Exhibit 4.1


 


Dated


 


June 30, 2008


 


 


(1)  THE CARPHONE
WAREHOUSE GROUP PLC


 


(2)  CPW RETAIL HOLDINGS LIMITED


 


(3)  BEST BUY CO., INC.


 


-and-


 


(4)  BEST BUY DISTRIBUTIONS LIMITED


 


 


SHAREHOLDERS AGREEMENT


 


relating to the operation of


 


CPW DISTRIBUTION
HOLDINGS 

LIMITED (to be renamed Best Buy 

International Limited)


 


1

















 


CONTENTS


 


	
  1.

  	
  DEFINITIONS
  AND INTERPRETATION

  	
  5

  
	
   

  	
   

  	
   

  
	
  2.

  	
  PURPOSE
  AND CORPORATE DETAILS OF JV CO

  	
  19

  
	
   

  	
   

  	
   

  
	
  3.

  	
  SHAREHOLDER
  ASSURANCES

  	
  21

  
	
   

  	
   

  	
   

  
	
  4.

  	
  PROVISION
  OF FINANCE

  	
  24

  
	
   

  	
   

  	
   

  
	
  5.

  	
  MANAGEMENT
  STRUCTURE

  	
  26

  
	
   

  	
   

  	
   

  
	
  6.

  	
  JV
  SHAREHOLDER RESERVED MATTERS

  	
  31

  
	
   

  	
   

  	
   

  
	
  7.

  	
  SHAREHOLDER
  MEETINGS

  	
  32

  
	
   

  	
   

  	
   

  
	
  8.

  	
  INFORMATION

  	
  32

  
	
   

  	
   

  	
   

  
	
  9.

  	
  DEADLOCK
  RESOLUTION

  	
  34

  
	
   

  	
   

  	
   

  
	
  10.

  	
  ANTI-DILUTION

  	
  36

  
	
   

  	
   

  	
   

  
	
  11.

  	
  TRANSFER
  OF JV INVESTMENT

  	
  36

  
	
   

  	
   

  	
   

  
	
  12.

  	
  DIVIDENDS

  	
  38

  
	
   

  	
   

  	
   

  
	
  13.

  	
  RESTRICTIONS
  ON SHAREHOLDERS

  	
  39

  
	
   

  	
   

  	
   

  
	
  14.

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
  43

  
	
   

  	
   

  	
   

  
	
  15.

  	
  ANNOUNCEMENTS
  AND CONFIDENTIALITY

  	
  43

  
	
   

  	
   

  	
   

  
	
  16.

  	
  TERMINATION

  	
  45

  
	
   

  	
   

  	
   

  
	
  17.

  	
  TRANSFER
  ON CHANGE OF CONTROL

  	
  46

  
	
   

  	
   

  	
   

  
	
  18.

  	
  TRANSFER
  TERMS

  	
  49

  
	
   

  	
   

  	
   

  
	
  19.

  	
  STRATEGIC
  OPTIONS

  	
  50

  
	
   

  	
   

  	
   

  
	
  20.

  	
  RIGHT
  OF FIRST REFUSAL

  	
  50

  
	
   

  	
   

  	
   

  
	
  21.

  	
  INADEQUACY
  OF DAMAGES

  	
  51

  
	
   

  	
   

  	
   

  
	
  22.

  	
  TAX

  	
  52

  
	
   

  	
   

  	
   

  
	
  23.

  	
  ENTIRE
  AGREEMENT AND SEVERANCE

  	
  52

  
	
   

  	
   

  	
   

  
	
  24.

  	
  AMENDMENTS

  	
  53

  
	
   

  	
   

  	
   

  
	
  25.

  	
  NO
  ASSIGNMENT

  	
  53

  



 


2

















 


	
  26.

  	
  REMEDIES
  AND WAIVERS

  	
  53

  
	
   

  	
   

  	
   

  
	
  27.

  	
  COSTS

  	
  54

  
	
   

  	
   

  	
   

  
	
  28.

  	
  DURATION

  	
  54

  
	
   

  	
   

  	
   

  
	
  29.

  	
  TIME
  OF THE ESSENCE

  	
  55

  
	
   

  	
   

  	
   

  
	
  30.

  	
  COUNTERPARTS

  	
  55

  
	
   

  	
   

  	
   

  
	
  31.

  	
  NOTICES

  	
  55

  
	
   

  	
   

  	
   

  
	
  32.

  	
  CONTRACTS
  (RIGHTS OF THIRD PARTIES) ACT 1999

  	
  57

  
	
   

  	
   

  	
   

  
	
  33.

  	
  SHAREHOLDER
  APPROVAL

  	
  57

  
	
   

  	
   

  	
   

  
	
  34.

  	
  GOVERNING
  LAW

  	
  57

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 1 PARTICULARS
  OF JV CO IMMEDIATELY AFTER CLOSING

  	
  58

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 2 JV
  SUBSIDIARIES

  	
  59

  
	
   

  	
   

  
	
   

  	
  UK Subsidiaries

  	
  59

  
	
   

  	
   

  	
   

  
	
   

  	
  European Subsidiaries

  	
  60

  
	
   

  	
   

  	
   

  
	
   

  	
  US Subsidiary

  	
  62

  
	
   

  	
   

  
	
  SCHEDULE 3 RESERVED
  MATTERS

  	
  63

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 4 COMPULSORY
  TRANSFER

  	
  66

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 5 FAIR
  MARKET VALUE

  	
  70

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 6 DEED OF
  ADHERENCE TO SHAREHOLDERS’ AGREEMENT

  	
  74

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 7 EUROPEAN
  COUNTRIES

  	
  75

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 8 TAX

  	
  76

  
	
   

  	
   

  	
   

  
	
  1.

  	
  PREPARATION
  OF TAX DOCUMENTS

  	
  76

  
	
   

  	
   

  	
   

  
	
  2.

  	
  CARRY
  BACK OF TAX LOSSES OR OTHER PREJUDICIAL ACTION

  	
  76

  
	
   

  	
   

  	
   

  
	
  3.

  	
  ACCESS
  TO TAX DOCUMENTS AND RIGHT TO COMMENT

  	
  77

  
	
   

  	
   

  	
   

  
	
  4.

  	
  NEGOTIATIONS
  WITH TAX AUTHORITIES

  	
  77

  
	
   

  	
   

  	
   

  
	
  5.

  	
  TAX
  COMMITTEE

  	
  77

  
	
   

  	
   

  	
   

  
	
  1.

  	
  U.S.
  TAX PROVISIONS

  	
  78

  
				



 


3

















 


Agreed Form


 


THIS SHAREHOLDERS AGREEMENT is made on
June 30, 2008


 


BETWEEN


 


(1)           THE CARPHONE WAREHOUSE GROUP PLC a company registered
in England and Wales (company number 03253714) whose registered office is
at 1 Portal Way, London W3 6RS, United Kingdom (“CPW”);


 


(2)           CPW RETAIL HOLDINGS LIMITED a company registered in England and Wales
(company number 06585729) whose registered office is at 1 Portal Way,
London W3 6RS, United Kingdom (“CPW
Affiliate”);


 


(3)           BEST BUY CO., INC. a company with a registered address at 7001
Penn Avenue South Richfield, MN 55423, United States of America (“BBY Hold Co”); and


 


(4)           BEST BUY DISTRIBUTIONS LIMITED a company registered
in England and Wales (company number 06576708) whose registered office is at
100 New Bridge Street, London EC4V 6JA, United Kingdom (“BBY Distributions”).


 


BACKGROUND


 


A             BBY Hold
Co, BBY Distributions, CPW and CPW Affiliate entered into the SPA, which
provides for BBY Distributions to acquire 50% of the issued Ordinary Shares;


 


B             CPW has
agreed to undertake a corporate reorganisation, prior to closing of the SPA, in
order to transfer the JV Business to JV Co (and ensure that the Excluded
Business does not form part of JV Co);


 


C             Upon
closing of the SPA, JV Co shall be owned as to 50% by BBY Distributions and as
to 49% by CPW and 1% by CPW Affiliate in respect of the issued Ordinary Shares;


 


D             The BBY
Mobile Agreement entered into by and between BBY Stores, L.P., and CPW Mobile
Limited dated as of 17 August 2007 (as amended) is to be amended and
restated as of the date hereof; and


 


E              In order
to give effect to the parties’ agreement on various matters governing, inter alia, their respective interests,
direct or otherwise, in JV Co and the management and provision of finance to JV
Co, the parties hereto have agreed to enter into this Agreement.


 


4

















 


IT IS AGREED as follows:


 


1.             DEFINITIONS
AND INTERPRETATION


 


1.1           Definitions


 


In this Agreement the
following definitions shall apply:


 


“Acceptance
Notice” shall have the meaning given to it in Clause 20;


 


“Acceptance
Period” shall have the meaning given to it in Clause 20;


 


“Ancillary Competing Business” means a
Competing Business, which is acquired as part of a larger acquisition and
which, in terms of revenues, constitutes no more than one-third of such larger
acquisition and which causes, or would cause a JV Shareholder to be in breach
of Clause 13.1.2;


 


“Ancillary
Competing Business  Contribution”
shall have the meaning given to it in Clause 13.1.8;


 


“Appointment
Period” has the meaning given to it in paragraph 2.1 of Schedule 5
(Fair Market Value);


 


“Appointment
Reserved Matter” means the Consolidation Reserved Matter in
paragraph 1 of Part 1 of Schedule 3 (Reserved
Matters);


 


“Auditors” means
Deloitte & Touche LLP unless otherwise determined in accordance with Part 2
of Schedule 3 (Reserved Matters);


 


“BBY
Country” means the United States of America, Canada, Mexico,
China and Turkey;


 


“BBY
Director” means a director or employee of a BBY Group Company;


 


“BBY
Group Company” means BBY Hold Co and from time to time any
holding company of BBY Hold Co or any subsidiary and/or subsidiary undertaking
of BBY Hold Co (including BBY Distributions) or of such holding company,
excluding any member of the JV Group;


 


“BBY
Guaranteed Obligations” has the meaning given to it in Clause 3.1 (Guarantee);


 


5

















 


“BBY
Loan” means the amount borrowed by JV Co from BBY
Distributions under the terms of the BBY Loan Agreement as increased or
decreased pursuant to the provisions of the SPA;


 


“BBY
Loan Agreement” means the loan agreement in agreed form between
BBY Distributions and JV Co in respect of the BBY Loan, to be entered into on
Closing;


 


“BBY
Mobile Agreement” means the agreement entered into by and
between BBY Stores, L.P., and CPW Mobile dated as of 17 August 2007 (as
amended) and to be amended and restated as of the Closing Date.


 


“BBY
Mobile Business” means the marketing and sale of mobile
products and accessories, as well as associated services (including, without
limitation, airtime from network operators) and such other products,
accessories and services as the parties to the BBY Mobile Agreement may agree
from time to time within stand-alone stores, stores-within-stores and other
distribution channels (including, without limitation, internet and direct sale
processes) owned and operated by BBY Co., Inc. or its Affiliates (as such
word is defined in the BBY Mobile Agreement) from time to time pursuant to the
BBY Mobile Agreement;


 


“BBY
Mobile Competing Business” means any business, enterprise or undertaking
which is similar to or in competition with the BBY Mobile Business;


 


“BBY’s
Solicitors” means Freshfields Bruckhaus Deringer LLP of 65 Fleet
Street, London EC4Y 1HS;


 


“BBY
Transferee” shall have the meaning given in Clause 3.1;


 


“Big
Box Retailing” means the retail business of selling consumer
electrical and electronics goods and services in stores which are primarily
devoted to retailing such goods and services with a retail store format of more
than 10,000 square feet, including online sales of such goods and services;


 


“Business
Day” means a day (other than a Saturday or Sunday) on
which banks are open for the transaction of general business in England;


 


“Buy
Notice” shall have the meaning given in Clause 17.2.1;


 


“CEO”,
“CFO” and “COO” shall
have the meanings given to them in Clause 5.3.1;


 


“Change
of Control” means a Competitor (together, if applicable, with
Persons 


 


6

















 


Acting in Concert
with such Competitor) acquiring a Controlling Interest in either BBY Hold Co or
CPW, as the case may be;


 


“Closing”
means the completion of SPA;


 


“Closing Date” means the closing
date under the SPA;


 


“COC
Completion” means  completion
of the sale and purchase of Shares in accordance with Clause 17.6;


 


“COC
Party” shall have the meaning given in Clause 17.1;


 


“Competing
Business” means a business, enterprise or undertaking which
competes with (a) the JV Business, or (b) the business of Big Box
Retailing, but excluding (i)  online sales from one country into another
country, and (ii) a BBY Mobile Competing Business;


 


“Competitor”
means a mobile network operator, internet service provider, manufacturer
or retailer of consumer electrical or electronics products with a share of that
market in the US or the UK exceeding 5%;”Compulsory
Sale Amount” has the meaning given to it in paragraph 2.1 of
Schedule 4 (Compulsory Transfer);


 


“Compulsory Transfer Event” means the
occurrence of any of the events listed in paragraph 1 of Schedule 4 (Compulsory Transfer);


 


“Compulsory Transfer Notice” has the
meaning given to it in paragraph 2.1 Schedule 4 (Compulsory Transfer);


 


“Compulsory Transferor” has the
meaning given to it in paragraph 1 of Schedule 4 (Compulsory Transfer);


 


“Condition” means closing of the
SPA in accordance with its terms;


 


“Confidential
Information” means any data or information whether oral, written
or otherwise recorded, that is non-public, confidential and proprietary in
nature, and shall include each of the following as long as they are non-public,
confidential and proprietary in nature:


 


(a)           the
negotiations concerning this Agreement;


 


(b)           the
existence, provisions and subject matter of this Agreement;


 


7

















 


(c)           any
scientific, computer or other technical information, technology, research,
design, idea, process, procedure, formula or improvement, or any portion or
phase thereof;


 


(d)           information
relating to any current or proposed products, services, methods, businesses or
business plans, marketing, pricing, distribution and other business strategies;


 


(e)           lists of,
or any other information relating to, any customers, suppliers, dealers, agents
or employees and the relationships therewith;


 


(f)            any financial information relating to any of
the foregoing; and


 


(g)           any annual capital expenditure plan, any annual
operational and financial budget and the proprietary information of suppliers
to and customers of the JV Business;


 


provided that
Confidential Information shall not include the concept of bundling together
certain products and services for purchase by customers in the ordinary course
of business;


 


“Consolidation
Reserved Matters” means those matters listed in Part 1 of
Schedule 3 (Reserved Matters);


 


“Consortium
Relief Agreement” means the agreement between CPW, JV Co and BBY
Distributions in respect of consortium tax relief to be entered into on the
Closing Date, in the agreed form;


 


“Continuing
Party” shall have the meaning given to it in clause 20;


 


“Contribution” means the
European Non-JV Contribution or the Ancillary Competing Business Contribution,
as the case may be;


 


“Controlling
Interest” means:


 


(a)           owning
(directly or indirectly) more than 50% of the voting share capital of the
relevant company; or


 


(b)           being able
to direct the casting of more than 50% of the votes exercisable at general
meetings of the relevant undertaking on all, or substantially all, matters,
except that in respect of the definition of “Persons Acting in 


 


8

















 


Concert”  each of the above percentages shall read
not less than 100%;


 


“CPW Director” means a director or
employee of any CPW Group Company;


 


“CPW
Group” means CPW and from time to time any holding company
of CPW and subsidiaries and/or subsidiary undertakings of CPW (including without
limitation CPW Affiliate) or of any such holding company, excluding (from
Closing) the JV Group;


 


“CPW
Group Company” means CPW and from time to time any holding
company of CPW or any subsidiary and/or subsidiary undertaking of CPW
(including without limitation CPW Affiliate) or of such holding company,
excluding (from Closing) the JV Group;


 


“CPW
Guaranteed Obligations” has the meaning given to it in Clause 3.6;


 


“CPW
Hold Co RCF” means the revolving credit facility, in an aggregate
amount of £550 million (five hundred and fifty), between CPW, Barclays Capital,
HSBC Bank PLC, ING Bank N.V., London Branch and The Royal Bank of Scotland PLC,
entered into on 13 March 2008;


 


“CPW
Loan” means the amount borrowed by JV Co from CPW under the
terms of the CPW Loan Agreement as increased or decreased pursuant to the
provisions of the SPA;


 


“CPW
Loan Agreement” means the loan agreement in agreed form between
CPW and JV Co in respect of the CPW Loan, to be entered into on Closing;


 


“CPW
Mobile” means CPW Mobile Limited (company number 06330995);


 


“CPW
RCF” means the revolving credit facility, in an aggregate
amount of £350 million (three hundred and fifty), between CPW, BBY Hold Co and
JV Co in agreed form, to be entered into at Closing;


 


“CPW
Services Agreement” means the agreement between CPW and Newco in
relation to the supply of certain services from CPW to Newco Group in the
agreed form and to be entered into on Closing;


 


“CPW
Transferee” has the meaning given to it in Clause 3.6;


 


“Deadlock
Directors” shall have the meaning given to it in Clause 9.2.1.1;


 


9

















 


“Encumbrance” means any
mortgage, charge, pledge, hypothecation, lien, assignment by way of security,
title retention, option, right to acquire, right of pre-emption, right of
set-off, counterclaim, trust arrangement or other security, preferential right
or agreement to confer security, or any equity or restriction (but excluding
liens arising by operation of law) and “Encumber”
shall be construed accordingly;


 


“European Non-JV Country” means any European
Country where the JV Group does not carry out the JV Business;


 


“European
Non-JV Contribution” has the meaning given in Clause 13.1.5;


 


“European
Country” means those countries set out in Schedule 8 (Tax);


 


“European
Subsidiaries” means those subsidiary undertakings of JV Co
incorporated outside the UK (except the US Subsidiary) listed in Part 2 of
Schedule 2 (JV Subsidiaries);


 


“Excluded
Business” means


 


(a)           any member
of the CPW Group;


 


(b)           all
businesses carried on by and assets of the CPW Group including without
limitation:


 


(i)             the mobile
virtual network operator business which it carries out in France, predominantly
under the “Virgin” brand by Omer Telecom Limited; and


 


