events shall
have occurred with respect to any Plan or Plans that
reasonably could be expected to result in liability of
either Borrower to the PBGC in an aggregate amount in
excess of $1,000,000 and within 30 days after the
reporting of such Reportable Event or Reportable Events
to the Banks the Agents shall have notified such
Borrower in writing that (i) it has determined that on
the basis of such Reportable Event or Reportable Events
there are reasonable grounds for termination of the Plan
by the PBGC or for the appointment by the appropriate
United States District Court of a trustee to administer
such Plan and (ii) as a result of such determination, an
Event of Default exists hereunder; or the PBGC shall
have instituted proceedings to terminate any Plan or
Plans, or a trustee shall have been appointed by a
United States District Court to administer any Plan or
Plans, with vested unfunded liabilities aggregating in
excess of $1,000,000; or

(l) there shall be entered against either Borrower
or any other Subsidiary of Tandy one or more judgments
or decrees in excess of $50,000,000 in the aggregate at
any one time outstanding for the Borrowers and all such
Subsidiaries and all such judgments or decrees shall
not have been vacated, discharged, stayed or bonded
pending appeal within 30 days from the entry thereof,
excluding those judgments or decrees for and to the
extent which the Borrowers or any such Subsidiary is
insured and with respect to which the insurer has
assumed responsibility in writing or for and to the
extent which the Borrowers or any such Subsidiary is
otherwise indemnified if the terms of such
indemnification are satisfactory to the Required Banks;

then, and in any such event (other than an event with respect
to either Borrower described in paragraph (f) or (g) above),
and at any time thereafter during the continuance of such
event, the Administrative Agent may, and at the request of
the Required Banks shall, by written or telegraphic notice to
the Borrowers, take either or both of the following actions
at the same or different times: (i) terminate forthwith the
Commitments of the Banks hereunder (if not theretofore
terminated) and (ii) declare the Notes then outstanding to be
forthwith due and payable, whereupon the principal of the
Notes, together with accrued interest thereon and any unpaid
accrued Commitment Fees and all other liabilities of the
Borrowers accrued hereunder, shall become forthwith due and
payable both as to principal and interest, without
presentment, demand, protest, notice of protest, notice of
intent to accelerate, notice of acceleration or any other
notice of any kind, all of which are hereby expressly waived
by the Borrowers, anything contained herein or in any Note or
other Loan Document to the contrary notwithstanding; and in
any event with respect to either Borrower described in
paragraph (f) or (g) above, the Commitments of the Banks
shall automatically terminate (if not theretofore terminated)
and the Notes shall automatically become due and payable,
both as to principal and interest, without presentment,
demand, protest, notice of intent to accelerate, notice of
acceleration or other notice of any kind, all of which are
hereby expressly waived by the Borrowers, anything contained
herein or in any Note to the contrary notwithstanding.

ARTICLE VIII

THE AGENTS

SECTION 8.01. Authorization and Action. In order to
expedite the various transactions contemplated by this
Agreement, each Bank hereby irrevocably appoints and
authorizes TCB-Dallas to act as Administrative Agent and TCB
to act as Funds Administrator on its behalf. Each of the
Banks, and each subsequent holder of any Note by its
acceptance thereof, hereby irrevocably authorizes and directs
the Agents to take such action on behalf of such Bank or
holder under the terms and provisions of this Agreement and
to exercise such powers hereunder as are specifically
delegated to or required of the Agents by the terms and
provisions hereof, together with such powers as are
reasonably incidental thereto. The Agents are hereby
expressly authorized on behalf of the Banks, without hereby
limiting any implied authority, (a) to receive on behalf of
each of the Banks any payment of principal of or interest on
the Notes outstanding hereunder and all other amounts accrued
hereunder paid to the Agents, and promptly to distribute to
each Bank its proper share of all payments so received; (b)
to give notice within a reasonable time on behalf of each of
the Banks to the Borrowers of any Default or Event of Default
specified in this Agreement of which the Agents have actual
knowledge as provided in Section 8.08; (c) to distribute to
each Bank copies of all notices, agreements and other
material as provided for in this Agreement as received by
such Agents; and (d) to distribute to the Borrowers any and
all requests, demands and approvals received by the Agents or
from the Banks.

SECTION 8.02. Agent's Reliance, etc. Neither the
Administrative Agent, the Funds Administrator nor any of its
directors, officers, employees or agents shall be liable as
such for any action taken or omitted by any of them hereunder
except for its or his own gross negligence or willful
misconduct (it being the express intention of the parties
that the Administrative Agent and the Funds Administrator and
their respective directors, officers, employees and agents
shall have no liability for actions and omissions hereunder
resulting from their ordinary sole or contributory
negligence), or be responsible for any statement, warranty or
representation herein or the contents of any document
delivered in connection herewith or be required to ascertain
or to make any inquiry concerning the performance or
observance by the Borrowers of any of the terms, conditions,
covenants or agreements of this Agreement or any other Loan
Document. Neither Agent shall be responsible to the Banks or
the holders of the Notes for the due execution, genuineness,
validity, enforceability or effectiveness of this Agreement,
the Notes, any other Loan Document or any other instrument to
which reference is made herein. The Agents may deem and
treat the payee of any Note as the owner thereof for all
purposes hereof until it shall have received from the payee
of such Note notice, given as provided herein, of the
transfer thereof. The Agents shall in all cases be fully
protected in acting, or refraining from acting, in accordance
with written instructions signed by the Required Banks, and,
except as otherwise specifically provided herein, such
instructions and any action taken or failure to act pursuant
thereto shall be binding on all the Banks. The Agents shall,
in the absence of knowledge to the contrary, be entitled to
rely on any paper or document believed by them in good faith
to be genuine and correct and to have been signed or sent by
the proper person or persons. Neither Agent nor any of its
directors, officers, employees or agents shall have any
responsibility to the Borrowers on account of the failure or
delay in performance or breach by any Bank of any of its
obligations hereunder or to any Bank on account of the
failure of or delay in performance or breach by any other
Bank or the Borrowers of any of their respective obligations
hereunder or in connection herewith. The Agents may execute
any and all duties hereunder by or through agents or
employees and shall be entitled to advice of legal counsel
selected by it with respect to all matters arising hereunder
and shall not be liable for any action taken or suffered in
good faith by it in accordance with the advice of such
counsel.

The Banks hereby acknowledge that the Agents shall be
under no duty to take any discretionary action permitted to
be taken by it pursuant to the provisions of this Agreement
unless an Agent shall be requested in writing to do so by the
Required Banks.

SECTION 8.03. Agent and Affiliates: TCB, TCB-Dallas and
Affiliates. Without limiting the right of any other Bank to
engage in any business transactions with either Borrower or
any of its Affiliates, with respect to their Commitments, the
Loans, if any, made by them and the Notes, if any, issued to
them, TCB-Dallas and, to the extent it becomes the holder of
any Note hereunder, TCB shall have the same rights and powers
under this Agreement, any Note or any of the other Loan
Documents as any other Bank and may exercise the same as
though it were not respectively the Administrative Agent and
the Funds Administrator; and the term "Bank" or "Banks"
shall, unless otherwise expressly indicated, include
TCB-Dallas and, to the extent TCB becomes the holder of any
Note, TCB, in its individual capacity. TCB, TCB-Dallas and
their respective Affiliates may be engaged in, or may
hereafter engage in, one or more loan, letter of credit,
leasing or other financing activities not the subject of the
Loan Documents (collectively, the "Other Financings") with
either Borrower or any of its Affiliates, or may act as
trustee on behalf of, or depositary for, or otherwise engage
in other business transactions with either Borrower or any of
its Affiliates (all Other Financings and other such business
transactions being collectively, the "Other Activities") with
no responsibility to account therefor to the Banks. Without
limiting the rights and remedies of the Banks specifically
set forth in the Loan Documents, no other Bank shall have any
interest in (a) any Other Activities, (b) any present or
future guarantee by or for the account of either Borrower not
contemplated or included in the Loan Documents, (c) any
present or future offset exercised by either Agent in respect
of any such Other Activities, (d) any present or future
property taken as security for any such Other Activities or
(e) any property now or hereafter in the possession or
control of either Agent which may be or become security for
the obligations of either Borrower under the Loan Documents
by reason of the general description of indebtedness secured,
or of property contained in any other agreements, documents
or instruments related to such Other Activities; provided,
however, that if any payment in respect of such guarantees or
such property or the proceeds thereof shall be applied to
reduction of the obligations evidenced hereunder and by the
Notes, then each Bank shall be entitled to share in such
application according to its pro rata portion of such
obligations.

SECTION 8.04. Agents Indemnity. Each Bank agrees (a)
to reimburse the Agents, on demand, in the amount of such
Bank's pro rata share (based on its Commitments hereunder) of
any expenses incurred for the benefit of the Banks by either
Agent, including counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Banks,
not reimbursed by the Borrowers and (b) to indemnify and hold
harmless each Agent and any of its directors, officers,
employees or agents, on demand, in the amount of its 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, incurred by, asserted against such
Agent in its capacity as an Agent or any of them in any way
relating to or arising out of this Agreement or any action
taken or omitted by such Agent or any of them under this
Agreement, to the extent not reimbursed by the Borrowers;
provided, however, that no Bank shall be liable to an Agent
for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence
or willful misconduct of such Agent or any of its directors,
officers, employees or agents. Each Bank agrees, however,
that it expressly intends, under this Section 8.04, to
indemnify each Agent as aforesaid for all such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses and disbursements resulting from such
Agent's ordinary sole or contributory negligence.

SECTION 8.05. Bank Credit Decision. Each Bank
acknowledges that it has, independently and without reliance
upon either Agent or any other Bank and based on such
documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon either Agent or any
other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
decisions in taking or not taking action under or based upon
this Agreement, the other Loan Documents, any related
agreement or any document furnished hereunder.

SECTION 8.06. Successor Administrative Agent. Subject
to the appointment and acceptance of a successor
Administrative Agent as provided herein, the Administrative
Agent may resign at any time by giving written notice thereof
to the Funds Administrator, the Banks and the Borrowers.
Upon any such resignation, the Required Banks shall have the
right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed
by the Required Banks, and shall have accepted such
appointment, within 30 calendar days after the retiring
Administrative Agent's giving of notice of resignation, then
the retiring Administrative Agent may, on behalf of the
Banks, appoint a successor Administrative Agent, which shall
be a commercial bank organized or licensed under the laws of
the United States or of any state thereof and having a
combined capital and surplus of at least $500,000,000. Upon
the acceptance of any appointment as Administrative Agent
hereunder and under the Notes by a successor Administrative
Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent,
and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement and the
Notes. After any retiring Administrative Agent's resignation
as Administrative Agent hereunder and under the Notes, the
provisions of this Article VIII and Section 9.04 shall inure
to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Agreement
and the Notes.

SECTION 8.07. Successor Funds Administrator. Subject
to the appointment and acceptance of a successor Funds
Administrator as provided herein, the Funds Administrator may
resign at any time by giving written notice thereof to the
Administrative Agent, the Banks and the Borrowers. Upon any
such resignation, the Required Banks shall have the right to
appoint a successor Funds Administrator. If no successor
Funds Administrator shall have been so appointed by the
Required Banks, and shall have accepted such appointment,
within 30 calendar days after the retiring Funds
Administrator's giving of notice of resignation, then the
retiring Funds Administrator may, on behalf of the Banks,
appoint a successor Funds Administrator, which shall be a
commercial bank organized or licensed under the laws of the
United States or of any state thereof and having a combined
capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Funds Administrator
hereunder and under the Notes by a successor Funds
Administrator, such successor Funds Administrator shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Funds
Administrator, and the retiring Funds Administrator shall be
discharged from its duties and obligations under this
Agreement and the Notes. After any retiring Funds
Administrator's resignation as Funds Administrator hereunder
and under the Notes, the provisions of this Article VIII and
Section 9.04 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Funds
Administrator under this Agreement and the Notes.

SECTION 8.08. Notice of Default. Neither Agent shall
be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default hereunder unless such Agent
shall have received notice from a Bank or a Borrower
referring to this Agreement, describing such Default or Event
of Default and stating that such notice is a "notice of
default" or "notice of event of default", as applicable. If
an Agent receives such a notice, such Agent shall give notice
thereof to the Banks and, if such notice is received from a
Bank, such Agent shall give notice thereof to the other
Agent, the other Banks and the Borrowers. The Agent shall be
entitled to take action or refrain from taking action with
respect to such Default or Event of Default as provided in
Section 8.01 and Section 8.02.

ARTICLE IX

MISCELLANEOUS

SECTION 9.01. Notices. All Notices, consents,
requests, approvals, demands and other communications
(collectively, "Communications") provided for herein shall be
in writing (including telecopy or telegraphic Communications)
and shall be delivered by hand or overnight courier service,
mailed or sent by telex, graphic scanning or other
telegraphic communications equipment addressed:

(a) if to Tandy, at 1700 One Tandy Center, Fort
Worth, Texas 76102, Attention of Dwain H. Hughes,
Assistant Treasurer (Telecopy No. (817) 390-2638);

(b) if to TCC, at 1700 One Tandy Center, Fort
Worth, Texas 76102, Attention of Dwain H. Hughes,
Assistant Treasurer (Telecopy No. (817) 390-2638);

(c) if to the Administrative Agent, at One Tandy
Center, Fort Worth, Texas 76102, Attention of Richard
Barajas, Vice President (Telecopy No. (817) 878-7591);

(d) if to the Funds Administrator, at 712 Main
Street, Houston, Texas 77002, Attention of Susan
Cummins, Investment Officer (Telecopy No. (713)
546-2339); and

(e) if to any Bank, at its address set forth on
Schedule I attached hereto or in the Assignment and
Acceptance pursuant to which such Bank became a party
hereto.

All Communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have
been given on the date of receipt if delivered by hand or
overnight courier service or sent by telex, telecopy or other
telegraphic communications equipment of the sender, or on the
date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or
mailed (properly addressed) to such party as provided in this
Section 9.01 or in accordance with the latest unrevoked
direction from such party given in accordance with this
Section 9.01.

SECTION 9.02. Survival of Agreement. All covenants,
agreements, representations and warranties made by the
Borrowers herein and in the other Loan Documents and in the
certificates or other instruments prepared or delivered in
connection with this Agreement shall be considered to have
been relied upon by the Banks and shall survive the making by
the Banks of the Loans and the execution and delivery to the
Banks of the Notes evidencing such Loans and shall continue
in full force and effect as long as the principal of or any
accrued interest on any Note or any Commitment Fee or any
other fee or amount payable under the Notes or this Agreement
is outstanding and unpaid and so long as the Commitments have
not been terminated.

SECTION 9.03. Successors and Assigns; Participations.
(a) Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Borrowers, the
Agents or the Banks that are contained in this Agreement
shall bind and inure to the benefit of their respective
successors and assigns. The Borrowers may not assign or
transfer any of their respective rights or obligations
hereunder without the prior written consent of all the Banks.

(b) Each Bank may assign to one or more Eligible
Assignees a portion (but not all) of its interests, rights
and obligations under this Agreement (including a portion of
its Commitments with respect to both Tranches and the same
portion of the Loans of its Tranches at the time owing to it
and the Notes held by it); provided, however, that (i) except
in the case of an assignment to a Bank or an Affiliate of a
Bank, the Borrowers and the Agents must give their prior
written consent by countersigning the Assignment and
Acceptance (which consent shall not be unreasonably
withheld), (ii) each such assignment shall be of a constant,
and not a varying, percentage of all the assigning Bank's
rights and obligations to this Agreement, (iii) the amount of
the Commitments of the assigning Bank of each Tranche subject
to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is
delivered to the Funds Administrator) shall in no event be
less than $10,000,000 and shall be in an amount which is an
integral multiple of $1,000,000, (iv) the parties to each
such assignment shall execute and deliver to the Funds
Administrator, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any
Notes subject to such assignment and a processing and
recordation fee of $2,000, and (v) the assignee shall deliver
to the Agents an Administrative Questionnaire. Upon such
execution, delivery, acceptance and recording, from and after
the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five
Business Days after the execution thereof, (x) the assignee
thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights
and obligations of a Bank hereunder and (y) the Bank
thereunder shall, to the extent provided in such assignment,
be released from its obligations under this Agreement.

(c) By executing and delivering an Assignment and
Acceptance, the assigning Bank thereunder and the assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than the representation
and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse
claim, such assigning Bank makes no representation or
warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in
connection with the Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value
of this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (ii) such
assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial
condition of the Borrowers or the performance or observance
by the Borrowers of any of their respective obligations under
this Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto;
(iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial
statements referred to in Section 3.05 and such other
documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon either Agent, such
Bank's assignor or any other Bank and based on such documents
and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not
taking action under this Agreement; (v) such assignee
confirms that it is an Eligible Assignee; (vi) such assignee
appoints and authorizes each Agent to take such action as
agent on its behalf and to exercise such powers under this
Agreement as are delegated to such Agent by the terms hereof,
together with such powers as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform
in accordance with their terms all of the obligations which
by the terms of this Agreement are required to be performed
by it as a Bank.

(d) The Funds Administrator shall maintain at its
address referred to in Section 9.01 a copy of each Assignment
and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Banks and the
Commitments of, and principal amount of the Loans owing to,
each Bank from time to time (the "Register"). The entries in
the Register shall be conclusive, in the absence of
demonstrable error, and the Borrowers, the Administrative
Agent and the Banks may treat each Person whose name is
recorded in the Register as a Bank hereunder for all purposes
of this Agreement. The Register shall be available for
inspection by the Borrowers, the Administrative Agent or any
Bank at any reasonable time and from time to time upon
reasonable prior notice.

(e) Upon its receipt of an Assignment and
Acceptance executed by an assigning Bank and an Eligible
Assignee together with the Notes subject to such assignment,
the processing and recordation fee referred to in paragraph
(b) above and, if required, the Borrowers written consent to
such assignment, the Funds Administrator shall (subject to
the consent of the Agents to such assignment, if required),
if such Assignment and Acceptance has been completed and is
in the form of Exhibit 1.01-B hereto, (i) accept such
Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt
notice thereof to the Borrowers, the Banks and the
Administrative Agent. Within five Business Days after
receipt of notice, the Borrowers, at their own expense, shall
execute and deliver to the Funds Administrator in exchange
for the surrendered Notes a new Tranche A Note to the order
of such Eligible Assignee in an amount equal to the assigning
Bank's Tranche A Commitment assumed by it pursuant to such
Assignment and Acceptance and a new Tranche B Note to the
order of such Eligible Assignee in an amount equal to the
assigning Bank's Tranche B Commitment assumed by such
Eligible Assignee pursuant to such Assignment and Acceptance,
and a new Tranche A Note to the order of the assigning Bank
in an amount equal to the portion of its Tranche A Commitment
retained by the assigning Bank hereunder and a new Tranche B
Note to the order of the assigning Bank in an amount equal to
the portion of its Tranche B Commitment retained by the
assigning Bank hereunder. Such new Notes shall be in an
aggregate principal amount equal to the aggregate principal
amount of such surrendered Notes, shall be dated the
effective date of such Assignment and Acceptance and shall
otherwise be in substantially the respective form of Exhibit
2.04-A or Exhibit 2.04-B hereto, as applicable. Cancelled
Notes shall be returned to the Borrower that is the signatory
thereto.

(f) Each Bank may without the consent of the
Borrowers or either Agent sell participations to one or more
banks or other entities in all or a portion of its rights and
obligations under this Agreement (including all or a portion
of its Commitments and the Loans owing to it and the Notes
held by it); provided, however, that (i) such Bank's
obligations under this Agreement shall remain unchanged, (ii)
such Bank shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii)
the participating banks or other entities shall be entitled
to the cost protection provisions contained in Sections 2.11
through 2.13 to the same extent that the Bank from which such
participating bank or other entity acquired its participation
would be entitled to the benefit of such cost protection
provisions and (iv) the Borrowers, the Agents and the other
Banks shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations
under this Agreement, and such Bank shall retain the sole
right to enforce the obligations of the Borrowers relating to
the Loans and to approve any amendment, modification or
waiver of any provision of this Agreement (other than
amendments, modifications or waivers with respect to any fees
payable hereunder or the amount of principal of or the rate
at which interest is payable on the Loans, or the dates fixed
for payments of principal of or interest on the Loans).

(g) Any Bank or participant may, in connection
with any assignment or participation or proposed assignment
or participation pursuant to this Section 9.03, disclose to
the assignee or participant or proposed assignee or
participant, any information relating to the Borrowers
furnished to such Bank by or on behalf of the Borrowers;
provided that prior to any such disclosure, each such
assignee or participant or proposed assignee or participant
shall agree (subject to customary exceptions) to preserve the
confidentiality of any confidential information relating to
the Borrowers received from such Bank.

(h) Anything in this Section 9.03 to the contrary
notwithstanding, any Bank may at any time, without the
consent of the Borrowers or either Agent, assign and pledge
all or any portion of its Commitment and the Loans owing to
it to any Federal Reserve Bank (and its transferees) as
collateral security pursuant to Regulation A of the Board and
any Operating Circular issued by such Federal Reserve Bank.
No such assignment shall release the assigning Bank from its
obligations hereunder.

SECTION 9.04. Expenses of the Banks; Indemnity. (a)
Tandy agrees to pay all reasonable out-of-pocket expenses
reasonably incurred by the Agents in connection with the
preparation of this Agreement, the Notes and the other Loan
Documents or with any amendments, modifications or waivers of
the provisions hereof (whether or not the transactions hereby
contemplated shall be consummated) or reasonably incurred by
either Agent or any Bank in connection with the enforcement
or protection of their rights in connection with this
Agreement or with the Loans made or the Notes issued
hereunder, including the reasonable fees and disbursements of
Andrews & Kurth, special counsel for the Agents, and, in
connection with such enforcement or protection, the
reasonable fees and disbursements of other counsel for any
Bank, including allocated staff counsel costs. Tandy agrees
that it shall indemnify the Banks from and hold them harmless
against any documentary taxes, assessments or charges made by
any governmental authority by reason of the execution and
delivery of this Agreement or any of the Notes.

