Document:

gpxm8k20100125ex10-1.htm

    
      

      

    

    Exhibit 10.1

     

    
      EMPLOYMENT
SEPARATION AND SEVERANCE AGREEMENT

      

      

      This
Employment Separation and Severance Agreement (the “Separation Agreement”) is
made effective as of January 19, 2010, by and between Golden Phoenix Minerals,
Inc., a Nevada corporation (the "Company") and David A. Caldwell, an individual
(the "Employee").

      

      RECITALS

      

      WHEREAS, pursuant to a written
employment agreement between the Company and Employee dated February 27, 2006,
as amended by that certain Addendum to Employment Agreement dated January 31,
2007, the Company has employed the Employee as its Chief Executive Officer
(“CEO”) effective as of January 31, 2007 (collectively, the “Employment
Agreement”);

      

      WHEREAS, the Employee also serves on
the Company’s Board of Directors (“Board”);

      

      WHEREAS, the Company and the Employee
now desire to terminate the Employment Agreement by mutual agreement and
Employee further wishes to tender his resignation from his position as CEO of
the Company and from the Board, effective as of 5:00 p.m. Pacific time, on
February 1, 2010 (the “Termination Date”);

      

      WHEREAS, the Company is currently
indebted to the Employee for various financial obligations, including, but not
limited to, those certain deferred unpaid salary amounts and director’s fees,
accrued unpaid expenses, principal and accrued interest due on that certain loan
made by Employee to the Company and one year of Employee’s base salary in such
amount as would be due pursuant to the terms of the Employment
Agreement;

      

      WHEREAS, due to the Company’s lack of
immediate access to the capital and credit markets as a result of the current
global economic difficulties, the Company is currently negotiating mutually
agreeable settlements and discounts with all of its creditors;

      

      WHEREAS, pursuant to the terms of that
certain non-binding Term Sheet entered into by the Company and Employee on
January 12, 2010 (“Term Sheet”), the Company and Employee have agreed to certain
mutually beneficial separation and severance terms as a compromise and
settlement in full of all amounts, obligations and indebtedness owed by the
Company to the Employee as well as a mutual release of any and all claims either
party may have against the other.

      

      NOW THEREFORE, in consideration of the
above and the mutual promises, covenants and conditions contained herein, and
other good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      

      AGREEMENT

      

      1.       
     Employment.  The
Company and the Employee hereby agree to mutually terminate the Employment
Agreement and sever their employment relationship effective on the Termination
Date pursuant to the terms and conditions set forth in this Separation
Agreement.

      

      2.        
    Resignation.  The
Employee shall cease functioning in the position of CEO for the Company, as well
as a member of the Board, and in any other position that he may hold or be
construed to hold with the Company or its affiliates, and shall cease to be an
employee for the Company and its affiliates, effective on the Termination
Date.  As of the Termination Date, the Employee hereby tenders
resignation, without cause, as the Company’s CEO, a member of the Board and as
any other position that the Employee may hold, or may be construed to hold with
the Company or its affiliates.

      

      3.       
     Severance.  All
payments of every description in this Section 3 shall be subject to the
customary withholding tax and other employment taxes as required with respect to
compensation paid to the Employee.  Employee acknowledges and agrees
that the payments and agreements set forth in this Section 3 shall constitute
payment in full of all monies owed to Employee, and the Company is not obligated
to provide any further severance in accordance with paragraph 4.5 or any other
section of the Employment Agreement.

      

      3.1.    
     Cash.  The Company
shall make cash payments to Employee in immediately available funds as
follows:

      

      a.           Initial
Payment.  The Company shall make an initial payment to Employee
of Twelve Thousand Five Hundred Dollars ($12,500) upon the signing of the Term
Sheet, receipt of which is hereby acknowledged.

      

      b.           Signing
Payment.  Immediately upon the signing of this Separation
Agreement by both parties, the Company shall make a further payment to Employee
of Twelve Thousand Five Hundred Dollars ($12,500).

      

      c.           Subsequent
Payment.  Upon the earlier of the Company’s closing of either
(i) a transaction involving the Company’s Mineral Ridge mining property, or (ii)
a financing by a third party involving an infusion of working capital to the
Company of at least $250,000, the Company shall make a payment to Employee of
Twenty Thousand Three Hundred Seventy-Eight Dollars and 57/100 ($20,378.57) (the
“Subsequent Payment”).

      

      3.2.    
     Promissory
Note.  The Company shall, as soon as reasonably practicable,
issue Employee an unsecured promissory note (the “Note”), in the principal
amount of Three Hundred Sixty-Six Thousand Six Hundred Twenty-Three Dollars and
32/100 ($366,623.32), such Note to accrue interest at a rate of 2.0% per annum,
with a maturity date twenty-four (24) months from the date of this Separation
Agreement.  Employee hereby agrees that the Note shall be forgiven in
its entirety and cancelled in the event the Company agrees, prior to the Note’s
maturity, to proceed with the purchase of an asset (project) owned by the
Employee and submitted through NewCo (as defined and further described below)
and the parties enter into a definitive agreement with respect to such
project.