(ii)            all of the
fixed line telephony business and assets (including broadband data) carried on
by the CPW Group (including under the brands of “Opal”, “TalkTalk” and “AOL”)
in the UK, Republic of Ireland and Belgium and any other countries from time to
time, excluding such businesses in Spain and Switzerland;


 


(c)           all
freehold properties owned by the CPW Group and the JV Group as at the date of
this Agreement; and


 


(d)           all
Employee Benefit Trusts of The Carphone Warehouse Limited as at the date of
this Agreement;


 


10
















 


“Executive
Committee” has the meaning given in Clause 9.2.1.2;


 


“Existing
Country” means those countries where the JV Group is carrying
on the JV Business as at the date of this Agreement being the UK, France,
Spain, Belgium, Holland, Germany, Switzerland, Portugal, Republic of Ireland
and Sweden excluding the United States of America;


 


“Exit” means a Listing or a Sale;


 


“Exit
Period” means each period of 20 Business Days starting on
each Trigger Date;


 


“Expert” shall
have the meaning given in paragraph 5.4 of Part A of Schedule 8;


 


“Fair
Market Value” means, as at the date of valuation, the fair market
value of the relevant JV Shareholder’s JV Co Investment as agreed or determined
in accordance with Schedule 5 (Fair
Market Value);


 


“Fiscal
Year” means the fiscal year of JV Co being the 12 month
period to the annual accounting reference date in each year;


 


“GAAP”
means Generally Accepted Accounting Principles and Practices in the
United Kingdom from time to time;


 


“Geek
Squad” means Geek Squad UK Limited;


 


“Geek
Squad Business” means the business carried on by Geek Squad of
the installation, maintenance and repair of software, hardware, computers,
broadband services and other related software and hardware for any type of
customers including without limitation residential and business broadband
customers and the provision of and/or sale of related products and services;


 


“GIS
PLC Services Agreement” means the agreement between ISE Net Solutions
Limited (“ISE”) and CPW in
relation to the supply of certain information technology services from ISE to
CPW in the agreed form and to be entered into on Closing;


 


“GIS
Telco Services Agreement” means the agreement between ISE Net Solutions
Limited (“ISE”)  and GIS Telecoms Limited (“GIS Telecoms”) in relation to the supply
of certain information technology services from ISE to GIS Telecoms in the
agreed form and to be entered into on Closing;


 


“Group
Company” means in respect of BBY Hold Co and BBY
Distributions, a 


 


11

















 


BBY Group Company
and, in respect of CPW, a CPW Group Company;


 


“holding
company” has the meaning given to it in Section 736 of
the Companies Act 1985, as amended by Section 144 of the Companies Act
1989;


 


“Independent
Expert” has the meaning given to it in paragraph 1.1 of
Schedule 5 (Fair Market Value);


 


“Initial
Consideration Period” has the meaning given to it in paragraph 1.2
of Schedule 5 (Fair Market Value);


 


“Insurance
Business” means the business of providing insurance for mobile
handsets, airtime contracts and accessories, as carried on by the JV Co
Subsidiaries as at the date of this Agreement;


 


“JV
Articles of Association” means the articles of association of JV Co from
time to time;


 


“JV
Board” means the Board of Directors of JV Co from time to time;


 


“JV
Business” means the businesses of the JV Group from time to
time, including without limitation:


 


(a) the mobile
distribution business being the sale of mobile handsets and similar devices,
the entering into of airtime contracts on behalf of mobile networks with
non-business customers, the sale of insurance products on behalf of the
Insurance Business and the sale of accessory products, all as carried on by the
JV Subsidiaries;


 


(b) the mobile
virtual network operator businesses carried on by the JV Group;


 


(c) the sale of
fixed line telecommunication services and broadband services and associated
products and services supplied by third party suppliers which are not members
of the JV Group;


 


(d) the fixed
line telephony business and assets carried out by the JV Group in Spain and
Switzerland;


 


(e) the
Insurance Business;


 


(f) the Geek
Squad Business;


 


(g) the BBY
Mobile Business; and


 


12

















 


(h) any other
business carried on by the JV Group after the Closing Date,


 


but excluding the
Excluded Business;


 


“JV
Co” means CPW Distribution Holdings Limited, a company
registered in England and Wales (company number 06534088) whose registered
address is at 1 Portal Way, London W3 6RS, United Kingdom;


 


“JV
Country” means any country in the world where the JV Business
is carried out by the JV Group at any time which at the date of this Agreement
shall be the Existing Countries excluding the BBY Countries;


 


“JV
Constitutional Documents” means the JV Articles of Association and the JV
Memorandum of Association;


 


“JV
Deadlock” has the meaning given to it in Clause 9.1.1;


 


“JV
Director” means a director of JV Co from time to time;


 


“JV
Group” means JV Co and the JV Subsidiaries;


 


“JV
Investment” means in respect of any of the JV Shareholders:


 


	
  (a)

  	
   

  	
  all Shares held by the relevant JV
  Shareholder; and

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  the amount loaned or, to the extent not
  loaned, the amount agreed to be loaned pursuant to the relevant JV
  Shareholder Loan (together with all interest accrued, but unpaid, thereon);

  



 


“JV
Management Team” means the senior management team of JV Co from
time to time;


 


“JV
Memorandum of Association” means the memorandum of association of JV Co
from time to time;


 


“JV
Shareholder Loans” means the CPW Loan and the BBY Loan;


 


“JV
Shareholder Reserved Matters” means those matters
listed in Part 2 of Schedule 3 (Reserved
Matters);


 


“JV
Shareholder Shares” means all of the issued shares in BBY
Distributions held directly or indirectly by BBY Hold Co or by one or more BBY
Group Company;


 


13

















 


“JV
Shareholders” means BBY Distributions, CPW and CPW Affiliate or any
other party holding Shares from time to time;


 


“JV
Subsidiaries” means the UK Subsidiaries, the European
Subsidiaries and the US Subsidiary, in each case as listed in Schedule 2 (JV Subsidiaries);


 


“JV
Tax Documents” shall have the meaning given in paragraph 1.1(a) of
Part A of Schedule 8;


 


“Key
Agreements” means the SPA, BBY Loan Agreement, the CPW Loan
Agreement, the CPW RCF, the CPW Services Agreement, the Telecoms Distribution
Agreement, the Telecoms Services Agreement, the Newco Services Agreement and
the GIS Telco Services Agreement;


 


“Listing” means the
admission to listing or to trading on a recognised securities exchange in
London or New York of any of the Ordinary Shares or any share capital of any
member of the JV Group;


 


“Listing
Rules” means the Listing Rules of the Financial Services
Authority applicable to companies with shares listed with the UK Listing
Authority and issued for trading on the London Stock Exchange Plc, as amended,
modified or replaced from time to time.


 


“Newco
Services Agreement” means the agreement between Newco and CPW in
relation to the supply of certain services by Newco Group to CPW Group in the
agreed form and to be entered into on Closing;


 


“Notification
Date” has the meaning given to it in Schedule 5 (Fair Market Value) paragraph 1.2;


 


“Ordinary
Shares” means ordinary shares of £1 each in the capital of JV
Co;


 


“Other
Shareholders” has the meaning given to it in paragraph 2.1 of
Schedule 4 (Compulsory Transfer);


 


“parties” means the
parties to this Agreement;


 


“Permitted
Third Party” means any third party purchaser of a JV Investment in
accordance with Clause 20 (Right of First
Refusal), provided that such party shall not be a Competitor;


 


14

















 


“Permitted
Transferee” means:


 


(a)           any BBY
Group Company, in relation to a transfer of a JV Investment (or part thereof)
held by BBY Distributions (or one of its permitted transferees);


 


(b)           any CPW
Group Company, in relation to a transfer of a JV Investment (or part thereof)
held by CPW (or one of its permitted transferees);


 


“Persons
Acting in Concert” means persons who, pursuant to an agreement or
understanding (whether formal or informal), actively co-operate through the
acquisition by any of them of shares in a party, to obtain a Controlling
Interest in relation to that party, or agree so to co-operate;


 


“Receiving
Agent” means such independent third party as the JV
Shareholders shall agree within a reasonable period of time after Closing;


 


“Receiving
Agent Engagement Letter” means the engagement letter to be entered into
within a reasonable period of time after Closing between the JV Shareholders
and the Receiving Agent setting out the material terms of the appointment of
the Receiving Agent;


 


“Regulatory
Approvals” means any approvals required by any competent
supranational, governmental or regulatory agencies or authorities;


 


“Related
Party” means a BBY Director or BBY Group Company or a CPW
Director or CPW Group Company (as the case may be);


 


“Review
Period” means the period of 3 consecutive calendar months
starting on the first day of the next calendar month after the day the relevant
notice was received or deemed received by the intended recipient;


 


“Sale” means the
sale of:


 


	
  (a)

  	
   

  	
  shares or an interest in
  shares (including the Shares) as a result of which a third party acquires a
  Controlling Interest in the JV Co or a member of the JV Group which holds
  (directly or indirectly) all or substantially all of the assets of the JV
  Group; or

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  all or substantially all
  of the business or the assets of the JV Group;

  



 


“Sale
Period” shall have the meaning given to it in Clause 20.7


 


15

















 


“Sell
Notice” shall have the meaning given to it in Clause 17.2.2;


 


“Seller”
shall have the meaning given to it in Clause 17.4;


 


“Selling
Party” shall have the meaning given to it in Clause 20;


 


“Shares” means
shares of whatever class in the capital of JV Co in issue from time to time;


 


“SPA”
means the conditional sale and purchase agreement entered into on 7 May 2008
between CPW, CPW Affiliate, BBY Hold Co and BBY Distributions, under which BBY
Distributions has agreed to acquire, and CPW and CPW Affiliate have between
them agreed to sell, 50% of the Ordinary Shares in issue as at the Closing Date
to BBY Distributions;


 


“Start
Date” shall have the meaning given to it in Clause 20.2;


 


“subsidiary
undertaking” is to be construed in accordance with section 258 of
the Companies Act 1985 and a “subsidiary”
is to be construed in accordance with section 736 of that Act;


 


“Surviving
Provisions” means Clauses 13.1.10, 14, 21, 22, 31 and 34;


 


“Tax”,
“tax”, “Taxation” or “taxation” means any form of
taxation, duty, impost, levy, tariff of any nature whatsoever of the UK or
elsewhere or any other decision by a Tax Authority, whether or not any such
taxation, duty, impost, levy or tariff of any nature arises in respect of
actual, deemed, gross or net income, profit, gain, value, receipt, payment,
sale, use, occupation, franchise, value added property or right and includes,
without imitation, any withholding amount subject to PAYE or other amount of or
in respect of any of the foregoing payable by virtue of any Tax Statute and any
penalty, charge, surcharge, fine or interest payable in connection with any
such taxation, duty, impost, levy or tariff of any nature;


 


“Tax
Authority” means HM Revenue and Customs or any authority or body,
whether of the United Kingdom or elsewhere and whether national or otherwise,
having the power or authority or other function in relation to Tax;


 


“Tax
Statute” means any primary or secondary statute, instrument,
enactment, order, law, by-law or regulation making any provision for or in
relation to Tax;


 


“Telecoms
Distribution Agreement” means the distribution agreement in agreed 


 


16

















 


form between CPW
Telecom Holdings Limited and JV Co, under which the JV Co Group shall sell on
behalf of CPW Telecom Holdings Limited fixed line telephony products (including
broadband and data products and services), to be entered into on Closing;


 


“Telecoms Services Agreement” means the
agreement between CPW Telecoms Holdings Limited (“CPW Telco”) and Newco in relation to the supply of certain
telecommunications services by CPW Telco to Newco Group in the agreed form and
to be entered into on Closing;


 


“Transfer
Notice” shall have the meaning given to it in Clause 20;


 


“Trigger
Date” means each date falling every two years after the
Closing Date (which if not a Business Day shall be the first Business Day
thereafter) provided that the first date shall be the fourth anniversary of the
Closing Date (which if not a Business Day shall be the first Business Day
thereafter);


 


“UK”
means the United Kingdom;


 


“UK
Subsidiaries” means those subsidiary undertakings of JV Co
listed in Part 1 of Schedule 2 (JV
Subsidiaries) that are incorporated in England and Wales;


 


“Undertaking”
has the meaning given to it in paragraph 1 of Schedule 4 (Compulsory Transfer);


 


“Unadjusted
Compulsory Disposal Amount” has the meaning given
to it in paragraph 2.1 of Schedule 4 (Compulsory
Transfer); and


 


“US
Subsidiary” means the subsidiary undertaking of JV Co listed in Part 3
of Schedule 2 (JV Subsidiaries)
that is incorporated in the United States of America) and owned 50% each
between CPW and BBY Hold Co; and


 


“VAT” means
value added tax and any similar sales or turnover tax.


 


1.2           Interpretation


 


In this Agreement,
unless otherwise specified:


 


1.2.1        the index and headings are for ease of
reference only and shall not be taken 


 


17

















 


into
account in construing this Agreement;


 


1.2.2        references to any Clause, paragraph or schedule
are to those contained in this Agreement and all schedules to this Agreement
are an integral part of this Agreement;


 


1.2.3        the expression this Clause shall, unless
followed by reference to a specific provision, be deemed to refer to the whole
Clause (not merely the sub-Clause, paragraph or other provision) in which the
expression occurs;


 


1.2.4        references to a party mean a party to this
Agreement including that party’s successors in title and assigns or transferees
permitted in accordance with the terms of this Agreement provided that the
relevant property, right or liability has been properly assigned or transferred
to such person;


 


1.2.5        a document is in the agreed form if it is in
the form of a draft agreed between and initialled by or on behalf of the
relevant parties to such document;


 


1.2.6        references to any gender shall include the
others; and words in the singular shall include the plural and vice versa;


 


1.2.7        references to a person (or to a word importing
a person) shall be construed so as to include:


 


	
  1.2.7.1

  	
   

  	
  an individual, firm, partnership, trust,
  joint venture, company, corporation, body corporate, unincorporated body,
  association, organisation, any government, or state or any agency of a
  government or state, or any local or municipal authority or other
  governmental body (whether or not in each case having separate legal
  personality); and

  
	
   

  	
   

  	
   

  
	
  1.2.7.2

  	
   

  	
  references to a person’s representatives
  shall be to its officers, employees, legal or other professional advisers,
  sub-contractors, agents, attorneys and other duly authorised representatives;

  



 


1.2.8        in writing means any communication made by
letter but does not include e-mail or other forms of electronic communication;


 


1.2.9        the words “include”, “including” and “in
particular” shall be construed as being by way of illustration or emphasis only
and shall not be construed as, 


 


18

















 


nor
shall they take effect as, limiting the generality of any preceding words;


 


1.2.10      the words “other” and “otherwise” shall not be
construed ejusdem generis with
any foregoing words where a wider construction is possible;


 


1.2.11      all references in this Agreement to monetary amounts
shall be in £ (pounds) sterling; andthe provisions of this agreement relating
to JV Co (except Clauses 13  (Restrictions on Shareholders), 19 (Strategic Options) and 20 (Right of First Refusal) shall be deemed to
apply mutatis mutandis to CPW
Mobile.


 


2.             PURPOSE
AND CORPORATE DETAILS OF JV CO


 


2.1           The JV Business


 


The parties agree that:


 


2.1.1        JV Co shall from the Closing Date be the
holding company of the JV Group;


 


2.1.2        notwithstanding any other provision of this
Agreement CPW shall be entitled after the date of this Agreement to make any
transfers to and from JV Group pursuant to Clause 20 (Further Assurances) of the SPA;


 


2.1.3        notwithstanding any other provision of this
Agreement, the parties agree to act in good faith towards each other and that
the JV Business shall be conducted in the best interest of the JV Group as a
whole on sound, commercial, profit-making principles in order to promote the
success of JV Co;


 


2.1.4        the central management of JV Co shall be
located in the UK, and each of the JV Shareholders and BBY Hold Co shall use
their best endeavours to ensure that JV Co is treated by all relevant
authorities as being resident for Taxation and other purposes in the UK and in
no other jurisdiction;


 


2.2           Branding


 


2.2.1        CPW shall
procure that the JV Group shall either have an exclusive right to use, or the
ownership of, the brand “The Carphone Warehouse”. BBY Hold Co shall procure
that the JV Group shall either have an exclusive right to use, or the ownership
of, the brand “Best Buy” in respect of the JV Business. The parties shall agree
a licence agreement to ensure that JV Co shall have an 


 


19

















 


exclusive right to use the
brands in the JV Countries except in the event of a transfer of a JV Interest
pursuant to a Sell Notice.


 


2.2.2        To develop
a structure to achieve a net-neutral after-tax position for each party in
relation to their brand licences, both annually and over time, taking into
account each party’s respective reasonable tax planning and other benefits and
costs, and furthermore it is recognised that CPW Brands Limited currently
charges a license fee to The Carphone Warehouse Limited in respect of such
brand, and the parties agree to work together to develop a structure to achieve
economic equalisation, taking into account each party’s respective reasonable
tax planning, and furthermore, the parties agree to work together in good faith
to ensure tax efficiency with respect to branding.


 


2.2.3        JV Co and
the JV Business shall trade under the name and brand of “Carphone Warehouse”,
“The Phone House”, “NTI”, “Geek Squad” or “Best Buy”, as appropriate for each
individual business within the JV Business, or such other brand as agreed from
time to time by the JV Board.


 


2.3           Independent Operation


 


The JV Group shall be
operated in accordance with Clause 5 (Management
Structure) as an independent operation to the operations of the JV
Shareholders, and the JV Group shall (and the JV Shareholders shall procure
that the JV Group shall) make its own decisions on the services and the
products the JV Group procures and supplies to its customers, provided the same
are in accordance with the principles of Clause 2.1.3, and the provisions of
this Agreement.


 


2.4           JV Co Employee Incentive
Scheme


 


Subject to Clause 5.5, the
JV Shareholders shall intend that, after Closing and in accordance with the provisions
of this Agreement, the relevant member or members of the JV Group establish an
employee incentive scheme for the benefit of the employees of the JV Group.


 


2.5           Ownership and corporate
details of JV Co


 


Immediately after Closing,
the JV Shareholders and corporate details of JV Co shall be as set out in
Schedule 1 (JV Co Details).