(b) Tandy agrees to indemnify the Agents and the
Banks and their directors, officers, employees and agents
(each such Person being called an "Indemnitee") against, and
to hold the Banks and such Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related
expenses, including reasonable counsel fees and expenses,
incurred by or asserted against any Indemnitee arising out
of, in any way connected with, or as a result of (i) the
execution and delivery of this Agreement and the other
documents contemplated hereby, the performance by the parties
hereto and thereto of their respective obligations hereunder
and thereunder (including but not limited to the making of
the Commitments of each Bank) and consummation of the
transactions contemplated hereby and thereby, (ii) the use of
proceeds of the Loans or (iii) any claim, litigation,
investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Bank, apply to any
such losses, claims, damages, liabilities or related expenses
that are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnitee.
Tandy agrees, however, that it expressly intends to indemnify
each Indemnitee from and hold each of them harmless against
any and all losses, liabilities, claims, damages or expenses
arising out of the ordinary sole or contributory negligence
of such Indemnitee, but not the gross negligence or willful
misconduct of such Indemnitee.

(c) The provisions of this Section 9.04 shall
remain operative and in full force and effect regardless of
the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or
unenforceability of any term or provision of this Agreement
or any Note, or any investigation made by or on behalf of any
Bank. All amounds due under this Section 9.04 shall be
payable on written demand therefor.

SECTION 9.05. Right of Setoff. If an Event of Default
shall have occurred and be continuing, each Bank is hereby
authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time
owing by such Bank to or for the credit or the account of
either Borrower against any of and all the obligations of the
Borrowers now or hereafter existing under this Agreement and
the Notes held by such Bank, irrespective of whether or not
such Bank shall have made any demand under this Agreement or
such Notes and although such obligations may be unmatured.
Each Bank agrees promptly to notify such Borrower after any
such setoff and application made by such Bank, but the
failure to give such notice shall not affect the validity of
such setoff and application. The rights of each Bank under
this Section 9.05 are in addition to other rights and
remedies (including other rights of setoff) which such Bank
may have under applicable law.

SECTION 9.06. Governing Law. This Agreement, the
Notes, the other Loan Documents and all other documents
executed in connection herewith, shall be deemed to be
contracts and agreements executed by the Borrowers, the
Agents and the Banks under the laws of the State of Texas and
of the United States of America and for all purposes shall be
governed by, and construed and interpreted in accordance
with, the laws of said state (without regard to principles of
conflicts of law) and of the United States of America.
Without limitation of the foregoing, nothing in this
Agreement, the Notes or the other Loan Documents shall be
deemed to constitute a waiver of any rights which any Bank
may have under applicable federal legislation relating to the
amount of interest which such Bank may contract for, take,
receive, or charge in respect of any Loans, including any
right to take, receive, reserve and charge interest at the
rate allowed by the law of the state where such Bank is
located. The Agents, the Banks and the Borrowers further
agree that insofar as the provisions of Article 1.04,
Subtitle 1, Title 79, of the Revised Civil Statutes of Texas,
1925, as amended, are at any time applicable to the
determination of the Highest Lawful Rate with respect to the
Notes, the indicated rate ceiling computed from time to time
pursuant to Section (a) of such Article shall apply to the
Notes, provided, however, that to the extent permitted by
such Article, the Funds Administrator may from time to time
by notice from the Funds Administrator to the Borrowers
revise the election of such interest rate ceiling as such
ceiling affects the then current or future balances of the
Loans outstanding hereunder and under the Notes. The
provisions of Chapter 15 of Subtitle 3 of the said Title 79
do not apply to this Agreement or any Note issued hereunder.

SECTION 9.07. Waivers; Amendments. (a) No failure or
delay of any Agent or any Bank in exercising any power or
right hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a
right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The
rights and remedies of the Agents and the Banks hereunder are
cumulative and not exclusive of any rights or remedies which
they would otherwise have. No waiver of any provision of
this Agreement, the Notes or the other Loan Documents or
consent to any departure by the Borrowers therefrom shall in
any event be effective unless the same shall be authorized as
provided in paragraph (b) below, and then such waiver or
consent shall be effective only in the specific instance and
for the purpose for which given. No notice or demand on the
Borrowers in any case shall entitle the Borrowers to any
other or further notice or demand in similar or other
circumstances. Each holder of any of the Notes shall be
bound by any amendment, modification, waiver or consent
authorized as provided herein, whether or not such Notes
shall have been marked to indicate such amendment,
modification, waiver or consent.

(b) Except as provided in Section 2.19, neither
this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or
agreements in writing entered into by the Borrowers and the
Required Banks; provided, however, that no such agreement
shall (i) change the principal amount of, or extend or
advance the maturity of or any date for the payment of any
principal of or interest on, any Loan, or waive or excuse any
such payment or any part thereof, or change the rate of
interest on any Loan, without the written consent of each
Bank affected thereby, (ii) change the Commitments of any
Bank without the written consent of such Bank, or change the
Commitment Fees of any Bank without the written consent of
each Bank or (iii) amend or modify the provisions of this
Section 9.07, Sections 2.08 through 2.15, Section 2.17,
Section 2.18, Section 9.03 or the definition of the "Required
Banks", without the written consent of each Bank; and
provided further that no such agreement shall amend, modify,
waive or otherwise affect the rights or duties of the
Administrative Agent hereunder without the written consent of
the Administrative Agent; and provided, finally, that no such
agreement shall amend, modify, waive or otherwise affect the
rights or duties of the Funds Administrator hereunder without
the written consent of the Funds Administrator. Each Bank
and each holder of any Note shall be bound by any
modification or amendment authorized by this Section 9.07
regardless of whether its Notes shall be marked to make
reference thereto, and any consent by any Bank or holder of a
Note pursuant to this Section 9.07 shall bind any Person
subsequently acquiring a Note from it, whether or not such
Note shall be so marked.

SECTION 9.08. Interest. Anything in this Agreement or
any Note or any other Loan Document to the contrary
notwithstanding, no Borrower shall ever be required to pay
unearned interest on any Note of such Borrower and shall
never be required to pay interest on such Note at a rate in
excess of the Highest Lawful Rate, and if the effective rate
of interest which would otherwise be payable under this
Agreement, such Note and the other Loan Documents would
exceed the Highest Lawful Rate, or if the holder of such Note
shall receive any unearned interest or shall receive monies
that are deemed to constitute interest which would increase
the effective rate of interest payable by such Borrower under
this Agreement and such Note to a rate in excess of the
Highest Lawful Rate, then (a) the amount of interest which
would otherwise be payable by such Borrower under this
Agreement and such Note shall be reduced to the amount
allowed under applicable law, and (b) any unearned interest
paid by such Borrower or any interest paid by such Borrower
in excess of the Highest Lawful Rate shall be credited on the
principal of such Note (or, if the principal amount of such
Note shall have been paid in full, refunded to such
Borrower). It is further agreed that, without limitation of
the foregoing, all calculations of the rate of interest
contracted for, charged or received by any Bank under the
Notes held by it, or under this Agreement, are made for the
purpose of determining whether such rate exceeds the Highest
Lawful Rate applicable to such Bank (such Highest Lawful Rate
being such Bank's "Maximum Permissible Rate"), and shall be
made, to the extent permitted by usury laws applicable to
such Bank (now or hereafter enacted), by amortizing,
prorating and spreading in equal parts during the period of
the full stated term of the Loans evidenced by said Notes all
interest at any time contracted for, charged or received by
such Bank in connection therewith. If at any time and from
time to time (i) the amount of interest payable to any Bank
on any date shall be computed at such Bank's Maximum
Permissible Rate pursuant to this Section 9.08 and (ii) in
respect of any subsequent interest computation period the
amount of interest otherwise payable to such Bank would be
less than the amount of interest payable to such Bank
computed at such Bank's Maximum Permissible Rate, then the
amount of interest payable to such Bank in respect of such
subsequent interest computation period shall continue to be
computed at such Bank's Maximum Permissible Rate until the
total amount of interest payable to such Bank shall equal the
total amount of interest which would have been payable to
such Bank if the total amount of interest had been computed
without giving effect to this Section 9.08.

SECTION 9.09. Severability. In the event any one or
more of the provisions contained in this Agreement or in the
Notes should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the
remaining provisions contained herein or therein shall not in
any way be affected or impaired thereby. The parties shall
endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions,
the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.

SECTION 9.10. Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together
shall constitute but one contract, and shall become effective
as provided in Section 9.11.

SECTION 9.11. Binding Effect. This Agreement shall
become effective on the Execution Date, and thereafter shall
be binding upon and inure to the benefit of the Borrowers,
each Agent and each Bank and their respective successors and
assigns, except that the Borrowers shall not have the right
to assign their rights hereunder or any interest herein
except as provided in Section 9.03(a).

SECTION 9.12. FINAL AGREEMENT OF THE PARTIES. THIS
WRITTEN AGREEMENT (INCLUDING THE EXHIBITS AND SCHEDULES
HERETO), THE NOTES, THE OPERATING AGREEMENT, THE SUPPORT
AGREEMENT, THE AGENT'S LETTER AND THE OTHER LOAN DOCUMENTS
CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION 26.02(a)
OF THE TEXAS BUSINESS AND COMMERCE CODE, AND REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. Any previous
agreement among the parties with respect to the subject
matter hereof is superseded by this Agreement. Nothing in
this Agreement, expressed or implied, is intended to confer
upon any party other than the parties hereto any rights,
remedies, obligations or liabilities under or by reason of
this Agreement.

SECTION 9.13 SUBMISSION TO JURISDICTION. (a) TCC
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY TEXAS
STATE OR FEDERAL COURT SITTING IN FORT WORTH, TEXAS OVER ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND TCC
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION
OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH TEXAS STATE
OR FEDERAL COURT; PROVIDED, HOWEVER, NOTHING IN THIS SECTION
9.13 IS INTENDED TO WAIVE THE RIGHT OF EITHER AGENT OR ANY
BANK OR TO REMOVE ANY SUCH ACTION OR PROCEEDING COMMENCED IN
ANY SUCH TEXAS STATE COURT TO AN APPROPRIATE TEXAS FEDERAL
COURT TO THE EXTENT THE BASIS FOR SUCH REMOVAL EXISTS UNDER
APPLICABLE LAW. TCC HEREBY IRREVOCABLY APPOINTS HERSCHEL C.
WINN (THE "PROCESS AGENT"), WITH AN OFFICE ON THE DATE HEREOF
AT 1800 ONE TANDY CENTER, FORT WORTH, TEXAS 76102, AS ITS
AGENT TO RECEIVE ON BEHALF OF IT AND ITS PROPERTIES SERVICE
OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS
WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. SUCH
SERVICE MAY BE MADE BY MAILING BY CERTIFIED MAIL A COPY OF
SUCH PROCESS TO TCC IN CARE OF THE PROCESS AGENT AT THE
PROCESS AGENT'S ABOVE ADDRESS, WITH A COPY TO TCC AT ITS
ADDRESS SPECIFIED HEREIN AND TCC HEREBY IRREVOCABLY
AUTHORIZES AND DIRECTS THE PROCESS AGENT TO ACCEPT SUCH
SERVICE ON ITS BEHALF. AS AN ALTERNATIVE METHOD OF SERVICE,
TCC ALSO IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL
PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING BY
CERTIFIED MAIL OF COPIES OF SUCH PROCESS TO IT AT ITS ADDRESS
SPECIFIED HEREIN. TCC AGREES THAT A FINAL JUDGMENT 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.

(b) NOTHING IN THIS SECTION 9.13 SHALL AFFECT THE
RIGHT OF THE AGENTS OR ANY BANK TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF EITHER
AGENT OR ANY BANK TO BRING ANY ACTION OR PROCEEDING AGAINST
TCC OR ITS PROPERTIES IN THE COURTS OF ANY OTHER
JURISDICTIONS.

IN WITNESS HEREOF, the Borrowers, the Banks, the
Administrative Agent and the Funds Administrator have caused
this Agreement to be duly executed by their respective
authorized officers as of the day and year first above
written.

TANDY CORPORATION

By: /s/ William Bousquette
Name: William Bousquette
Title: Executive Vice President and
Chief Financial Officer

TANDY CREDIT CORPORATION

By: /s/ Dwain H. Hughes
Name: Dwain H. Hughes
Title: Assistant Treasurer

<PAGE>

Tranche A Tranche B TEXAS COMMERCE BANK,
Commitment Commitment NATIONAL ASSOCIATION,
individually
$25,000,000 $25,000,000 and as Administrative Agent

By: /s/ J. Richard Barajas
Name: J. Richard Barajas
Title: Vice President

TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Funds
Administrator

By: /s/ Gina Hardwick
Name: Gina Hardwick
Title: Investment Officer

Tranche A Tranche B ALGEMENE BANK NEDERLAND N.V.,
Commitment Commitment HOUSTON AGENCY
$10,000,000 $10,000,000

By: /s/ Charles W. Randall
Name: Charles W. Randall
Title: Vice President

By: /s/ Alan C. Weitzner
Name: Alan C. Weitzner
Title: Assistant Vice President

$20,000,000 $20,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION

By: /s/ Samir Sidani
Name: Samir Sidani
Title: Vice President

$20,000,000 $20,000,000 THE BANK OF NEW YORK
By: /s/ Michael J. Moretti
Name: Michael J. Moretti
Title: Vice President

$15,000,000 $15,000,000 BARCLAYS BANK PLC

By: /s/ William C. Collins, II
Name: William C. Collins, II
Title: Vice President

$15,000,000 $15,000,000 CONTINENTAL BANK N.A.

By: /s/ Laurens F. Schaad, Jr.
Name: Laurens F. Schaad, Jr.
Title: Vice President

Tranche A Tranche B CREDIT LYONNAIS, CAYMAN ISLAND
Commitment Commitment BRANCH
$20,000,000 $20,000,000

By:
Name:
Title:

$20,000,000 $20,000,000 NATIONAL WESTMINSTER BANK PLC
NEW YORK BRANCH

By: /s/ David F. Brealey
Name: David F. Brealey
Title: Vice President

NATIONAL WESTMINSTER BANK PLC
NASSAU BRANCH

By: /s/ David F. Brealey
Name: David F. Brealey
Title: Vice President

$20,000,000 $20,000,000 NCNB TEXAS NATIONAL BANK

By: /s/ Vincent A. Liberio
Name: Vincent A. Liberio
Title: Senior Vice President

Tranch A Tranch B SOCIETE GENERALE, SOUTHWEST
Commitment Commitment AGENCY
$10,000,000 $10,000,000

By: /s/ Matthew Flanigan
Name: Matthew Flanigan
Title: Vice President-Manager

By: /s/ Louis P. Laville, III
Name: Louis P. Laville, III
Title: Assistant Treasurer

$5,000,000 $5,000,000 THE SUMITOMO BANK, LIMITED
HOUSTON AGENCY

By: /s/ Hideki Matsui
Name: Hideki Matsui
Title: General Manager

$20,000,000 $20,000,000 WESTPAC BANKING CORPORATION

By: /s/ Lawrence Creedon
Name: Lawrence Creedon
Title: Vice President
<PAGE>

Exhibit 4c(ii)
FIRST AMENDMENT
TO
REVOLVING CREDIT AGREEMENT

THIS FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT (this
Amendment ) dated as of June 11, 1992 is among TANDY
CORPORATION, a Delaware corporation ( Tandy ), TANDY CREDIT
CORPORATION, a Delaware corporation ( TCC and together with
Tandy collectively the Borrowers ), the banks listed on the
signature pages hereof (the Banks ), TEXAS COMMERCE BANK,
NATIONAL ASSOCIATION, a national banking association, as
administrative agent for the Banks (in such capacity the
Administrative Agent ), and TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, a national banking association, as funds
administrator for the Banks (in such capacity, the Funds
Administrator ).

PRELIMINARY STATEMENT

The Borrowers, the Banks, the Administrative Agent and
the Funds Administrator are parties to a Revolving Credit
Agreement dated as of June 17, 1991 (the Credit Agreement ).
All capitalized terms defined in the Credit Agreement and not
otherwise defined herein shall have the same meanings herein
as in the Credit Agreement. The Borrowers, the Banks, the
Administrative Agent and the Funds Administrator have agreed,
upon the terms and conditions specified herein, to amend the
Credit Agreement as hereinafter set forth:

NOW THEREFORE, in consideration of the premises and
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties
hereto, the Borrowers, the Banks, the Administrative Agent
and the Funds Administrator hereby agree as follows:

SECTION 1. Amendment to Article I of the Credit
Agreement. The definition of the term Tranche A Maturity
Date is hereby amended in its entirety to read as follows:

Tranche A Maturity Date shall mean June 8, 1993. .

SECTION 2. Conditions of Effectiveness. This Amendment
shall become effective when, and only when the following have
occurred:

(a) the Administrative Agent shall have (i)
executed a counterpart hereof and (ii) shall have
received a counterpart hereof executed by the Borrowers,
the Funds Administrator and the Banks or, in the case of
any such Bank as to which an executed counterpart hereof
shall not have been so received, the Administrative
Agent shall have received written confirmation by
telecopy, telex or other similar writing from such Bank
of execution of a counterpart hereof by such Bank; and

(b) The Administrative Agent shall have received
(i) a certificate as to the good standing of each
Borrower from the Secretary of State of the State of
Delaware; (ii) a certificate as to the good standing of
Tandy from the Comptroller of the State of Texas; and
(iii) a certificate of the Secretary or an Assistant
Secretary of each Borrower, dated the date hereof and
certifying (A) that attached thereto is a true and
complete copy of the certificate of incorporation of
such Borrower, as amended to on the date of such
certificate, (B) that attached thereto is a true and
complete copy of resolutions duly adopted by the Board
of Directors of such Borrower authorizing the execution,
delivery and performance of this Amendment and that such
resolutions have not been modified, rescinded or amended
and are in full force and effect, (C) that the bylaws of
such Borrower have not been amended since the date of
the certificate delivered in connection with the Credit
Agreement, and (D) as to the incumbency and specimen
signature of each officer of such Borrower executing
this Amendment or any other document delivered in
connection herewith and (iii) a certificate of another
officer of such Borrower as to the incumbency and
specimen signature of the Secretary or such Assistant
Secretary of such Borrower.

SECTION 3. Representations and Warranties True; No
Default or Event of Default. The Borrowers hereby represent
and warrant to the Administrative Agent, the Funds
Administrator and the Banks that, after giving effect to the
execution and delivery of this Amendment (a) the
representations and warranties set forth in the Credit
Agreement are true and correct on the date hereof as though
made on and as of such date and (b) neither any Default nor
Event of Default has occurred and is continuing as of the
date hereof.

SECTION 4. Reference to the Credit Agreement and Effect
on the Notes and other Documents executed pursuant to the
Credit Agreement.

(a) Upon the effectiveness of this Amendment, each
reference in the Credit Agreement to this Agreement,
hereunder, herein, hereof or words of like import shall mean
and be a reference to the Credit Agreement, as affected and
amended hereby.

(b) Upon the effectiveness of this Amendment, each
reference in the Notes, the Support Agreement and the form of
Guaranty attached as Exhibit 7.01 to the Credit Agreement and
the other documents and agreements delivered or to be
delivered pursuant to the Credit Agreement shall mean and be
a reference to the Credit Agreement, as affected and amended
hereby.

(c) The Credit Agreement, as amended and modified by
this Amendment, shall remain in full force and effect and is
hereby ratified and confirmed.

(d) The Support Agreement, as affected by this
Amendment, shall remain in full force and effect and is
hereby ratified and confirmed.

SECTION 5. Execution in Counterparts. This Amendment
may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an
original and all of which taken together shall constitute but
one and the same instrument.

SECTION 6. GOVERNING LAW; BINDING EFFECT. THIS
AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL
LAW AND SHALL BE BINDING UPON THE BORROWERS, THE
ADMINISTRATIVE AGENT, THE FUNDS ADMINISTRATOR AND THE BANKS
AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.

SECTION 7. Headings. Section headings in this
Amendment are included herein for convenience of reference
only and shall not constitute a part of this Amendment for
any other purpose.

SECTION 8. ENTIRE AGREEMENT. WITH RESPECT TO THE
SUBJECT MATTER DESCRIBED THEREIN, THE CREDIT AGREEMENT, AS
AMENDED HEREBY, THE NOTES, THE SUPPORT AGREEMENT AND THE
AGENT'S LETTER CONSTITUTE A LOAN AGREEMENT FOR PURPOSES OF
SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE. THE
CREDIT AGREEMENT, AS AMENDED HEREBY, THE NOTES, THE SUPPORT
AGREEMENT AND THE AGENT'S LETTER REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed effective as of the date first
stated herein, by their respective officers thereunto duly
authorized.

TANDY CORPORATION

By:
Name:
Title:

TANDY CREDIT CORPORATION

By:
Name:
Title:

TEXAS COMMERCE BANK, NATIONAL ASSOCIATION, individually
and as Administrative Agent

By:
Name:
Title:

TEXAS COMMERCE BANK NATIONAL ASSOCIATION, as Funds
Administrator

By:
Name:
Title:

ABN AMRO BANK N.V., HOUSTON AGENCY (formerly Algemene
Bank Nederland N.V., Houston Agency)

By:
Name:
Title:

BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION

By:
Name:
Title:

THE BANK OF NEW YORK

By:
Name:
Title:

BARCLAYS BANK PLC

By:
Name:
Title:

CONTINENTAL BANK N.A.