      
        
           

        

        
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      3.3.          New Company Interest. Employee
shall, as soon as reasonably practicable, form a new company, contemplated by
the parties to be a Nevada limited liability company (“NewCo”), which shall be
formed for the purposes of engaging in mineral exploration and development, and
Employee shall act as Chief Executive Officer and Exploration Geologist of
NewCo.

      

      a.           Issuance of NewCo
Interest.  Immediately upon the formation of NewCo, NewCo shall
issue the Company that number of shares or membership interests, as applicable,
of NewCo representing a twenty-five percent (25%) ownership interest in NewCo
(the “NewCo Interest”) in exchange for ongoing monthly cash payments of Seven
Thousand Five Hundred Dollars ($7,500) (“NewCo Payments”), such NewCo Payments
to commence 30 days after the formation of NewCo and continue on a monthly basis
thereafter for a period of twenty-four (24) months, all as to be further
detailed in a contribution agreement contemplated to be entered into by and
between the Company and NewCo (“Contribution Agreement”).  The NewCo
Payments shall be under the sole control and discretion of Employee in his
capacity as CEO of NewCo, to use for the benefit of NewCo.  The
Company shall have no further financial or other obligations to NewCo except as
expressly agreed to in writing.

      

      b.           NewCo Mineral
Projects.  Employee hereby agrees to use his best commercially
reasonable efforts in his capacity as CEO of NewCo to identify, locate and
review commercially viable exploration and mining projects in order to acquire,
sell or joint venture such properties with third parties, with the Company to
have a right of first refusal as described below.  For the sake of
clarity, the parties hereby acknowledge that as of the date of this Separation
Agreement, neither party has identified any such property intended to be the
basis of such future transaction.  The Company shall have a right of
first refusal to negotiate with NewCo for the purchase of any such mining,
mineral or exploration property rights acquired by NewCo (the “Right of First
Refusal”) as follows, all of which shall be subject to definitive agreements
between the Company and NewCo to be executed upon NewCo’s
formation:

      

      (i)           Notice.  NewCo shall
provide Company with written notice (“Notice”) stating (A) NewCo’s bona fide
intention to recommend, broker, joint venture, sell or otherwise transfer the
subject property or portions thereof (“Offered Property”); (B) the name and
address of each proposed purchaser or other transferee (the “Proposed
Transferee”), (C) the bona fide cash price or other consideration for which
NewCo proposes to transfer the Offered Property (the “Offered Price”), and (D)
that NewCo acknowledges the Notice is an offer to transfer the Offered Property,
or any rights therein, to the Company pursuant to the Company’s Right of First
Refusal at the Offered Price as provided for in this Agreement;

      

      (ii)           Exercise of Right of First
Refusal.  At any time within thirty (30) days after the date of
the Notice, the Company may, by giving written notice to NewCo, elect to
participate in the purchase or transfer of all or some portion of the Offered
Property proposed to be transferred to any one or more of the Proposed
Transferees named in the Notice, on terms at or more favorable than the terms
set forth in the Notice.

      
        
           

        

        
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      (iii)           Purchaser’s Right to
Transfer.  If the Company purchases less than all of the
Offered Property as provided in this Section, then NewCo may sell or otherwise
transfer such remaining portion of the Offered Property to each Proposed
Transferee at the Offered Price or at a higher price, provided that (A) such
sale or other transfer is consummated within one hundred twenty (120) days after
the date of the Notice.

      

      3.4.          Conversion of Amounts Owed into
Company Common Stock.  Amounts owed to Employee pursuant to
this Section 3 may be converted into shares of Company common stock under
certain circumstances as set forth below and upon the following terms and
conditions:

      

      a.           Conversion of
Note.  The Note to be issued to Employee pursuant to Section
3.2 shall, by its terms and to the extent of an outstanding balance of principal
and interest, be convertible into shares of Company common stock as follows: (i)
on the one (1) year anniversary of the date of the Note, the Employee may elect
to convert up to fifty percent (50%) of the then outstanding balance of
principal and interest into such number of shares of Company common stock at a
conversion rate of 16.7 shares of Company common stock for each $1.00 of
principal and interest to be converted; and (ii) on the Note’s stated maturity
date, the Employee may elect to convert any remaining outstanding balance of
principal and interest into such number of shares of Company common stock at a
conversion rate of 10 shares of Company common stock for each $1.00 of principal
and interest to be converted.

      

      b.           Conversion of NewCo
Payments.  In the event the Company is unable or fails to make
the NewCo Payments when and as due pursuant to Section 3.3(a) for three (3)
consecutive months, such accrued sums due and owing may, at the option of NewCo,
be convertible into such number of shares of Company common stock at a
conversion rate to be determined by dividing the total amount due and elected by
NewCo to be converted by the 20-day trailing average closing price of the
Company’s common stock as quoted by the OTC Bulletin Board based on the date of
the conversion election.  In the event of issuance shares carrying a
Rule 144 Legend a 30% discount to the 20-day trailing average will be applied
when calculating the number of shares to be issued.