 


20

















 


3.             SHAREHOLDER
ASSURANCES


 


3.1           BBY Hold Co unconditionally and irrevocably
guarantees to CPW and JV Co as a continuing obligation the due and punctual
performance by BBY Distributions and, on or following any transfer by BBY
Distributions of any or all of its equity interest in JV Co to another BBY
Group Company (the “BBY Transferee”)
of BBY Distributions’s or the BBY Transferee’s obligations under or pursuant to
this Agreement and/or the Consortium Relief Agreement (the “BBY  Guaranteed
Obligations”).


 


3.2           BBY Hold Co agrees to indemnify CPW and the JV
Group against all reasonable losses, reasonable damages, reasonable costs and
reasonable expenses (including reasonable legal costs and expenses) which CPW
and/or the JV Group may suffer or incur through or arising from any failure by
BBY Hold Co to satisfy the guarantee under Clause 3.1.


 


3.3           BBY Hold Co shall not in any way or to any
extent be released from its obligations under this guarantee by reason of any
time or other indulgence, waiver, release or discharge granted by CPW and/or
the JV Group to BBY Distributions or to any third party or by the acceptance of
any compensation from or the making of any arrangement with BBY Distributions
or any third party or any circumstances or any provision or rule of law
whether statutory or otherwise affecting or preventing recovery from BBY
Distributions of any sum due or rendering any debt, obligation or liability of
BBY Distributions void or unenforceable and which but for this provision might
operate to exonerate or discharge BBY Hold Co from its obligations to CPW
and/or the JV Group under this guarantee and shall continue in force until BBY
Distributions or BBY Hold Co on its behalf shall have fully performed and
discharged all of the BBY Guaranteed Obligations.  Any settlement or discharge between CPW
and/or the JV Group and BBY Distributions shall be subject to the condition that
no security or payment to CPW and/or JV Co by BBY Distributions or any third
party shall be avoided or reduced by virtue of any provision or enactment
relating to bankruptcy, insolvency or liquidation for the time being and from
time to time in force.


 


3.4           Without prejudice to the rights of CPW and/or
the JV Group against BBY Distributions as principal debtor BBY Hold Co shall as
between CPW and/or the JV Group be deemed principal debtor and obligor in
respect of the BBY Guaranteed Obligations and not merely a surety and
accordingly it shall not be necessary for CPW and/or JV Co before seeking to
enforce this guarantee to seek to enforce any security or lien it may hold from
BBY Distributions or any third party or otherwise to 


 


21

















 


take any steps or proceedings against BBY
Distributions.


 


22
















 


3.5           Nothing in this Agreement (and in particular the
consent of the JV Shareholders shall not be required) shall restrict and/or
limit any action, claim or right that any of the parties wish to bring and/or
enforce against the other pursuant to the terms of the SPA or the Consortium
Relief Agreement.


 


3.6           On and following any transfer by CPW of any or all of
its equity interest in JV Co to another CPW Group Company (the “CPW Transferee”), CPW unconditionally and
irrevocably guarantees to BBY Distributions and JV Co, as a continuing
obligation and, the due and punctual performance by CPW of the CPW Transferee’s
obligations under or pursuant to this Agreement and/or the Consortium Relief
Agreement (the “CPW Guaranteed Obligations”).


 


3.7           CPW agrees to indemnify BBY Distributions and the JV
Group against all reasonable losses, reasonable damages, reasonable costs and
reasonable expenses (including reasonable legal costs and expenses) which BBY
Distributions and/or the JV Group may suffer or incur through or arising from
any failure by CPW to satisfy the guarantee under Clause 3.6.


 


3.8           CPW shall not in any way or to any extent be released
from its obligations under this guarantee by reason of any time or other
indulgence, waiver, release or discharge granted by BBY Distributions and/or
the JV Group to the CPW Transferee or to any third party or by the acceptance
of any compensation from or the making of any arrangement with the CPW
Transferee or any third party or any circumstances or any provision or rule of
law whether statutory or otherwise affecting or preventing recovery from the
CPW Transferee of any sum due or rendering any debt, obligation or liability of
the CPW Transferee void or unenforceable and which but for this provision might
operate to exonerate or discharge CPW from its obligations to BBY Distributions
and/or the JV Group under this guarantee and shall continue in force until the
CPW Transferee or CPW on its behalf shall have fully performed and discharged
all of the CPW Guaranteed Obligations.  Any
settlement or discharge between CPW and/or the JV Group and the CPW Transferee
shall be subject to the condition that no security or payment to BBY
Distributions and/or the JV Group by the CPW Transferee or any third party
shall be avoided or reduced by virtue of any provision or enactment relating to
bankruptcy, insolvency or liquidation for the time being and from time to time
in force.


 


3.9           Without prejudice to the rights of BBY Distributions
and/or the JV Group  against the CPW
Transferee as principal debtor, CPW shall as between BBY Distributions


 


23

















 


and/or
the JV Group be deemed principal debtor and obligor in respect of the CPW
Guaranteed Obligations and not merely a surety and accordingly it shall not be
necessary for BBY Distributions and/or the JV Group, before seeking to enforce
this guarantee to seek to enforce any security or lien it may hold from the CPW
Transferee or any third party or otherwise to take any steps or proceedings
against the CPW Transferee.


 


3.10         Nothing in this Agreement shall restrict and/or limit
any action, claim or right that any of the parties or JV Co wish to bring
and/or enforce pursuant to the terms of the SPA, and in particular the consent
of the JV Shareholders shall not be required.


 


3.11         CPW shall be jointly and severally liable in respect
of all of the obligations, warranties and undertakings provided by CPW
Affiliate pursuant to this Agreement.


 


3.12         CPW and CPW Affiliate shall be regarded as one JV
Shareholder holding the aggregate number of Shares between them for the
purposes of interpreting and applying the provisions of Schedule 4 (Compulsory Transfer), Clause 6 (JV Shareholder Reserved Matters), Clause
17 (Transfer on a Change of Control)
and Clause 20 (Right of First Refusal).


 


3.13         The JV Shareholders shall use reasonable endeavours to
procure the performance, by CPW Mobile Limited, of its obligations under the
BBY Mobile Agreement.


 


3.14         Notwithstanding any other provisions of this
Agreement, if the JV Board has prevented JV Co from exercising a contractual
right under any contract it may have with a JV Shareholder or any other Group
Company of such JV Shareholder and/or from pursuing any dispute in respect of
the same, in each case as a result of all of the JV Directors appointed by such
JV Shareholder voting against JV Co taking such action at a JV Board Meeting,
then such decision shall be capable of being proposed again at the same or
different JV Board Meeting, provided that on such second proposal, the JV
Directors appointed by such JV Shareholder shall not vote on the decisions of
the JV Board regarding such dispute matter.


 


4.             PROVISION OF
FINANCE


 


4.1           Financing of JV Co


 


4.1.1        Subject to the remaining provisions of this Clause
4.1, JV Co shall be


 


24

















 


financed
out of cash flow and by way of the JV Shareholder Loans and, pending
refinancing pursuant to Clause 4.1.3, the CPW RCF.


 


4.1.2        JV Co shall be entitled as it shall determine to
utilise the CPW RCF for its working capital purposes.


 


4.1.3        The parties acknowledge and agree that it is the
intention of JV Co to refinance the CPW RCF as soon as practicable after
Closing by entering into a non-recourse revolving credit, or other non-recourse
working capital facilities with third party providers of finance (subject to
the terms available to JV Co from such providers of finance and to the
provisions of this Agreement).


 


4.1.4        Pending refinancing of the CPW RCF as contemplated by
Clause 4.1.3, CPW shall promptly notify BBY Hold Co and BBY Distributions of
any Potential Event of Default or an Event of Default (both as defined in the
CPW Hold Co RCF) which occurs and which, in each case, could result in the CPW
Hold Co RCF being withdrawn, or amounts owing under the CPW Hold Co RCF
becoming immediately due and repayable.


 


4.1.5        Save for the entry into and provision of the
Shareholder Loans and the CPW RCF, and in accordance with the terms of each, no
party shall be required to contribute any debt or equity capital to, or to
guarantee any debt of, JV Co (or any other member of the JV Group) without that
party’s prior written consent.


 


4.1.6        Subject to the provisions of this Agreement, the JV
Management Team shall be responsible for preparing any proposals for any additional
finance required by the JV Group which proposals shall, if appropriate, be
reviewed by the JV Board and approved as JV Shareholder Reserved Matters in
accordance with this Agreement.  To the
extent that the JV Management Team determines that additional finance is
required by the JV Group, and makes appropriate proposals to the JV Board, the
parties shall consider in good faith any proposals in respect of such
financing, and shall determine subject to Clause 4.1.5 whether (and on what
terms) the JV Group shall seek to raise such finance (whether by way of debt or
equity, whether from the JV Shareholders or from external funding sources, or
otherwise).


 


4.1.7        The parties acknowledge that all amounts owed,
outstanding or accrued in


 


25

















 


the
ordinary course of trading (including any VAT arising on such amounts) as
between any member of the JV Group and any CPW Group Company, in respect of
inter-company trading activity and the provision of services, facilities and
benefits, shall be made in the ordinary course of business, in accordance with
the applicable terms of such activity.


 


4.2           Draw down of JV Shareholder Loans


 


4.2.1        It is agreed and acknowledged that the full amount of
the CPW Loan shall be deemed to have been drawn down by JV Co on the Closing
Date.


 


4.2.2        The BBY Loan shall be drawn down by JV Co in full on
the Closing Date.


 


4.2.3        The parties shall procure that, on the Closing Date,
50% of the CPW Loan shall be repaid by JV Co to CPW by utilising all of the
amount drawn down under the BBY Loan on the Closing Date. Such amount of the
CPW Loan repaid shall no longer be capable of being drawn down by JV Co.


 


4.2.4        Each of the JV Shareholder Loans shall be increased or
reduced (as the case may be) pursuant to Schedule 6 (Closing Statement) of the SPA.


 


4.2.5        The parties shall procure that the JV Shareholder
Loans are capitalised in full  on equal
terms within 20 Business Days of Closing.


 


5.             MANAGEMENT
STRUCTURE


 


5.1           Constitution of JV Co


 


Subject to the
provisions of this Agreement relating to the Consolidation Reserved Matters and
the JV Shareholder Reserved Matters the business and affairs of JV Co shall be
managed by the JV Board and the JV Management Team, whose respective
constitutions, procedures, responsibilities and restrictions shall be as set
out in this Clause 5 and in Clause 6.


 


5.2           JV Board of Directors


 


5.2.1        Subject to Clauses 5.5 and 6, the JV Board shall be
responsible for the operation of the JV Business. The JV Board shall be the
statutory board of directors of JV Co.


 


5.2.2        Subject to Clauses 5.5 and 6, the JV Management Team
will operate the JV


 


26

















 


Business
on a day-to-day basis in accordance with the directions of the JV Board from time
to time and the provisions of this Agreement. The JV Management Team shall not
constitute a committee of the JV Board unless expressly appointed as such from
time to time in respect of a specific matter.


 


5.2.3        From the Closing Date, the JV Board shall comprise six
JV Directors.  BBY Distributions shall
always be entitled to appoint three JV Directors and CPW shall always be
entitled to appoint three JV Directors. CPW Affiliate shall not be entitled to
appoint any JV Directors.


 


5.2.4        A JV Director appointed by a JV Shareholder cannot be
removed from the JV Board without the written consent of the JV Shareholder who
has appointed such JV Director.  In the
event a JV Director resigns or dies in office, the JV Shareholder who appointed
him shall be entitled to appoint his replacement.


 


5.2.5        Each JV Shareholder shall be free to appoint and to
replace the JV Director(s) it is entitled to appoint without the consent
of the other JV Shareholder.


 


5.2.6        The initial
chairman of the JV Board from the Closing Date shall be appointed from one of
and by the JV Directors appointed by
BBY Distributions. Thereafter, the JV Board shall be entitled to appoint any other JV Director as the
chairman of the JV Board from time to time. The chairman of the JV Board shall
not have a casting vote in respect of any matter.


 


5.2.7        The quorum for a JV Board meeting shall be at least
four JV Directors (whether present in person or by any other means permitted
under this Agreement including by alternate or proxy) comprising of at least two
JV Directors appointed by each JV Shareholder. All JV Board meetings shall be
held in London unless the JV Shareholders decide otherwise.


 


5.2.8        If, within one hour of the time appointed for a JV
Board meeting, there is no quorum, the JV Director(s) present shall
adjourn the meeting to a place and time not less than five Business Days
later.  If at such adjourned meeting the
number of JV Directors required to achieve a quorum in accordance with Clause
5.2.6 are not present within one hour from the time appointed for the adjourned
meeting, then the requirement that such JV Director(s) shall be


 


27

















 


	
   

  	
   

  	
  present shall not apply and the JV
  Director(s) present may conduct the business of the meeting.

  
	
   

  	
   

  	
   

  
	
  5.2.9

  	
   

  	
  Meetings of the JV Board shall (if not held
  by telephone in accordance with the provisions of this Clause 5.2.9) be held
  at either JV Co’s registered office, or such other location in London as a
  quorum of the JV Directors agree, at intervals of not more than three
  calendar months, although the JV Board shall hold a meeting as soon as
  reasonably practicable upon receiving notification from any JV Director in
  accordance with Clause 5.3.3 that any Consolidation Reserved Matter or JV
  Shareholder Reserved Matter or any other material matter requires their
  consideration. Meetings of the JV Board shall be convened in accordance with
  the provisions of this Agreement and with the JV Articles of Association and
  the JV Board shall be permitted to hold such meetings by way of video and/or
  telephone conferencing.

  
	
   

  	
   

  	
   

  
	
  5.2.10

  	
   

  	
  Save for in relation to Consolidation
  Reserved Matters and JV Shareholder Reserved Matters, the JV Board shall
  decide on all matters by a majority vote. All JV Directors shall have one
  vote. All decisions of the JV Board shall be communicated by the chairman or
  such JV Director as the JV Board shall determine to the JV Shareholders.

  
	
   

  	
   

  	
   

  
	
  5.2.11

  	
   

  	
  If a JV Director is unable to attend a JV
  Board meeting, he or the JV Shareholder that appointed him may by notice to
  JV Co appoint an alternate or issue a proxy and entrust a representative
  (which may be another JV Director) to attend and vote at the meeting on his
  behalf. The representative so entrusted shall have the same rights and powers
  as the director who entrusted him and (subject to his fiduciary duties) must
  vote in accordance with the instructions, if any, given in the proxy. One
  person may represent more than one director as an alternate or by proxy.

  
	
   

  	
   

  	
   

  
	
  5.2.12

  	
   

  	
  A written resolution signed by all of the JV
  Directors (or their duly appointed alternates), whether on the same document
  or on different documents in identical terms, shall be as valid and effective
  as a resolution duly passed at a duly constituted meeting of JV Directors,
  provided that such resolution shall be placed in the minute book of the JV
  Board as soon as possible thereafter.

  
	
   

  	
   

  	
   

  
	
  5.2.13

  	
   

  	
  The JV Board shall appoint a company
  secretary for the purpose of recording the minutes of all JV Board meetings
  and performing other secretarial

  



 


28

















 


functions
of the JV Board. The first Company Secretary shall be Tim Morris.


 


5.2.14      The JV Board will cause complete and accurate minutes
to be kept of all JV Board meetings. 
Minutes of all meetings, including resolutions to be adopted by the JV
Board, shall be signed by one JV Director appointed by each JV Shareholder in
person and recorded by the company secretary appointed for the meeting.  Minutes of all meetings of the JV Board shall
be distributed to all the directors as soon as practicable after each meeting
but not later than 20 Business Days from the end of such meeting.  The secretary to the JV Board shall maintain
a file of all JV Board meeting minutes, resolutions and decisions and make the
same available for inspection during normal business hours by the JV Directors
and the JV Shareholders.


 


5.2.15      JV Co shall indemnify each JV Director, so far as
permitted by applicable law, against all claims and liabilities incurred
pursuant to his duties as a director of JV Co, provided that any acts or
omissions of a director which give rise to such claims and liabilities do not
constitute intentional misconduct, gross negligence or violations of laws.  JV Co shall also provide, at its own expense,
appropriate directors’ and officers’ insurance cover for each JV Director.


 


5.2.16      To the extent that the JV Board resolves to do so, JV
Co shall reimburse all reasonable travel costs incurred by a JV Director in
travelling to and from any meeting of the JV Board.


 


5.3           JV Management Team


 


5.3.1        Subject to Clause 5.5, the JV Board shall appoint a
Chief Executive Officer (“CEO”), a
Chief Financial Officer (“CFO”)
and a Chief Operating Officer (“COO”).
The CEO or the JV Management Team will provide comprehensive and timely
information to the JV Board in accordance with this Clause 5 and Clause 8.


 


5.3.2        The first CEO will be Roger Taylor and, subject to
Clause 5.5 the COO, CFO and any future CEO will be appointed by the JV Board
from time to time. The CEO will be the leader of the JV Management Team.


 


5.3.3        A JV Director shall promptly notify the JV Board of
any Consolidation Reserved Matter and/or JV Shareholder Reserved Matter which
requires


 


29

















 


consideration
by the JV Board, which shall then convene a meeting pursuant to Clause 5.2.9.


 


5.3.4        The JV Management Team shall take no action in respect
of:


 


	
  5.3.4.1

  	
   

  	
  a Consolidation Reserved Matter, until it has received written
  confirmation from the JV Board or all of the directors of JV Directors
  appointed by BBY Distributions of the action that is to be taken; and/or

  
	
   

  	
   

  	
   

  
	
  5.3.4.2

  	
   

  	
  a JV Shareholder Reserved Matter, until it has received written
  confirmation from:

  



 


(a)          the JV Board (following approval by unanimous vote of the JV Directors
present at a meeting convened for the purpose of considering such JV
Shareholder Reserved Matter); or


 


(b)         both of the JV Shareholders,


 


of the action that is to be taken.


 


5.3.5        All material decisions taken by the JV Management Team
shall be communicated to the JV Board by the CEO in monthly written reports in
sufficient detail within 5 Business Days of the end of each calendar month or,
if otherwise requested by the JV Board or a JV Director, within 3 Business Days
from the date of such request.