By:
Name:
Title:

CREDIT LYONNAIS, CAYMAN ISLAND BRANCH

By:
Name:
Title:

NATIONAL WESTMINSTER BANK PLC NEW YORK BRANCH

By:
Name:
Title:

NATIONAL WESTMINSTER BANK PLC NASSAU BRANCH

By:
Name:
Title:

NATIONS BANK, N.A. (formerly NCNB Texas
National Bank)

By:
Name:
Title:

SOCIETE GENERALE, SOUTHWEST AGENCY

By:
Name:
Title:

THE SUMITOMO BANK, LIMITED HOUSTON
AGENCY

By:
Name:
Title:

WESTPAC BANKING CORPORATION

By:
Name:
Title:
<PAGE>

EXHIBIT 4d
CONTINUING GUARANTY

THIS CONTINUING GUARANTY (the "Guaranty") is made by
Tandy Corporation, a Delaware corporation (the "Guarantor"),
in favor of the Banks (as hereinafter defined), Texas
Commerce Bank, National Association, as a Bank and as
Administrative Agent for the other Banks and Texas Commerce
Bank National Association, as Funds Administrator for the
Banks.

PRELIMINARY STATEMENTS

WHEREAS, this Guaranty is executed and delivered
pursuant to Section 7.01(d) of that certain Revolving Credit
Agreement dated as of June 17, 1991 (the "Credit Agreement")
among the Guarantor, Tandy Credit Corporation, a Delaware
corporation ("TCC"), the Banks from time to time party
thereto (the "Banks"), Texas Commerce Bank, National
Association, as Administrative Agent (the "Administrative
Agent"), and Texas Commerce Bank National Association, as
Funds Administrator (the "Funds Administrator"); capitalized
terms used in this Guaranty which are not defined herein
shall have the same meanings as provided in the Credit
Agreement; and

WHEREAS, the Guarantor has determined that it will
receive substantial benefit if Loans are made to TCC pursuant
to the Credit Agreement and has agreed to execute and deliver
this Guaranty;

NOW, THEREFORE, in consideration of the premises, the
Guarantor agrees as follows:

SECTION 1. Guaranty. The Guarantor hereby absolutely,
unconditionally and irrevocably guarantees the punctual
payment and performance when due, whether at stated maturity,
by acceleration or otherwise, of all obligations and
covenants of TCC now or hereafter existing under the Credit
Agreement, the Notes and any of the other Loan Documents to
which it is a party whether for principal, interest
(including, without limitation, interest accruing or becoming
owing both prior to and subsequent to the commencement of any
proceeding against or with respect to TCC under any chapter
of the Bankruptcy Code of 1978, 11 U.S.C. 101 et seq.), fees,
commissions, expenses (including reasonable counsel fees,
including reasonable allocated costs of any Bank's in-house
counsel fees, and expenses) or otherwise, and all reasonable
costs and expenses, if any, incurred by the Administrative
Agent, the Funds Administrator or any Bank in connection with
enforcing any rights under this Guaranty (all such
obligations being the "Guaranteed Obligations"), and agrees
to pay any and all expenses incurred by each Bank, the
Administrative Agent and the Funds Administrator in enforcing
this Guaranty. This Guaranty is an absolute, unconditional,
present and continuing guaranty of payment and not of
collectibility and is in no way conditioned upon any attempt
to collect from TCC or any other action, occurrence or
circumstance whatsoever.

SECTION 2. Continuing Guaranty. The Guarantor
guarantees that the Guaranteed Obligations will be paid
strictly in accordance with the terms of this Guaranty, the
Notes and the other Loan Documents. The Guarantor agrees
that the Guaranteed Obligations and Loan Documents may be
extended or renewed, and Loans repaid and reborrowed in whole
or in part, without notice to or assent by the Guarantor, and
that it will remain bound upon this Guaranty notwithstanding
any extension, renewal or other alteration of any Guaranteed
Obligations or Loan Documents, or any repayment and
reborrowing of Loans. The obligations of the Guarantor under
this Guaranty shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance
with the terms hereof under any circumstances whatsoever,
including:

(a) any extension, renewal, modification, settlement,
compromise, waiver or release in respect of any Guaranteed
Obligations, including any reduction or termination of all or
a portion of the Total Commitment or any Commitment of any
Bank;

(b) any extension, renewal, amendment, modification,
rescission, waiver or release in respect of any Loan
Documents;

(c) any release, exchange, substitution, non-perfection
or invalidity of, or failure to exercise rights or remedies
with respect to, any direct or indirect security for any
Guaranteed Obligations, including the release of the
Guarantor or other Person liable on any Guaranteed
Obligations;

(d) any change in the corporate existence, structure or
ownership of TCC, the Guarantor, or any insolvency,
bankruptcy, reorganization or other similar proceeding
affecting TCC, the Guarantor, any other guarantor or any of
their respective assets;

(e) the existence of any claim, defense, set-off or
other rights or remedies which the Guarantor at any time may
have against TCC, or TCC or the Guarantor may have at any
time against any Agent, any Bank, any other guarantor or any
other Person, whether in connection with this Guaranty, the
Loan Documents, the transactions contemplated hereby and
thereby or any other transaction;

(f) any invalidity or unenforceability for any reason
of the Credit Agreement or other Loan Documents, or any
provision of law purporting to prohibit the payment or
performance by TCC, the Guarantor or any other guarantor of
the Guaranteed Obligations or Loan Documents, or of any other
obligations to any Agent or any Bank; or

(g) any other circumstances or happening whatsoever,
whether or not similar to any of the foregoing.

SECTION 3. Effect of Debtor Relief Laws. If after
receipt of any payment of, or proceeds of any security
applied (or intended to be applied) to the payment of all or
any part of the Guaranteed Obligations, any Agent or any Bank
is for any reason compelled to surrender or voluntarily
surrenders, such payment or proceeds to any Person (a)
because such payment or application of proceeds is or may be
avoided, invalidated, declared fraudulent, set aside,
determined to be void or voidable as a preference, fraudulent
conveyance, fraudulent transfer, impermissible set-off or a
diversion of trust funds, or (b) for any other reason,
including (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such Agent, any
Bank or any of their respective properties, or (ii) any
settlement or compromise of any such claim effected by such
Agent or any Bank with any such claimant (including TCC),
then the Guaranteed Obligations or part thereof intended to
be satisfied shall be reinstated and continue, and this
Guaranty shall continue in full force as if such payment or
proceeds have not been received, notwithstanding any
revocation thereof or the cancellation of any Note or any
other instrument evidencing any Guaranteed Obligations or
otherwise; and the Guarantor shall be liable to pay such
Agent and the Banks, and hereby does indemnify the Agents and
the Banks and holds them harmless for the amount of such
payment or proceeds so surrendered and all expenses
(including reasonable attorneys' fees, court costs and
expenses attributable thereto) incurred by any Agent or any
Bank in the defense of any claim made against it that any
payment or proceeds received by such Agent or any Bank in
respect of all or part of the Guaranteed Obligations must be
surrendered. The provisions of this paragraph shall survive
the termination of this Guaranty, and any satisfaction and
discharge of TCC by virtue of any payment, court order or any
federal or state law.

SECTION 4. Waiver of Subrogation. Notwithstanding any
payment or payments made by the Guarantor hereunder, or any
set-off or application by the Agents or any Bank of any
security or of any credits or claims, the Guarantor will not
assert or exercise any rights of any Agent or any Bank or of
the Guarantor against TCC to recover the amount of any
payment made by the Guarantor to such Agent or any Bank
hereunder by way of subrogation, reimbursement, contribution,
indemnity, or otherwise arising by contract or operation of
law, and the Guarantor shall not have any right of recourse
to or any claim against assets or property of TCC, whether or
not the obligations of TCC have been satisfied, all of such
rights being herein expressly waived by the Guarantor. The
Guarantor agrees not to seek contribution from any other
Person until all of the Guaranteed Obligations shall have
been paid in full and the Total Commitment is terminated. If
any amount shall nevertheless by paid to the Guarantor by TCC
prior to payment in full of the Guaranteed Obligations, such
amount shall be held in trust for the benefit of the Agents
and the Banks and shall forthwith be paid to the Funds
Administrator to be credited and applied to the Guaranteed
Obligations, whether matured or unmatured. The provisions of
this paragraph shall survive the termination of this
Guaranty, and any satisfaction and discharge of TCC by virtue
of any payment, court order or any law.

SECTION 5. Subordination. The Guarantor hereby
subordinates all indebtedness owing to it from TCC to all
indebtedness of TCC to the Agents and the Banks, and agrees
that upon the occurrence and continuance of a Default or an
Event of Default, it shall not accept any payment on the same
until payment in full of the obligations of TCC under the
Credit Agreement, the Notes and all other Loan Documents, and
shall in no circumstance whatsoever attempt to set-off or
reduce any obligations hereunder because of such
indebtedness. If any amount shall nevertheless be paid to
the Guarantor by TCC prior to payment in full of the
Guaranteed Obligations, such amount shall be held in trust
for the benefit of the Agents and the Banks and shall
forthwith be paid to the Funds Administrator to be credited
and applied to the Guaranteed Obligations, whether matured or
unmatured.

SECTION 6. Waiver. The Guarantor hereby waives
promptness, diligence, notice of acceptance and any other
notice with respect to any of the Guaranteed Obligations and
this Guaranty and waives presentment, protest, demand of
payment, notice of intent to accelerate, notice of
acceleration, notice of dishonor or nonpayment and any
requirement that the Agents or any Bank institute suit,
collection proceedings or take any other action to collect
the Guaranteed Obligations, including any requirement that
the Agents or any Bank protect, secure, perfect or insure any
Lien against any property subject thereto or exhaust any
right or take any action against TCC or any other Person or
any collateral (it being the intention of the Agents, the
Banks and the Guarantor that this Guaranty is to be a
guaranty of payment and not of collection). It shall not be
necessary for the Agents or any Banks, in order to enforce
any payment by the Guarantor hereunder, to institute suit or
exhaust its rights and remedies against TCC or any other
Person, including others liable to pay any Guaranteed
Obligations, or to enforce its rights against any security
ever given to secure payment thereof. The Guarantor hereby
expressly waives each and every right to which it may be
entitled by virtue of the suretyship laws of the State of
Texas, including, without limitation, any and all rights it
may have pursuant to Rule 31, Texas Rules of Civil Procedure,
Section 17.001 of the Texas Civil Practice and Remedies Code
and Chapter 34 of the Texas Business and Commerce Code. The
Guarantor hereby waives marshaling of assets and liabilities,
notice by any Agent or any Bank or any indebtedness or
liability to which such Bank applies or may apply any amounts
received by such Bank and of the creation, advancement,
increase, existence, extension, renewal, rearrangement and/or
modification of the Guaranteed Obligations. The Guaranty
expressly waives, to the extent permitted by applicable law,
the benefit of any and all laws providing for exemption of
property from execution or for valuation and appraisal upon
foreclosure.

SECTION 7. Full force and Effect. This Guaranty is a
continuing guaranty and shall remain in full force and effect
until payment in full of the obligations of TCC under the
Credit Agreement, the Notes and all other Loan Documents and
all other amounts payable under this Guaranty and until the
termination of the Total Commitment.

SECTION 8. Independent Obligations. The obligations
hereunder are independent of the obligations of TCC, and a
separate action or actions may be brought and prosecuted
against the Guarantor whether action is brought against TCC
or whether TCC is joined in any such action or actions.

SECTION 9. Renewals, Security, Etc. The Guarantor
authorizes the Banks or any of them, without notice or demand
and without affecting the Guarantor's liability hereunder,
from time to time, either before or after revocation hereof,
to (a) renew, compromise, extend, accelerate or otherwise
change the time for payment of, or otherwise change the terms
of the indebtedness or any part thereof, including increase
or decrease of the rate of interest thereon as provided in
the Credit Agreement; (b) take and hold security for the
payment of this Guaranty or the indebtedness guaranteed, and
exchange, enforce, waive, release, fail to perfect, sell, or
otherwise dispose of any such security; (c) apply such
security and direct the order or manner of sale thereof as
each Bank in its discretion may determine; and (d) release or
substitute any one or more of the endorsers or guarantors.

SECTION 10. Information. The Guarantor acknowledges
and agrees that it shall have the sole responsibility for
obtaining from TCC such information concerning TCC's
financial condition or business operations as the Guarantor
may require, and that the Banks have no duty at any time to
disclose to the Guarantor any information relating to the
business operations or financial condition of TCC.

SECTION 11. Set-Off. If an Event of Default shall have
occurred and be continuing, each Bank is hereby authorized at
any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by
such Bank to or for the credit or the account of the
Guarantor against any of and all the obligations of the
Guarantor now or hereafter existing under this Guaranty held
by such Bank, irrespective of whether or not such Bank shall
have made any demand under this Guaranty and although such
obligations may be unmatured. Each Bank agrees promptly to
notify the Guarantor after any such set-off and application
made by such Bank, but the failure to give such notice shall
not affect the validity of such set-off and application. The
rights of each Bank under this Section 11 are in addition to
other rights and remedies (including other rights of set-off)
which such Bank may have under applicable law.

SECTION 12. Powers. It is not necessary for the Banks
or any of them to inquire into the powers of TCC or of the
officers, directors, or agents acting or purporting to act on
its behalf, and any indebtedness made or created in reliance
upon the professed exercise of such powers shall be
guaranteed hereunder.

SECTION 13. Authority; Binding Obligation. The
Guarantor has all requisite power and authority to deliver
and perform its obligations under this Guaranty and all
corporate action on the Guarantor's part requisite for the
due execution, delivery and performance of this Guaranty has
been duly and effectively taken. This Guaranty constitutes
the legal, valid and binding obligation of the Guarantor
enforceable against the Guarantor in accordance with its
terms.

SECTION 14. Notices. All notices, consents, requests,
approvals, demands and other communications (collectively,
"Communications") provided for herein shall be in writing
(including telecopy or telegraphic Communications) and shall
be delivered by hand or overnight courier service, mailed or
sent by telex, graphic scanning or other telegraphic
communications equipment addressed as provided in the Credit
Agreement.

All communications given to any party hereto in accordance
with the provisions of this Guaranty shall be deemed to have
been given on the date of receipt if delivered by hand or
overnight courier service or sent by telex, telecopy or other
telegraphic communications equipment of the sender, or on the
date five Business Days after dispatch or certified or
registered mail if mailed, in each case delivered, sent or
mailed (property addressed) to such party as provided in this
Section 14 or in accordance with the latest unrevoked
direction from such party given in accordance with this
Section 14.

SECTION 15. Governing Law. This Guaranty and all other
documents executed in connection herewith, shall be deemed to
be contracts and agreements executed by the Guarantor, under
the laws of the State of Texas and of the United States of
America and for all purposes shall be governed by, and
construed and interpreted in accordance with, the laws of
said state (without regard to principles of conflicts of law)
and of the United States of America.

SECTION 16. Waivers; Amendments. (a) No failure or
delay of any Agent or any Bank in exercising any power or
right hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a
right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The
rights and remedies of the Agents and the Banks hereunder are
cumulative and not exclusive of any rights or remedies which
they would otherwise have. No waive of any provision of this
Guaranty or consent to any departure by the Guarantor
therefrom shall in any event be effective unless the same
shall be authorized as provided in paragraph (b) below, and
then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No
notice or demand on the Guarantor in any case shall entitle
the Guarantor to any other or further notice or demand in
similar or other circumstances.

(b) Neither this Guaranty nor any provisions hereof may
be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the
Guarantor and the Required Banks.

SECTION 17. Usury. Notwithstanding any other
provisions herein contained, no provision of this Guaranty
shall require or permit the collection from the Guarantor of
interest in excess of the maximum rate or amount that the
Guarantor may be required or permitted to pay pursuant to any
applicable law nor prevent the Guarantor from successfully
asserting the claim or defense of usury.

SECTION 18. Severability. In the event any one or more
of the provisions contained in this Guaranty should be held
invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining
provisions contained herein or therein shall not in any way
be affected or impaired thereby. The parties shall endeavor
in good faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions, the economic
effect of which comes as close as possible to that of the
invalid, illegal or unenforceable provisions.

SECTION 19. Counterparts. This Guaranty may be
executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together
shall constitute but one contract, and shall become effective
as provided in Section 20.

SECTION 20. Binding Effect. This Guaranty shall become
effective on the date it is executed by the Guarantor, and
thereafter shall be binding upon and inure to the benefit of
each Agent and each Bank and their respective successors and
assigns. Without limiting the generality of the foregoing,
any Bank may assign or otherwise transfer a portion of its
Notes to any other Person in accordance with the Credit
Agreement, and such other Person shall thereupon become
vested with all the rights in respect thereof granted to the
Banks herein or otherwise.

SECTION 21. Captions. The captions in this Guaranty
have been inserted for convenience only and shall be given no
substantive meaning or significance whatever in construing
the terms and provisions of this Guaranty.

SECTION 22. Further Assurances. The Guarantor hereby
agrees to execute and deliver all such instruments and take
all such action as any Agent or the Banks may from time to
time reasonably request in order to fully effectuate the
purpose of this Guaranty.

SECTION 23. Support Agreement. Upon the execution and
delivery of this Guaranty in accordance with the terms of
Section 7.01(d) of the Credit Agreement and so long as this
Guaranty remains in full force and effect, the Agents and the
Banks shall no longer be entitled to the benefits, and shall
not be considered third-party beneficiaries, of the Support
Agreement.

SECTION 24. FINAL AGREEMENT OF THE PARTIES. THIS
GUARANTY AND THE OTHER LOAN DOCUMENTS CONSTITUTE A "LOAN
AGREEMENT" FOR PURPOSES OF SECTION 26.02(a) OF THE TEXAS
BUSINESS AND COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF
THE PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN THE
PARTIES.

Executed as of June 18, 1991.

Guarantor:

TANDY CORPORATION

By:___________________________
Name:_________________________
Title:________________________
<PAGE>

EXHIBIT 4e
CONTINUING GUARANTY

THIS CONTINUING GUARANTY (the "Guaranty") is made by
Tandy Corporation, a Delaware corporation (the "Guarantor"),
in favor of the holders from time to time of commercial
paper, medium term notes and other indebtedness issued by
Tandy Credit Corporation, a Delaware corporation ("TCC"),
that (a) is or may be publicly traded and (b) is rated by at
least one nationally recognized rating agency (all such
commercial paper, notes and other indebtedness of TCC meeting
both such criteria being collectively, the "Public Rated
Debt").

WHEREAS, the Guarantor is the owner and the holder of
all of the issued and outstanding capital stock of TCC; and

WHEREAS, the Guarantor has determined that it will
receive substantial benefit if the publicly traded debt of
TCC is Publicly Rated Debt;

NOW, THEREFORE, in consideration of the premises, the
Guarantor agrees as follows:

SECTION 1. Guaranty. The Guarantor hereby absolutely,
unconditionally and irrevocably guarantees the punctual
payment and performance when due, whether at stated maturity,
by acceleration or otherwise, of all obligations and
covenants of TCC now or hereafter existing under any Publicly
Rated Debt issued by TCC for principal, interest (including,
without limitation, interest accruing or becoming owing both
prior to and subsequent to the commencement of any proceeding
against or with respect to TCC under any chapter of the
Bankruptcy Code of 1978, 11 U.S.C. 101 et seq.), or
otherwise, and all reasonable costs and expenses, if any,
incurred by the holders of Publicly Rated Debt (the
"Debtholders") in connection with enforcing any rights under
this Guaranty (all such obligations being the "Guaranteed
Obligations"), and agrees to pay any and all expenses
incurred by each Debtholder in enforcing this Guaranty. This
Guaranty is an absolute, unconditional, present and
continuing guaranty of payment and not of collectibility and
is in no way conditioned upon any attempt to collect from TCC
or any other action, occurrence or circumstance whatsoever.

SECTION 2. Continuing Guaranty. The Guarantor
guarantees that the Guaranteed Obligations will be paid
strictly in accordance with the terms of this Guaranty, and
any note or other instrument or document ("Debt Documents")
evidencing any Publicly Rated Debt. The Guarantor agrees
that the Guaranteed Obligations and Debt Documents may be
extended or renewed, and Publicly Rated Debt repaid and
reborrowed in whole or in part, without notice to or assent
by the Guarantor, and that it will remain bound upon this
Guaranty notwithstanding any extension, renewal or other
alteration of any Guaranteed Obligations or Debt Documents,
or any repayment and reborrowing of Publicly Rated Debt. The
obligations of the Guarantor under this Guaranty shall be
absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms hereof under
any circumstances whatsoever, including:

(a) any extension, renewal, modification, settlement,
compromise, waiver or release in respect of any Guaranteed
Obligations;

(b) any extension, renewal, amendment, modification,
rescissions, waiver or release in respect of any Debt
Documents;

(e) the existence of any claim, defense, set-off or
other rights or remedies which the Guarantor at any time may
have against TCC, or TCC or the Guarantor may have at any
time against any Debtholder, any other guarantor or any other
person, whether in connection with this Guaranty, the Debt
Documents or any other transaction;

(f) any invalidity or unenforceability for any reason
of the Debt Documents, or any provision of law purporting to
prohibit the payment or performance by TCC, the Guarantor or
any other guarantor of the Guaranteed Obligations or Debt
Documents, or of any other obligations to any Debtholder,; or

(g) any other circumstances or happening whatsoever,
whether or not similar to any of the foregoing.