      

      c.           Conversion upon
Termination.  Notwithstanding anything herein to the contrary,
in the event the parties mutually agree to terminate this Separation Agreement
prior to the payment of all amounts owed under this Section 3, any such sums,
including, but not limited to, the Subsequent Payment, the Note and the NewCo
Payments, shall automatically be converted into such number of shares of Company
common stock at a conversion rate to be determined by dividing the total amount
due and unpaid pursuant to Section 3 herein by the 20-day trailing average
closing price of the Company’s common stock as quoted by the OTC Bulletin Board
based on the date of termination.

      

      3.5.           Stock Option
Grants.  Any unvested portion of the Employee’s stock options
outstanding as of the Termination Date shall vest immediately upon the
Termination Date, and shall otherwise be subject to the provisions and terms
thereof.

      
        
           

        

        
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      3.6.          Purchase of Company
Stock.  The Company further acknowledges that additional
amounts in Expenses ($4,807.74), Director’s fees ($5,000.00) and truck rental to
Mineral Ridge ($4,320.00) through the date of resignation will be held in
reserve to offset the $11,835.00 for the purchase of the 1.5MM shares of stock
that it was to have issued on May 7, 2009 under an engagement contract dated the
same day.  Any amounts owing (or in credit) to complete the $11,835.00
purchase will be paid within thirty (30) days of the Effective Date and the
stock certificate shall be issued at that time.

       

      4.       
     Release of
Liability.  The Employee acknowledges that he enters into this
Separation Agreement freely and voluntarily, and agrees as follows:

      

      4.1.          Title VII
Claims.  The Employee acknowledges that Title VII of the Civil
Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Americans With
Disabilities Act, as amended, the Age Discrimination in Employment Act of 1967,
the Vietnam Era Veterans Readjustments Assistance Act of 1974, the Federal
Family and Medical Leave Act of 1993, as amended, and other state and local laws
provide the right to an employee to bring charges, claims or complaints against
an employer if the employee believes he has been discriminated against on a
number of bases, including but not limited to race, ancestry, color, religion,
sex, marital status, national origin, age, status as a veteran of the Vietnam
era, request or need for family or medical leave, physical or mental disability,
medical condition or sexual preference.  The Employee, with full
understanding of the rights afforded him under these and other federal, state
and local laws, agrees that he will not file, or cause to be filed against the
Company, any charges, complaints, or actions based on any alleged violation of
these federal, state and local laws, or any successor or replacement federal or
state laws.  The Employee hereby waives any right to assert a claim
for relief available under these federal, state and local laws including, but
not limited to, back pay, attorneys' fees, damages, reinstatement, or injunctive
relief, which the Employee may otherwise recover based on any alleged violation
of these federal, state and local laws, or any successor or replacement federal,
state or local laws.

      

      4.2.          Release of
Claims.  In exchange for the promises and covenants set forth
herein, the Employee hereby releases, acquits, and forever discharges the
Company, its parents and subsidiaries, and their officers, directors, agents,
servants, employees, attorneys, shareholders, partners, successors, assigns,
affiliates, customers, and clients of and from any and all claims liabilities,
demands, causes of action, costs, expenses, attorneys' fees, damages,
indemnities and obligations of every kind and nature, in law, equity, or
otherwise, known and unknown, suspected and unsuspected, disclosed and
undisclosed (“Claims”), (including but not limited to any federal, state or
local law or cause of action including, but not limited to, the National Labor
Relations Act, Title VII of the Civil Rights Act of 1964, as amended, the Civil
Rights Act of 1991, the Americans With Disability Act, as amended, the Federal
Family and Medical Leave Act of 1993, as amended, the Vietnam Era Veterans
Readjustment Assistance Act of 1974, and state and local laws, any allegation of
wrongful termination and any claim arising out of the Constitution of the State
of Nevada; contract law; wrongful discharge; discrimination; harassment; fraud;
defamation; emotional distress; and breach of the implied covenant of good faith
and fair dealing), but only to the extent that such Claims directly or
indirectly arise out of or are in any way connected with: (a) the Company’s
employment of the Employee, (b) the termination of that employment, (c) the
Employee’s tenure as a member of the Board; (d) the Company’s performance of its
obligations as the Employee’s former employer; (e) claims or demands related to
salary, bonuses, commissions, (f) vacation pay, fringe benefits, expense
reimbursements, severance pay, or any form of compensation, or (g) repayment of
loans made by Employee to the Company. The Employee agrees to indemnify and hold
the Company and its shareholders, directors, officers, agents and employees
harmless from any liabilities, debts, demands, causes of action, injuries,
costs, attorneys' fees or damages of any kind arising out of the Employee’s
action or inactions, whether negligent or otherwise, with respect to, or in
connection with this Separation Agreement or the Employment
Agreement.