 


5.4           Fiduciary duties


 


The JV Shareholders
shall each use their best endeavours to procure that any JV Director appointed
by them from time to time shall act in good faith and in accordance with
appropriate fiduciary duties.


 


5.5           Consolidation Reserved Matters


 


5.5.1        All Consolidation Reserved Matters shall only be
considered and approved or not approved (as the case may be) by the JV Board at
a JV Board meeting convened and constituted in accordance with the provisions
of this Agreement.


 


5.5.2        Any action or decision in relation to any
Consolidation Reserved Matter shall


 


30

















 


be
determined by the approval of all of the JV Directors appointed by BBY
Distributions and present at the relevant meeting of the JV Board (whether in
person, by proxy, or represented by a duly appointed alternate), regardless of
the affirmative or negative voting of the JV Directors appointed by CPW.  BBY Distributions shall procure that the JV
Directors appointed by BBY Distributions shall, however, consider in good faith
any proposals (including contradictory proposals) put forward in good faith by
any JV Directors appointed by CPW in relation to the discussion of a
Consolidation Reserved Matter.


 


5.5.3        Subject always to the provisions of Clauses 5.5 and 6,
if there is a contractual dispute between JV Co or any of its subsidiaries and
a JV Shareholder or any of its subsidiaries, then in such circumstances, the
directors appointed by such JV Shareholder shall not vote on decisions of the
JV Board regarding the conduct of such dispute.


 


6.             JV
SHAREHOLDER RESERVED MATTERS


 


6.1           JV Shareholder approval


 


6.1.1        Notwithstanding any other provision of this Agreement,
or any annual financial expenditure and/or annual financial budget, all JV Shareholder
Reserved Matters even if contained within a budget approved as a Consolidation
Reserved Matter shall require the prior consent of all JV Shareholders before
JV Co makes any decision or takes any action in respect of any JV Shareholder
Reserved Matter, such consent to be given in writing or at a separate meeting
of the JV Shareholders (unless the provisions of Clause 6.1.2 apply).


 


6.1.2        All JV Shareholder Reserved Matters and/or any other
decision in this Agreement requiring the consent of both JV Shareholders may,
unless this Agreement expressly provides otherwise, be considered at a meeting of
the JV Board, convened and constituted in accordance with the provisions of
this Agreement and, notwithstanding Clause 6.1.2, shall be validly approved if
approved by a unanimous vote of the JV Directors present at such meeting
(whether in person, by proxy or by alternate).


 


31

















 


7.             SHAREHOLDER
MEETINGS


 


The JV Shareholders
shall procure the holding of JV Shareholder meetings in England in accordance
with the JV Articles of Association and in any event not less than once
annually.


 


8.             INFORMATION


 


8.1           Information


 


The CEO shall procure
the preparation and delivery or cause to be prepared and delivered to the JV Board
the following financial statements and reports for JV Co that shall be prepared
in accordance with GAAP (with a conversion to IFRS) and accompanied by an
analysis, in reasonable detail, of the variance between the financial condition
and the results of operations reported in such statements or reports and the
corresponding amounts for the applicable period.  Each JV Shareholder and the JV Board shall,
to the extent it is able, procure that the JV Management Team shall comply with
its obligations pursuant to this Clause 8.1.


 


8.1.1        Annual statements.  As soon as
practicable following the end of each Fiscal Year (and in any event, not later
than 60 Business Days after the end of each Fiscal Year):


 


	
  8.1.1.1

  	
   

  	
  a balance sheet as at the end of such Fiscal
  Year; and

  
	
   

  	
   

  	
   

  
	
  8.1.1.2

  	
   

  	
  related income statement, Shareholder Loan
  accounts and changes therein, cash flow statement and a breakdown of all
  indebtedness under the CPW RCF and/or under any other facility for such
  Fiscal Year,

  



 


together with
appropriate notes and supporting schedules, all of which will be audited and
which will include the comparative corresponding statements for the two
previous Fiscal Years if applicable.


 


8.1.2        Quarterly statements.  As soon as
practicable following the end of each of the four quarters in each Fiscal Year
(and in any event, not later than 20 Business Days after the end of each such
quarter):


 


	
  8.1.2.1

  	
   

  	
  a balance sheet as at the end of such
  quarter; and

  
	
   

  	
   

  	
   

  
	
  8.1.2.2

  	
   

  	
  related income statement, Shareholder Loan
  accounts and changes therein, cash flow statement and a breakdown of all
  indebtedness under the CPW RCF and/or under any other facility for such

  



 


32

















 


quarter
and for the Fiscal Year to date,


 


together with
appropriate notes and supporting schedules, which will include the comparative corresponding
figures for the prior Fiscal Year’s quarter and Fiscal Year to date if
applicable.


 


8.1.3        Monthly statements.  As soon as practicable following the end of each of the first two calendar
months of each quarter (and in any event, not later than 20 Business Days after
the end of each such calendar month):


 


	
  8.1.3.1

  	
   

  	
  a balance sheet as at the end of such month;

  
	
   

  	
   

  	
   

  
	
  8.1.3.2

  	
   

  	
  related income statement, Shareholder Loan
  accounts and changes therein, cash flow statement and a breakdown of all
  indebtedness under the CPW RCF and/or under any other facility for the
  monthly period then ended and for Fiscal Year to date,

  



 


together with
appropriate notes and supporting schedules, which will include the comparative
corresponding figures for the same month in the prior Fiscal Year if
applicable.


 


8.1.4        Monthly cash reports.  A monthly report detailing the JV Co’s projected cash needs for a
rolling 12 calendar month period and the anticipated source of those funds.


 


8.1.5        Weekly key metrics reports.  A weekly update of the key metrics of the JV Business as requested from
time to time by the JV Board.


 


8.1.6        Other reports.  Such other reports or financial data that a JV Shareholder may
reasonably request from time to time provided that, if the CEO so determines
within 20 Business Days of such a request, such reports or data will be
provided at the requesting JV Shareholder’s sole cost and expense.


 


8.2           Operational and Financial Budget


 


The JV Board may from time
to time agree an annual operational and financial budget for the JV Group in
accordance with the provisions of this Agreement (and, in particular, Clause
5.5 hereof). If there is any conflict or inconsistency between the terms of
this Agreement and such annual operational and financial budget, the terms of
this Agreement shall prevail.


 


33
















 


	
   

  	
  8.3

  	
  Compliance

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The JV Board shall ensure that the JV Co:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.3.1

  	
  complies with all appropriate regulatory and
  legal requirements, including the requirements of the United States Foreign
  Corrupt Practices Act 1998 and the Sarbanes-Oxley Act, in each case as
  amended from time to time, and all applicable data protection legislation;
  and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.3.2

  	
  adopts appropriate compliance and training
  protocols (which shall include compliance protocols, standards, policies,
  notices, procedures, training modules and a code of ethics).

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  DEADLOCK
  RESOLUTION

  
	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  JV Deadlock

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.1.1

  	
  Subject to Clause 9.1.2, any
  two JV Directors appointed by the same JV Shareholder may declare in writing
  to all JV Directors that a JV Deadlock (“JV
  Deadlock”) has occurred where (i) in their view, acting in
  good faith, a serious issue, dispute, claim or difference has arisen or there
  has been a breakdown in the relations of the JV Board that will materially
  affect the day to day operation of and/or the long term development of the JV
  Business; or (ii) despite all reasonable endeavours by the JV Board to
  reach agreement, there has been a persistent failure on the part of the JV
  Directors to approve a JV Shareholder Reserved Matter having raised the
  matter at 3 separate meetings of the JV Board which will all be held within
  20 Business Days of the date of the JV Deadlock has been raised.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.1.2

  	
  A JV Deadlock may not be declared in respect
  of the following:-

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  9.1.2.1

  	
  any Consolidation Reserved Matter ;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  9.1.2.2

  	
  any discussion and/or disagreement in respect
  of the provision and/or availability and/or the draw down of any additional
  funding by any JV Shareholder pursuant to Clause 4.1.5;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  9.1.2.3

  	
  any failure by a JV Shareholder to give its
  consent pursuant to Clauses 11.1 and 11.3;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  9.1.2.4

  	
  any discussion and/or disagreement in respect
  of any non-material

  
						



 


34

















 


	
   

  	
   

  	
   

  	
   

  	
  matter whether or not
  provided for in this Agreement that will not materially affect the day to day
  operation of and/or long term development of JV Co and the JV Business.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.2

  	
  Resolution of Deadlock

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.2.1

  	
  Subject to Clause 9.1.2, in the event of a JV
  Deadlock, the following steps shall be taken in attempting to resolve the
  same:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  9.2.1.1

  	
  first, the JV Board shall refer the matter to
  Roger Taylor on behalf of CPW and Bob Willett on behalf of BBY Hold Co and of
  BBY Distributions (or their respective successors of no lesser position in
  their respective companies) (“Deadlock
  Directors”) who shall use all reasonable endeavours to resolve the
  JV Deadlock amicably within 10 Business Days of the date of such referral.
  Any unanimous decision of the Deadlock  Directors
  shall be final and binding on the JV Board, each JV Director and each JV
  Shareholder;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  9.2.1.2

  	
  second, and if the Deadlock Directors have
  been unable to resolve the JV Deadlock within such 10 Business Days, the JV
  Board shall refer the matter to Charles Dunstone on behalf of CPW and Brad
  Anderson on behalf of BBY Hold Co and BBY Distributions (or their respective
  designates of no lesser position in their respective companies) (the “Executive Committee”) who shall use all
  reasonable endeavours to resolve the JV Deadlock amicably within 20 Business
  Days of such referral. Any unanimous decision of the Executive Committee
  shall be final and binding on the JV Board, each JV Director and each JV
  Shareholder; and

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  9.2.1.3

  	
  third, and if the Executive Committee is
  unable to resolve a JV Deadlock within such 20 Business Days, the JV
  Shareholders shall have a further period of 20 Business Days within which to
  resolve the JV Deadlock amicably and, if they are unable to do so, JV Co
  shall continue to be managed and operated in a manner consistent with that in
  existence prior to the JV Deadlock). For the avoidance of doubt, a failure to
  resolve a JV Deadlock will not give rise to the liquidation of JV Co.

  



 


35

















 


	
   

  	
  9.3

  	
  Management during deadlock

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Unless and until a JV Deadlock has been
  finally resolved the parties agree that the management and operation of JV Co
  shall continue to be managed and operated in a manner consistent with the
  situation prior to the JV Deadlock.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  ANTI-DILUTION

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Save in accordance with the other provisions
  of this Agreement, no share capital of JV Co shall be issued.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  TRANSFER
  OF JV INVESTMENT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.1

  	
  Transfer of Shares and
  Shareholder Loans

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.1.1

  	
  Unless expressly provided for otherwise in
  this Agreement, a JV Shareholder shall not be entitled to offer, sell,
  transfer or dispose of its JV Investment (or part thereof whether legally
  and/or beneficially) without the prior express written consent of the other
  JV Shareholder.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.1.2

  	
  Unless expressly provided for otherwise in
  this Agreement, each of BBY Distributions and BBY Hold Co shall procure that
  the relevant BBY Group Company shall not be entitled to offer, sell, transfer
  or dispose of any of its JV Shareholder Shares (or part thereof whether
  legally and/or beneficially) without the prior express written consent of
  CPW.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.2

  	
  Permitted transfers

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.2.1

  	
  A JV Shareholder shall be permitted to
  transfer some or all of its JV Investment to any Permitted Transferee only in
  the event that such transfer is required in connection with (i) a bona
  fide internal reorganisation affecting the JV Shareholder concerned; or
  (ii) for reasonable and bona fide tax planning purposes, and in each
  case subject to such Permitted Transferee agreeing to transfer all of such JV
  Investment back to such transferor JV Shareholder or to another Permitted
  Transferee of the transferor JV Shareholder immediately upon the Permitted
  Transferee ceasing to be a Permitted Transferee of such transferor JV
  Shareholder.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.2.2

  	
  BBY Hold Co shall procure that the provisions
  of Clauses 11.1 and 11.2.1 shall apply to any shares in BBY Distributions
  held by any member of the

  



 


36

















 


	
   

  	
   

  	
   

  	
  BBY Group or any other party mutatis mutandis to JV Shareholder
  Shares held by any BBY Group Company.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.2.3

  	
  The JV Shareholders shall procure that JV Co
  shall, subject to payment of stamp duty, if any, promptly register any
  transfer of Shares made in accordance with this Clause 11.2.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.3

  	
  Grant of security over
  Shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A JV Shareholder may not Encumber any of its
  Shares to any party without prior written consent of the other JV
  Shareholder.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.4

  	
  Compulsory Transfer Event,
  Change of Control, Permitted Third Party Transfers and Put Options

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.4.1

  	
  If a Compulsory Transfer Event occurs, the
  provisions of Schedule 4 (Compulsory
  Transfer) shall apply.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.4.2

  	
  If a Change of Control occurs, the provisions
  of Clause 17 (Transfer on Change of
  Control) shall apply.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.4.3

  	
  The parties shall be permitted to transfer
  their JV Investment in accordance with Clause 20 (Right of First Refusal).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.5

  	
  Rights in respect of
  Shareholder Loans following a transfer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Except in respect of a transfer to a
  Permitted Transferee:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.5.1

  	
  in the event that a JV Shareholder sells,
  transfers or otherwise disposes of all or any part of its JV Investment, such
  JV Shareholder shall from the date of such sale, transfer or other disposal
  have no further entitlement to be paid interest and/or any other repayment by
  JV Co pursuant to the terms of the relevant Shareholder Loan (or part
  thereof) transferred pursuant to such sale, transfer or other disposal of
  that JV Shareholder’s JV Investment (or part thereof);

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.5.2

  	
  a JV Shareholder which acquires a Shareholder
  Loan (or part thereof) pursuant to a transfer of a JV Investment (or part
  thereof) in accordance with the terms of this Agreement shall,
  notwithstanding the consideration paid for such JV Investment (or part
  thereof) be entitled to interest and/or any other repayment on the full
  amount of the Shareholder Loan (or part thereof) in

  



 


37

















 


	
   

  	
   

  	
   

  	
  accordance with the terms of such Shareholder
  Loan so acquired pursuant to such sale, transfer or other disposal of a JV
  Investment (or part thereof);

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.5.3

  	
  if CPW sells, transfers or otherwise disposes
  of all or any part of its JV  Investment,
  CPW shall be entitled to terminate the CPW RCF from the date of such transfer
  and be repaid all monies (including costs and interest) due thereunder to
  CPW.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.6

  	
  Conditions applying to
  transfers

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  It shall be a condition of any sale, transfer
  or other disposal of Shares or JV Investment to any person (including a
  Permitted Transferee) not being an existing JV Shareholder that the
  transferee shall enter into a deed substantially in the form of
  Schedule 6 (Deed of Adherence to
  Joint Venture)  agreeing
  to become party to and to be bound by the terms of this Agreement and to
  assume the obligations of the transferring JV Shareholder and, thereafter,
  any reference to a party or a JV Shareholder herein shall be deemed to
  include (as appropriate having regard to the nature of the JV Investment
  being transferred) a reference to such transferee as if named herein as a
  party in such capacity.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.7

  	
  This Clause 11 shall be subject to
  clause 9 of the Consortium Relief Agreement.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  DIVIDENDS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.1

  	
  JV Co shall procure that the Auditors report
  on the amount of distributable reserves available to JV Co simultaneously
  with the Auditors’ final preparation of JV Co’s annual accounts. Any
  distribution of dividends (whether in cash or in specie) in any Fiscal Year
  to the JV Shareholders shall be:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  12.1.1

  	
  in an amount as the JV Board shall determine,
  having regard to the profits available for distribution, their fiduciary
  duties, reasonable provisions and transfers to reserves and the ability of JV
  Co to meet its debts and debt obligations as they fall due; and

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  12.1.2

  	
  subject to approval as a JV Shareholder
  Reserved Matter, in accordance with Clause 6.

  



 


38

















 


	
  13.