SECTION 3. Effect of Debtor Relief Laws. If after
receipt of any payment of, or proceeds of any security
applied (or intended to be applied) to the payment of all or
any part of the Guaranteed Obligations, any Debtholder is for
any reason compelled to surrender or voluntarily surrenders,
such payment or proceeds to any person (a) because such
payment or application of proceeds is or may be avoided,
invalidated, declared fraudulent, set aside, determined to be
void or voidable as a preference, fraudulent conveyance,
fraudulent transfer, impermissible set-off or a diversion of
trust funds, or (b) for any other reason, including (i) any
judgment, decree or order of any court or administrative body
having jurisdiction over such Debtholder or any of their
respective properties, or (ii) any settlement or compromise
of any such claim effected by such Debtholder with any such
claimant (including TCC), then the Guaranteed Obligations or
part thereof intended to be satisfied shall be reinstated and
continue, and this Guaranty shall continue in full force as
if such payment or proceeds have not been received,
notwithstanding any revocation thereof or the cancellation of
any Debt Document evidencing any Guaranteed Obligations or
otherwise; and the Guarantor shall be liable to pay such
Debtholder, and hereby does indemnify the Debtholders and
holds them harmless for the amount of such payment or
proceeds so surrendered and all expenses (including
reasonable attorneys' fees, court costs and expenses
attributable thereto) incurred by any Debtholder in the
defense of any claim made against it that any payment or
proceeds received by such Debtholder in respect of all or
part of the Guaranteed Obligations must be surrendered. The
provisions of this paragraph shall survive the termination of
this Guaranty, and any satisfaction and discharge of TCC by
virtue of any payment, court order or any federal or state
law.

SECTION 4. Waiver of Subrogation. Notwithstanding any
payment or payments made by the Guarantor hereunder, or any
set-off or application by the Debtholders of any security or
of any credits or claims, the Guarantor will not assert or
exercise any rights of any Debtholder or of the Guarantor
against TCC to recover the amount of any payment made by the
Guarantor to such Debtholder by way of subrogation,
reimbursement, contribution, indemnity, or otherwise arising
by contract or operation of law, and the Guarantor shall not
have any right of recourse to or any claim against assets or
property of TCC, whether or not the obligations of TCC have
been satisfied, all of such rights being herein expressly
waived by the Guarantor. The Guarantor agrees not to seek
contribution from any other person until all of the
Guaranteed Obligations shall have been paid in full. If any
amount shall nevertheless by paid to the Guarantor by TCC
prior to payment in full of the Guaranteed Obligations, such
amount shall be held in trust for the benefit of the
Debtholders and shall forthwith be paid to the Debtholder or
its representative to be credited and applied to the
Guaranteed Obligations, whether matured or unmatured. The
provisions of this paragraph shall survive the termination of
this Guaranty, and any satisfaction and discharge of TCC by
virtue of any payment, court order or any law.

SECTION 5. Subordination. The Guarantor hereby
subordinates all indebtedness owing to it from TCC to all
indebtedness of TCC to the Debtholders, and agrees that upon
the occurrence and continuance of a default or an event of
default under any Debt Document, it shall not accept any
payment on the same until payment in full of the Guaranteed
Obligations of TCC under any Debt Documents, and shall in no
circumstance whatsoever attempt to set-off or reduce any
obligations hereunder because of such indebtedness. If any
amount shall nevertheless be paid to the Guarantor by TCC
prior to payment in full of the Guaranteed Obligations, such
amount shall be held in trust for the benefit of the
Debtholders and shall forthwith be paid to the Debtholders or
their representatives to be credited and applied to the
Guaranteed Obligations, whether matured or unmatured.

SECTION 6. Waiver. The Guarantor hereby waives
promptness, diligence, notice of acceptance and any other
notice with respect to any of the Guaranteed Obligations and
this Guaranty and waives presentment, protest, demand of
payment, notice of intent to accelerate, notice of
acceleration, notice of dishonor or nonpayment and any
requirement that the Debtholders institute suit, collection
proceedings or take any other action to collect the
Guaranteed Obligations, including any requirement that the
Debtholders protect, secure, perfect or insure any Lien
against any property subject thereto or exhaust any right or
take any action against TCC or any other person or any
collateral (it being the intention of the Guarantor that this
Guaranty is to be a guaranty of payment and not of
collection). It shall not be necessary for the Debtholders,
in order to enforce any payment by the Guarantor hereunder,
to institute suit or exhaust it rights and remedies against
TCC or any other person, including others liable to pay any
Guaranteed Obligations, or to enforce its rights against any
security ever given to secure payment thereof. The Guarantor
hereby expressly waives each and every right to which it may
be entitled by virtue of the suretyship laws of any state.
The Guarantor hereby waived marshaling of assets and
liabilities, notice by any Debtholder or any indebtedness or
liability to which such Debtholder applies or may apply any
amounts received by such Debtholder, and of the creation,
advancement, increase, existence, extension, renewal,
rearrangement and/or modification of the Guaranteed
Obligations. The Guaranty expressly waives, to the extent
permitted by applicable law, the benefit of any and all laws
providing for exemption of property from execution or for
valuation and appraisal upon foreclosure.

SECTION 7. Full Force and Effect. This Guaranty is a
continuing guaranty and shall remain in full force and effect
until payment in full of the Guaranteed Obligations of TCC
and all other amounts payable under this Guaranty.

SECTION 9. Renewals, Security, Etc. The Guarantor
authorized the Debtholders or any of them, without notice or
demand and without affecting the Guarantor's liability
hereunder, from time to time, either before or after
revocation hereof, to (a) renew, compromise, extend,
accelerate or otherwise change the time for payment of, or
otherwise change the terms of the Publicly Rated Debt or any
part thereof, including increase or decrease of the rate of
interest thereon; (b) take and hold security for the payment
of this Guaranty or the Publicly Rated Debt guaranteed, and
exchange, enforce, waive, release, fail to perfect, sell, or
otherwise dispose of any such security; (c) apply such
security and direct the order or manner of sale thereof as
each Debtholders in its discretion may determine; and (d)
release or substitute any one or more of the endorsers or
guarantors.

SECTION 10. Information. The Guarantor acknowledges
and agrees that it shall have the sole responsibility for
obtaining from TCC such information concerning TCC's
financial condition or business operations as the Guarantor
may require, and that the Debtholders have no duty at any
time to disclose to the Guarantor any information relating to
the business operations or financial condition of TCC.

SECTION 11. Powers. It is not necessary for the
Debtholders or any of them to inquire into the powers of TCC
or of the officers, directors, or agents acting or purporting
to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be
guaranteed hereunder.

SECTION 12. Authority; Binding Obligation. The
Guarantor has all requisite power and authority to deliver
and perform its obligations under this Guaranty and all
corporate action on the Guarantor's part requisite for the
due execution, delivery and performance of this Guaranty has
been duly and effectively taken. This Guaranty constitutes
the legal, valid and binding obligation of the Guarantor
enforceable against the Guarantor in accordance with its
terms.

SECTION 13. Notices. All notices, consents, requests,
approvals, demands and other communications (collectively,
"Communications") provided for herein shall be in writing
(including telecopy or telegraphic Communications) and shall
be delivered by hand or overnight courier service, mailed or
sent by telex, graphic scanning or other telegraphic
communications equipment addressed as provided in any Debt
Document.

All communications given to any party hereto in accordance
with the provisions of this Guaranty shall be deemed to have
been given on the date of receipt if delivered by hand or
overnight courier service or sent by telex, telecopy or other
telegraphic communications equipment of the sender, or on the
date five Business Days after dispatch or certified or
registered mail if mailed, in each case delivered, sent or
mailed (property addressed) to such party as provided in the
Section 13 or in accordance with the latest unrevoked
direction from such party given in accordance with this
Section 13.

SECTION 14. Governing Law. This Guaranty shall be
deemed to be executed by the Guarantor under the laws of the
State of Texas and of the United States of America and for
all purposes shall be governed by, and construed and
interpreted in accordance with, the laws of said state
(without regard to principles of conflicts of law) and of the
United States of America.

SECTION 15. Waivers; Revocability. (a) No failure or
delay of any Debtholder in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a
right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The
rights and remedies of the Debtholders hereunder are
cumulative and not exclusive of any rights or remedies which
they would otherwise have. No waiver of any provision of
this Guaranty or consent to any departure by the Guarantor
therefrom shall in any event be effective unless the same
shall be authorized as provided in paragraph (b) below, and
then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No
notice or demand on the Guarantor in any case shall entitle
the Guarantor to any other or further notice or demand in
similar or other circumstances.

(b) So long as TCC has no Publicly Rated Debt
outstanding, this Guaranty may be terminated by the
Guarantor, and/or TCC may be dissolved or merged into the
Guarantor, upon thirty (30) day written notice to the
nationally recognized rating agencies which at such time have
a current rating for such Publicly Rated Debt.

SECTION 16. Usury. Notwithstanding any other
provisions herein contained, no provision of this Guaranty
shall require or permit the collection from the Guarantor of
interest in excess of the maximum rate or amount that the
Guarantor may be required or permitted to pay pursuant to any
applicable law nor prevent the Guarantor from successfully
asserting the claim or defense of usury.

SECTION 17. Severability. In the event any one or more
of the provisions contained in this Guaranty should be held
invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining
provisions contained herein or therein shall not in any way
be affected or impaired thereby. The parties shall endeavor
in good faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions, the economic
effect of which comes as close as possible to that of the
invalid, illegal or unenforceable provisions.

SECTION 18. Binding Effect. This Guaranty shall become
effective on the date it is executed by the Guarantor, and
thereafter shall inure to the benefit of each Debtholder and
their respective successors and assigns.

SECTION 19. Captions. The captions in this Guaranty
have been inserted for convenience only and shall be given no
substantive meaning or significance whatever in construing
the terms and provisions of this Guaranty.

SECTION 20. Further Assurances. The Guarantor hereby
agrees to execute and deliver all such instruments and take
all such action as any Debtholder may from time to time
reasonably request in order to fully effectuate the purpose
of this Guaranty.

Executed as of June 18, 1991.

Guarantor:

TANDY CORPORATION

By: /s/ R. L. Ramsey
Name: Richard L. Ramsey
Title:Vice President and Controller
<PAGE>

Exhibit 10a
SALARY CONTINUATION PLAN
FOR EXECUTIVE EMPLOYEES
OF
TANDY CORPORATION
AND SUBSIDIARIES
(RESTATED)

ARTICLE ONE

PURPOSE

Section 1.1 The purpose of the Salary Continuation Plan for
Executive Employees of Tandy Corporation and Subsidiaries
(the "Plan") is to afford Tandy Corporation ("Tandy") an
additional opportunity to secure and retain the services of
outstanding key executive employees by providing, subject to
the provisions of the Plan, income payments to key executive
employees during their lifetimes after retirement and to
their beneficiaries following their death.

ARTICLE TWO

DEFINITIONS

Section 2.1 Beneficiary. The recipient(s) designated (in
accordance with Article Seven) by a Participant in the Plan
to whom benefits are payable following his death.

Section 2.2 Committee. The Insurance Committee of Tandy
which shall administer the Plan in accordance with Article
Nine.

Section 2.3 Disability. A physical or mental condition
which, in the opinion of the Committee, totally and
presumably permanently prevents a Participant from
substantially performing duties for which such Participant is
suited to perform either by education or training, or if such
Participant is on a Leave of Absence when such condition
develops, substantially performing duties for which such
Participant is suited to perform either by education or
training. A determination that Disability exists shall be
based upon competent medical evidence satisfactory to the
Committee. The date that any person's Disability occurs
shall be deemed to be the date such condition is determined
to exist by the Committee.

Section 2.4 Employee. A regular full-time executive
employee of an Employer.

Section 2.5 Employer. Tandy Corporation, a Delaware
Corporation, and those subsidiary corporations in which Tandy
owns at least eighty percent (80%) of the total combined
voting power of all classes of stock entitled to vote.

Section 2.6 Leave of Absence. Any period during which:

(a) an Employee is absent with the prior consent of his
Employer, which consent shall be granted under uniform rules
applied to all Employees on a nondiscriminatory basis, but
only if such person is an Employee immediately prior to the
commencement of such period of authorized absence and resumes
employment with Employer not later than the first working day
following the expiration of such period of authorized
absence; or

(b) an Employee is a member of the Armed Forces of the
United States and his reemployment rights are guaranteed by
law, but only if such person is an Employee immediately prior
to becoming a member of such Armed Forces and resumes
employment with Employer within the period during which his
reemployment rights are guaranteed by law.

Section 2.7 Participant. An Employee who has been selected
and has accepted a Plan Agreement as provided in Article
Three.

Section 2.8 Plan Agreement. The agreement between an
employer and a Participant, entered into in accordance with
Article Three (as such form may be amended from time to time
hereunder).

Section 2.9 Plan Compensation. An amount determined by the
Committee as set forth in the Plan Agreement with each
Participant, such amount to be determinative for the purposes
hereof regardless of a Participant's total compensation paid
by his Employer.

Section 2.10 Retirement. The following classifications of
Retirement as referred to in this Plan are defined as follows:

(a) Early Retirement. The voluntary election, as
opposed to involuntary termination by Employer, prior to the
Participant's attaining the age of sixty-five (65) years, by
a Participant to terminate his employment after attaining the
age of fifty-five (55) years.

(b) Normal Retirement. The termination of a
Participant's service with Employer at the date of attaining
age sixty-five (65) years.

(c) Late Retirement. The termination of a Participant's
service with Employer after the Participant's attaining the
age of sixty-five (65) years.

ARTICLE THREE

SELECTION OF PARTICIPANTS AND
AGREEMENT TO PARTICIPATE

Section 3.1 Participation in the Plan shall be limited to
those Employees of Employer who shall be selected for
participation by the Committee, whose decisions in this
respect shall be conclusive.

Section 3.2 Participation in the Plan by an Employee so
selected by the Committee is voluntary and subject to his
written acceptance of a Plan Agreement executed by Employer
and submitted to him by the Committee. Unless and until a
Plan agreement has been so submitted to and accepted by him,
he shall not become a Participant.

Section 3.3 Subject to Section 8.4 hereof, the Committee
reserves the right, at its discretion, and without prejudice
or liability, to terminate any Plan Agreement with any
Participant of any Employer at any time prior to the
Participant's retirement or death.

ARTICLE FOUR

LIFE INSURANCE

Section 4.1 Employer may obtain permanent life insurance
insuring the life of any Participant as a means of funding
Employer's obligations to his Beneficiary in whole or part.
Employer shall be the sole owner and beneficiary of all such
policies of insurance so obtained and of all incidents of
ownership therein, including without limitation, the rights
to all cash and loan values, dividends (if any), death
benefits and the right to terminate. No Beneficiary or
Participant shall be entitled to any rights, interests or
equities in such policies or to any specific asset of
Employer of any type, and on the contrary, their rights
against Employer under the Plan shall be solely as general
creditors.

Section 4.2 If as a result of misrepresentations made by a
Participant in any application for life insurance upon his
life obtained by Employer hereunder, the insurance carrier or
carriers or any reinsurance thereof successfully avoid(s)
payment to Employer of the proceeds of its or their policy or
policies, or such proceeds are not payable because the
Participant's death results from suicide within two years of
the issuance of such policy or within two years of the
issuance to Employer of additional policies obtained by
Employer hereunder, then, in any of said events, and
notwithstanding any other provisions of the Plan or of the
Plan Agreement with such Participant, Employer shall have no
obligation to his Beneficiary to provide any of the death
benefits otherwise payable under the terms thereof.

Section 4.3 Each Participant shall cooperate in the securing
of life insurance on his life by furnishing such information
as the insurance company may require, taking such physical
examinations as may be necessary, and taking any other action
which may be requested by the Employer or the insurance
company to obtain such insurance coverage. If a Participant
refuses to cooperate in the securing of life insurance, or if
Employer is unable to secure life insurance at standard rates
on a Participant, then, the Plan Agreement shall be of no
force and effect as to a Participant unless Employer waives
such requirement in writing.

ARTICLE FIVE

BENEFITS PAYABLE TO PARTICIPANTS AND
TO BENEFICIARIES OF PARTICIPANTS

Section 5.1 Subject to the terms and conditions of the Plan,
upon the Retirement of a Participant, Employer agrees to pay
to Participant a Retirement benefit as follows:

(a) Normal Retirement. If a Participant retires at the
date of Normal Retirement, then Employer agrees to pay to
Participant or to the designated Beneficiary of Participant
in the event of the death of Participant prior to the
termination of payment of Retirement benefits hereunder, all
from its general assets, an amount equal to five hundred
percent of Plan Compensation, such sum to be paid as set
forth in Section 5.3 hereof.

(b) Early Retirement. If a Participant retires at a
time that constitutes an Early Retirement, then, Employer
agrees to pay to Participant or to the designated Beneficiary
of Participant in the event of the death of Participant prior
to the termination of payment of Early Retirement benefits
hereunder, all from its general assets, an amount equal to
five hundred percent of Plan Compensation, reduced by five
percent per year for each year that Early Retirement precedes
the date of Normal Retirement. Such year shall be a fiscal
year beginning on the date a Participant attains age
fifty-five (55). Any reduction for a part of a year shall be
prorated on a daily basis assuming a 365 day year. Such
amount shall be paid as set forth in Section 5.3 hereof.

(c) Late Retirement. If a Participant retires at a date
that constitutes Late Retirement, then, Employer agrees to
pay to Participant or to the designated Beneficiary of
Participant in the event of the death of Participant prior to
the termination of payment of Late Retirement Benefits
hereunder, all from its general assets, an amount equal to
five hundred percent of Plan Compensation, reduced by a
percentage determined as follows:

At Date of Late Retirement Percent of Reduction of
Attainment of Age 500% of Plan Compensation

66 0%
67 0%
68 0%
69 0%
70 0%
71 20%
72 40%
73 60%
74 80%
75 100%

The percent of reduction of five hundred percent of Plan
Compensation shall be measured on a fiscal year beginning on
the date of a Participant's date of birth and shall commence
on the day after the date a Participant attains age 70, and
any reduction for a part of a year shall be prorated on a
daily basis at the applicable percentage assuming a 365 day
year. Such amount shall be paid as set forth in Section 5.3
hereof.

Section 5.2 Subject to the terms and conditions of the Plan,
upon the death of a Participant, but only if the Participant
is an Employee of Employer at his death and is not entitled
to Retirement benefits pursuant to a Plan Agreement at such
time, Employer agrees to pay to his Beneficiary from its
general assets an amount equal to five hundred percent of
Plan Compensation as reflected in Employee's Plan Agreement
or, as the case may be, in the last amendment to his Plan
Agreement. With respect to such benefits, however, it is
further provided that:

(a) No benefits shall be payable to the Beneficiary of a
Participant in those instances covered by Section 4.2;

(b) If a Participant dies while an Employee of Employer
after the date of his Normal Retirement, then the amount
payable to his Beneficiary upon a Participant's death shall
be reduced as set forth in Section 5.1(c) hereof.

Section 5.3 The aggregate amount payable upon the Normal
Retirement, Early Retirement, Late Retirement or death of a
Participant to a Participant or his Beneficiary shall be paid
in 120 equal monthly installment payments commencing on the
first day of the month next following thirty (30) days after
Retirement or after the Committee's receipt of a certified
death or proof of death certificate verifying the
Participant's death. A Participant shall notify Employer of
Retirement by hand delivery or by certified or registered
mail, return receipt requested, postage prepaid, of a written
notice of Retirement specifying the effective date of
Retirement, such written notice to be addressed to: Insurance
Committee of the Board of Directors, Tandy Corporation, 1800
One Tandy Center, Fort Worth, Texas 76102. Such notice shall
be deemed to be received when actually received by said
Insurance Committee at said address as may be changed from
time to time in the Plan Agreements, as amended.

Section 5.4 Until actually paid and delivered to the
Participant or to the Beneficiary entitled to same, none of
the benefits payable by Employer under any Plan Agreement
shall be liable for the debts or liabilities of either the
Participant or his Beneficiary, nor shall the same be subject
to seizure by any creditor of the Participant or his
Beneficiary under any writ or proceeding at law, in equity or
in bankruptcy. Further, no Participant or Beneficiary shall
have power to sell, assign, transfer, encumber, or in any
manner anticipate or dispose of the benefits to which he is
entitled or may become entitled under a Plan Agreement.

Section 5.5 After Participant has attained the age of
fifty-five (55) and is an Employee of Employer, or during the
period that Participant is receiving Retirement benefits
under a Plan Agreement, and for one year after cessation of
employment after attaining the age of fifty-five (55) for any
reason or for one year after cessation of payment of
Retirement benefits, whichever shall last occur, Participant
agrees that he will not, either directly or indirectly,
within the United States of America or in any country of the
world that Tandy sells, imports, exports, assembles, packages
or furnishes its products, articles, parts, supplies,
accessories or services or is causing them to be sold,
imported, exported, assembled, packaged or furnished through
related entities, representatives, agents, or otherwise, own,
manage, operate, join, control, be employed by, be a
consultant to, be a partner in, be a creditor of, engage in
joint operations with, be a stockholder, officer or director
of any corporation, sole proprietorship or business entity of
any type, or participate in the ownership, management,
direction, or control or in any other manner be connected
with, any business of manufacturing, designing, programming,
servicing, repairing, selling, ceasing, or renting any
products, articles, parts, supplies, accessories or services
which is at the time of Participant's engaging in such
conduct competitive with products, articles, parts, supplies,
accessories or services manufactured, sold, imported,
exported, assembled, packaged or furnished by Tandy, except
as a shareholder owning less than five percent (5%) of the
shares of a corporation whose shares are traded on a stock
exchange or in the over-the-counter market by a member of the
National Association of Securities Dealers. In the event
that a Participant takes Retirement and engages in any of the
activities described in the immediately preceding sentence,
or engaged in any of such activities prior to Retirement,
then, without any further notification, and upon
determination by the Committee that such a Participant is
engaged or has engaged in such activities, such Committee's
decision to be conclusive and binding upon all concerned, and
notwithstanding any other provisions of the Plan or of the
Plan Agreement with such Participant, Employer's obligation
to a Participant to pay any Retirement or Death benefits
hereunder shall automatically cease and terminate, and
Employer shall have no further obligation to such Participant
or Beneficiary pursuant to the Plan or the Plan Agreement.
Employer may enforce this provision by suit for damages which
shall include but not be limited to all sums paid to
Participant hereunder, or for injunction, or both.