      
        
           

        

        
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      4.3.          ADEA
Waiver.  Employee acknowledges that he is knowingly and
voluntarily waiving and releasing any rights Employee may have under the Age
Discrimination in Employment Act of 1967, as amended (“ADEA”). Employee also
acknowledges that the consideration set forth in Section 3 given for the waiver
and release pursuant to this Agreement is in addition to anything of value to
which Employee was already entitled.  Employee further acknowledges
that he has been advised by this Agreement in writing, as required by the ADEA,
that:

      

      a.           his
waiver and release does not apply to any rights or claims that may arise after
the execution date of this Agreement;

      

      b.           he
has the right to consult with an attorney prior to executing this
Agreement;

      

      c.           he
has twenty-one (21) days to consider this Agreement (although Employee may
choose to waive this provision by voluntarily executing this Agreement
earlier);

      

      d.           he
has seven (7) days following the execution of this Agreement to revoke the
Agreement; and

      

      e.           this
Agreement will not be effective until the date upon which the revocation period
has expired, which will be the eighth (8th) day after this Agreement is executed
by both parties.

      

      5.         
   Confidential
Information.  The Employee acknowledges that during the course
of his duties with the Company, he handled confidential information of the
Company and its affiliates.  The Employee agrees he will retain in the
strictest confidence all confidential matters which relate to the Company or its
affiliates, including, without limitation, pricing lists, business plans,
financial projections and reports, business strategies, internal operating
procedures and other confidential business information from which the Company
derives an economic or competitive advantage or from which the Company might
derive such advantage in its business, whether or not labeled "secret" or
"confidential," and not to disclose directly or indirectly or use by him in any
way, either during the term of this Separation Agreement or at any time
thereafter except as permitted by law.

      
        
           

        

        
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      6.  
          Trade Secrets.  The
Employee shall not disclose to any others or take or use for the Employee's own
purposes or purposes of any others at any time, any of the Company's trade
secrets, including without limitation, confidential information; customer lists;
information concerning current or any future and proposed work, services,
properties or products; the fact that any such work, services, properties or
products are planned, under consideration, or in production, as well as any
description thereof, computer programs or computer software.  The
Employee agrees that these restrictions shall also apply to (i) trade secrets
belonging to third parties in the Company's possession and (ii) trade secrets
conceived, originated, discovered or developed by the Employee during the term
of his employment.

      

      7.         
   Inventions;
Ownership Rights.  The Employee agrees that all ideas,
techniques, inventions, systems, formulas, discoveries, technical information,
programs, prototypes and similar developments ("Developments") developed,
created, discovered, made, written or obtained by him in the course of or as a
result, directly or indirectly, of performance of his duties to the Company, and
all related industrial property, copyrights, patent rights, trade secrets and
other forms of protection thereof, shall be and remain the property of the
Company.  The Employee agrees to execute or cause to be executed such
assignments and applications, registrations and other documents and to take such
other action as may be requested by the Company to enable the Company to protect
its rights to any such Developments.

      

      8.       
     No Disparagement of the Company or
Employee.  The Employee agrees that he
will not make any statements which are or may appear derogatory about or
disparaging to the Company or any of its agents, officers, directors or other
employees, except as may be required by court order or applicable
law.  The Company also agrees it
will not make any statements which are or may appear derogatory about or
disparaging to the Employee, except as may be required by court order or
applicable law.

      

      9.        
    Non-Interference; No
Solicitation.  The Employee agrees not to interfere with any of
the Company's contractual obligations with others.  Furthermore, the
Employee agrees during a period of eighteen (18) months commencing on the
Termination Date, to not, without the Company's express written consent, on his
behalf or on behalf of another: (i) contact or solicit the business of any
client, customer, creditor or licensee of the Company, (ii) hire employees of
the Company, other than clerical employees, or (iii) solicit the business of any
client, customer or licensee of the Company.  The Employee
acknowledges that this section 9 is a reasonable and necessary measure designed
to protect the proprietary information of the Company.

      

      10.           Return Company
Property.  The Employee agrees that he will promptly, within
two (2) business days of the Termination Date, return to the Company, all the
Company's or its affiliates' memoranda, notes, records, reports, manuals,
drawings, designs, computer files in any media and other documents (including
extracts and copies thereof) relating to the Company or its affiliates, and all
other property of the Company.

      
        
           

        

        
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      11.           Actions Contrary to
Law.  Nothing contained in this Separation Agreement shall be
construed to require the commission of any act contrary to law, and whenever
there is any conflict between any provision of this Separation Agreement and any
statute, law, ordinance, or regulation, contrary to which the parties have no
legal right to contract, then the latter shall prevail; but in such event, the
provisions of this Separation Agreement so affected shall be curtailed and
limited only to the extent necessary to bring it within legal
requirements.