  	
  RESTRICTIONS
  ON SHAREHOLDERS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.1

  	
  Restrictions

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.1.1

  	
  Each of the JV Shareholders hereby further
  undertakes to the others and JV Co that it shall not and shall procure that
  each of its Group  Companies shall not
  at any time whilst any of their respective Group Companies is a JV
  Shareholder:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  13.1.1.1

  	
  to an extent that is materially detrimental to the business of the JV
  Business, either on its own behalf or for or with any other person directly
  or indirectly:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (a)

  	
  approach, canvass, solicit or otherwise endeavour to entice away from any
  member of the JV Group for its own benefit or the benefit of any other person
  carrying on business in competition with the JV Business in the JV Countries
  the business of any person who, at any time during the preceding 12 calendar
  months, has been a material customer of or material supplier to any member of
  the JV Group;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (b)

  	
  use its knowledge of, or influence over, any material customer of or
  material supplier to any member of the JV Group, to or for its own benefit or
  the benefit of any other person carrying on business in competition with the
  JV Business;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  13.1.1.2

  	
  either on its own behalf or for or with any other person, directly or
  indirectly, approach, canvas, solicit or otherwise endeavour to entice away
  any employee of any member of the JV Group, who has an annual gross
  remuneration package in excess of £150,000, with a view to the specific
  knowledge or skills of such person being used by or for the benefit of any
  person carrying on business in competition with the JV Business in the JV
  Countries or carrying on any other business in any country.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.1.2

  	
  At any time whilst any of their respective Group Companies is a JV
  Shareholder, each of the JV Shareholders hereby undertakes not to (whether or
  not on such party’s own behalf or for or with any other person), and shall
  procure that each of their respective Group Companiesshall not, engage in, or be otherwise concerned with or interested in,
  a Competing Business within the territory of:

  



 


39

















 


	
   

  	
   

  	
   

  	
   

  	
  (a)

  	
  any JV Country; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (b)

  	
  any BBY Country.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.1.3

  	
  The provisions of Clause 13.1.2 shall not restrict or otherwise limit,
  within the territory of the BBY Countries:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  13.1.3.1

  	
  the business or operations of the BBY Group Companies as such business
  or operations exist at the date of this Agreement;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  13.1.3.2

  	
  the business or operations of the BBY Group Companies as such business
  or operations may evolve or develop, including by logical extension to the
  business or operations of the BBY Group Companies as such business or
  operations exist at the date of this Agreement; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  13.1.3.3

  	
  the ability of the BBY Group Companies to acquire any Big Box
  Retailing business or entity in the BBY countries.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.1.4

  	
  Notwithstanding the provisions of Clause 13.1.3, the BBY Mobile
  Agreement shall apply with respect to any BBY Mobile Competing Business.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.1.5

  	
  At any time whilst any of their respective Group Companies is a JV
  Shareholder, each of CPW and BBY Hold Co (or any Group Company of CPW or BBY
  Hold Co) may engage in, or be otherwise concerned with or interested in, a
  Competing Business in the territory of any European Non-JV Country, provided
  that such party (the “Offeror”)
  first offers the other party (the “Offeree”)
  the right to require that JV Co engages in such Competing Business (the “Offer”). The Offeree shall, before the
  expiration of the Review Period, notify the Offeror in writing whether it
  wishes to accept or reject the Offer. If the Offeree accepts the Offer, then,
  subject to agreement of the JV Board, the Offeree will provide in cash or
  otherwise (as agreed by the parties in accordance with  Clause 13.1.9) to JV Co (or such other entity as the
  JV Shareholders agree, subject always to Clause 13.1.9, an “Alternative Entity”), an amount equal to
  50% of the consideration payable for such Competing Business (the “European Non-JV Contribution”), and JV
  Co (or an Alternative Entity) shall engage in such Competing Business. If the
  Offeree does not accept the Offer, the Offer shall not be put to the JV

  



 


40

















 


	
   

  	
   

  	
   

  	
  Board for consideration, and the Offeror may proceed to engage in such
  Competing Business on its own and solely for its own benefit.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.1.6

  	
  Each of CPW and BBY Hold Co (or any Group Company of CPW or BBY Hold
  Co) may engage in, or be otherwise concerned with or interested in, a
  Competing Business in the territory of any country which is not:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (a)

  	
  a JV Country;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (b)

  	
  a BBY Country; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (c)

  	
  a European Non-JV Country.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.1.7

  	
  Notwithstanding the terms of Clause 13.1.2, and subject to Clause
  13.1.3, each of CPW and BBY Hold Co (or any Group Company of CPW or BBY Hold
  Co) may acquire an Ancillary Competing Business provided that such acquiring
  JV Shareholder (or its relevant Group Company, as the case may be) notifies
  the non-acquiring JV Shareholder prior to the completion of the acquisition
  of the Ancillary Competing Business.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.1.8

  	
  Following receipt of the notice referred to in Clause 13.1.7, the
  non-acquiring JV Shareholder may notify the acquiring JV Shareholder, before
  expiration of the Review Period, to indicate whether or not it requires the
  Ancillary Competing Business to be purchased by JV Co (or, subject to Clause
  13.1.9, an Alternative Entity) at Fair Market Value in accordance with the
  terms of Schedule 5. If the non-acquiring JV Shareholder requires JV Co
  (or an Alternative Entity) to purchase the Ancillary Competing Business for
  Fair Market Value, the Ancillary  Competing
  Business shall, immediately upon its acquisition, be transferred into JV Co
  (or the Alternative Entity) whereupon the non-acquiring JV Shareholder will
  provide in cash or otherwise (as agreed by the parties in accordance with
  Clause 13.1.9) to JV Co (or the Alternative Entity), an amount equal to 50%
  of the Fair Market Value of the acquired Ancillary Competing Business (the “Ancillary Competing Business Contribution”).
  If, following receipt of the notice referred to in Clause 13.1.7, the
  non-acquiring JV Shareholder notifies the acquiring JV Shareholder that it
  does not require JV Co (or an Alternative Entity) to purchase the Ancillary
  Competing Business, the acquiring JV Shareholder must dispose of the
  Ancillary Competing Business as soon as reasonably practicable (and in any
  event within twelve (12)

  



 


41

















 


	
   

  	
   

  	
   

  	
  calendar months of the date of completion of the acquisition of the
  Ancillary Competing Business).

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.1.9

  	
  The parties shall determine and agree in good faith the most tax
  efficient method by which a Contribution shall be made. In the event that the
  parties cannot reach agreement, a Contribution shall be structured as an
  acquisition by JV Co, to be funded by cash lent equally by the JV
  Shareholders on the terms of the JV Shareholder Loans.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.1.10

  	
  Each party undertakes to the others that it shall not and shall
  procure that each of its Group Companies shall not for a period of 18 calendar
  months after the date they cease to be such a JV Shareholder, breach any of
  the terms of this Clause 13.1.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.1.11

  	
  Each of the undertakings contained in this Clause 13.1 shall be read
  and construed as an entirely separate and independent undertaking by the
  parties.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.1.12

  	
  Fair Market Value of the acquired Competing Business for purposes of
  this Clause 13.1 shall be calculated in accordance with Schedule 5 which
  shall apply mutatis mutandis to
  such calculation.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.2

  	
  Delivery of documents

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Each JV Shareholder shall, on ceasing to hold a JV Investment, deliver
  or procure the delivery to JV Co on demand, all plans, budgets, documents
  provided pursuant to Clause 8 (Information),
  correspondence, budgets, schedules, documents, records and other materials
  (whether in eye or machine-readable form) belonging to or relating to the JV
  Business or JV Co together with all copies thereof (including, without
  limitation, computer disks) held by it or its agents or advisers and, if
  required by the remaining JV Shareholders, deliver notice in writing from a
  director of the JV Shareholder ceasing to hold Shares confirming that it has
  complied with the terms of this Clause 13.2.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.3

  	
  Reasonableness of restrictions

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The restrictions and exceptions thereto set out in this Clause 13
  are considered reasonable by the parties and necessary for the protection of
  their proprietary and commercial interests and those of JV Co.

  



 


42

















 


	
  14.

  	
  REPRESENTATIONS AND
  WARRANTIES

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Each party (as appropriate) makes the following representations and
  warranties in respect of itself in favour of the other parties:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.1

  	
  it is duly registered and the signature, execution and performance of
  this Agreement and all ancillary documents have been duly authorised and are
  within its corporate power, and will not give rise to any breach of any
  instrument, agreement, law, order, judgment or decree by which it is bound;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.2

  	
  all consents, licences or approvals required by law or regulation in
  order for it to enter into this Agreement have been obtained, are valid, are
  subsisting and any conditions have been adhered to; and

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.3

  	
  the signature, execution and performance of this Agreement and all
  ancillary documents will not give rise to any breach of any instrument,
  agreement, law, order, judgment or decree by which such party is bound.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  ANNOUNCEMENTS AND
  CONFIDENTIALITY

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.1

  	
  No announcements without agreement

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  15.1.1

  	
  The parties hereby agree to use reasonable efforts to co-ordinate with
  each other in advance as to the form, content and timing of any announcements
  regarding the financial performance of the JV Group or the JV Business
  including without limitation where the matter in question may give rise to a
  legal or regulatory obligation for either JV Shareholder, and (so far as
  reasonably practicable) to take into account any reasonable comments of the
  other party.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  15.1.2

  	
  Subject to Clauses 15.1.3 and 15.3 and save as required by law or with
  the prior written consent of the JV Shareholders, no statement or
  announcement of any nature relating to the subject matter of or the
  transaction referred to in this Agreement, the Key Agreements or the
  establishment of JV Co, or any financial data or result relating to the JV Co
  or the JV Shareholders, shall be made to the public, the press or otherwise
  unless in a form previously agreed in writing between the JV Shareholders.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  15.1.3

  	
  Save for the restriction set out in Clause 15.1.2 above, the JV Co
  shall be entitled to issue press releases or media announcements relating to
  the day-to-day operations of JV Co without the approval of the JV
  Shareholders first being obtained.

  



 


43
















 


15.1.4      The parties shall
each use their respective reasonable endeavours to make announcements with
respect to the financial performance of the JV Group or the JV Business only
pursuant to a calendar of announcement dates to be agreed in accordance with Clause
15.1.5.


 


15.1.5      The parties shall agree a calendar of announcements
pursuant to Clause 15.1.4 as soon as reasonably practicable following:


 


(a)                             the Closing Date, in relation to such announcements to
be made during the remainder of the current Fiscal Year; and


 


(b)                            the commencement of each Fiscal Year (and in any event
within 20 Business Days thereof), in relation to such announcements to be made
during each such Fiscal Year.


 


15.2         Confidentiality obligations


 


15.2.1      Save as provided by
Clause 15.3, each party shall (and each JV Shareholder shall procure that
each of its Permitted Transferees shall) keep confidential and not disclose to
any person any Confidential Information.


 


15.2.2      Each of the parties
agrees with and acknowledges to the others that, before the Closing Date, it
has obtained and that during the term of this Agreement it will obtain
Confidential Information and, accordingly, each of the parties hereby
undertakes to the other and JV Co that it will not at any time after the
Closing Date (save by compulsion of law) disclose or divulge any Confidential
Information to any person (other than to officers or employees of the JV Group
whose province it is to know the same).


 


15.2.3      Each JV Shareholder
and JV Co shall at all times comply in all respects with all relevant
legislation and applicable regulations in respect of the protection of
information of any nature relating to customers of the JV Co.


 


15.3         Permitted disclosures


 


Subject to Clause
15.1 a party may disclose or permit the disclosure of Confidential Information:


 


15.3.1      to its
representatives, advisors, Permitted Transferees or JV Shareholder Group
Companies, to the extent necessary to enable it or them to perform or 


 


44

















 


cause
to be performed or to enforce any of its rights or obligations under this
Agreement provided that such representative, advisor, Permitted Transferee or
JV Shareholder Group Companies, has executed a confidentiality undertaking
equivalent to that set out in this Clause 15;


 


15.3.2      when required to do
so:


 


15.3.2.1     by law; or


 


15.3.2.2     by or pursuant to the rules or any order of any
court, tribunal or agency of competent jurisdiction; or


 


15.3.2.3     by any securities exchange or regulatory or
governmental body having jurisdiction over it,


 


15.3.2.4     provided that the party making the disclosure shall
use its reasonable efforts to consult with the other party in advance as to its
form, content and timing, and shall (so far as reasonably practicable) take
into account any reasonable comments of the other party;


 


15.3.3      to the extent that
the Confidential Information has become publicly available or generally known
to the public at the time of such disclosure otherwise than as a result of a
breach of this Clause 15; or


 


15.3.4      if the other parties
to this Agreement have given prior written approval to the disclosure.


 


15.4         Duration of confidentiality obligations


 


The obligations in
this Clause 15 shall continue to apply after termination of this Agreement and
after any party has ceased to be party to this Agreement for a period of five
years.


 


16.          TERMINATION


 


16.1         This
Agreement shall remain in full force and effect unless and until terminated in
accordance with the provisions of this Clause 16.


 


16.2         This
Agreement shall terminate upon:


 


45

















 


16.2.1      one JV Shareholder
(except CPW Affiliate) acquiring all of the JV Investment held by the other JV
Shareholder (and any shareholder in the JV Co which is its Permitted
Transferee) (except CPW Affiliate) pursuant to a Compulsory Transfer, as a
result of a Change of Control, pursuant to Clause 20 (Right of First Refusal) or otherwise; or


 


16.2.2      the making of an
order or the passing of an effective resolution for the winding up of the JV Co
except in respect of a restructure of JV Co for reasonable business and/or tax
restructuring; or


 


16.2.3      the execution of a
written agreement to such effect by all the JV Shareholders.


 


16.3         The
Surviving Provisions shall survive and remain in full force and effect
notwithstanding their terms should this Agreement be terminated for any reason.


 


17.          TRANSFER ON CHANGE OF CONTROL


 


17.1         On
the occurrence of a Change of Control of CPW or BBY Hold Co, as the case may
be, the party suffering the Change of Control (“COC Party”), shall within 20 Business Days of completion of
the same notify the party not suffering the Change of Control (“Buyer”) of the Change of Control.


 


17.2         The
Buyer shall within 10 Business Days of being notified by the COC Party under Clause
17.1 notify the COC Party as to which of the following options the Buyer wishes
to take place:-


 


17.2.1      that the Buyer shall
buy all of the COC Party’s (or of any Permitted Transferee of the COC Party) JV
Investment in accordance with this Clause 17, in which case the notice from the
Buyer shall constitute a “Buy Notice”;


 


17.2.2      that the Buyer shall
sell all of the Buyer’s (or of any Permitted Transferee of the COC Party) JV
Investment to the COC Party in accordance with this Clause 17, in which case the
notice from the Buyer shall constitute a “Sell
Notice”;


 


17.2.3      that the Buyer wishes
neither to buy nor to sell in accordance with Clauses 19.2.1 or 19.2.2, and
instead remain as a JV Shareholder in accordance with the terms of this
Agreement.


 


46

















 


A failure by the Buyer to
serve any notice on the COC Party during such 20 Business Day Period shall be
deemed to constitute a notice by the Buyer that it wishes (pursuant to Clause
17.2.3 to remain as a JV Shareholder.


 


17.3                            Each of CPW and BBY Hold Co shall procure (as the case
may be) that each of their respective Permitted Transferees shall act in
accordance with the instructions of the JV Shareholder of which it is the
Permitted Transferee in order to give effect to the provision of this Clause
17.


 


17.4                            A Buy Notice shall be deemed to constitute an offer by
the Buyer to the COC Party to buy from the COC Party and/or its Permitted
Transferee (“Seller”) all (but not
some only) of the JV Investment held by the Seller at the Fair Market Value to
be completed within the 10 Business Day period referred to in Clause 17.6. Once
served, a Buy Notice may not be revoked without the written consent of the COC
Party and the COC Party shall be bound to sell and the Buyer shall be bound to
buy all of the Seller’s JV Investment at the Fair Market Value.


 


17.5                            A Sell Notice shall be deemed to constitute an offer
by the Buyer to the COC Party to sell to the COC Party all (but not some only)
of the JV Investment held by the Buyer at the Fair Market Value to be completed
within the 10 Business Day period referred to in Clause 17.6. Once served, a
Sell Notice shall not be revoked without the written consent of the COC Party
and the Buyer shall be bound to sell and the COC Party shall be bound to buy
all of the Buyer’s JV Investment at the Fair Market Value.


 


17.6                            Following agreement or determination of the Fair
Market Value, completion of the sale and purchase under a Buy Notice or Sell
Notice (as the case may be) shall (subject to Clause 33) take place at such
reasonable time and place (and otherwise in accordance with all applicable time
periods herein specified) as the Buyer or Seller (as the case may be) may
specify, but being no more than 10 Business Days after such agreement or
determination of the Fair Market Value, whereupon the following events
described in this Clause 17.6 shall take place (herein collectively referred to
as the “COC Completion”):


 


17.6.1      the party selling
shall deliver to the party buying a duly executed transfer or transfers in
favour of the party buying, or such other person as it may direct, together
with the share certificates in respect of all Shares held by the party selling
as part of its JV Investment;


 


17.6.2      the party selling and
the party buying shall execute a sale and purchase 


 


47

















 


agreement incorporating the transfer terms set out in Clause 18 below;


 


17.6.3      the party selling
shall deliver to the party buying a duly executed assignment in favour of the
party buying of all of the selling party’s Shareholder Loans.


 


17.6.4      the party buying
shall pay the Fair Market Value, to the party selling by wire transfer or
banker’s draft for value, on the date of COC Completion; and


 


17.6.5      the party selling shall
do all such other things and execute all such other documents as the party
buying, or such other person as it may direct, may require to give effect to
the sale and purchase and/or transfer of all of the JV Investment to the party
buying.


 


17.7                            If any party shall fail or refuse to transfer any of
its JV Investment in accordance with its obligations hereunder, the JV Co shall
authorise any person to execute and deliver on its behalf the necessary
transfer and the JV Co shall receive the purchase money in trust for the party
selling and cause the party buying to be registered as the holder of all Shares
held by the party selling the relevant part of its JV Investment.  The receipt by JV Co of the Fair Market Value
shall be a good discharge to the party buying (and it shall not be bound to see
to the application thereof).


 


17.8                            The party selling hereby agrees that payment to it of
such Fair Market Value shall constitute full and final satisfaction of the
consideration due to it and, in particular, JV Co’s indebtedness to the party
selling in respect of any outstanding amounts drawn down under Shareholder
Loans provided by the party selling to JV Co as at the date of COC Completion
and, for the avoidance of doubt, the Seller agrees that no interest shall continue
to accrue in its favour in respect of such Shareholder Loans from the date of
occurrence of such Change of Control.


 


17.9                            Upon completion of a transfer of all the selling party’s
JV Investment in accordance with this Clause 17,  the party buying shall use all reasonable endeavours (but,
save as provided below, without involving any financial obligations on its
part) to procure the release of any guarantees or indemnities given by the
party selling (or by any person controlled by or connected with the party
selling) to or in respect of the JV Co provided that the reasonable costs in
relation thereto shall be borne by the buying party save where such guarantee
or indemnity given by the party selling (or by any person controlled by or
connected with the party selling) is in form or substance substantially
different  from that given by the
party buying in which event the party selling shall bear such costs.


 


48

















 


17.10       Each Shareholder
waives any of its rights of pre-emption on the transfer of the Shares  whether contained in the JV Articles of
Association, this Agreement or otherwise to the extent necessary to effect the
provisions of this Clause 17, Clause 20 or Schedule 4  (Compulsory
Transfer).


 


18.          TRANSFER TERMS


 


18.1         This
Clause sets out the terms on which any Shares are to be transferred under
Clause 10 (Transfer of JV Investment),
Clause 17 (Transfer on Change of Control),
Clause 20 (Right of First Refusal),
and Schedule 4  (Compulsory Transfer).