Section 5.6 Employer may liquidate out of the interest of a
Participant hereunder, but only as Retirement or death
benefits become due and payable hereunder, any outstanding
loan or loans or other indebtedness of a Participant.
Employer may elect not to distribute Retirement or death
benefits to any Participant or to a Beneficiary unless and
until all unpaid loans or other indebtedness due to Employer
from such Participant, together with interest, have been paid
in full.

Section 5.7 Subject to termination or amendment of the Plan,
Plan Agreement, or both, a Participant's participation in the
Plan shall continue during his Disability or his taking a
Leave of Absence. A Participant who is Disabled or on Leave
of Absence shall notify Employer of his date of Retirement as
provided in Section 5.3 hereof.

ARTICLE SIX

AMENDMENTS OF PLAN AGREEMENTS

Section 6.1 The Committee may enter into amendments to the
Plan Agreement with any Participant for the purpose of
increasing the benefits payable to the Participant or his
Beneficiary in view of increases in his compensation
following the execution of such Plan Agreement or the last
amendment thereto and for the purpose of amending any
provision of this Plan as it might apply to a Participant.
In such cases, the acceptance of an amendment by a
Participant is voluntary and until the amended Plan Agreement
has been submitted to and accepted by him, it shall not be
effective.

ARTICLE SEVEN

BENEFICIARIES OF PARTICIPANTS

Section 7.1 At the time of his acceptance of a Plan
Agreement, a Participant shall be required to designate the
Beneficiary to whom benefits under the Plan and his Plan
Agreement will be payable upon his death. A Beneficiary may
be one or more persons or entities, such as dependents,
persons who are natural objects of the Participant's bounty,
an inter vivos or testamentary trust, or his estate. Such
Beneficiaries may be designated contingently or successively
as the Participant may direct. The designation of his
Beneficiary shall be made by the Participant on a Beneficiary
Designation Form to be furnished by the Committee and filed
with it.

Section 7.2 A Participant may change his Beneficiary, as he
may desire, by filing new and amendatory Beneficiary
Designation Forms with the Committee.

Section 7.3 In the event a Participant designates more than
one Beneficiary to receive benefit payments simultaneously,
each such Beneficiary shall be paid such proportion of such
benefits as the Participant shall have designated. If no
such percentage designation has been made, the Committee
shall hold all benefit payments until the Beneficiaries agree
as to the distribution of the funds or a judicial
determination has been made.

Section 7.4 If the designated Beneficiary dies before the
Participant in question and no Beneficiary was successively
named, or if the designated Beneficiary dies before complete
payment of the deceased Participant's benefits have been made
and no Beneficiary was successively named, the Committee
shall direct that such benefits (or the balance thereof) be
paid to those persons who are the deceased Participant's
heirs-at-law determined in accordance with the laws of
descent and distribution in force at the date hereof in the
State of Texas for separate personal property, such
determination to be made as though the Participant had died
intestate and domiciled in Texas.

Section 7.5 Whenever any person entitled to payments under
this Plan shall be a minor or under other legal disability or
in the sole judgment of the Committee shall otherwise be
unable to apply such payments to his own best interest and
advantage (as in the case of illness, whether mental or
physical, or where the person not under legal disability is
unable to preserve his estate for his own best interest), the
Committee may in the exercise of its discretion direct all or
any portion of such payments to be made in any one or more of
the following ways unless claims shall have been made
therefor by an existing and duly appointed guardian,
conservator, committee or other duly appointed legal
representative, in which event payment shall be made to such
representative:

(1) directly to such person unless such person shall be
an infant or shall have been legally adjudicated incompetent
at the time of the payment;

(2) to the spouse, child, parent or other blood relative
to be expended on behalf of the person entitled or on behalf
of those dependents as to whom the person entitled has the
duty of support;

(3) to a recognized charity or governmental institution
to be expended for the benefit of the person entitled or for
the benefit of those dependents as to whom the person
entitled has the duty of support; or

(4) to any other institution, approved by the Committee,
to be expended for the benefit of the person entitled or for
the benefit of those dependents as to whom the person
entitled has the duty of support.

The decision of the Committee will, in each case, be final
and binding upon all persons and the Committee shall not be
obliged to see to the proper application or expenditure of
any payments so made. Any payment made pursuant to the power
herein conferred upon the Committee shall operate as a
complete discharge of the obligations of Employer and of the
Committee.

Section 7.6 If the Committee has any doubt as to the proper
Beneficiary to receive payments hereunder, the Committee
shall have the right to withhold such payments until the
matter is finally adjudicated or, the Committee may direct
Employer to bring a suit for interpleader in any appropriate
court, pay any amounts due into the court, and Employer
and/or Committee shall have the right to recover its
reasonable attorney's fees from such proceeds so paid or to
be paid. Any payment made by the Committee, in good faith
and in accordance with this Plan, shall fully discharge the
Committee and Employer from all further obligations with
respect to such payments.

ARTICLE EIGHT

TERMINATION OF PARTICIPATION

Section 8.1 Except as provided in Section 8.4 hereof,
termination of a Participant's employment by Employer other
than by reason of Retirement, Permanent Disability or Leave
of Absence, whether by action of Employer or the
Participant's resignation, shall terminate the Participant's
participation in the Plan. Neither the Plan nor the Plan
Agreement shall in any way obligate Employer to continue the
employment of a Participant, nor will either limit the right
of Employer to terminate a Participant's employment at any
time, for any reason, with or without cause.

Section 8.2 Except as provided in Section 8.4 hereof,
participation in the Plan by a Participant shall also
terminate upon the happening of any of the following:

(a) The Plan is terminated by Employer in accordance
with Article Ten; or

(b) His Plan Agreement is terminated by Employer or the
Committee in accordance with Section 3.3.

Section 8.3 Except as provided in Section 8.4 hereof, upon
termination of a Participant's participation in the Plan, all
of Employer's obligations to the Participant and his
Beneficiary under the Plan and Plan Agreement and each of
them, shall terminate and be of no further effect.

Section 8.4 If a Participant's participation in the Plan is
terminated, by:

(a) termination of the Plan;

(b) termination of a Plan Agreement; or

(i) Death or Retirement, which shall be governed by
Article Five, or

(ii) dishonest or fraudulent conduct of a
Participant or indictment, or the possibility
of indictment of a Participant of a felony
crime involving moral turpitude, in which event
no vesting under this Section 8.4 shall occur,

then such Participant shall be entitled, as set forth below,
to a percentage of five hundred percent of his Plan
Compensation as follows:

Age Attained at Date of Event Set
Forth in 8.4(a), (b) or (c) % Vested

Age 54 or younger 0%

Age 55 to age 65 A percent as determined
in Section 5.1(b) hereof

Age 65 to age 70 100%

Age 70 to age 75 A percent as determined
in Section 5.1(c) hereto

Age 75 and thereafter 0%

The amount payable under this Section 8.4 shall be determined
as of the date of the event set forth in Section 8.4(a), (b)
or (c) hereof and such amount as so determined at that time
shall not be altered or changed thereafter except that the
provisions of Section 5.5 hereof shall remain fully
applicable during the Participant's employment by Employer,
during the payment of benefits under this Section 8.4 and for
one year after termination of employment or payment of
benefits. The amount payable under this Section 8.4 shall be
paid as set forth in Section 5.3 hereunder to commence on the
first day of the month next following thirty (30) days after
cessation of Participant's employment with Employer.

ARTICLE NINE

ADMINISTRATION OF THE PLAN

Section 9.1 The Plan shall be administered by the Insurance
Committee of the Board of Directors of Tandy, as it is
presently constituted or as it may be changed from time to
time by the Board of Directors of Tandy.

Section 9.2 In addition to the express powers and
authorities accorded the Committee under the Plan, it shall
be responsible for:

(a) Construing and interpreting the Plan;

(b) Computing and certifying to Employer the amount of
benefits to be provided in each Plan Agreement for
the Participant or the Beneficiary of the
Participant; and

(c) determining the right of a Participant or a
Beneficiary to payments under the Plan and otherwise
authorizing disbursements of such payments by
Employer;

in these and all other respects its decisions shall be
conclusive and binding upon all concerned.

Section 9.3 Employer agrees to hold harmless and indemnify
the members of the Committee against any and all expenses,
claims and causes of action by or on behalf of any and all
parties whomsoever, and all losses therefrom, including
without limitation the cost of defense and attorney's fees,
based upon or arising out of any act or omission relating to
or in connection with the Plan other than losses resulting
from any such Committee member's fraud or willful misconduct.

ARTICLE TEN

TERMINATION OR AMENDMENT OF THE PLAN

Section 10.1 Employer reserves the right to terminate or
amend this Plan, in whole or in part, at any time, or from
time to time, by resolution of its Board of Directors,
provided, only, that no such termination or amendment shall
affect those rights and benefits previously vested in a
Participant or a Beneficiary under Section 8.4 hereof.

ARTICLE ELEVEN

MISCELLANEOUS

Section 11.1 The Plan and Plan Agreement and each of their
provisions shall be construed and their validity determined
under the laws of the State of Texas.

Section 11.2 The masculine gender, where appearing in the
Plan or Plan Agreement, shall be deemed to include the
feminine gender. The words "herein", "hereunder" and other
similar compounds of the word "here" shall mean and refer to
the entire Plan and Plan Agreement, not to any particular
provision, section or subsection, and words used in the
singular or plural may be construed as though in the plural
or singular where they would so apply.

Section 11.3 Any suit against Employer or the Committee or
any member thereof concerning any provisions hereunder, the
construction of the Plan, payment of benefits hereunder, or
in any other manner connected with this Plan may only be
brought in the appropriate state or federal court located in
Tarrant County, Texas, and each Participant agrees not to
bring any suit in any other county, state or countries. It
is agreed that Employer may bring any suit to enforce the
provisions of Section 5.5 hereof in the appropriate state or
federal court located in Tarrant County, Texas.

Section 11.4 Any person born on February 29 shall be deemed
to have been born on the immediately preceding February 28
for all purposes of this Plan.

Section 11.5 This Plan shall be binding upon and inure to
the benefit of any successor of Employer and any such
successor shall be deemed substituted for Employer under the
terms of this Plan. As used in this Plan, the term "successor"
shall include any person, firm, corporation, or
other business entity which at any time, whether by merger,
purchase, or otherwise, acquires all or substantially all of
the assets or business of Employer.

The Salary Continuation Plan for Executive Employees of
Tandy Corporation and Subsidiaries (the "Plan") was adopted
November 8, 1979. This copy of the Plan has been restated to
include amendments to the Plan pursuant to resolution at a
special meeting of the Board of Directors of Tandy
Corporation on April 27, 1984.
<PAGE>

Exhibit 10b

Form of Executive Pay Plan Letters

Form 1 is used in the case of seven executive officers.
Form 2 is used in the case of one executive officer.
Form 3 is used in the case of one executive officer.
Form 4 is used in the case of one executive officer.

In no case will the maximum bonus amount exceed the amount
of the individuals base salary.

<PAGE>

(Date) Form 1

TO: (Name)

FROM: Richard L. Ramsey

SUBJECT: Compensation Plan, Fiscal Year 1994

Your compensation plan for fiscal year 1994, as approved by
the Organization and Compensation Committee of the Board of
Directors, is outlined below.

I. FY 1994 Base Salary

Your Base Salary for FY94 shall be $_________

II. Your bonus for FY94 shall be determined by multiplying
the percent determined in the following TARGET
INCENTIVE GOALS times the FACTORS set forth below.

The bonus amounts payable are subject to limitations
set forth in Paragraph III and IV.

TARGET INCENTIVE GOALS:

1. INCOME
Each percentage point of positive change that the Tandy
Corporation and subsidiaries income from operations
(before income taxes) increases from the prior year.

2. EARNINGS PER SHARE
Each percentage point of positive change that the Tandy
Corporation earnings per share increases from the prior
year.

3. STOCK PRICE
a. Each percentage point of positive change that the
Tandy Corporation stock price increases, based on the
average daily closing price for December 1993 ($47.3)
and December 1994.

b. If the stock performance exceeds the "Peer Group"
average and the 5% minimum increase, a bonus will be
paid equal to the stock price increase amount. In
addition, if Tandy's stock percent increase is in or
above the 75th percentile of the "Peer Group", an
additional bonus will be paid equal to the stock price
increase amount.

Percentages shall be calculated to two decimal
points.

Your factors to be used for each of the
calculations above are as follows:

1. Income increase: $_________

2. Earnings per share increase: $___________

3. Stock price increase: $_____________

III. Minimum Bonus

Minimum Threshold Increase Percent for Each Target
Incentive Goal

Minimum Increase %
1. Income ___

2. Earnings per share ___

3. Stock price ___

Bonus amounts earned from each of the factors which
exceed the minimum increase above will be accumulated.
No bonus will be paid unless the accumulated bonus
exceeds __% of your base salary.

Bonus will only be paid on each goal which exceeds the
Minimum Increase % set forth above.

IV. Maximum Bonus

The bonus paid will be limited to an amount not to
exceed $_______

V. This compensation plan is not an employment contract,
but a method of calculating your total earnings. You
forfeit your rights to receive a bonus if you resign
before the end of the current fiscal year. If you are
terminated by the Company, you forfeit your rights to
receive a bonus except at the sole discretion of the
Company and in such amount as the Company might decide.
If you retire at age 55 or over, provided the Company
has given its consent to your early retirement, or die
before the end of the then current fiscal year, your
bonus for the current year-to-date will be calculated
to the nearest end of the month preceding or succeeding
such event, using the formula above and adjusting for
the partial year. The amount will be paid to you or to
the legal representative of your estate.

VI. If at any time during your continued employment, your
responsibility, duties or title changes, this plan is
subject to revision or termination by the Company at
the time of the foregoing change.

<PAGE>

(Date) Form 2

TO: (Name)

FROM: Richard L. Ramsey

SUBJECT: Compensation Plan, Fiscal Year 1994

Your compensation plan for fiscal year 1994 is outlinedbelow.

I. FY 1994 Base Salary

Your Base Salary for FY94 shall be $_________

II. Your bonus for FY94 shall be determined by multiplying
the percent determined in the following TARGET
INCENTIVE GOALS times the FACTORS set forth below.

The bonus amounts payable are subject to limitations
set forth in Paragraph III and IV.

TARGET INCENTIVE GOALS:

1. INCOME
Each percentage point of positive change that the Tandy
Corporation and subsidiaries income from operations
(before income taxes) increases from the prior year.

2. Each percentage point of positive change that the
Tandy Service's net income (Pre Tandy Admin)
increases from the prior year. Tandy Services,
for this calculation, will include TE-US, TE
Asia, Tandy Services Consolidation (P&L
RS3-8200), and Tandy Transportation.

Your factors to be used for each of the calculations
above are as follows:

1. Tandy Corporation income increase: $_______

2. Tandy Services income increase: $_______

III. Minimum Bonus

Minimum Threshold Increase Percent for Each Target
Incentive Goal

Minimum Increase %

1. Tandy Corporation income
increase: _______

2. Tandy Services income increase: _______

Bonus amounts earned from each of the factors which
exceed the minimum increase above will be accumulated.
No bonus will be paid unless the accumulated bonus
exceeds __% of your base salary.

Bonus will only be paid on each goal which exceeds the
Minimum Increase % set forth above.

IV. Maximum Bonus

The bonus paid will be limited to an amount not to
exceed $_______

VI. If at any time during your continued employment, your
responsibility, duties or title changes, this plan is
subject to revision or termination by the Company at
the time of the foregoing change.

<PAGE>

(Date) Form 3

TO: (Name)

FROM: Richard L. Ramsey

SUBJECT: Compensation Plan, Fiscal Year 1994

Your compensation plan for fiscal year 1994 is outlined below.

I. FY 1994 Base Salary

Your Base Salary for FY94 shall be $_________

II. Your bonus for FY94 shall be determined by multiplying
the percent determined in the following TARGET
INCENTIVE GOALS times the FACTORS set forth below.

The bonus amounts payable are subject to limitations
set forth in Paragraph III and IV.

TARGET INCENTIVE GOALS:

1. INCOME
Each percentage point of positive change that the Radio
Shack division net income (before income taxes)
increases from the prior year.

2. SALES
Each percentage point of positive change that the Radio
Shack division sales increase from the prior year.

3. GROSS PROFIT
Each percentage point of positive change that the Radio
Shack division gross profit dollars increase from the
prior year.

Radio Shack results will be adjusted to reflect
certain Tandy support operations for 1993 and 1994 and
for estimated costs of Tandy Credit promotions for
1993.

Percentages shall be calculated to two decimal points.

Your factors to be used for each of the
calculations above are as follows:

1. Radio Shack income increase: $_______

2. Radio Shack sales increase: $_______

3. Radio Shack gross profit dollars increase: $_______

III. Minimum Bonus

Minimum Threshold Increase Percent for Each Target
Incentive Goal

Minimum Increase %

1. Income _______

2. Sales _______

3. Gross Profit _______

Bonus amounts earned from each of the factors which
exceed the minimum increase above will be accumulated.
No bonus will be paid unless the accumulated bonus
exceeds __% of your base salary.

Bonus will only be paid on each goal which exceeds the
Minimum Increase % set forth above.

IV. Maximum Bonus

The bonus paid will be limited to an amount not to
exceed $_______

VI. If at any time during your continued employment, your
responsibility, duties or title changes, this plan is
subject to revision or termination by the Company at
the time of the foregoing change.

<PAGE>

(Date) Form 4

TO: (Name)

FROM: Richard L. Ramsey

SUBJECT: Compensation Plan, Fiscal Year 1994

Your compensation plan for fiscal year 1994 is outlined
below.

I. FY 1994 Base Salary

Your Base Salary for FY94 shall be $_________

II. Your bonus for FY94 shall be determined in the
following TARGET INCENTIVE GOALS set forth below.

The bonus amounts payable are subject to limitations
set forth in Paragraph III and IV.

TARGET INCENTIVE GOALS:

Tandy Corporation

Each percentage point of positive change that the Tandy
Corporation and subsidiaries Income from operations
(before income taxes) increases from the prior year,
times a factor of $1,315.

Tandy Credit

A. Each percentage point of positive change that the
Tandy Corporation accounts receivable purchased
increases from the prior year level of $605
million, times a factor of $450.

B. You will receive a $5,220 bonus for each
percentage point reduction of gross charge-off
dollars (includes regular, bankrupt and fraud,
excludes reinstatements) from a $70.2M level.

EXAMPLE:

LOSS BASE 70,200
ACTUAL LOSS 68,300
______
DIFF 1,900
% Reduction 2.7% X $5,220 = $14,094 Bonus

III. Minimum Bonus

Minimum Threshold Increase Percent for Each Target
Incentive Goal

Minimum Increase %

1. Tandy Corporation Income _______

2. Tandy Credit Receivables, Purchases _______

3. Tandy Credit Gross Charge-Off Dollars _______ (Decrease%)

Bonus amounts earned from each of the factors which
exceed the minimum increase above will be accumulated.
No bonus will be paid unless the accumulated bonus
exceeds __% of your base salary.

Bonus will only be paid on each goal which exceeds the
Minimum Increase % set forth above.

IV. Maximum Bonus

The bonus paid will be limited to an amount not to
exceed $_______

V. This compensation plan is not an employment contract,
but a method of calculating your total earnings. You
forfeit your rights to receive a bonus if you resign
before the end of the current fiscal year. If you
are terminated by the Company, you forfeit your rights
to receive a bonus except at the sole discretion of the
Company and in such amount as the Company might decide.
If you retire at age 55 or over, provided the Company
has given its consent to your early retirement, or die
before the end of the then current fiscal year, your
bonus for the current year-to-date will be calculated
to the nearest end of the month preceding or succeeding
such event, using the formula above and adjusting for
the partial year. The amount will be paid to you or
to the legal representative of your estate.

VI. If at any time during your continued employment, your
responsibility, duties or title changes, this plan is
subject to revision or termination by the Company at
the time of the foregoing change.
<PAGE>

Exhibit 10c
POST RETIREMENT DEATH BENEFIT PLAN
FOR SELECTED EXECITOVE EMPLOYEES
OF
TANDY CORPORATION
AND SUBSIDIARIES
RE-STATED PLAN
BOARD OF DIRECTORS MEETING, JANUARY 26, 1989

ARTICLE ONE

PURPOSE

Section 1.1 The purpose of the Post Retirement Death Benefit
Plan for Selected Executive Employees of Tandy Corporation
and Subsidiaries (the "Plan") is to afford Tandy Corporation
("Tandy") an additional opportunity to secure and retain the
services of outstanding key executive employees by providing,
subject to the provisions of the Plan, income payments to
their beneficiaries following the death of the key executive
employee.

ARTICLE TWO

DEFINITIONS

Section 2.1 Beneficiary. The recipient(s) designated (in
accordance with Article Seven) by a Participant in the Plan
to whom benefits are payable following his death.

Section 2.2 Committee. The Organization and Compensation
Committee of Tandy which shall administer the Plan in
accordance with Article Nine.