      

      12.           Miscellaneous.

      

      12.1.        Notices.  All
notices to be given by either party to the other shall be in writing and may be
transmitted by personal delivery, facsimile transmission, overnight courier or
mail, registered or certified, postage prepaid with return receipt requested;
provided, however, that notices
of change of address or facsimile number shall be effective only upon actual
receipt by the other party.  Notices shall be delivered at the
following addresses, unless changed as provided for herein:

      

      
        	
                To
      the Employee:

              	
                David
      A. Caldwell

                165
      West Oak Street

                Elko,
      NV 89801

                 

              
	
                To
      the Company:

              	
                Board
      of Directors

                Golden
      Phoenix Minerals, Inc.

                1675
      East Prater Way, Suite 102

                Sparks,
      Nevada 89434

                Fax:  775-853-5010

              

      

      

      12.2.        Entire
Agreement.  This Separation Agreement supersedes any and all
agreements, either oral or written, between the parties hereto with respect to
its subject matter, including, but not limited to, the Employment Agreement and
the Term Sheet.  Each party to this Separation Agreement acknowledges
that no representations, inducements, promises, or agreements, orally or
otherwise, have been made by any party or anyone acting on behalf of any party,
which are not embodied herein, and that no other agreement, statement, or
promise not contained in this Separation Agreement shall be valid or
binding.  Any modification of this Separation Agreement will be
effective only if it is in writing and signed by both parties.

      

      12.3.        Governing Law.  This
Separation Agreement shall be governed by and construed in accordance with the
laws of the State of Nevada.

      

      12.4.        Jurisdiction and
Venue.  The parties hereby consent to the exclusive
jurisdiction of the state and federal courts sitting in Nevada with the sole and
exclusive venue of Washoe County in any action on a claim arising out of, under
or in connection with this Separation Agreement or the transactions contemplated
by this Separation Agreement, provided such claim is not required to be
arbitrated pursuant to Section 12.5.  The parties further agree that
personal jurisdiction over them may be effected by notice as provided in Section
12.1, and that when so made shall be as if served upon them personally within
the State of Nevada.

      
        
           

        

        
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      12.5        Arbitration.  Any
controversy, dispute or claim arising out of or relating to this Separation
Agreement or the Employment Agreement terminated by this Separation Agreement,
performance hereunder or breach thereof, which cannot be amicably settled, shall
be settled by arbitration conducted in Washoe County unless some other location
is mutually agreed to in a writing signed by both parties.  Said
arbitration shall be conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association at a time and place within the
above-referenced location as selected by the arbitrator(s).

      

      a.           Initiation of
Arbitration.  After seven (7) calendar days prior written
notice to the other, either party hereto may formally initiate arbitration under
this Separation Agreement by filing a written request therefore, and paying the
appropriate filing fees, if any.

      

      b.           Hearing and Determination
Dates.  The hearing before the arbitrator shall occur within
thirty (30) calendar days from the date the matter is submitted to
arbitration.  Further, a determination by the arbitrator shall be made
within forty-five (45) calendar days from the date the matter is submitted to
arbitration.  Thereafter, the arbitrator shall have fifteen (15)
calendar days to provide the parties with his decision in
writing.  However, any failure to meet the deadlines in this paragraph
will not affect the validity of any decision or award.  The
arbitrator’s written decision shall summarize the issues and resolution of the
controversy, and the decision shall be based solely upon the law governing the
claims and defenses pleaded by the parties.  The arbitrator shall have
the authority to award any relief available in a court of law.

      

      c.           Binding Nature of
Decision.  The written reasoned decision of the arbitrator
shall be binding on the parties without the right to any writ of review, appeal,
or court review thereof.  Judgment thereon shall be entered in a court
of competent jurisdiction.

      

      d.           Injunctive
Actions.  Nothing herein contained shall bar the right of
either party to seek to obtain injunctive relief or other provisional remedies
against threatened or actual conduct that will cause loss or damages under the
usual equity rules including the applicable rules for obtaining preliminary
injunctions and other provisional remedies.

      

      e.           Fees and Costs.  The
cost of arbitration, including the fees of the arbitrator, shall initially be
borne by the Company; provided, the prevailing party (as determined by the
arbitrator) shall be entitled to recover all such costs allowed by law, in
addition to attorneys’ fees and other costs, in accordance with Section 12.6 of
this Separation Agreement.

      

      12.6.        Attorneys' Fees.  In the event of any
litigation, arbitration, or other proceeding arising out of this Separation
Agreement, or the parties’ performance as outlined herein, the prevailing party
shall be entitled to an award of costs, including an award of reasonable
attorneys’ fees.  Any judgment, order, or award entered in any such
proceeding shall designate a specific sum as such an award of attorneys’ fees
and costs incurred.  This attorneys’ fee provision is intended to be
severable from the other provisions of this Separation Agreement, shall survive
any judgment or order entered in any proceeding and shall not be deemed merged
into any such judgment or order, so that such further fees and costs as may be
incurred in the enforcement of an award or judgment or in defending it on appeal
shall likewise be recoverable by further order of a court or panel or in a
separate action as may be appropriate.