 


18.2         Any
transfer of the Shares shall be on the following terms:


 


18.2.1      the Shares will be
sold with full title guarantee, free from all Encumbrances and third party
rights, together with all rights of any nature attaching to them including all
rights to any dividends or other distributions declared, paid or made after the
date of completion of such transfer;


 


18.2.2      the party selling  shall deliver to the party buying duly
executed transfer(s) in favour of the party buying or as it may direct,
together with any share certificate(s) for the Shares and a certified copy
of any authority under which such transfer(s) is/are executed and, against
delivery of the transfer(s), the party buying shall pay the consideration for
the Shares to the party selling  in
cleared funds for value on the relevant completion date;


 


18.2.3      the parties shall
ensure (insofar as they are able) that the relevant transfer or transfers
(subject to their being duly stamped, stamp duty to be paid by the party
buying) are registered in the name of the party buying or as it may direct;


 


18.2.4      the party selling  shall do all such other things and execute
all other documents (including any deed) as the party buying may reasonably
request to give effect to the sale and purchase of the Shares;


 


18.2.5      if requested by the
party buying, the party selling  shall
ensure that all the JV Directors appointed by it or any of its Group Companies
resign and the resignation(s) take effect without any liability on the JV
Co for compensation for loss of office or otherwise.


 


49

















 


19.          STRATEGIC OPTIONS


 


At least once in every three
consecutive years after the Closing Date the JV Board shall be entitled to
appoint a reputable Investment Bank to review the JV Group and the JV Business
and report to the JV Board  on potential
future strategic options for the JV Group and the JV Business including any
potential Exit.


 


20.          RIGHT OF FIRST REFUSAL


 


20.1                            At any time during an Exit Period each JV Shareholder
(the “Selling Party”) shall be
entitled to give a sealed written notice to the Receiving Agent providing the
other JV Shareholder (the “Continuing Party”)
with written notice (a “Transfer Notice”)
of the Selling Party’s offer to sell all (and not part) of its JV Investment to
the Continuing Party. A Transfer Notice once served on the Receiving Agent
shall be irrevocable.


 


20.2                            The Receiving Agent shall not communicate to any JV
Shareholder during any Exit Period as to whether or not he has received any
sealed written notices pursuant to Clause 20.1 the Receiving Agent shall not
open any Transfer Notice(s) until after the expiry of the relevant Exit
Period unless all the JV shareholders agree otherwise in writing, at which
stage it/they shall be opened by the Receiving Agent in the presence of a
representative of each JV Shareholder at 9 am on the first Business Day after
the expiry of the relevant Exit Period at the registered office of JV Co (“Start Date”). If any one of such
representatives do not attend such meeting the Receiving Agent may still open
such notices and advise the JV Shareholders of the contents in writing as soon
as reasonably possible and in any event no later than three Business Days
thereafter (such date also being the “Start
Date”).


 


20.3                            If both JV Shareholders have delivered a Transfer
Notice to the Receiving Agent the remaining provisions of this Clause 20
(except Clauses 20.8 and 20.9) shall not apply and the JV Shareholders shall
acting reasonably and in good faith discuss alternative and mutually beneficial
options in respect of their respective JV Investments including without
limitation any potential Exit.


 


20.4                            If only one JV Shareholder serves a Transfer Notice
the Continuing Party shall have the right (but no obligation) to buy all (but
not part) of the JV Investment of the Selling Party, at the price set out in
Clause 20.5 first by giving a notice of intention within 20 Business Days and
then by giving notice (the “Acceptance Notice”)
to the Selling Party within 60 Business Days of the Start Date (the “Acceptance Period”). An Acceptance Notice
once served on the Selling Party shall be irrevocable.


 


50

















 


20.5                            The price shall equal 60% of the Fair Market Value of
the JV Investment of the Selling Party as agreed between the Selling Party and
the Continuing Party or as determined in accordance with Schedule 5 (Fair Market Value).


 


20.6                            Following service of an Acceptance Notice on the
Selling Party the Continuing Party shall be bound to buy and the Selling Party
shall be bound to sell (in each case subject only to any necessary approvals of
its shareholders in general meeting and any Regulatory Approvals and any
reasonable period of time in which to obtain such approvals) the JV Investment
of the Selling Party and, in such event, completion of the sale and purchase of
the JV Investment of the Selling Party shall take place within 40 Business Days
after the agreement or determination of the price in accordance with Clause
20.5 and on the terms contained in Clause 20 and any such other terms as agreed
by the Selling Party and the Continuing Party. Unless the Selling Party and
Continuing Party decides otherwise (such matter shall not be a deadlock matter)
the price shall be paid in cash and in full on completion of such sale and
purchase.


 


20.7                            If the Continuing Party does not serve an Acceptance
Notice pursuant to Clause 20.4, the Selling Party shall be entitled (but not
obliged) within a period of 60 Business Days commencing immediately after the
end of the Acceptance Period (“Sale Period”)
to enter into a legally binding agreement to transfer all (but not part) of its
JV Investment on bona fide arm’s length terms (which shall comply with Clause
12.6) to a Permitted Third Party at any price. For the avoidance of doubt the
Selling Party shall not be entitled to enter into such legally binding
agreement after the end of the Sale Period.


 


20.8                            The JV Shareholders shall not be entitled to serve a
Transfer Notice if a notice has been served under Clause 17 (Transfer on Change of Control) or under
Schedule 4  (Compulsory Transfer).


 


20.9                            Any time period referred to in this Clause 20 shall be
deemed inclusive of the first and last day of such time period.


 


21.                               INADEQUACY OF
DAMAGES


 


Without prejudice to any
other rights or remedies that a party may have, each party acknowledges and
agrees that damages alone would not be an adequate remedy for any breach of the
terms of this Agreement by another party. Accordingly, a party shall be
entitled, without proof of special damages, to the remedies of injunction,
specific performance or other equitable relief for any threatened or actual
breach of the terms of this Agreement.


 


51

















 


22.                               TAX


 


The provisions of Schedule 8 shall apply
in relation to Tax.


 


23.                               ENTIRE
AGREEMENT AND SEVERANCE


 


23.1                            Entire agreement


 


This Agreement,
together with the Key Agreements, sets out the entire agreement between the
parties, and supersedes any previous agreement between them in relation to the
subject matter of this Agreement and the Key Agreements (including any relevant
term sheets).


 


23.2         Acknowledgment by parties


 


Each party
acknowledges that:


 


23.2.1      in entering into this
Agreement and the Key Agreements, it does not rely on, and shall have no remedy
in respect of, any representation (whether negligent or otherwise) made to it
by any person (whether a party to this Agreement or not) which is not expressly
set out or referred to in this Agreement;


 


23.2.2      the only remedy
available to it in respect of any representation or warranty expressly set out
or referred to in this Agreement shall, except where expressly provided for in
this Agreement, be for breach of contract in respect of that term of this
Agreement; and


 


23.2.3      nothing in this
Clause 23 shall operate to exclude or restrict any liability for fraud or
fraudulent misrepresentation.


 


23.3         Conflict between agreements


 


The parties intend
that the provisions of the SPA shall prevail over this Agreement, the JV
Constitutional Documents, the Key Agreements and any other agreements entered
into between the parties in relation to the JV Business in the event of
conflict and, accordingly, the parties shall, if necessary, exercise all voting
and other rights and powers available to them whether as JV Shareholders or otherwise,
or under this Agreement, to procure any amendment to the JV Constitutional
Documents, the Key Agreements and any other agreements entered into between the
parties in relation to the JV Business required to give effect to the
provisions of this Agreement.


 


52
















 


23.4         Severance


 


If any provision of
this Agreement or part thereof is rendered void, illegal or unenforceable in
any respect (whether against all or only some of the parties), the validity,
legality and enforceability of the remaining provisions (and such aforesaid
provision against the other parties) shall not in any way be affected or
impaired thereby.


 


23.5         No agency


 


Nothing in this
Agreement, and no action taken under this Agreement, shall create a
relationship of principal and agent between any of the parties or (save as
otherwise stated herein) otherwise authorise any party to bind any other party
for any purpose.


 


24.          AMENDMENTS


 


24.1         This Agreement may not be changed, altered,
waived or, save as in accordance with this Agreement, terminated without the
written consent of the parties to it.


 


24.2         The parties undertake to negotiate in good
faith any amendments to this Agreement for purposes of accommodating any future
changes in the regulatory environment which governs telecommunications in any
JV Country.


 


25.          NO
ASSIGNMENT


 


Save as results from
a transfer of Shares and/or a JV Investment as permitted under this Agreement,
no party may assign its rights under this Agreement without the consent of the
other parties.


 


26.          REMEDIES
AND WAIVERS


 


26.1         No waiver or discharge


 


No default by any
party in the performance of or compliance with any provision of this Agreement
shall be waived or discharged except with the express written consent of all
other parties.  A waiver by a party of a
default by another party will not prevent the first party from subsequently
requiring compliance with the 


waived obligation.


 


26.2         Saving for future waivers


 


No waiver by any
party of any default by another party in the performance of or 


 


53

















 


compliance with any
of the provisions of this Agreement shall operate or be construed as a waiver
of any other or further default whether of a like or different character.


 


26.3         Failure to exercise not a
waiver


 


26.3.1      No failure to exercise, nor delay or omission by any
party in exercising, any right, power or remedy conferred on it under this
Agreement or provided by law shall except with the express written consent of
that party:


 


26.3.1.1      affect that right,
power or remedy; or


 


26.3.1.2      operate as a waiver
of it.


 


26.3.2      No single or partial exercise by any party of any
right, power or remedy shall prevent any further exercise of that right, power
or remedy or the exercise of any other right, power or remedy.


 


26.4         Rights and remedies cumulative


 


The rights, powers
and remedies conferred on the parties by this Agreement are cumulative and not
exclusive of any rights, powers and remedies provided by law or otherwise.


 


27.          COSTS


 


Save where expressly agreed
to the contrary, each party shall bear the legal, accountancy and other costs
and expenses incurred by it in connection with the preparation and
implementation of this Agreement and the Key Agreements.


 


28.          DURATION


 


The rights and
obligations of each JV Shareholder shall continue and be enforceable by or
against it only while it or any of its Permitted Transferees is a JV
Shareholder save for:


 


28.1         the Surviving Provisions  which shall continue to have effect
notwithstanding a party ceasing to be a JV Shareholder or termination of this
Agreement; and


 


28.2         rights and obligations in respect of antecedent
breaches of this Agreement or the JV Constitutional Documents.


 


54

















 


29.          TIME
OF THE ESSENCE


 


Time shall be of the
essence for the purposes of any provision of this Agreement.


 


30.          COUNTERPARTS


 


This Agreement may be
executed in any number of counterparts and by the parties on separate
counterparts.  Each counterpart shall
constitute an original of this Agreement, but together the counterparts shall
constitute one document.


 


31.          NOTICES


 


31.1         Service


 


Any notice or other
communication to be given under this Agreement shall be in writing and shall be
delivered by hand or sent by prepaid registered mail, and shall be addressed to
the party to be served at the address specified below:


 


BBY
Hold Co

Keith Nelsen

c/o Premier Corporate Services, Inc.

590 Park Street

Suite 6

St Paul, Minneapolis

55103, USA


 


With a copy to:


 


Attention: General
Counsel, International

7001 Penn Avenue South

Richfield MN

55423 USA


 


BBY
Distributions


 


Keith Nelsen

100 New Bridge Street

London EC4V 6JA

United Kingdom


 


The
Carphone Warehouse Group PLC and CPW Retail Holdings Limited


 


Company Secretary and Chief Financial Officer




55

















 


1 Portal Way

London

W3 6RS


 


or to such other
address as a party may notify to each other party in writing as being its
address for such purpose.


 


31.2         Receipt


 


31.2.1      Any notice sent by any party to any other (“Addressee”) which:


 


	
  31.2.1.1

  	
   

  	
  is delivered by hand during the normal
  business hours of the Addressee at the Addressee’s address shall be deemed,
  until the contrary is proved by the Addressee, to have been received by the
  Addressee at the time of delivery or, if outside such normal business hours,
  at the opening of business on the next following Business Day;

  
	
   

  	
   

  	
   

  
	
  31.2.1.2

  	
   

  	
  is posted by prepaid registered mail to the
  Addressee at the Addressee’s address shall be deemed, until the contrary is
  proved by the Addressee, to have been received by the Addressee on the fifth
  Business Day after the date of posting.

  



 


 


31.2.2      Notwithstanding anything contained to the contrary in
this Agreement, any notice written or otherwise actually received by one party
from another party shall be adequate notice to such party, unless otherwise
required by any provision of this Agreement.


 


31.3         BBY Hold Co shall at all times maintain an
agent for service of process in England in relation to any matter arising out
of or in connection with this Agreement. Such agent shall be BBY Distributions
and service of any claim form, judgment or other notice of legal process shall
be sufficiently served on such party if served upon such agent.


 


31.4         BBY Hold Co shall inform CPW in writing of any
change in its process agent or the address of its process agent within 14 days
of such change provided that any new agent must be of a similar good standing
to the original agent and have an address in England.


 


56

















 


32.          CONTRACTS
(RIGHTS OF THIRD PARTIES) ACT 1999


 


32.1         JV Co
shall be entitled, as a third party beneficiary, to enforce the provisions of
Clause 3 (Shareholder Assurances),
by reason of the Contracts (Rights of Third Parties) Act 1999.  This right is subject to:


 


32.1.1      the rights
of the parties to amend or vary this Agreement without the consent of JV Co;
and


 


32.1.2      the other
terms and conditions of this Agreement.


 


32.2         Except as
provided in 32.1, a person who is not a party to this Agreement shall have no
right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of
its terms.


 


33.          SHAREHOLDER
APPROVAL


 


Notwithstanding any
time period stated in the Agreement, time shall be given to CPW and BBY Hold Co
to obtain any necessary shareholder approval or non-approval (as their
respective shareholders shall decide) pursuant to Chapter 10 and/or 11 of the
Listing Rules or pursuant to the rules of the SEC, as appropriate,
where such rules are applicable to any event or action or decision
required to be taken under or pursuant to this Agreement. CPW and BBY Hold Co
shall each act in good faith and in a reasonably timely manner in procuring the
holding of a general meeting of their respective shareholders for the purposes
of obtaining any such approval, or non-approval as the case may be.


 


34.          GOVERNING
LAW


 


This Agreement is
governed by and is to be construed in accordance with the laws of England and
Wales.  Unless otherwise stated in this
Agreement, the parties hereby irrevocably submit to the Dispute Resolution
Procedure.  The parties confirm that the
forums provided for in the Dispute Resolution Procedure are not inconvenient
forums and each party irrevocably waives any right it may have to object to
their jurisdiction on the grounds of inconvenience or otherwise.


 


57

















 


SCHEDULE 1




PARTICULARS OF JV CO IMMEDIATELY AFTER
CLOSING


 


	
  Name:

  	
   

  	
  CPW Distribution Holdings
  Limited

  
	
   

  	
   

  	
   

  
	
  Registered Number:

  	
   

  	
  6534088

  
	
   

  	
   

  	
   

  
	
  Registered Office:

  	
   

  	
  1 Portal Way, London, W3
  6RS, UK

  
	
   

  	
   

  	
   

  
	
  Subsidiaries:

  	
   

  	
  The JV Subsidiaries

  
	
   

  	
   

  	
   

  
	
  Shareholders:

  	
   

  	
  The Carphone Warehouse
  Group PLC – 49% of the issued Ordinary Shares  

  

  CPW Retail Holdings Limited – 1% of the issued Ordinary shares  

  

  Best
  Buy Distributions Limited – 50% of the issued Ordinary Shares

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accounting Reference
  Period:

  	
   

  	
  31 March

  
	
   

  	
   

  	
   

  
	
  Auditors:

  	
   

  	
  Deloitte & Touche
  LLP

  



 


58

















 


SCHEDULE 2




JV SUBSIDIARIES


 


Part 1


 


UK Subsidiaries


 


The Carphone Warehouse Limited (Co. No. 2142673)


 


The Carphone Warehouse UK Limited (Co. No. 3827277)


 


 


CPW Co 16 Limited ( Co. No. 6617436)


 


Mobiles.co.uk Limited (Co. No. 6320783)


 


The Phone House Holdings (UK) Limited (Co. No. 3663563)


 


Geek Squad UK Limited (Co. No. 6032807)


 


ISE-Net Solutions Limited (Co. No. 2881162)


 


Talk Mobile Limited (Co. No. 4154716)


 


Fresh Telecom Limited (Co. No. 3843665)


 


Evergreen Services Holdings Limited (Co. No. 2441554)


 


Evergreen Services (2) Limited (Co. No. 4682207)


 


Cellcom Limited (Co. No. 1847868)


 


Spinvox Limited (Co. No. 4825183)


 


 


Note:


 


CPW Mobile Limited (Co. No. 6330995) and
its subsidiary company CPW Co 16 Limited (Co. No. 6617436) will not be
subsidiary companies of Newco on the Closing Date.


 


59

















 


Part 2


 


European Subsidiaries


 


The Carphone Warehouse Limited (Ireland)


 


Compro- Telematics BV (The Netherlands)


 


Provitel Groothandel BV (The Netherlands)


 


The Phone House BV (The Netherlands)


 


The Phone House NV (Belgium)


 


The Phone House Deutschland GmbH (Germany)


 


The Phone House Netherlands Business Centers BV
(The Netherlands)


 


The Phone House Netherlands BV (The
Netherlands)


 


The Phone House Netherlands Franchise BV (The
Netherlands)


 


The Phone House Netherlands Retail BV (The
Netherlands)


 


The Phone House Netherlands Retail Regio Midden
BV (The Netherlands)


 


The Phone House Netherlands Retail Regio Noord
BV (The Netherlands)


 


The Phone House Netherlands Retail Regio Zuid
BV (The Netherlands)


 


The Phone House Services GmbH (Germany)


 


The Phone House Shop Management GmbH (Germany)


 


The Phone House Telecom Gmbh (Germany)


 


GEAB The Phone House AB (Sweden)


 


Helvetiatel GmbH (Switzerland)


 


MSG The Phone House AB (Sweden)


 


MTIS Limited (Ireland)


 


New Technology Insurance (Ireland)


 


N-Tel Telecom GmbH (Switzerland)


 


Sociedade Gestora de Participcoes Socias SA


 


OSFONE- Comercio de Aparelhos de
Telecomunicacoes Lda


 


OSFONE NEGOCIOS- Comercio de Aparelhos de
Telecomunicacoes Lda


 


60

















 


The Phone House Holdings (UK) Spanish branch


 


The Phone House Direct S.L (Spain)


 


The Phone House Movil S.L.U (Spain)


 


Phonehouse International AB (Sweden)


 


Telechoice Espana SA (Spain)


 


The Phone House Canarias S.L.U (Spain)


 


The Phone House SAS (France)


 


The Phone House LTDA (The Phone House Comercio
e Aluguer de bens e Services Lda) (Portugal)


 


The Phone House SA (Switzerland)


 


The Phone House Services Telecom SAS (France)


 


The Phone House Spain S.L (Spain)


 


TPH Trading France EURL


 


Talktalk Telecom  GmbH (Switzerland)


 


Xtra Telecom SA (Spain)


 


F.M. Investments B.V.