Section 2.4 Employee. A regular full-time executive employee
of an Employer.

Section 2.6 Leave of Absence. Any period during which:

(a) an Employee is absent with the prior consent of his
Employer, which consent shall be granted under uniform
rules applied to all Employees, on a non-discriminatory
basis, but only if such person is an Employee
immediately prior to the commencement of such period of
authorized absence and resumes employment with Employer
not later than the first working day following the
expiration of such period of authorized absence; or

(b) an Employee is a member of the Armed Forces of the
United States and his re-employment rights are
guaranteed by law, but only if such person is an
Employee immediately prior to becoming a member of such
Armed Forces and resumes employment with Employer within
the period during which his re-employment rights are
guaranteed by law.

Section 2.7 Participant. An Employee who has been selected
and has accepted a Plan Agreement as provided in Article
Three.

Section 2.8 Plan Agreement. The agreement between an
Employer and a Participant, entered into in accordance with
Article Three (as such form may be amended from time to time
hereunder).

Section 2.9 Retirement. The following classifications of
Retirement as referred to in this Plan are defined as
follows:

(a) Early Retirement. The voluntary election, as
opposed to involuntary termination by Employer, prior to
the Participant's attaining the age of sixty-five (65)
years, by a Participant to terminate his employment
after attaining the age of fifty-five (55) years.

(b) Normal Retirement. The termination of a
Participant's service with Employer at the date of
attaining age sixty-five (65) years.

(c) Late Retirement. The termination of a
Participant's service with Employer after the
Participant's attaining the age of sixty-five (65)
years.

Section 2.10 Tandy Subsidiary. Any corporation in which
Tandy owns at least eighty percent (80%) of the total
combined voting power of all classes of stock entitled to
vote.

ARTICLE THREE

SELECTION OF PARTICIPANTS AND
AGREEMENT TO PARTICIPATE

Section 3.1 Participation in the Plan shall be limited to
those Employees of Employer who shall be selected for
participation by the Committee, whose decisions in this
respect shall be conclusive.

Section 3.2 Participation in the Plan by an Employee so
selected by the Committee is voluntary and subject to his
written acceptance of a Plan Agreement executed by Employer
and submitted to him by the Committee. Unless and until a
Plan Agreement has been so submitted to and accepted by him,
he shall not become a Participant.

ARTICLE FOUR

LIFE INSURANCE

Section 4.2 If as a result of misrepresentations made by a
Participant in any application for life insurance upon his
life obtained by Employer hereunder, the insurance carrier or
carriers or any reinsurance thereof successfully avoid(s)
payment to Employer of the proceeds of its or their policy or
policies, or such proceeds are not payable because the
Participant's death results from suicide within two years of
the issuance to Employer of additional policies obtained by
Employer hereunder, then, in any of said events, and
notwithstanding any other provisions of the Plan or of the
Plan Agreement with such Participant, Employer shall have no
obligation to his Beneficiary to provide any of the death
benefits otherwise payable under the terms thereof.

Section 4.3 Each Participant shall cooperate in the securing
of life insurance on his life by furnishing such information
as the insurance company may require, taking such physical
examinations as may be necessary, and taking any other action
which may be requested by the Employer or the insurance
company to obtain such insurance coverage. If a Participant
refuses to cooperate in all the securing of life insurance,
or if Employer is unable to secure life insurance at standard
rates on a Participant, then, the Plan Agreement shall be of
no force and effect as to a Participant unless the Employer
waives such requirement in writing.

Section 4.4 All benefits under the Plan or Plan Agreement
represent an unsecured promise to pay by Tandy. The Plan
shall be unfunded and the benefits hereunder shall be paid
only from the general assets of Tandy resulting in the
Participants and Beneficiaries having no greater rights than
Tandy's general creditors; provided, however, nothing herein
shall prevent or prohibit Tandy from establishing a trust or
other arrangement for the purpose of providing for the
payment of the benefits payable under the Plan or Plan
Agreement.

ARTICLE FIVE

BENEFITS PAYABLE TO BENEFICIARIES

Section 5.1 Subject to the terms and conditions of the Plan,
upon the death of a Participant in Retirement, Employer
agrees to pay to Beneficiary a retirement benefit as follows:

(a) Normal Retirement. If a Participant retires at a
time that constitutes Normal Retirement, then, upon the
death of such retired Participant, Employer agrees to
pay to the designated Beneficiary of such deceased
Participant, all from its general assets, a total amount
equal to the amount set forth in the Plan Agreement,
such amount to be paid as set forth in Section 5.3
hereof.

(b) Early Retirement. If a Participant retires at a
time that constitutes an Early Retirement, then, upon
the death of such retired Participant, Employer agrees
to pay to the designated Beneficiary of such deceased
Participant a total amount equal to the amount set forth
in the Plan Agreement, reduced by five percent per year
for each year that Early Retirement precedes the date of
Normal Retirement. Such year shall be a fiscal year
beginning on the date a Participant attains age
fifty-five (55). Any reduction for a part of a year
shall be prorated on a daily basis assuming a 365 day
year. Such amount shall be paid as set forth in Section
5.3 hereof.

(c) Late Retirement. If a Participant retires at a
time that constitutes Late Retirement, then, upon the
death of such retired Participant, Employer agrees to
pay to the designated Beneficiary of such deceased
Participant, all from its general assets, a total amount
equal to the amount set forth on the Plan Agreement,
reduced by a percentage determined as follows:

At Date of Late Retirement
Attainment of Age Percent of Reduction

66 0%
67 0%
68 0%
69 0%
70 0%
71 20%
72 40%
73 60%
74 80%
75 100%

The percent of reduction shall be measured on a fiscal year
beginning on the date of a Participant's date of birth and
shall commence on the day after the date a Participant
attains age 70, and any reduction for a part of a year shall
be prorated on a daily basis at the applicable percentage
assuming a 365 day year. Such amount shall be paid as set
forth in Section 5.3 hereof.

Section 5.2 Subject to the terms and conditions of the Plan,
upon the death of a Participant in Retirement, Employer
agrees to pay to his Beneficiary from its general assets an
amount equal to the amount set forth in the Plan Agreement
reduced as provided in Section 5.1 or, as the case may be, in
the last amendment to his Plan Agreement. With respect to
such benefits, however, it is further provided that: No
benefits shall be payable to the Beneficiary of a Participant
in those instances covered by Section 4.2.

Section 5.3 Except as provided in Section 8.5, the aggregate
amount payable upon the death of a Participant in Retirement
to his Beneficiary shall be paid in 120 equal monthly
installment payments commencing on the first day of the month
next following thirty (30) days after the Committee's receipt
of a certified death or proof of death certificate verifying
the retired Participant's death. A Beneficiary shall notify
Employer of death by hand delivery or by certified or
registered mail, return receipt requested, postage prepaid,
of a written notice of death specifying the date of death,
such written notice to be addressed to: Organization and
Compensation Committee of the Board of Directors, Tandy
Corporation, 1800 One Tandy Center, Fort Worth, Texas 76102.
Such notice shall be deemed to be received when actually
received by said Committee at said address as may be changed
from time to time in the Plan Agreements, as amended.

Section 5.4 Until actually paid and delivered to the
Beneficiary entitled to same, none of the benefits payable by
Employer under any Plan Agreement shall be liable for the
debts or liabilities of either the Participant or his
Beneficiary, nor shall the same be subject to seizure by any
creditor of the Participant or his Beneficiary under any writ
or proceeding at law, in equity or in bankruptcy. Further,
no Participant or Beneficiary shall have power to sell,
assign, transfer, encumber, or in any manner anticipate or
dispose of the benefits to which he is entitled or may become
entitled under a Plan Agreement.

Section 5.5

(a) During the period that Participant is in Retirement
or vested under Sections 8.5 or 10.2, Participant agrees
that he will not, either directly or indirectly, within
the United States of America or in any country of the
world that Tandy (or Tandy Subsidiary) or one of its
dealers or franchisees sells Consumer Electronic
Products (as hereinafter defined) at retail, own,
manage, operate, join, control, be employed by, be a
consultant to, be a partner in, be a creditor of,
engage in joint operations with, be a stockholder,
officer or director of any corporation, sole
proprietorship or business entity of any type, or
participate in the ownership, management, direction, or
control or in any other manner be connected with, any
business selling Consumer Electronic Products at retail
which is at the time of Participant's engaging in such
conduct competitive with such products sold by Tandy at
retail, except as a shareholder owning less than five
percent (5%) of the shares of a corporation whose shares
are traded on a stock exchange or in the
over-the-counter market by a member of the National
Association of Securities Dealers. "Consumer Electronic
Products" are those types of products sold at the retail
level to the ultimate customer as are advertised by
Tandy in its most recently published annual catalogs and
monthly flyers. Manufacturing of Consumer Electronic
Products and sale of Consumer Electronic Products at
levels of distribution other than the retail level are
not considered a violation of this covenant.

(b) In the event that a Participant engages in any of
the activities described in Section 5.5(a) Tandy will
give notice to the Participant specifying in detail the
alleged violation of Section 5.5(a). Participant will
be allowed ninety (90) days to cure such default. If
the Committee feels there is continuing competition,
then, without any further notice or opportunity to cure,
and upon determination by the Board of Directors that
such a Participant is engaged in such activities, such
Board's decision to be conclusive and binding upon all
concerned, and notwithstanding any other provisions of
the Plan or of the Plan Agreement with such Participant,
Employer's obligation to a Participant to pay any
benefits hereunder shall automatically cease and
terminate, and Employer shall have no further obligation
to such Participant or Beneficiary pursuant to the Plan
or the Plan Agreement. Employer may also enforce this
provision by suit for damages which shall include but
not be limited to all sums paid to Participant
hereunder, or for injunction, or both.

Section 5.6 Employer may liquidate out of the interest of a
Participant hereunder, but only as death benefits become due
and payable hereunder, any outstanding loan or loans or other
indebtedness of a deceased Participant. Employer may elect
not to distribute death benefits to a Beneficiary unless and
until all unpaid loans or other indebtedness due to Employer
from such deceased Participant, together with interest, have
been paid in full.

ARTICLE SIX

AMENDMENTS OF PLAN AGREEMENTS

Section 6.1 The Committee may enter into amendments to the
Plan Agreement with any Participant for the purpose of
increasing the benefits payable to Participant's Beneficiary
in view of increases in his compensation following the
execution of such Plan Agreement or the last amendment
thereto and for the purpose of amending any provision of this
Plan as it might apply to a Participant. In such cases, the
acceptance of an amendment by a Participant is voluntary and
until the amended Plan Agreement has been submitted to and
accepted by him, it shall not be effective.

ARTICLE SEVEN

BENEFICIARIES OF PARTICIPANTS

Section 7.2 A Participant may change his Beneficiary, as he
may desire, by filing new and amendatory Beneficiary
Designation Forms with the Committee.

(a) directly to such person unless such person shall be
an infant or shall have been legally adjudicated
incompetent at the time of the payment;

(b) to the spouse, child, parent or other blood
relative to be expended on behalf of the person entitled
or on behalf of those dependents as to whom the person
entitled has the duty of support;

(c) to a recognized charity or governmental institution
to be expended for the benefit of the person entitled or
for the benefit of those dependents as to whom the
person entitled has the duty of support; or

(d) to any other institution, approved by the
Committee, to be expended for the benefit of the person
entitled or for the benefit of those dependents as to
whom the person entitled has the duty of support.

Section 7.6 If the Committee has any doubt as to the proper
Beneficiary to receive payments hereunder, the Committee
shall have the right to withhold such payments until the
matter is finally adjudicated, or the Committee may direct
Employer to bring a suit for interpleader in any appropriate
court, pay any amounts due into court, and Employer and/or
Committee shall have the right to recover its reasonable
attorney's fees from such proceeds so paid or to be paid.
Any payment made by the Committee, in good faith and in
accordance with this Plan, shall fully discharge the
Committee and Employer from all further obligations with
respect to such payments.

ARTICLE EIGHT

TERMINATION OF PARTICIPATION

Section 8.1 Except as provided in Sections 8.4, 8.5, 10.1 and
10.2 hereof, termination of a Participant's employment by
Employer other than by reason of Retirement, Disability or
Leave of Absence, whether by action of Employer or the
Participant's resignation, shall terminate the Participant's
participation in the Plan. Neither the Plan nor the Plan
Agreement shall in any way obligate Employer to continue the
employment of a Participant, nor will either limit the right
of Employer to terminate a Participant's employment at any
time, for any reason, with or without cause.

Section 8.2 Except as provided in Sections 8.4, 8.5, 10.1 and
10.2 hereof, participation in the Plan by a Participant shall
also terminate if the Plan or his Plan Agreement is
terminated by Tandy in accordance with Article Ten.

Section 8.3 Except as provided in Sections 8.4, 8.5, 10.1 and
10.2, hereof, upon termination of a Participant's
participation in the Plan, all of Employer's obligations to
the Participant and his Beneficiary under the Plan and Plan
Agreement and each of them, shall terminate and be of no
further effect.

Section 8.4 Except as provided in Sections 8.5, 10.1 and
10.2, if a Participant's participation in the Plan is
terminated by:

(a) termination of the Plan;

(b) termination of a Plan Agreement; or

(i) Dishonest or fraudulent conduct, or
(ii) Indictment of a Participant for a felony crime
involving moral turpitude (in which event no
vesting of Section 8.4(a) or (b) or 10.1
shall occur).

then upon death after Retirement of the Participant, such
ceased Participant's Beneficiary shall be entitled, as set
forth below, to a percentage of the amount set forth in the
Plan Agreement as follows:

Age Attained at Date of Event
Set Forth in Section 8.4(a), (b)
or (c) % Vested

Age 54 or younger 0%

Age 55 to age 65 A percent as determined
in Section 5.1(b) hereof

Age 65 to age 70 100%

Age 70 to age 75 A percent as determined
in Section 5.1(c) hereof

Age 75 and thereafter 0%

The amount payable under this Section 8.4 shall be determined
as of the date of the event set forth in Section 8.4 (a), (b)
or (c) hereof and such amount as so determined at that time
shall not be altered or changed thereafter except that the
provisions of Section 5.5 hereof shall remain fully
applicable. The amount payable under this Section 8.4 shall
be paid as set forth in Section 5.3 hereunder. No benefits
shall be payable under this Section 8.4 if Participant is
employed by employer at the date of his death.

Section 8.5 Notwithstanding anything to the contrary in the
Plan or Plan Agreement,

(a) In the event of a Change in Control, as hereinafter
defined, every Participant immediately shall be vested
with the full amount set forth in his Plan Agreement
without regard to Section 5.1(b) but subject to Section
5.1(c). Such Plan Agreement Amount shall be payable to
the Participant's Beneficiary in a lump sum on the
first day of the month next following the date on which
such Participant dies. Such lump sum payment shall
equal the present value of the Participant's Plan
Agreement Amount discounted at the Pension Benefit
Guaranty Corporation's Immediate Annuity Rate used to
value benefits for single-employer plans terminating on
the date of the Participant's death, compounded
semi-annually.

(b) Any Beneficiary who, on the date of the Change in
Control, was receiving benefits under the Plan or Plan
Agreement shall be entitled to receive a lump sum equal
to the present value of the Beneficiary's remaining
amount set forth in the Plan Agreement, calculated in a
manner consistent with Section 8.5(a).

Section 8.6 In the event that a Participant's employment with
Employer is involuntarily terminated for any reason other
than those reasons set forth in Section 8.4(c)(i) and (ii),
and within a one-year period beginning on the date of such
termination there occurs a Change in Control, then such
Participant's Beneficiary shall be entitled to receive a lump
sum equal to the present value of the amount set forth in the
Participant's Plan Agreement (calculated in a manner
consistent with Section 8.5(a), payable on the first day of
the month next following the Participant's death.

Section 8.7 For purposes of the Plan, "Change in Control"
shall mean any of the following terms:

(a) An acquisition (other than directly from Tandy) of
any voting securities of Tandy (the "Voting Securities")
by any "Person" (as the term person is used for purposes
of Section 13(d) or 14(d) of the Securities Exchange Act
of 1934, as amended (the "1934 Act")) immediately after
which such Person has "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the 1934 Act) of
fifteen percent (15%) or more of the combined voting
power of Tandy's then outstanding Voting Securities;
provided, however, in determining whether a Change in
Control has occurred, Voting Securities which are
acquired in a "Non-Control Acquisition" (as hereinafter
defined) shall not constitute an acquisition which would
cause a Change in Control. A "Non-Control Acquisition"
shall mean an acquisition by (1) an employee benefit
plan (or a trust forming a part thereof) maintained by
(a) Tandy or (b) any corporation or other Person of
which a majority of its voting power or its voting
equity securities or equity interest is owned, directly
or indirectly, by Tandy (for purposes of this Sectin
8.7, a "Tandy Subsidiary"), (2) Tandy or its
Subsidiaries, or (3) any Person in connection with a
"Non-Control Transaction" (as hereinafter defined).

(b) The individuals who, as of August 22, 1990, are
members of the Board (the "Incumbent Board"), cease for
any reason to constitute at least two-thirds of the
Board; provided, however, that if the election, or
nomination for election by Tandy's stockholders, of any
new director was approved by a vote of at least
two-thirds of the Incumbent Board, such new director
shall, for purposes of the Plan, be considered as a
member of the Incumbent Board; provided further,
however, that no individual shall be considered a member
of the Incumbent Board if such individual initially
assumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule
14a-11 promulgated under the 1934 Act) or other actual
or threatened solicitation of proxies or consents by or
on behalf of a Person other than the Board (a "Proxy
Contest") including by reason of any agreement intended
to avoid or settle any Election Contest or Proxy
Contest; or

(1) A merger, consolidation or reorganization
involving Tandy, unless

(i) the stockholders of Tandy, immediately
before such merger, consolidation or
reorganization, own, directly or indirectly
immediately following such merger,
consolidation or reorganization, at least
sixty percent (60%) of the combined voting
power of the outstanding voting securities of
the corporation resulting from such merger or
consolidation or reorganization (the
"Surviving Corporation") in substantially the
same proportion as their ownership of the
Voting Securities immediately before such
merger, consolidation or reorganization,

(ii) the individuals who were members of the
Incumbent Board immediately prior to the
execution of the agreement providing for such
merger, consolidation or reorganization
constitute at least two-thirds of the members
of the board of directors of the Surviving
Corporation,

(iii) no Person [other than Tandy, any
Subsidiary, any employee benefit plan (or any
trust forming a part thereof) maintained by
Tandy, the Surviving Corporation, or any Tandy
Subsidiary, or any Person who, immediately
prior to such merger, consolidation or
reorganization had Beneficial Ownership of
fifteen percent (15%) or more of the then
outstanding Voting Securities] has Beneficial
Ownership of fifteen percent (15%) or more of
the combined voting power of the Surviving
Corporation's then outstanding voting
securities, and

(iv) a transaction described in clauses (i)
through (iii) shall herein be referred to as a
"Non-Control Transaction";

(v) A complete liquidation or dissolution of
Tandy; or

(vi) An agreement for the sale or other
disposition of all or substantially all of the
assets of the Company to any Person (other
than a transfer to a Tandy Subsidiary).

Notwithstanding the foregoing, a Change in Control shall
not be deemed to occur solely because any Person (the
"Subject Person") acquired Beneficial Ownership of more than
the permitted amount of the outstanding Voting Securities as
a result of the acquisition of Votin Securities by Tandy
which, by reducing the number of Voting Securities
outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a
Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities
by Tandy, and after such share acquisition by Tandy, the
Subject Person becomes the Beneficial Owner of any additional
Voting Securities which increases the percentage of the then
outstanding Voting Securities Beneficially Owned by the
Subject Person, then a Change in Control shall occur.

Section 8.8 Notwithstanding any provision to the contrary in
the Plan, upon a Change in Control, the provisions of
Sections 5.5 and 5.6 shall lapse and become null and void.

ARTICLE NINE

ADMINISTRATION OF THE PLAN

Section 9.1 The Plan shall be administered by the
Organization and Compensation Committee of the Board of
Directors of Tandy, as it is presently constituted or as it
may be changed from time to time by the Board of Directors.

Section 9.2 In addition to the express powers and authorities
accorded the Committee under the Plan, it shall be
responsible for:

(a) Construing and interpreting the Plan;

(b) Computing and certifying to Employer the amount of
benefits to be provided in each Plan Agreement for the
Beneficiary of the Participant; and

(c) Determining the right of a Beneficiary to payments
under the Plan and otherwise authorizing disbursements
of such payments by Employer;

in these and all other respects its decisions shall be
conclusive and binding upon all concerned.

Section 9.3 Employer agrees to hold harmless and indemnify
the members of the Committee against any and all expenses,
claims, and causes of action by or on behalf of any and all
parties whomsoever, and all losses therefrom, including
without limitation the cost of defense and attorneys' fees,
based upon or arising out of any act or omission relating to
or in connection with the Plan other than losses resulting
from any such Committee member's fraud or willful misconduct.

ARTICLE TEN

TERMINATION OR AMENDMENT OF THE PLAN
OR PLAN AGREEMENT

Section 10.1 Employer reserves the right to terminate or
amend this Plan or any Plan Agreement, in whole or in part,
at any time, or from time to time, by resolution of the Board
of Directors of Tandy, provided, however, no amendment to the
Plan or to any Plan Agreement shall alter the vested rights
of a Participant or Beneficiary applicable on the effective
date of such termination or amendment and, except for
increases in Plan compensation as provided in Section 8.5
hereof, such vested rights shall remain unchanged. Rights
are deemed to have vested if benefits are actually being paid
or if the only condition precedent to the payment of benefits
is the death of a Participant (unless his employment was
terminated for reasons set forth in Section 8.4(c)(i) and
(ii), in which event all benefits are forfeited) with
Employer or the giving of notice of Retirement or the
occurrence of an event described in Section 8.5(a), (b) or
(c).