      
        
           

        

        
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      12.7.        Amendment,
Waiver.  No amendment or variation of the terms of this
Separation Agreement shall be valid unless made in writing and signed by the
Employee and the Company.  A waiver of any term or condition of this
Separation Agreement shall not be construed as a general waiver by the
Company.  Failure of either the Employee or the Company to enforce any
provision or provisions of this Separation Agreement shall not waive any
enforcement of any continuing breach of the same provision or provisions or any
breach of any provision or provisions of this Separation Agreement.

      

      12.8.        Ambiguities.  This
Separation Agreement shall not be subject to the rule that any ambiguities in
the contract are to be interpreted against the drafter of the Separation
Agreement.

      

      12.9.        Counterparts.  This Separation
Agreement may be signed in one or more counterparts (by facsimile or otherwise),
all of which shall be treated as one and the same instrument.

      

      IN
WITNESS WHEREOF, the undersigned have executed this Separation Agreement
effective as of the date first hereinabove written.

      

      
        	 	 
      	
                THE
      EMPLOYEE

              
	 	 	 
	 	 	 
	 	 	 
	 	
                
                  Date:      
      1/19/10     

                

              	
                By:      /s/ David A.
      Caldwell                       

                David A.
  Caldwell

              
	 	 	 
	 	 	 
	 	 	 
	 	 
      	
                THE
      COMPANY

              
	 	 	 
	
                 

                 

                 

                 

                 

                 

              	
                 

                 

                 

                Date:      
      1/25/10     

              	
                Golden
      Phoenix Minerals, Inc.

                 

                 

                By:      /s/ Robert P.
      Martin                       
       

                Robert P. Martin,
      President

              

      

      

      

      

      10Exhibit 4.1

 

JANUARY 2010

 

 

BEST BUY EUROPE
DISTRIBUTIONS LIMITED

 

 

BEST BUY DISTRIBUTIONS
LIMITED

 

 

THE CARPHONE WAREHOUSE
GROUP PLC

 

 

NEW CARPHONE WAREHOUSE
PLC

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  

 

£125,000,000

 

FACILITY AGREEMENT

 

	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Freshfields
Bruckhaus Deringer LLP

65 Fleet Street

London EC4Y 1HS

 

 

CONTENTS

 

	
  CLAUSE

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  DEFINITIONS AND INTERPRETATION

  	
   

  	
  1

  
	
  2.

  	
  THE FACILITY

  	
   

  	
  9

  
	
  3.

  	
  PURPOSE

  	
   

  	
  9

  
	
  4.

  	
  CONDITIONS OF UTILISATION

  	
   

  	
  9

  
	
  5.

  	
  UTILISATION

  	
   

  	
  10

  
	
  6.

  	
  REPAYMENT

  	
   

  	
  12

  
	
  7.

  	
  PREPAYMENT AND CANCELLATION

  	
   

  	
  13

  
	
  8.

  	
  INTEREST

  	
   

  	
  14

  
	
  9.

  	
  INTEREST PERIODS

  	
   

  	
  15

  
	
  10.

  	
  CHANGES TO THE CALCULATION OF INTEREST

  	
   

  	
  16

  
	
  11.

  	
  FEES

  	
   

  	
  16

  
	
  12.

  	
  TAX GROSS UP

  	
   

  	
  17

  
	
  13.

  	
  INDEMNITIES

  	
   

  	
  18

  
	
  14.

  	
  COSTS AND EXPENSES

  	
   

  	
  19

  
	
  15.

  	
  REPRESENTATIONS

  	
   

  	
  19

  
	
  16.

  	
  INFORMATION UNDERTAKINGS

  	
   

  	
  20

  
	
  17.

  	
  GENERAL UNDERTAKINGS

  	
   

  	
  21

  
	
  18.

  	
  EVENTS OF DEFAULT

  	
   

  	
  25

  
	
  19.

  	
  CHANGES TO THE PARTIES

  	
   

  	
  28

  
	
  20.

  	
  CONDUCT OF BUSINESS BY THE LENDERS

  	
   

  	
  32

  
	
  21.

  	
  SHARING AMONG THE LENDERS

  	
   

  	
  32

  
	
  22.

  	
  PAYMENT MECHANICS

  	
   

  	
  33

  
	
  23.

  	
  SET-OFF

  	
   

  	
  36

  
	
  24.

  	
  NOTICES

  	
   

  	
  36

  
	
  25.

  	
  CALCULATIONS AND CERTIFICATES

  	
   

  	
  38

  
	
  26.

  	
  PARTIAL INVALIDITY

  	
   

  	
  38

  
	
  27.

  	
  REMEDIES AND WAIVERS

  	
   

  	
  38

  
	
  28.

  	
  AMENDMENTS AND WAIVERS

  	
   

  	
  38

  
	
  29.

  	
  COUNTERPARTS

  	
   

  	
  38

  
	
  30.

  	
  GOVERNING LAW

  	
   

  	
  38

  
	
  31.