 


F.M. Development B.V.


 


Typhone E-Concepts B.V.


 


F.M. Corporate Communications B.V.


 


61

















 


Part 3


 


US Subsidiary


 


BBY Consulting LLC (50% owned by the BBY Hold
Co Group)


 


62
















 


SCHEDULE 3


 


RESERVED MATTERS


 


Part 1


 


Consolidation Reserved Matters


 


1.             Selecting,
appointing, terminating and setting the compensation (including any bonus,
profit sharing or other incentive scheme) of the CEO, CFO and COO.


 


2.             Establishing
and approving the annual capital expenditure budget of the JV Group in the
ordinary course of business in each Fiscal Year.


 


3.             Establishing
and approving the annual operational and financial budget of the JV Group in
the ordinary course of business in each Fiscal Year.


 


63

















 


Part 2


 


JV Shareholder Reserved Matters


 


The following shall apply in respect of every
member of the JV Group:


 


1.             any material change
in nature of the JV Business;


 


2.             any modification to
the JV Constitutional Documents including any alteration to the rights
attaching to the Shares;


 


3.             increasing the share
capital of JV Co or authorising or issuing any Shares or rights to subscribe
for or convert into or call for the issue of such Shares;


 


4.             redeeming, purchasing
or otherwise acquiring any of the JV Co’s issued Shares;


 


5.             entering into or
amending any contractual arrangement with any Related Party except as provided
for in the Key Agreements and except pursuant to Clause 3.5 (SPA);


 


6.             liquidating,
dissolving or otherwise taking any steps to effect a recapitalisation or
reorganisation of JV Co;


 


7.             selling, leasing,
assigning or charging all or any substantial portion of JV Co’s assets or
undertaking;


 


8.             except in respect of
working capital in the ordinary course of business disposing or acquiring any
asset, undertaking or stock with a value in excess of £25 million in a single
or a number of related transactions;


 


9.             incorporating any new
subsidiary or acquiring any share in any other company;


 


10.           entering into any
joint venture or partnership or non-arm’s-length arrangement with any person;


 


11.           instigating or
settling any litigation proceedings with a value of more than £1 million
(including against a JV Shareholder or Group Company or other party to this
Agreement in respect of a breach of this Agreement), except if a JV Shareholder
is conflicted, when in such circumstances the JV Directors appointed by the
non-conflicted JV Shareholders only shall decide upon such matter;


 


12.           entering into any
lease or licences of any property with an annual rental value of more than £3
million in any Fiscal Year;


 


64

















 


13.           incurring any
indebtedness (except Shareholder Loans and the CPW RCF) of any nature (including
any guarantee or indemnity of any third party liability or obligation) which is
outside the ordinary course of business for more than £25 million except as
specifically provided for in any annual operational and financial budget;


 


14.           subject to paragraph
15 below, making to any party any loans or any other form of credit other than
in the ordinary course of business in excess of £25 million;


 


15.           making any loan or
form of credit to any Related Party;


 


16.           making any material
decisions towards any Exit;


 


17.           changing the
Auditors;


 


18.           amending any Key
Agreement or any other material contract entered into by JV Co from time to
time (such other material contracts being contracts in excess of £1 million in
respect of a single or number of related material contracts);


 


19.           declaring or paying
any dividends or other distributions upon any of the Shares in accordance with
Clause 12 (Dividends);


 


20.           altering the
accounting reference date or changing the accounting policies of any member of
the JV Group;


 


21.           entering into any
factoring agreement in respect of any debts other than in the ordinary course
of business;


 


22.           appointing any
additional JV Directors resulting in the total number of JV Directors being
more than 6 (Six).


 


65

















 


SCHEDULE 4


 


COMPULSORY TRANSFER


 


1.             Compulsory Transfer Events


 


A JV Shareholder (for
the purposes of this Schedule 4, a “Compulsory
Transferor”) shall be obliged to sell its JV Investment in
accordance with the terms of this Schedule 4 if, in relation to any JV
Shareholder or a JV Parent who is not an individual (for the purposes of this
paragraph 1 only, an “Undertaking”):


 


1.1           a petition shall be
presented and advertised for the making of an administration order in relation
to such Undertaking or if an effective resolution is passed for the winding-up
of such Undertaking except for the purpose of a solvent reconstruction or
amalgamation or where such petition has been withdrawn within 20 Business Days
of it being presented; and/or


 


1.2           any encumbrance shall
take possession or an administrative receiver or a receiver shall be validly
appointed over the Undertaking, property and assets of such Undertaking or any
part thereof; and/or


 


1.3           analogous
circumstances have occurred in respect of such Undertaking in any country
whatsoever,


 


each of the events listed in
paragraphs 1.1 to 1.3 above being a “Compulsory
Transfer Event”.


 


2.             Consequences of a Compulsory
Transfer Event


 


2.1           If a
Compulsory Transfer Event occurs the other JV Shareholder not being the
Compulsory Transferor (“Other Shareholder”)
shall be entitled to serve a notice (“Compulsory
Transfer Notice”) within 10 Business Days of the occurrence of such
Compulsory Transfer Event on the Compulsory Transferor requiring the Compulsory
Transferor to transfer all of its JV Investment to the Other Shareholder held
by the Other Shareholders at the time of the Compulsory Transfer Event in
consideration for the payment by the Other Shareholder(s) of:


 


2.1.1        an amount
equal to the par value of the Shares in respect of its Shares; and


 


66

















 


2.1.2        an amount
equal to all outstanding amounts drawn down by the JV Group under the JV
Shareholder Loan provided by the Compulsory Transferor (together with if CPW is
the Compulsory Transferor all outstanding amounts drawn down by the JV Group
under the CPW RCF) to the JV Group (together with accrued, but unpaid, interest
thereon) as at the date of the Compulsory Transfer Event,


 


(together the “Unadjusted Compulsory Disposal Amount”)
such Unadjusted Compulsory Disposal Amount to be increased or decreased by way
of an early prepayment charge or deduction (as the case may be) in respect of
such Shareholder Loans as follows:


 


2.1.3        if the
Unadjusted Compulsory Disposal Amount is less than 50% of the Fair Market Value
of the Compulsory Transferor’s JV Investment, the Other Shareholder shall pay
an additional amount equal to the difference between 50% such Fair Market Value
of the Compulsory Transferor’s JV Investment and the Unadjusted Compulsory
Disposal Amount;


 


2.1.4        if the
Unadjusted Compulsory Disposal Amount is greater than 50% of the Fair Market
Value of the Compulsory Transferor’s JV Investment, the Unadjusted Compulsory
Disposal Amount payable by the Other Shareholder shall be reduced by an amount
equal to the difference between the Unadjusted Compulsory Disposal Amount and
50% of such Fair Market Value of the Compulsory Transferor’s JV Investment,


 


(the total amount
payable to a Compulsory Transferor pursuant to this paragraph 2.1 being the “Compulsory Sale Amount”), provided always
that in no circumstances shall the Compulsory Sale Amount exceed 50% of such
Fair Market Value of the Compulsory Transferor’s JV Investment as at the date
of the Compulsory Transfer Event.


 


2.2           Application of the Compulsory Sale Amount


 


The Compulsory
Transferor hereby agrees that receipt of the Compulsory Sale Amount shall
constitute full and final satisfaction of the Compulsory Transferor’s JV
Investment and, in particular, JV Co’s indebtedness to the Compulsory
Transferor in respect of any outstanding amounts drawn down


 


67

















 


by the JV Group under
the Shareholder Loan provided by the Compulsory Transferor to (together with if
CPW is the Compulsory Transferor all outstanding amounts drawn down by the JV
Group under the CPW RCF) to the JV Group as at the date of the Compulsory
Transfer Event and for the avoidance of doubt the Compulsory Transferor agrees
that no interest shall continue to accrue to it in respect of such indebtedness
from the date of the Compulsory Transfer Event.


 


2.3           In the
event that a Compulsory Transfer Event specified in paragraph 1.2 above
applies, and the Other Shareholder has served a Compulsory Transfer Notice on
the Compulsory Transferor in respect thereof then the Other Shareholder shall
make available to JV Co a Shareholder Loan in an amount equal to the
Shareholder Loan the Compulsory Transferor has opted not to provide. The Other
Shareholder(s) may not revoke a Compulsory Transfer Notice.


 


2.4           With
effect from the service of a Compulsory Transfer Notice:


 


2.4.1        no further Shares
shall be issued or required to be offered to the Compulsory Transferor;


 


2.4.2        the Compulsory
Transferor and any JV Director appointed by the Compulsory Transferor shall be
deemed to have resigned forthwith and forthwith cease to be required in order
to form a quorum at meetings of JV Shareholders and the JV Board (as the case
may be) and the decision of the Other Shareholder or JV Directors or appointed
by the Other Shareholder(s) (as appropriate) on such issues shall in all
cases prevail.  The Compulsory Transferor
shall indemnify JV Co against any and all claims whatsoever that may arise from
any JV Director being deemed to resign in accordance with this paragraph 2.4.2;
and


 


2.4.3        the Compulsory
Transferor shall be deemed to have ceded its right to vote and/or receive
dividends in respect of its Shares in favour of the Other Shareholder.


 


3.             Transfer duties


 


Any transfer duties
payable as a result of any transfer required pursuant to the terms


 


68

















 


of this
Schedule 4 shall be borne by the Compulsory Transferor and if the Other
Shareholder pays any such transfer duties the Compulsory Transferor agrees that
it shall pay to such Other Shareholder an amount equal to such transfer duty
within 5 Business Days of a demand for payment from such Other
Shareholder.


 


69

















 


SCHEDULE 5


 


FAIR MARKET VALUE


 


The following provisions shall apply for the
purposes of determining Fair Market Value:


 


1.             Calculation of Fair Market
Value


 


1.1           This Schedule
outlines the scope and nature of the calculation of Fair Market Value and, if
the JV Shareholders cannot agree Fair Market Value, the appointment of an
independent expert (“Independent Expert”)
to determine Fair Market Value.


 


1.2           In the event a
calculation of Fair Market Value is required in accordance with this Agreement
by the JV Shareholders, any JV Shareholder may notify the other JV Shareholder
(the date or deemed date of receipt of such notice being the “Notification Date”) and the JV
Shareholders will seek to agree a sum equal to Fair Market Value between
themselves within a period of 15 Business Days, or such additional time as
agreed between the JV Shareholders, of the Notification Date (“Initial Consideration Period”).


 


2.             Appointment of Independent
Expert


 


2.1           In the event the JV
Shareholders do not agree a sum equal to Fair Market Value in accordance with paragraph
1.2, they will each use their reasonable endeavours to agree upon the
appointment of the Independent Expert, which will be an investment bank, within
3 Business Days of the expiry of the Initial Consideration Period (“Appointment Period”).


 


2.2           At the commencement
of the Appointment Period, the JV Shareholders must also instruct the Auditors
to select (but not appoint) a suitable investment bank to act as Independent
Expert (including ascertaining the availability of the investment bank to perform
that role).


 


2.3           In the event that the
JV Shareholders are unable to reach agreement upon an Independent Expert within
the Appointment Period, subject to paragraph 11, they shall appoint as
independent expert the suitable investment bank selected by the Auditors for
that purpose pursuant to paragraph 2.2 and that appointment will be made within
two Business Days after the expiry of the Appointment Period.


 


70

















 


3.             Instruction to Independent
Expert


 


Forthwith upon the
appointment of the Independent Expert, the JV Shareholders will instruct the
Independent Expert to calculate and determine in writing the sum which in its
opinion represents the Fair Market Value for the relevant JV Investment in
accordance with the provisions of this Schedule 5.


 


4.             Valuation principles


 


4.1           The Independent
Expert will determine the Fair Market Value of the relevant JV Investment
between a willing buyer and a willing seller with no premium for control or
discount for a minority shareholding taking into account the matters set out in
paragraph 4.3 and such other matters that the Independent Expert considers
appropriate in its reasonable discretion.


 


4.2           The JV Shareholders
may make submissions to the Independent Expert as to the valuation methodology
to be applied in the circumstances giving rise to the valuation of the Fair
Market Value in accordance with their rights to make submissions in paragraph
7.3.


 


4.3           The Fair Market Value
shall be calculated by the Independent Expert in accordance with this
Schedule 5 as follows:


 


4.3.1        for the purposes of
Schedule 4 (Compulsory Transfer)
and Clause 17 (Transfer of a Change of
Control) the Fair Market Value shall be calculated as at the date
(as the case may be) of the Compulsory Transfer Event or the Business Day
immediately prior to the completion of the Change of Control;


 


4.3.2        for the purposes of
Clause 13.1.8 the Fair Market Value shall be calculated as at the day the
Competing Business was acquired;


 


4.3.3        for the purposes of
Clause 20 the Fair Market Value shall be calculated as at the date of the
Acceptance Notice;


 


4.3.4        no addition or
discount shall be made in respect of any effect the Change of Control,
including JV Co being owned by a Competitor, may have on the Fair Market Value;


 


4.3.5        no addition or
discount shall be made to reflect the fact that the JV


 


71

















 


	
   

  	
   

  	
  Investment might
  constitute a minority interest or a majority interest, nor the provision of
  Clause 5.5 (Consolidation Reserved Matters);
  and

  
	
   

  	
   

  	
   

  
	
  4.3.6

  	
   

  	
  no addition or discount
  shall be made to reflect the fact that any licence agreement entered into
  pursuant to Clause 2.2.1 may be terminated or are terminated as a result of
  the Compulsory Transfer Event or the Change of Control.

  



 


5.             Expert not arbitrator


 


The Independent
Expert will act as a third party expert charged with giving a binding
determination and not as an arbitrator, and the Independent Expert’s decision
will be final and binding on the JV Shareholders.


 


6.             Relevant date for purpose of
assessment


 


The relevant date for
the purposes of calculation of Fair Market Value of the relevant JV Investment,
referred to as “the date of valuation” in this Schedule 5, will be the
relevant date referred to in paragraph 4.3 of this Schedule 5.


 


7.             Independent Expert’s due
diligence


 


To perform the
assessment of Fair Market Value, the Independent Expert will be permitted to
conduct due diligence as follows:


 


7.1           review of the
business and financial information of JV Co;


 


7.2           discuss (as the
Independent Expert shall in its sole discretion decide) with the JV
Shareholders and/or the JV Board and/or and JV Management Team the current
operations, financial conditions and positioning within the industry, strategic
guidelines and prospects, including any plans approved in accordance with this
Agreement for expansion in other product areas; and


 


7.3           the Independent
Expert will take account of any written representations made by the JV
Shareholders only where such representations are provided to the Independent
Expert no later than 5 Business Days before the assessment of Fair Market Value
is due under paragraph 9 of this Schedule 5.


 


72

















 


8.             Co-operation with the
Independent Expert


 


Subject to any
principle of law or ruling of any regulatory body to the contrary, the JV
Shareholders will afford as soon as reasonably practicable upon request and to
the Independent Expert all facilities and access to their respective premises,
personal papers, books, accounts, records, returns and other documents as may
be in their respective possession or under their respective control so far as
such records and documents may be reasonably required by the Independent Expert
to make its determination.


 


9.             Timing of determination


 


The Independent
Expert shall be instructed to and will finalise its assessment of Fair Market
Value within 20 Business Days of referral.


 


10.          Cost of Independent Expert


 


Each of the JV
Shareholders will bear the costs and expenses of all advisers, witnesses and
employees retained by it and the costs and expenses of the Independent Expert
will be borne by:


 


10.1         the Compulsory
Transferor, in the case of a Compulsory Transfer Event; and


 


10.2         the JV Shareholders
pro rata to their respective holdings of Shares, in any other case.


 


11.          Terms of engagement


 


The terms of
appointment of the Independent Expert will be agreed upon at the time the
engagement is undertaken.  Failing
agreement on the terms of appointment, the Independent Expert’s reasonable
standard form terms and usual conditions applicable to valuation work will
apply.


 


73
















 


SCHEDULE 6


 


DEED OF ADHERENCE TO SHAREHOLDERS’ AGREEMENT


 


By this deed [I] [we]
[of] [whose registered office is at] o who intend[s] to become the holder[s] of o ordinary Shares of o£[           ]1 each in the issued share capital of [                 ]
a company registered in England and Wales (company number[                ])
whose registered office is at [                      ](“JV Co”) hereby
agree that as and with effect from o [I] [we] will observe, perform and be fully bound by and assume
the benefit of the provisions of a shareholders agreement dated o and made between (1) The Carphone Warehouse Group
plc, (2) Best Buy Co., Inc., (3) Best Buy Distributions Limited
and (4) CPW Distribution Holdings Limited (a copy
of which is attached to this deed [together with copies of [insert details of any instrument modifying the
original agreement]] and has been initialed by [me] [us] for
identification purposes) in all respects as if [I] [we] [was] [were] an
original party to the Shareholders Agreement and [was] [were] referred to
therein as the JV Shareholder.