Section 10.2 Notwithstanding anything to the contrary in the
Plan or Plan Agreement,

(a) Sections 8.5, 8.6, 8.7, 8.8 and this Section 10.2
shall not be amended or terminated at any time.

(b) For a period of one year following a Change in
Control, the Plan or Plan Agreement shall not be
terminated or amended in any way, nor shall the manner
in which the Plan is administered be changed in a way
that adversely affects the Participants' or
Beneficiary's right to existing or future Tandy
provided benefits or contributions provided hereunder,
including, but not limited to, any change in, or to, the
eligibility requirements, benefit formulae and manner
and optional forms of payments.

(c) Any amendment or termination of the Plan or Plan
Agreement prior to a Change in Control which (i) was at
the request of a third party who has indicated an
intention or taken steps reasonably calculated to effect
a Change in control or (ii) otherwise arose in
connection with, or in anticipation of, a Change in
Control, shall be null and void and shall have no effect
whatsoever.

(d) In the event the Plan or any Plan Agreement is
terminated or adversely amended to the detriment of any
Participant or Beneficiary and within a one-year period
from the effective date of any such amendment or
termination a Change in Control occurs, then the
Beneficiaries of any Participant whose employment with
Employer is terminated, voluntarily or involuntarily,
within a three-year period from the date of the Change
in Control shall be entitled to receive those benefits
set forth in Section 8.5 hereof to the same extent and
in the same amounts as though such amendment or
termination had not occurred. This Section 10.2(e)
shall not apply to any Beneficiary of any Participant
who, on the date of the Change in Control, has
previously retired or has otherwise voluntarily
terminated his employment with Employer.

ARTICLE ELEVEN

MISCELLANEOUS

Section 11.1 The Plan and Plan Agreement and each of their
provisions shall be construed and their validity determined
under the laws of the State of Texas.

Section 11.2 The masculine gender, where appearing in the
Plan or Plan Agreement, shall be deemed to include the
feminine gender. The words "herein," "hereunder" and other
similar compounds of the word "here" shall mean and refer to
the entire Plan Agreement, not to any particular provision,
section or subsection, and words used in the singular or
plural may be construed as though in the plural or singular
where they would so apply.

Section 11.3 Any action brought by a Participant or
Beneficiary under the Plan or Plan Agreement may be brought
in the appropriate state or federal court for Tarrant County,
Texas, or for the county wherein the Participant or
Beneficiary maintains his or her residence. Any suit brought
by Tandy under the Plan may only be brought in the county
wherein the Participant or Beneficiary maintains his or her
residence, unless the Participant or Beneficiary consents to
suit elsewhere.

Section 11.4 Any person born on February 29 shall be deemed
to have been born on the immediately preceding February 28
for all purposes of this Plan.

Section 11.5 This Plan shall be binding upon and inure to the
benefit of any successor of Employer and any such successor
shall be deemed substituted for Employer under the terms of
this Plan. As used in this Plan, the term "successor" shall
include any person, firm, corporation, or other business
entity which at any time, whether by merger, purchase, or
otherwise, acquires all or substantially all of the assets or
business of Employer.

DATED: June 10, 1991

The foregoing plan was adopted 11/12/86, and includes
amendments adopted on 1/26/89 and on 8/22/90.
<PAGE>

Exhibit 10d
TANDY CORPORATION OFFICERS
DEFERRED COMPENSATION PLAN
(RESTATED)

ARTICLE ONE

PURPOSE

Section 1.1 The purpose of this Tandy Corporation Officers
Deferred Compensation Plan ("the Plan") is to enable Tandy
Corporation and its subsidiaries to secure and retain the
services of outstanding key executive personnel by providing
certain death and retirement benefits.

ARTICLE TWO

DEFINITIONS

Section 2.1 Beneficiary. The recipient(s) designated (in
accordance with Article Seven) by a Participant in the Plan
to whom benefits are payable following his death.

Section 2.2 Committee. The Insurance Committee of Tandy
which shall administer the Plan in accordance with Article
Nine.

Section 2.3 Disability. A physical or mental condition
which, in the opinion of the Committee, totally and
presumably permanently, prevents a Participant from
substantially performing duties for which such Participant is
suited to perform either by education or training, or if such
Participant is on a Leave of Absence when such condition
develops, substantially performing duties for which such
Participant is suited to perform either by education or
training. A determination that Disability exists shall be
based upon competent medical evidence satisfactory to the
Committee. The date that any person's Disability occurs
shall be deemed to be the date such condition is determined
to exist by the Committee.

Section 2.4 Employee. A regular full-time executive employee
of Tandy.

Section 2.5 Leave of Absence. Any period during which:

(a) an Employee is absent with the prior consent of
Tandy, which consent shall be granted under uniform rules
applied to all Employees on a nondiscriminatory basis, but
only if such person is an Employee immediately prior to the
commencement of such period of authorized absence and resumes
employment with Tandy not later than the first working day
following the expiration of such period of authorized
absence; or

(b) an Employee is a member of the Armed Forces of the
United States and his reemployment rights are guaranteed by
law, but only if such person is an Employee immediately prior
to becoming a member of such Armed Forces and resumes
employment with Tandy within the period during which his
reemployment rights are guaranteed by law.

Section 2.6 Participant. An Employee who has been selected
and has accepted a Plan Agreement as provided in Article
Three.

Section 2.7 Plan Agreement. The agreement between Tandy and
a Participant, entered into in accordance with Article Three,
and in the form of attached Exhibit "A" (as such form may be
amended from time to time hereunder).

Section 2.8 Plan Benefit Amount. Plan Benefit Amount means
the dollar amount set forth and so designated in a
Participant's Plan Agreement.

Section 2.9 Retirement. The following classifications of
Retirement as referred to in this Plan are defined as
follows:

(a) Early Retirement. The voluntary election, as
opposed to involuntary termination by Tandy, prior to the
Participant's attaining the age of sixty-five (65) years, by
a Participant to terminate his employment after attaining the
age of fifty-five (55) years.

(b) Normal Retirement. The termination of a
Participant's service with Tandy at the date of attaining age
sixty-five (65) years.

(c) Late Retirement. The termination of a
Participant's service with Tandy after the Participant's
attaining the age of sixty-five (65) years.

Section 2.10 Tandy. Tandy Corporation, a Delaware
corporation, and those subsidiary corporations in which Tandy
owns at least eighty percent (80%) of the total combined
voting power of all classes of stock entitled to vote.

Section 2.11 Tandy Subsidiary. Any corporation in which
Tandy owns at least eighty percent (80%) of the total
combined voting power of all classes of stock entitled to
vote.

ARTICLE THREE

SELECTION OF PARTICIPANTS AND
AGREEMENT TO PARTICIPATE

Section 3.1 The Committee, in its sole and exclusive
discretion, shall select from among the key executive
employees of Tandy, candidates for participation in the Plan.
A candidate shall become a Participant only upon his
execution of a Plan Agreement and a Beneficiary Designation
Form.

ARTICLE FOUR

LIFE INSURANCE

Section 4.1 Tandy may obtain permanent life insurance
insuring the life of any Participant as a means of funding
Tandy's obligations to his Beneficiary in whole or part.
Tandy shall be the sole owner and beneficiary of all such
policies of insurance so obtained and of all incidents of
ownership therein, including without limitation, the rights
to all cash and loan values, dividends (if any), death
benefits and the right to terminate. No Beneficiary or
Participant shall be entitled to any rights, interests or
equities in such policies or to any specific asset of Tandy
of any type, and on the contrary, their rights against Tandy
under the Plan shall be solely as general creditors.

Section 4.2 If as a result of misrepresentations made by a
Participant in any application for life insurance upon his
life obtained by Tandy hereunder, the insurance carrier or
carriers or any reinsurance thereof successfully avoid(s)
payment to Tandy of the proceeds of its or their policy or
policies, or such proceeds are not payable because the
Participant's death results from suicide within two (2) years
of the issuance of such policy or within two (2) years of the
issuance to Tandy of additional policies obtained by Tandy
hereunder, then, in any of said events, notwithstanding any
other provisions of the Plan or of the Plan Agreement with
such Participant, Tandy shall have no obligation to his
Beneficiary to provide any of the death benefits otherwise
payable under the terms thereof.

Section 4.4 All benefits under the Plan or Plan Agreement
represent an unsecured promise to pay by Tandy Corporation.
The Plan shall be unfunded and the benefits hereunder shall
be paid only from the general assets of Tandy Corporation
resulting in the Participants having no greater rights than
Tandy Corporation's general creditors; provided, however,
nothing herein shall prevent or prohibit Tandy Corporation
from establishing a trust or other arrangement for the
purpose of providing for the payment of the benefits payable
under the Plan or Plan Agreement.

ARTICLE FIVE

BENEFITS PAYABLE TO PARTICIPANTS AND
TO BENEFICIARIES OF PARTICIPANTS

Section 5.1 Subject to the terms and conditions of the Plan,
upon the Retirement of a Participant, Tandy agrees to pay to
Participant a Retirement benefit as follows:

(a) Normal Retirement. If a Participant retires at the
date of Normal Retirement, then Tandy agrees to pay to
Participant or to the designated Beneficiary of Participant
in the event of the death of Participant prior to the
termination of payment of Retirement benefits hereunder, all
from its general assets, an amount equal to such
Participant's Plan Benefit Amount, such sum to be paid as set
forth in Section 5.3 hereof.

(b) Early Retirement. If a Participant retires at a
time that constitutes an Early Retirement, then Tandy agrees
to pay to Participant or to the designated Beneficiary of
Participant in the event of the death of Participant prior to
the termination of payment of Early Retirement benefits
hereunder, all from its general assets, an amount equal to
such Participant's Plan Benefit Amount, reduced by five
percent (5%) per year for each year that Early Retirement
precedes the date of Normal Retirement. Such year shall be a
fiscal year beginning on the date a Participant attains age
fifty-five (55). Any reduction for a part of a year shall be
prorated on a daily basis assuming a 365-day year. Such
amount shall be paid as set forth in Section 5.3 hereof.

(c) Late Retirement. If a Participant retires at a
date that constitutes Late Retirement, then Tandy agrees to
pay to Participant or to the designated Beneficiary of
Participant in the event of the death of Participant prior to
the termination of payment of Late Retirement benefits
hereunder, all from its general assets, an amount equal to
such Participant's Plan Benefit Amount, reduced by a
percentage determined as follows:

Age on Date of Percent of Reduction
Late Retirement of Plan Benefit Amount

66 0%
67 0%
68 0%
69 0%
70 0%
71 20%
72 40%
73 60%
74 80%
75 100%

The percent of reduction of a Participant's Plan Benefit
Amount shall be measured on a fiscal year beginning on the
date of Participant's date of birth and shall commence on the
day after the date a Participant attains age 70, and any
reduction for a part of a year shall be prorated on a daily
basis at the applicable percentage assuming a 365-day year.
Such amount shall be paid as set forth in Section 5.3 hereof.

Section 5.2 Subject to the terms and conditions of the Plan,
upon the death of a Participant, but only if the Participant
is an Employee of Tandy at his death (except as set forth in
Section 5.2(c) below) and is not being paid benefits pursuant
to a Plan Agreement at such time, Tandy agrees to pay to his
Beneficiary from its general assets an amount equal to such
Participant's Plan Benefit Amount as reflected in Employee's
Plan Agreement or, as the case may be, in the last amendment
to his Plan Agreement. With respect to such benefits,
however, it is further provided that:

(a) no benefits shall be payable to the Beneficiary of
a Participant in those instances covered by Section 4.2;

(b) if a Participant dies while an Employee of Tandy
after the date of his Normal Retirement, then the amount
payable to his Beneficiary upon a Participant's death shall
be reduced as set forth in Section 5.1(c) hereof.

(c) The death of a Participant within the first year
after involuntary termination of employment with Tandy as
provided in Section 8.6 shall not defeat the right of such
Participant's Beneficiary to receive benefits under this
Section 5.2 so long as an event described in Section 8.5(a),
(b) or (c) occurs within one year of the date of termination
of the Participant's employment.

Section 5.3 Except as provided in Section 8.5, the aggregate
amount payable upon the Normal Retirement, Early Retirement,
Late Retirement benefits due and payable under Section 8.5 or
8.6 hereof, or death of a Participant to a Participant or his
Beneficiary shall be paid in one hundred twenty (120) equal
monthly installments commencing on the first day of the month
next following thirty (30) days after Retirement or after the
Committee's receipt of a certified death or proof of death
certificate verifying the Participant's death, or at the time
stated in Section 8.5 or 8.6 hereof. A Participant shall
notify Tandy of Retirement by hand delivery or by certified
or registered mail, return receipt requested, postage
prepaid, of a written notice of Retirement specifying the
effective date of Retirement, such written notice to be
addressed to: Insurance Committee of the Board of Directors,
Tandy Corporation, 1800 One Tandy Center, Fort Worth, Texas
76102. Such notice shall be deemed to be received when
actually received by said Insurance Committee at said address
as may be changed from time to time in the Plan Agreements,
as amended.

Section 5.4 Until actually paid and delivered to the
Participant or to the Beneficiary entitled to same, none of
the benefits payable by Tandy under any Plan Agreement shall
be liable for the debts or liabilities of either the
Participant or his Beneficiary, nor shall the same be subject
to seizure by any creditor of the Participant or his
Beneficiary under any writ or proceeding at law, in equity or
in Bankruptcy. Further, no Participant or Beneficiary shall
have power to sell, assign, transfer, encumber, or in any
manner anticipate or dispose of the benefits to which he is
entitled or may become entitled under a Plan Agreement.

Section 5.5
(a) During the period that Participant is receiving
benefits under a Plan Agreement and for one (1) year after
cessation of payment of benefits, Participant agrees that he
will not, either directly or indirectly, within the United
States of America or in any country of the world that Tandy
(or a Tandy Subsidiary) or one of its dealers or franchisees
sells Consumer Electronic Products (as hereinafter defined)
at retail, own, manage, operate, join, control, be employed
by, be a consultant to, be a partner in, be a creditor of,
engage in joint operations with, be a stockholder, officer or
director of any corporation, sole proprietorship or business
entity of any type, or participate in the ownership,
management, direction, or control or in any other manner be
connected with, any business selling Consumer Electronic
Products at retail which is at the time of Participant's
engaging in such conduct competitive with such products sold
by Tandy at retail, except as a stockholder owning less than
five percent (5%) of the shares of a corporation whose shares
are traded on a stock exchange or in the over-the-counter
market by a member of the National Association of Securities
Dealers. "Consumer Electronic Products" are those type of
products sold at the retail level to the ultimate customer as
are advertised by Tandy in its most recently published annual
catalogs and monthly flyers. Manufacturing of Consumer
Electronic Products and sale of Consumer Electronic Products
at levels of distribution other than the retail level are not
considered a violation of this covenant.

(b) In the event that a Participant engages in any of
the activities described in Section 5.5(a) Tandy will give
notice to the Participant specifying in detail the alleged
violation of Section 5.5(a). Participant will be allowed
ninety (90) days to cure such default. If the Committee
feels there is continuing competition, then, without any
further notice or opportunity to cure, and upon determination
by the Board of Directors that such a Participant is engaged
in such activities, such Board's decision to be conclusive
and binding upon all concerned, and notwithstanding any other
provisions of the Plan or of the Plan Agreement with such
Participant, Tandy's obligation to a Participant to pay any
benefits hereunder shall automatically cease and terminate
and Tandy shall have no further obligation to such
Participant or Beneficiary pursuant to the Plan or the Plan
Agreement. Tandy may also enforce this provision by suit for
damages which shall include but not be limited to all sums
paid to Participant hereunder, or for injunction, or both.

Section 5.6 Tandy may liquidate out of the interest of a
Participant hereunder, but only as Retirement or death
benefits become due and payable hereunder, any outstanding
loan or loans or other indebtedness of a Participant. Tandy
may elect not to distribute Retirement or death benefits to
any Participant or to a Beneficiary unless and until all
unpaid loans or other indebtedness due to Tandy from such
Participant, together with interest, have been paid in full.

Section 5.7 Subject to termination or amendment of the Plan,
Plan Agreement, or both, a Participant's participation in the
Plan shall continue during his Disability or his taking a
Leave of Absence. A Participant who is Disabled or on Leave
of Absence shall notify Tandy of his date of Retirement as
provided in Section 5.3 hereof.

ARTICLE SIX
AMENDMENTS OF PLAN AGREEMENTS

ARTICLE SEVEN

BENEFICIARIES OF PARTICIPANTS

Section 7.1 At the time of his acceptance of a Plan
Agreement, a Participant shall be required to designate the
Beneficiary to whom benefits under the Plan and his Plan
Agreement will be payable upon his death. A Beneficiary may
be one (1) or more persons or entities, such as dependents,
persons who are natural objects of the Participant's bounty,
an inter vivos or testamentary trust, or his estate. Such
Beneficiaries may be designated contingently or successively
as the Participant may direct. The designation of his
Beneficiary shall be made by the Participant on a Beneficiary
Designation Form to be furnished by the Committee and filed
with it.

Section 7.2 A Participant may change his Beneficiary, as he
may desire, by filing new and amendatory Beneficiary
Designation Forms with the Committee.

Section 7.3 In the event a Participant designates more than
one (1) Beneficiary to receive benefit payments
simultaneously, each such Beneficiary shall be paid such
proportion of such benefits as the Participant shall have
designated. If no such percentage designation has been made,
the Committee shall hold all benefit payments until the
Beneficiaries agree as to the distribution of the funds or a
judicial determination has been made.

(1) directly to such person unless such person shall be
an infant or shall have been legally adjudicated incompetent
at the time of the payment;

(2) to the spouse, child, parent or other blood
relative to be expended on behalf of the person entitled or
on behalf of those dependents as to whom the person entitled
has the duty of support;

(4) to any other institution, approved by the
Committee, to be expended for the benefit of the person
entitled or for the benefit of those dependents as to whom
the person entitled has the duty of support.

The decision of the Committee will, in each case, be final
and binding upon all persons and the Committee shall not be
obligated to see to the proper application or expenditure of
any payments so made. Any payment made pursuant to the power
herein conferred upon the Committee shall operate as a
complete discharge of the obligations of Tandy and of the
Committee.

Section 7.6 If the Committee has any doubt as to the proper
Beneficiary to receive payments hereunder, the Committee
shall have the right to withhold such payments until the
matter is finally adjudicated or the Committee may direct
Tandy to bring a suit for interpleader in any appropriate
court, pay any amounts due into the court, and Tandy shall
have the right to recover its reasonable attorney's fees from
such proceeds so paid or to be paid. Any payment made by the
Committee, in good faith and in accordance with this Plan,
shall fully discharge the Committee and Tandy from all
further obligations with respect to such payments.

ARTICLE EIGHT

TERMINATION OF PARTICIPATION

Section 8.1 Except as provided in Sections 8.4, 8.5, 8.6,
10.1, and 10.2 hereof, termination of a Participant's
employment by Tandy other than by reason of Retirement,
Permanent Disability or Leave of Absence, whether by action
of Tandy or the Participant's resignation, shall terminate
the Participant's participation in the Plan. Neither the
Plan nor the Plan Agreement shall in any way obligate Tandy
to continue the employment of a Participant, nor will either
limit the right of Tandy to terminate a Participant's
employment at any time, for any reason, with or without
cause.

Section 8.2 Except as provided in Sections 8.4, 8.5, 8.6,
10.1 and 10.2 hereof, participation in the Plan by a
Participant shall also terminate if the Plan or his Plan
Agreement is terminated by Tandy in accordance with Article
Ten.

Section 8.3 Except as provided in Sections 8.4, 8.5, 8.6,
10.1, and 10.2 hereof, upon termination of a Participant's
participation in the Plan, all of Tandy's obligations to the
Participant and his Beneficiary under the Plan and Plan
Agreement and each of them, shall terminate and be of no
further effect.

Section 8.4 Except as provided in Sections 8.5, 8.6, 10.1 and
10.2, if a Participant's participation in the Plan is
terminated, by:

(a) termination of the Plan;

(b) termination of a Plan Agreement; or

(i) death or Retirement, which shall be governed by
Article Five, or

(ii) dishonest or fraudulent conduct of a Participant
or indictment of a Participant for a felony crime involving
moral turpitude, in which event no vesting under Section 8.4,
8.6, 10.1, or 10.2 shall occur,

then such Participant shall be entitled, as set forth below,
to a percentage of his Plan Benefit Amount as follows:

Age Attained at Date of Event Set
Forth in Section 8.4(a), (b) or (c) % Vested

Age 54 or younger 0%

Age 55 to age 65 A percent as determined
in 5.1(b) hereof

Age 65 to age 70 100%

Age 70 to age 75 A percent as determined
in 5.1(c) hereto

Age 75 and thereafter 0%

The amount payable under this Section 8.4 shall be
determined as of the date of the event set forth in Section
8.4(a), (b) or (c) hereof and such amount as so determined at
that time shall not be altered or changed thereafter except
that the provisions of Section 5.5 hereof shall remain fully
applicable during the Participant's employment by Tandy,
during the payment of benefits under this Section 8.4 and for
one (1) year after termination of employment or payment of
benefits. The amount payable under this Section 8.4 shall be
paid as set forth in Section 5.3 hereunder to commence on the
first day of the month next following thirty (30) days after
cessation of Participant's employment with Tandy.