  	
  ENFORCEMENT

  	
   

  	
  39

  
	
  SCHEDULE 1PART A
  CONDITIONS PRECEDENT

  	
   

  	
  40

  
	
  SCHEDULE 2
  UTILISATION REQUEST 

  	
   

  	
  42

  
	
  SCHEDULE 3 TIMETABLE

  	
   

  	
  43

  
	
  SCHEDULE 4

  	
   

  	
  44

  

 

1

 

THIS
AGREEMENT is dated 27 January 2010 and made BETWEEN:

 

(1)                                  BEST BUY EUROPE DISTRIBUTIONS LIMITED (formerly CPW DISTRIBUTION
HOLDINGS LIMITED), a company incorporated in
England and Wales with registration number 6534088 (the Company);

 

(2)                                  BEST BUY DISTRIBUTIONS LIMITED, a company
incorporated in England and Wales with registration number 06576708 as Original
Best Buy Lender (the Original Best Buy Lender);

 

(3)                                  THE CARPHONE WAREHOUSE GROUP PLC, a company incorporated
in England and Wales with registration number 3253714 as the Carphone Lender
(the Original  Carphone
Lender); and

 

(4)                                  NEW CARPHONE WAREHOUSE PLC, a company
incorporated in England and Wales with registration number 07105905 (as
the Successor
Carphone Lender).

 

IT IS
AGREED as follows:

 

1.                                      DEFINITIONS AND INTERPRETATION

 

1.1                               Definitions

 

In this
Agreement:

 

Affiliate means, in
relation to any person, a Subsidiary of that person or a Holding Company of
that person or any other Subsidiary or Holding Company.

 

Authorisation means an
authorisation, permit, consent, approval, resolution, licence, exemption,
filing or registration.

 

Availability Period
means the period from and including the date of this Agreement to and including
the date which is one Month before the Final Maturity Date or such other later
date as may be agreed by the Lenders acting reasonably.

 

Available Commitment
means a Lender’s Commitment minus:

 

(a)                                  the
Base Currency Amount of any outstanding Loans; and

 

(b)                                 in
relation to any proposed Utilisation, the Base Currency Amount of any Loans
that are due to be made on or before the proposed Utilisation Date,

 

other than any
Loans that are due to be repaid or prepaid on or before the proposed
Utilisation Date.

 

Available Facility
means the aggregate for the time being of each Lenders’ Available Commitment.

 

Base Currency  means pounds sterling.

 

Base Currency Amount
means, in relation to a Loan, the amount specified in the Utilisation Request
delivered by the Company for that Loan.

 

1

 

Best Buy Lender means the
Original Best Buy Lender and any entity which has become a Lender in accordance
with Clause 19 (Changes To the Parties)
by acquiring some or all of the rights and obligations of a Best Buy Lender.

 

Break Costs means the amount
(if any) by which:

 

(a)                                  the
interest (excluding the Margin) which the Lenders should have received for the
period from the date of receipt of all or any part of a Loan or Unpaid Sum to
the last day of the current Interest Period in respect of that Loan or Unpaid
Sum, had the principal amount or Unpaid Sum received been paid on the last day
of that Interest Period;

 

exceeds:

 

(b)                                 the
amount which the Lenders would be able to obtain by placing an amount equal to
the principal amount or Unpaid Sum received by it on deposit with a leading
bank in the Relevant Interbank Market for a period starting on the Business Day
following receipt or recovery and ending on the last day of the current
Interest Period.

 

Business Day means a day
(other than a Saturday or Sunday) on which banks are open for general business
in London.

 

Combined Finance Documents
means the Finance Documents and the SHA Loan Agreement.

 

Commitment means in
relation to each Lender, the amount in the Base Currency set opposite its name
under the heading “Lenders and Commitments” in Part B of Schedule 1 and
the amount of any other Commitment transferred to it under this Agreement.

 

Confidentiality Undertaking
means a confidentiality undertaking substantially in the recommended form of
the Loan Market Association.

 

Default means an Event
of Default or any event or circumstance specified in Clause 18  (Events of
Default) which would (with the expiry of a grace
period, the giving of notice, the making of any determination under the Finance
Documents or any combination of any of the foregoing) be an Event of Default.

 

Disproportionate Amount
means an amount greater than zero equivalent to the difference between the
aggregate of the amounts of the outstandings owing to each Lender under the
Finance Documents.

 

Disproportionate Lender
means a Lender that has advanced a Disproportionate Loan which remains
outstanding such that there is a Disproportionate Amount.

 

Disproportionate Loan
means a Loan that has not been funded pro
rata by each Lender based on the Commitments of each Lender at the
time the relevant Loan was utilised.

 

Event of Default means any event
or circumstance specified as such in Clause 18 (Events of Default).

 

Facility means the
revolving credit loan facility made available under this Agreement as described
in Clause 2 (The Facility).

 

2

 

Facility Debt
means all present and future sums, liabilities and obligations (whether actual,
contingent, present and/or future) payable or owing by the Company to the
Lenders under the Finance Documents.

 

Final Maturity Date
means 31 March 2013.