 


IN WITNESS of which this deed has been executed and delivered on the date hereof


 


	
  EXECUTED (but not delivered until the date

  	
  )

  
	
   

  	
   

  
	
  hereof) as a deed by a director:

  	
   

  
	
   

  	
  )

  
	
   

  	
   

  
	
   

  	
  )

  
	
   

  	
   

  
	
   

  	
  )

  
	
   

  	
   

  
	
  Director

  	
   

  
	
   

  	
   

  
	
  Witness

  	
   

  



 


74

















 


SCHEDULE 7


 


EUROPEAN COUNTRIES


 


Albania


Andorra


Armenia


Austria


Azerbaijan


Belarus


Belgium


Bosnia and Herzegovina


Bulgaria


Croatia


Cyprus


Czech Republic


Denmark


Estonia


Finland


France


Georgia


Greece


Hungary


Iceland


Italy


Kazakhstan


Kosovo


Latvia


Liechtenstein


Lithuania


Macedonia


Malta


Moldova


Monaco


Motenegro


Norway


Poland


Romania


Russia


San Marino


Serbia


Slovakia


Slovenia


Switzerland


Ukraine


 


75

















 


SCHEDULE 8


 


TAX


 


Part A -  Tax Conduct


 


1.             PREPARATION OF TAX DOCUMENTS


 


1.1           Save
as provided below and subject to the provisions of Schedule 7 to the SPA, CPW
(or such professional advisers as CPW may select subject to BBY Distributions’
approval (as to both professional adviser and as to the scope of the service to
be performed) as to independence as defined by the US Securities and Exchange
Commission and/or other US regulatory bodies) shall be responsible for:


 


(a)                                  the preparation, authorisation and submission of all
notices, elections, claims, returns, computations and ancillary information
relating to Tax of each member of the JV Group (the “JV Tax Documents”);


 


(b)                                 the preparation and submission of all correspondence
relating to such JV Tax Documents; and


 


(c)                                  the negotiation and agreement of all matters relevant
to the Tax position of the JV Group,


 


for both periods before and after Closing.


 


1.2           CPW
shall procure (to the best of its endeavours) that no JV Tax Document is
submitted to any tax authority which is not true and accurate in all material
respects.


 


1.3           CPW,
shall not be directly responsible for the matters outlined in paragraphs 1.1
and 1.2 above in respect of the members of the JV Group which are not resident
for tax purposes in the UK in respect of periods commencing on or after
Closing.  However, CPW undertakes that it
shall supervise to the extent it can and support those members of the JV Group
which are not resident for tax purposes in the UK in carrying out their
respective obligations referred to above and, together with BBY Distributions,
shall procure those companies carry out their respective obligations set out in
this Schedule.


 


2.             CARRY BACK OF TAX LOSSES OR OTHER
PREJUDICIAL ACTION


 


2.1           None
of BBY Distributions, CPW or CPW Affiliate shall, unless otherwise agreed, do
any act or thing (including, in particular, the carry back of losses from
accounting periods ending after Closing) after Closing which:


 


(a)           might affect a Company’s liability to make claims or allowances or Reliefs
in respect of any period ending on or prior to the Closing Date; or


 


(b)           would reduce or extinguish any allowance relating to any period ending
on or prior to the Closing Date.


 


2.2           None
of BBY Distributions, CPW or CPW Affiliate shall, unless agreed by them to the
contrary, amend, disregard, withdraw or disclaim any elections, claims or
benefits or disclaim any initial or writing down allowances or any other
capital allowances in respect of any period ending on or prior to the Closing
Date.


 


76

















 


3.             ACCESS TO TAX DOCUMENTS AND RIGHT TO COMMENT


 


3.1           CPW
shall provide or, in respect of the non-UK tax resident members of the JV
Group, procure that there shall be provided BBY Distributions with copies of
all tax returns submitted for each member of the JV Group and any other tax
returns which are required to be submitted in relation to the JV Group within
15 Business Days of the submission of such returns.


 


3.2           BBY
Distributions and CPW (to the extent that it does not already have such access)
shall be afforded access (including the taking of copies) to all JV Tax
Documents and any other information (including information in relation to the
computation of any Tax return) it may require in relation to the Tax position
of any member of the JV Group.


 


3.3           Notwithstanding
paragraph 1.1 above, BBY Distributions shall be entitled to request a draft of
any JV Tax Document from CPW in respect of the UK tax resident members of the
JV Group or from the relevant non-UK tax resident member of the JV Group (where
applicable) and comment on any such JV Tax Document in advance of its
submission, provided that it gives CPW reasonable notice of its intention to
comment on such JV Tax Document.


 


4.             NEGOTIATIONS WITH TAX AUTHORITIES


 


4.1           The
provisions of the Schedule 7 to the SPA shall apply in respect of any notice,
demand, assessment, letter or other document issued or action taken by or on
behalf of a tax authority or any person (including any member of the JV Group)
indicating that any person is or may be placed or sought to be placed under a
Tax liability, being a Tax liability which would give rise to a liability for
the Seller under Schedule 7 to the SPA and in respect of any Group Relief
Claims between the JV Group and any member of the CPW Group.  This provision shall apply in respect of all
other matters (whether relating to pre-Closing or post-Closing periods).


 


4.2           CPW
shall keep BBY Distributions informed of any negotiations with any Tax
Authority regarding any Tax liability of any member of the JV Group or, in
respect of any non-UK resident member of the JV Group, shall procure to the
extent possible that such information is provided.  Before any Material Correspondence is
submitted or Material Agreement is reached with any Tax Authority, draft copies
and details of the Material Correspondence or Material Agreement shall be given
by CPW (or, where applicable CPW shall procure to the extent possible that
those shall be given by the relevant non-UK resident member of the JV Group) to
BBY Distributions at least 15 Business Days (unless the parties agree
otherwise) before the proposed submission of such Material Correspondence or
conclusion of such Material Agreement.


 


4.3           If,
within 15 Business Days of receiving details of Material Correspondence or
proposed Material Agreements referred to in paragraph 4.1, BBY Distributions
makes any representations to CPW, those representations shall (and, in the case
of any non UK resident member of the JV Group, CPW shall procure to the extent
possible that those representations shall), to the extent that they are
reasonable, be reflected in the Material Correspondence or Material Agreement
with the relevant Tax Authority.


 


5.             TAX COMMITTEE


 


5.1           The
JV Tax Committee shall meet at intervals of not more than one calendar
month.  Meetings of the JV Tax Committee
may be held by way of video and/or telephone conferencing.


 


77

















 


5.2           The
JV Tax Committee shall, in good faith, consider the following matters:


 


(a)                                  any dispute or failure to reach agreement in respect
of any matter in this Schedule 9 or any other matter relating to the Tax
position of the JV Group;


 


(b)                                 any proposed transaction, or arrangements or
agreements relating to the JV Group which may have a material impact on the Tax
position of the JV Group or on any BBY Group Company or CPW Group Company in
respect of but not limited to any of the aforementioned companies’ relationship
with a Tax Authority or any liability to Tax of any such company;


 


(c)                                  any tax planning or mitigation proposals which may
have a material impact on the Tax position or the reputation of any member of
the JV Group or on any BBY Group Company or CPW Group Company, or on the
relationship of any such person with any Tax Authority;


 


(d)                                 any material dispute with any Tax Authority in
relation to any member of the JV Group;


 


5.3           All
material recommendations and decisions taken by the JV Tax Committee shall be
communicated to the JV Management Team or JV Board (as agreed by the parties)
in an agreed written report and the JV Management Team or the JV Board (as
appropriate), shall be obliged to follow the recommendations of the JV Tax
Committee save where there are overriding commercial reasons for not doing so
or to do so would not be in the best interests of the shareholders of BBY Hold
Co and/or CPW.


 


5.4           If
the JV Committee, having discussed any matter in good faith, fail to reach
agreement in relation to any matter on Tax, the JV Tax Committee shall refer
the matter for determination by an independent internationally recognised firm
of chartered accountants or Attorneys or Solicitors in the relevant
jurisdiction or jurisdictions in relation to which the dispute arises (the “Expert”).  The Expert shall be appointed by agreement by
the majority of representatives of the JV Tax Committee.  The Expert shall decide the matter in
question as an expert (and not as an arbitrator) and his decision shall be
final, except in the case of manifest error in which case a different Expert
shall be appointed by the agreement by the majority of representatives of the
JV Tax Committee.  Both parties shall
make all relevant information available to the Expert.  The costs of the Expert shall be borne by the
parties in such proportions as the Expert considers to be fair and reasonable
in all the circumstances.


 


Part B - US Tax Provisions


 


1.             U.S. TAX PROVISIONS


 


1.1           In
respect of any periods after Closing, BBY Hold Co may, after consulting with
CPW and taking account of its opinion, choose the U.S. tax classification for
any entity within the JV Group or owned by a member of the JV Group.  In addition, to the extent BBY Hold Co
desires to change the entity classification for an entity, and the only way to
effect that change is to reorganize the entity into a newly created entity, CPW
shall consent to that reorganization, unless CPW can identify a negative tax
consequence to CPW or any other entity within the JV Group as a result of
taking such action.


 


1.2           Under
the terms of the SPA, JV Co was, prior to the Closing Date, and will be
immediately after the Closing Date, considered a partnership for U.S. federal
income tax purposes.  The parties hereby
covenant and agree to refrain from taking any action that is inconsistent with
treating JV Co as a partnership for U.S. federal income tax purposes.


 


78

















 


1.3           JV
Co will make an election under section 6231(a)(1)(B)(ii) of the Code to
have the TEFRA audit provisions of subchapter C of chapter 23 of the Code apply
to JV Co.   BBY Distributions shall be
the “tax matters partner” within the meaning of section 6231 of the Code.


 


1.4           JV
Co’s taxable year shall be the year ended 31 March and for purposes of
determining the net profits, net losses, or any other items allocable to any
period, net profits, net losses, and any such other items shall be determined
on a daily, monthly, or other basis, as determined by the tax matters partner
using any permissible method under section 706 of the Code and the Treasury
Regulations issued thereunder.


 


1.5           The
income, gains, taxes, deductions and credits of the JV Co shall, except as
otherwise provided herein, be allocated to each of the JV Shareholders for U.S.
federal income tax purposes in proportion to the Ordinary Shares owned by each
JV Shareholder.


 


1.6           In
accordance with section 704(c) of the Code and the Treasury Regulations
thereunder, income, gain, loss, and deduction with respect to any property
contributed to the capital of JV Co shall, solely for U.S. federal income tax purposes,
be allocated among the JV Shareholders so as to take account of any variation
between the adjusted basis of such property to the JV Co for U.S. federal
income tax purposes and its initial Book Value. 
In the event that the Book Value of any asset is subsequently adjusted
in accordance with subparagraph (b) or subparagraph (d) of the
definition of Book Value, any allocation of income, gain, loss, and deduction
with respect to such asset shall thereafter take account of any variation
between the adjusted tax basis of the asset to the JV Co and its Book Value in
the same manner as under section 704(c) of the Code and the Treasury
Regulations promulgated thereunder.


 


(a)                                  Except as provided in paragraph 1.6(b), below, JV Co
shall elect to apply the “traditional method” described in Treas. Reg. §
1.704-3(b) with respect to any contributed property or any property whose
Book Value is subsequently adjusted pursuant to subparagraph (b) or
subparagraph (d) of the definition of Book Value.


 


(b)                                 Notwithstanding the immediately preceding sentence,
the parties agree and understand that a section 754 election was made for JV Co
and applied to the sale of the 50% interest in the JV Co that occurred on the
closing of the SPA.  As a result of that
election, BBY Distributions was entitled to increase the basis in one-half of
the property owned by JV Co for U.S. federal income tax purposes.  The parties hereby agree that JV Co shall
elect to apply the “remedial method” described in Treas. Reg. §1.704-3(d) with
respect to any asset subject to section 197(f) of the Code for U.S.
federal income tax purposes.


 


(c)                                  Allocations pursuant to this paragraph 1.6 are solely
for purposes of U.S. federal, state and local taxes and shall not affect, or in
any way be taken into account in computing, any JV Shareholder’s share of net
profits, net losses, or distributions pursuant to any provision of this
Agreement.


 


1.7           If
any gain recognized on the disposition of the JV Co’s property represents “recapture”
of previously allocated deductions by virtue of the application of Section 1245
of the Code or Section 1250 of the Code (“Recapture Gain”), such Recapture
Gain shall be allocated, solely for income tax purposes, in accordance with
Treas. Reg. §1.1245-1(e)(2) and Treas. Reg. § 1.1250-1(f).


 


1.8           Tax
credits and tax credit recapture and any similar items shall be allocated
(solely for US. federal income tax purposes) among the JV Shareholders in a
manner determined by the tax matters member, provided such allocation is in
compliance with the Code and


 


79

















 


regulations issued pursuant thereto (including,
without limitation, Treas. Reg. § 1.704-1(b)(4)(ii)).


 


1.9           CPW
undertakes that it will not, and undertakes that it will procure that each CPW
Group Company and member of the JV Group will not, take any action which so far
as it is aware could result in any income, profit or gains of any member of the
JV Group (other than the US Subsidiary) or any BBY Group Company being subject
to Tax in the US.


 


1.10         The
parties acknowledge and agree that, by virtue of BBY Distribution’s ownership
of the JV Group, certain U.S. tax and information filings will have to be
prepared for the members of the JV Group as required under the Code for which
CPW will have responsibility under paragraph 1.1 of Part A of Schedule
8.  As such, the parties agree to
cooperate to share such information as is required in order to enable the
timely filing of those returns.


 


1.11         Where
under this paragraph any member of the JV Group is required to take, enter into
election or take any other action for US tax purposes, BBY Hold Co shall set
out in writing any such action that is required and give the relevant member of
the JV Group reasonable notice of such action.


 


1.12         BBY
Hold Co shall indemnify, or procure that the relevant JV Co or any member of
the CPW Group is indemnified in respect of any Tax liability incurred by any
member of the JV Co Group or the CPW Group as a result of taking such action.


 


1.13         BBY
Distributions agrees to consult with CPW to the extent the provisions in this Part B
cause any UK tax or other non-US tax issues for JV Co or the JV Group and BBY
Distributions and CPW will work together to ensure that the JV Co and the JV
Group remain as tax efficient as possible; provided that the provisions in this
Part B shall not force the JV Co or the JV Group into actions that cause
material tax inefficiencies for any of the relevant companies outside the US.


 


Part C - Definitions


 


“Book Value” means with respect to any asset, the asset’s adjusted
basis for federal income tax purposes, except as follows:


 


(a)           The
initial Book Value of any asset contributed by a JV Shareholder to the JV Co
shall be the gross fair market value of such asset, and such value shall be
determined by the tax matters partner.


 


(b)           The
Book Values of all JV Co assets shall be adjusted to equal their respective
gross fair market values, as determined by the tax matters partner, as of the
following times: (i) the acquisition of any additional interest in the JV
Co by any new or existing JV Shareholder either in exchange for more than a de minimis capital contribution or in
exchange for the provision of services for the benefit of the JV Co; (ii) the
distribution by JV Co to a JV Shareholder of more than a de minimis amount of JV Co property,
unless all JV Shareholders receive simultaneous distributions of undivided
interests in the distributed property in proportion to their interests in the
JV Co; and (iii) the liquidation of the JV Co within the meaning of Treas.
Reg. § 1.704-1(b)(2)(ii)(g).


 


(c)           The
Book Value of any JV Co asset distributed to any JV Shareholder shall be
adjusted to equal the gross fair market value, as determined by the tax matters
partner, of such asset on the date of distribution.


 


(d)           The
Book Values of JV Co assets shall be increased (or decreased) to reflect any
adjustments to the adjusted basis of such assets pursuant to sections 734(b) or
743(b) of the Code, but only to the extent that such adjustments are taken
into account in determining capital accounts pursuant to Treas. Reg. §
1.704-1(b)(2)(iv)(m).


 


80

















 


If the Book Value of an asset has been
determined or adjusted pursuant to subparagraphs (a), (b), or (d), such Book
Value shall thereafter be adjusted by the depreciation or amortization taken
into account with respect to such asset for purposes of computing net profits
and net losses;


 


“Code” means the United States Internal Revenue Code of
1986, as amended;


 


“JV Tax Committee” means the tax committee consisting of two
representatives of  BBY Distributions and
two representatives of CPW or such number or representatives of BBY
Distributions  and CPW as CPW and BBY
Distributions agree as long as there are always the same number of representatives
of BBY Distributions and CPW (including a secretary to be appointed by
agreement between the parties);


 


“Material Agreement” means any agreement with any Tax Authority which may
be of material importance to any member of the JV Group or any BBY Group
Company as regards the relationship with any Tax Authority, or the liability to
Tax, of any member of the JV Group or any BBY Group Company;


 


“Material Correspondence” means any correspondence with any Tax Authority which
may be of material importance to any member of the JV Group or any BBY Group
Company as regards the relationship with any Tax Authority, or the liability to
Tax, of any member of the JV Group or any BBY Group Company;


 


“Relief” has the meaning given in Schedule 7 to the SPA.


 


81

















 


EXECUTION
PAGE


 


EXECUTED
AND DELIVERED by the parties as a
deed and witnessed on the date hereof.


 


	
  EXECUTED as a DEED
  by

  	
   

  
	
   

  	
   

  
	
  THE CARPHONE WAREHOUSE 

  	
   

  
	
   

  	
   

  
	
  GROUP PLC

  	
   

  
	
   

  	
   

  
	
  acting
  by:

  	
  Director
  /s/ ROGER TAYLOR  

  
	
   

  	
   

  
	
   

  	
  Director/Secretary
  /s/ TIM MORRIS

  
	
   

  	
   

  
	
  EXECUTED as a DEED
  by

  	
   

  
	
   

  	
   

  
	
  CPW
  RETAIL HOLDINGS

  	
   

  
	
   

  	
   

  
	
  LIMITED

  	
   

  
	
   

  	
   

  
	
  acting
  by:

  	
  Director
  /s/ ROGER TAYLOR

  
	
   

  	
   

  
	
   

  	
  Director/Secretary
  /s/ TIM MORRIS

  
	
   

  	
   

  
	
  EXECUTED as a DEED
  by

  	
   

  
	
   

  	
   

  
	
  BEST BUY
  CO., INC.

  	
   

  
	
   

  	
   

  
	
  acting
  by:

  	
  Director
  /s/ ROBERT A. WILLETT

  
	
   

  	
   

  
	
   

  	
  Director/Secretary
  /s/ ROBERT A. WILLETT

  
	
   

  	
   

  
	
  EXECUTED as a DEED
  by

  	
   

  
	
   

  	
   

  
	
  BEST BUY DISTRIBUTIONS LIMITED  

  	
   

  
	
   

  	
   

  
	
  acting
  by:

  	
  Director
  /s/ ROBERT A. WILLETT 

  
	
   

  	
   

  
	
   

  	
  Director/Secretary
  /s/ ROBERT A. WILLETT

  



 


82