Section 8.5 Notwithstanding anything to the contrary in the
Plan,

(a) In the event of a "Change in Control" (as
hereinafter defined), every Participant immediately shall be
vested with his Plan Benefit Amount determined without regard
to Section 5.1(b) but subject to Section 5.1(c). Such
retirement benefit shall be payable in a lump sum on the
first day of the month next following the date on which such
Participant's employment with Tandy Corporation terminates
for any reason (the "Termination Date"). Such lump sum
payment shall equal the present value of the Participant's
Plan Benefit Amount discounted for interest only at the
Pension Benefit Guaranty Corporation's Immediate Annuity Rate
used to value benefits for single-employer plans terminating
on the Termination Date, compounded semi-annually.

(b) Any Participant or Beneficiary who on the date of a
Change in Control was receiving benefits under the Plan shall
be entitled to receive a lump sum equal to the present value
of the remaining Plan Benefit Amount, payable on the first
day of the month next following the date of the Change in
Control, calculated in a manner consistent with Section
8.5(a).

Section 8.6 In the event that a Participant's employment with
Tandy Corporation is involuntarily terminated for any reason
other than those reasons set forth in Section 8.4(c)(ii), and
within a one-year period beginning on the date of such
termination there occurs a Change in Control, then such
Participant, or his Beneficiary if such Participant dies
after termination of employment, shall be entitled to receive
a lump sum equal to the present value of the Participant's
Plan Benefit Amount (determined in a manner consistent with
Section 8.5(a)), payable in a lump sum on the first day of
the month next following the date of the Change in Control.

Section 8.7 For purposes of the Program, "Change in Control"
shall mean any of the following events:

(a) An acquisition (other than directly from Tandy
Corporation) of any voting securities of Tandy Corporation
(the "Voting Securities") by any "Person" (as the term person
is used for purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"))
immediately after which such Person has "Beneficial
Ownership" (within the meaning of Rule 13d-3 promulgated
under the 1934 Act) of fifteen percent (15%) or more of the
combined voting power of Tandy Corporation's then outstanding
Voting Securities; provided, however, in determining whether
a Change in Control has occurred, Voting Securities which are
acquired in a "Non-Control Acquisition" (as hereinafter
defined) shall not constitute an acquisition which would
cause a Change in Control. A "Non-Control Acquisition" shall
mean an acquisition by (1) an employee benefit plan (or a
trust forming a part thereof) maintained by (a) Tandy
Corporation or (b) any corporation or other Person of which a
majority of its voting power or its voting equity securities
or equity interest is owned, directly or indirectly, by Tandy
Corporation (for purposes of this Section 8.7, a "Tandy
Subsidiary"), (2) Tandy Corporation or its Tandy
Subsidiaries, or (3) any Person in connection with a
"Non-Control Transaction" (as hereinafter defined).

(b) The individuals who, as of August 22, 1990, are
members of the board (the "Incumbent Board"), cease for any
reason to constitute at least two-thirds of the Board;
provided, however, that if the election, or nomination for
election by Tandy Corporation's stockholders, of any new
director was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of the
Plan, be considered as a member of the Incumbent Board;
provided further, however, that no individual shall be
considered a member of the Incumbent Board if such individual
initially assumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11
promulgated under the 1934 Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than the Board (a "Proxy Contest") including by
reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or

(1) A merger, consolidation or reorganization
involving Tandy Corporation, unless

(i) the stockholders of Tandy Corporation,
immediately before such merger, consolidation or
reorganization, own, directly or indirectly immediately
following such merger, consolidation or reorganization, at
least sixty percent (60%) of the combined voting power of the
outstanding voting securities of the corporation resulting
from such merger or consolidation or reorganization (the
"Surviving Corporation") in substantially the same proportion
as their ownership of the Voting Securities immediately
before such merger, consolidation or reorganization,

(ii) the individuals who were members of the
Incumbent Board immediately prior to the execution of the
agreement providing for such merger, consolidation or
reorganization constitute at least two-thirds of the members
of the board of directors of the Surviving Corporation,

(iii) no Person (other than Tandy
Corporation, any Tandy Subsidiary, any employee benefit plan
(or any trust forming part thereof) maintained by Tandy
Corporation, the Surviving Corporation, or any Tandy
Subsidiary, or any Person who, immediately prior to such
merger, consolidation or reorganization had Beneficial
Ownership of fifteen percent (15%) or more of the then
outstanding Voting Securities) has Beneficial Ownership of
fifteen percent (15%) or more of the combined voting power of
the combined voting power of the Surviving Corporation's then
outstanding voting securities, and

(iv) a transaction described in clauses (i)
through (iii) shall herein be referred to as a "Non-Control
Transaction";

(2) A complete liquidation or dissolution of Tandy
Corporation; or

(3) An agreement for the sale or other disposition
of all or substantially all of the assets of Tandy
Corporation to any Person (other than a transfer to a Tandy
Subsidiary).

Notwithstanding the foregoing, a Change in Control shall
not be deemed to occur solely because any Person (the
"Subject Person") acquired Beneficial Ownership of more than
the permitted amount of the outstanding Voting Securities as
a result of the acquisition of Voting Securities by Tandy
Corporation which, by reducing the number of Voting
Securities outstanding, increases the proportional number of
shares Beneficially Owned by the Subject Person, provided
that if a Change in Control would occur (but for the
operation of this sentence) as a result of the acquisition of
Voting Securities by Tandy Corporation, and after such share
acquisition by Tandy Corporation, the Subject Person becomes
the Beneficial Owner of any additional Voting Securities
which increases the percentage of the then outstanding Voting
Securities Beneficially Owned by the Subject Person, then a
Change in Control shall occur.

Section 8.8 Notwithstanding any provision to the contrary in
the Plan, upon a Change in Control, the provisions of
Sections 5.5 and 5.6 shall lapse and become null and void.

ARTICLE NINE

ADMINISTRATION OF THE PLAN

Section 9.2 In addition to the express powers and authorities
accorded the Committee under the Plan, it shall be
responsible for:

(a) construing and interpreting the Plan;

(b) computing and certifying to Tandy the amount of
benefits to be provided in each Plan Agreement for the
Participant or the Beneficiary of the Participant; and

(c) determining the right of a Participant or a
Beneficiary to payments under the Plan and otherwise
authorizing disbursements of such payments by Tandy;

in these and all other respects its decisions shall be
conclusive and binding upon all concerned.

Section 9.3 Tandy agrees to hold harmless and indemnify the
members of the Committee against any and all expenses, claims
and causes of action by or on behalf of any and all parties
whomsoever, and all losses therefrom, including without
limitation the cost of defense and attorney's fees, based
upon or arising out of any act or omission relating to or in
connection with the Plan other than losses resulting from any
such Committee member's fraud or willful misconduct.

ARTICLE TEN

TERMINATION OR AMENDMENT OF THE PLAN
OR PLAN AGREEMENTS

Section 10.1 Tandy reserves the right to terminate or amend
this Plan or any Plan Agreement, in whole or in part, at any
time, from time to time, by resolution of the Board of
Directors of Tandy, provided, however, no amendment to the
Plan or to any Plan Agreement shall alter the vested rights
of a Participant or Beneficiary applicable on the effective
date of such termination or amendment and, except for
increases in Plan Compensation as provided in Section 8.5
hereof, such vested rights shall remain unchanged. Rights
are deemed to have vested if benefits are actually being paid
or if the only condition precedent to the payment of benefits
is the termination of employment (unless terminated for
reasons set forth in Section 8.4(c)(ii), in which event
benefits are forfeited) with Tandy or the giving of notice of
Retirement or the occurrence of an event described in Section
8.5(a), (b) or (c).

Section 10.2 Notwithstanding anything to the contrary in the
Plan,

(a) Sections 8.5, 8.6, 8.7, 8.8 and this Section 10.2
shall not be amended or terminated at any time.

(b) For a period of one (1) year following a Change in
Control, the Plan or Plan Agreement shall not be terminated
or amended in any way, nor shall the manner in which the Plan
is administered be changed in a way that adversely affects
the Participants' right to existing or future Tandy
Corporation provided benefits or contributions provided
hereunder, including, but not limited to, any change in, or
to, the eligibility requirements, benefit formulae and manner
and optional forms of payments.

(c) Any amendment or termination of the Plan prior to a
Change in Control which (i) was at the request of a third
party who has indicated an intention or taken steps
reasonably calculated to effect a Change in Control or (ii)
otherwise arose in connection with, or in anticipation of, a
Change in Control, shall be null and void and shall have no
effect whatsoever.

(d) In the event the Plan or any Plan Agreement is
terminated or adversely amended to the detriment of any
Participant and within a one-year period from the effective
date of any such amendment or termination a Change in Control
occurs, then any Participant so affected whose employment
with Tandy Corporation is terminated, voluntarily or
involuntarily, within a three-year period from the date of
the Change in Control shall be entitled to receive those
benefits set forth in Section 8.5 hereof to the same extent
and in the same amounts as though such amendment or
termination had not occurred. This Section 10.2(d) shall not
apply to any Participant who, on the date of the Change in
Control, has previously retired or has otherwise voluntarily
terminated his employment with Tandy Corporation.

ARTICLE ELEVEN

MISCELLANEOUS

Section 11.1 The Plan and Plan Agreement and each of their
provisions shall be construed and their validity determined
under the laws of the State of Texas.

Section 11.3 Any action brought by a Participant under the
Plan or Plan Agreement may be brought in the appropriate
state or federal court for Tarrant County, Texas, or for the
county wherein the Participant maintains his or her
residence. Any suit brought by Tandy Corporation under the
Plan may only be brought in the county wherein the
Participant maintains his or her residence, unless the
Participant consents to suit elsewhere.

Section 11.4 Any person born on February 29 shall be deemed
to have been born on the immediately preceding February 28
for all purposes of this Plan.

Section 11.5 This Plan shall be binding upon and inure to the
benefit of any successor of Tandy and any such successor
shall be deemed substituted for Tandy under the terms of this
Plan. As used in this Plan, the term "successor" shall
include any person, firm, corporation, or other business
entity which at any time, whether by merger, purchase, or
otherwise, acquires all or substantially all of the assets or
business of Tandy.

Section 11.6 A Participant shall not be required to mitigate
the amount of any payment provided for in this Plan by
seeking other employment or otherwise.

Section 11.7 In the event that a Participant institutes any
legal action to enforce his rights under, or to recover
damages for breach of any of the terms of this Plan or any
Plan Agreement, the Participant, if he is the prevailing
party, shall be entitled to recover from Tandy all actual
expenses incurred in the prosecution of said suit including
but not limited to attorneys' fees, court costs, and all
other actual expenses.

Section 11.8 Notwithstanding all other provisions in the
Plan, in the event a Participant is entitled to benefits
under two (2) separate sections of the Plan, the maximum a
Participant may receive under this Plan is his Plan Benefit
Amount, payable in accordance with Section 5.3 hereof.

The original Plan was adopted by the Board of Directors on
June 27, 1986. This restated plan includes amendments
thereto pursuant to resolutions at meetings of the Board of
Directors of Tandy Corporation on January 20, 1989 and August
22, 1990.
<PAGE>

Exhibit 10e
SPECIAL COMPENSATION PLAN NO. 1 FOR
TANDY CORPORATION EXECUTIVE OFFICERS

ARTICLE ONE

PURPOSE

ARTICLE TWO

DEFINITIONS

Section 2.1 Beneficiary. The recipient(s) designated (in
accordance with Article Seven) by a Participant in the Plan
to whom benefits are payable following his death.

Section 2.2 Committee. The Insurance Committee of Tandy
which shall administer the Plan in accordance with Article
Nine.

Section 2.4 Employee. A regular full-time executive employee
of Tandy.

Section 2.5 Leave of Absence. Any period during which:

(b) an Employee is a member of the Armed Forces of the
United States and his reemployment rights are guaranteed by
law, but only if such person is an Employee immediately prior
to becoming a member of such Armed Forces and resumes
employment with Tandy within the period during which his
reemployment rights are guaranteed by law.

Section 2.6 Participant. An Employee who has been selected
and has accepted a Plan Agreement as provided in Article
Three.

Section 2.8 Plan Benefit Amount. Plan Benefit Amount means
the dollar amount set forth and so designated in a
Participant's Plan Agreement.

Section 2.9 Retirement. The following classifications of
Retirement as referred to in this Plan are defined as
follows:

(a) Normal Retirement. The termination of a
Participant's service with Tandy at the date of attaining age
sixty-five (65) years.

(b) Late Retirement. The termination of a
Participant's service with Tandy after the Participant's
attaining the age of sixty-five (65) years.

Section 2.11 Tandy Subsidiary. Any corporation in which
Tandy owns at least eighty percent (80%) of the total
combined voting power of all classes of stock entitled to
vote.

ARTICLE THREE

SELECTION OF PARTICIPANTS AND
AGREEMENT TO PARTICIPATE

ARTICLE FOUR

LIFE INSURANCE

ARTICLE FIVE

BENEFITS PAYABLE TO PARTICIPANTS AND
TO BENEFICIARIES OF PARTICIPANTS

Section 5.1 Subject to the terms and conditions of the Plan,
upon the Retirement of a Participant, Tandy agrees to pay to
Participant a Retirement benefit as follows:

(b) Late Retirement. If a Participant retires at a
date that constitutes Late Retirement, then Tandy agrees to
pay to Participant or to the designated Beneficiary of
Participant in the event of the death of Participant prior to
the termination of payment of Late Retirement benefits
hereunder, all from its general assets, an amount equal to
such Participant's Plan Benefit Amount, reduced by a
percentage determined as follows:

Age on Date of Percent of Reduction
Late Retirement of Plan Benefit Amount

66 0%
67 0%
68 0%
69 0%
70 0%
71 20%
72 40%
73 60%
74 80%
75 100%

(a) no benefits shall be payable to the Beneficiary of
a Participant in those instances covered by Section 4.2;

Section 5.3 Except as provided in Section 8.5, the aggregate
amount payable to a Participant or his Beneficiary upon (a)
Normal Retirement, (b) Late Retirement, (c) benefits due and
payable under Section 8.5 or 8.6 hereof, or (d) death of a
Participant, shall be paid in one hundred twenty (120) equal
monthly installments commencing on the first day of the month
next following thirty (30) days after Retirement or after the
Committee's receipt of a certified death or proof of death
certificate verifying the Participant's death, or at the time
stated in Section 8.5 or 8.6 hereof. A Participant shall
notify Tandy of Retirement by hand delivery or by certified
or registered mail, return receipt requested, postage
prepaid, of a written notice of Retirement specifying the
effective date of Retirement, such written notice to be
addressed to: Insurance Committee of the Board of Directors,
Tandy Corporation, 1800 One Tandy Center, Fort Worth, Texas
76102. Such notice shall be deemed to be received when
actually received by said Insurance Committee at said address
as may be changed from time to time in the Plan Agreements,
as amended.

Section 5.5

(a) During the period that Participant is receiving
benefits under a Plan Agreement and for one (1) year after
cessation of payment of benefits, Participant agrees that he
will not, either directly or indirectly, within the United
States of America or in any country of the world that Tandy
(or a Tandy Subsidiary) or one of its dealers or franchisees
sells Consumer Electronic Products (as hereinafter defined)
at retail, own, manage, operate, join, control, be employed
by, be a consultant to, be a partner in, be a creditor of,
engage in joint operations with, be a stockholder, officer or
director of any corporation, sole proprietorship or business
entity of any type, or participate in the ownership,
management, direction, or control or in any other manner be
connected with, any business selling Consumer Electronic
Products at retail which is at the time of Participant's
engaging in such conduct competitive with such products sold
by Tandy at retail, except as a stockholder owning less than
five percent (5%) of the shares of a corporation whose shares
are traded on a stock exchange or in the over-the-counter
market by a member of the National Association of Securities
Dealers. "Consumer Electronic Products" are those type of
products sold at the retail level to the ultimate customer as
are advertised by Tandy in its most recently published annual
catalogs and monthly flyers. Manufacturing of Consumer
Electronic Products and sale of Consumer Electronic Products
at levels of distribution other than the retail level are not
considered a violation of this covenant.

(b) In the event that a Participant engages in any of
the activities described in Section 5.5(a) Tandy will give
notice to the Participant specifying in detail the alleged
violation of Section 5.5(a). Participant will be allowed
ninety (90) days to cure such default. If the Committee
feels there is continuing competition, then, without any
further notice or opportunity to cure, and upon determination
by the Board of Directors that such a Participant is engaged
in such activities, such Board's decision to be conclusive
and binding upon all concerned, and notwithstanding any other
provisions of the Plan or of the Plan Agreement with such
Participant, Tandy's obligation to a Participant to pay any
benefits hereunder shall automatically cease and terminate
and Tandy shall have no further obligation to such
Participant or Beneficiary pursuant to the Plan or the Plan
Agreement. Tandy may also enforce this provision by suit for
damages which shall include but not be limited to all sums
paid to Participant hereunder, or for injunction, or both.

Section 5.7 Subject to termination or amendment of the Plan,
Plan Agreement, or both, a Participant's participation in the
Plan shall continue during his Disability or his taking a
Leave of Absence. A Participant who is Disabled or on Leave
of Absence shall notify Tandy of his date of Retirement as
provided in Section 5.3 hereof.

ARTICLE SIX

AMENDMENTS OF PLAN AGREEMENTS

ARTICLE SEVEN

BENEFICIARIES OF PARTICIPANTS

Section 7.1 At the time of his acceptance of a Plan
Agreement, a Participant shall be required to designate the
Beneficiary to whom benefits under the Plan and his Plan
Agreement will be payable upon his death. A Beneficiary may
be one (1) or more persons or entities, such as dependents,
persons who are natural objects of the Participant's bounty,
an inter vivos or testamentary trust, or his estate. Such
Beneficiaries may be designated contingently or successively
as the Participant may direct. The designation of his
Beneficiary shall be made by the Participant on a Beneficiary
Designation Form to be furnished by the Committee and filed
with it.

Section 7.2 A Participant may change his Beneficiary, as he
may desire, by filing new and amendatory Beneficiary
Designation Forms with the Committee.

(1) directly to such person unless such person shall be
an infant or shall have been legally adjudicated incompetent
at the time of the payment;

(2) to the spouse, child, parent or other blood
relative to be expended on behalf of the person entitled or
on behalf of those dependents as to whom the person entitled
has the duty of support;

(4) to any other institution, approved by the
Committee, to be expended for the benefit of the person
entitled or for the benefit of those dependents as to whom
the person entitled has the duty of support.

Section 7.6 If the Committee has any doubt as to the proper
Beneficiary to receive payments hereunder, the Committee
shall have the right to withhold such payments until the
matter is finally adjudicated or the Committee may direct
Tandy to bring a suit for interpleader in any appropriate
court, pay any amounts due into the court, and Tandy shall
have the right to recover its reasonable attorney's fees from
such proceeds so paid or to be paid. Any payment made by the
Committee, in good faith and in accordance with this Plan,
shall fully discharge the Committee and Tandy from all
further obligations with respect to such payments.

ARTICLE EIGHT

TERMINATION OF PARTICIPATION

Section 8.1 Except as provided in Sections 8.4, 8.5, 8.6,
10.1, and 10.2 hereof, termination of a Participant's
employment by Tandy other than by reason of Retirement,
Disability or Leave of Absence, whether by action of Tandy or
the Participant's resignation, shall terminate the
Participant's participation in the Plan. Neither the Plan
nor the Plan Agreement shall in any way obligate Tandy to
continue the employment of a Participant, nor will either
limit the right of Tandy to terminate a Participant's
employment at any time, for any reason, with or without
cause.

Section 8.4 Except as provided in Sections 8.5, 8.6, 10.1 and
10.2, if a Participant's participation in the Plan is
terminated, by:

(a) termination of the Plan;

(b) termination of a Plan Agreement; or

(i) death or Retirement, which shall be governed
by Article Five, or

(ii) dishonest or fraudulent conduct of a
Participant or indictment of a Participant for a felony crime
involving moral turpitude, in which event no vesting under
Section 8.4, 8.6, 10.1, or 10.2 shall occur,

then such Participant shall be entitled, as set forth below,
to a percentage of his Plan Benefit Amount as follows:

Age Attained at Date of Event Set
Forth in Section 8.4(a), (b) or (c) % Vested

Any age under 65 years 0%

Age 65 to age 70 100%

Age 70 to age 75 A percent as determined
in 5.1(b) hereto

Age 75 and thereafter 0%

The amount payable under this Section 8.4 shall be
determined as of the date of the event set forth in Section
8.4(a), (b) or (c) hereof and such amount as so determined at
that time shall not be altered or changed thereafter except
that the provisions of Section 5.5 hereof shall remain fully
applicable during the Participant's employment by Tandy,
during the payment of benefits under this Section 8.4 and for
one (1) year after termination of employment or payment of
benefits. The amount payable under this Section 8.4 shall be
paid as set forth in Section 5.3 hereunder to commence on the
first day of the month next following thirty (30) days after
cessation of Participant's employment with Tandy.

Section 8.5 Notwithstanding anything to the contrary in the
Plan,

(a) In the event of a "Change in Control" (as
hereinafter defined), every Participant immediately shall be
vested with his Plan Benefit Amount, notwithstanding the
Participant's age, provided, however, any Participant who has
at the time of a Change in Control over the age of 70 years
shall suffer a reduction of his Plan Benefit Amount as set
forth in Section 5.1(b). Such retirement benefit shall be
payable in a lump sum on the first day of the month next
following the date on which such Participant's employment
with Tandy Corporation terminates for any reason (the
"Termination Date"). Such lump sum payment shall equal the
present value of the Participant's Plan Benefit Amount
discounted for interest only at the Pension Benefit Guaranty
Corporation's Immediate Annuity Rate used to value benefits
for single-employer plans terminating on the Termination
Date, compounded semi-annually.