 

Finance Document means this
Agreement and any other document designated as such by the Lenders and the
Company.

 

Financial Indebtedness
means, without double counting, any indebtedness for or in respect of:

 

(a)                                  moneys
borrowed;

 

(b)                                 any
amount raised by acceptance under any acceptance credit facility;

 

(c)                                  any
amount raised pursuant to any note purchase facility or the issue of bonds,
notes, debentures, loan stock or any similar instrument;

 

(d)                                 the
amount of any liability in respect of any lease or hire purchase contract which
would, in accordance with GAAP, be treated as a finance or capital lease;

 

(e)                                  receivables
sold or discounted (other than any receivables to the extent they are sold on a
non-recourse basis);

 

(f)                                    any
amount raised under any other transaction (including any forward sale or
purchase agreement) intended to and having the commercial effect of a
borrowing;

 

(g)                                 any
derivative transaction entered into in connection with protection against or
benefit from fluctuation in any interest rate or foreign exchange rate or price
(and, when calculating the value of any derivative transaction, only the marked
to market value shall be taken into account);

 

(h)                                 shares
which are expressed to be redeemable before the Final Maturity Date;

 

(i)                                     any
counter-indemnity obligation in respect of a guarantee, indemnity, bond,
standby or documentary letter of credit or any other instrument issued by a
bank or financial institution (provided that, for all purposes, any
counter-indemnity obligation relating to the obligations of a member of the
Group arising in the ordinary course of its trade for purposes other than to
raise finance, shall not be included in this paragraph (i)); and

 

(j)                                     the
amount of any liability in respect of any guarantee or indemnity for any of the
items referred to in paragraphs (a) to (i) above.

 

Financial Year means a
financial year of the Company.

 

GAAP means generally
accepted accounting principles, standards and practices in the United Kingdom,
being IFRS.

 

Group means the
Company and its Subsidiaries for the time being.

 

Holding Company means in
relation to any company or corporation, any other company or corporation in
respect of which it is a Subsidiary.

 

3

 

IFRS means
international accounting standards within the meaning of the IAS Regulation
1606/2002 to the extent applicable to the relevant financial statements.

 

Interest Period means, in
relation to a Loan, each period determined in accordance with Clause 9 (Interest
Periods) and, in relation to an Unpaid Sum, each
period determined in accordance with Clause 8.3  (Default
interest).

 

Lender  means:

 

(a)                                  the
Original Best Buy Lender or the Original Carphone Lender (each an Original Lender and together the Original Lenders); and

 

(b)                                 any
entity which has become a Lender in accordance with Clause 19 (Changes to the Parties),

 

and Lenders means all of the
above.

 

LIBOR means, in
relation to a Loan:

 

(a)                                  the
applicable Screen Rate; or

 

(b)                                 (if
no Screen Rate is available for the currency or Interest Period of that Loan)
the arithmetic mean of the rates (rounded upwards to four decimal places) as
supplied to the Lenders at their request quoted by the Reference Banks to
leading banks in the London interbank market,

 

(c)                                  as
of the Specified Time on the Quotation Day for the offering of deposits in the
currency of that Loan and for a period comparable to the Interest Period for
that Loan.

 

Loan means a loan made
or to be made under the Facility or the principal amount outstanding for the
time being of that loan.

 

Margin means 3.00 per
cent. per annum.

 

Market Disruption Event
means:

 

(a)                                  at
or about noon on the Quotation Day for the relevant Interest Period the Screen
Rate is not available and none of the Reference Banks supplies a rate to the
Lenders to determine LIBOR for the relevant currency and period; or

 

(b)                                 before
close of business in London on the Quotation Day for the relevant Interest
Period, the Company receives notification from a Lender or the Lenders that the
cost to it or them of obtaining matching deposits in the Relevant Interbank
Market would be in excess of LIBOR.

 

Material Adverse Effect means
a material adverse effect on the ability of the Company to perform and comply
with any payment obligations under any Finance Document.

 

Material Subsidiary
means:

 

(a)                                  a
Subsidiary of the Company, the profits before interest and tax or gross assets
(excluding debts owed to it by other members of the Group) of which as at the
date as at which its latest annual audited or semi-annual consolidated
financial statements were prepared or, as the case may be, for the financial
period to which those financial

 

4

 

statements relate
account for five per cent. or more of the consolidated profits before interest
and tax or consolidated gross assets (respectively) of the Group (all as
calculated by reference to the latest annual audited or semi-annual
consolidated financial statements of the Group); or

 

(b)                                 a
Subsidiary of the Company, to which has been transferred (whether in a single
transaction or a series of transactions (whether related or not)) the whole or
substantially the whole of the assets of a Subsidiary which immediately prior
to such transactions was a Material Subsidiary.

 

For the purposes of this definition:

 

(i)                                     if a
Subsidiary of the Company becomes a Material Subsidiary under paragraph (b) above,
then the Material Subsidiary (if any) by which the relevant transfer was made
shall, subject to paragraph (a) above, cease to be a Material
Subsidiary; and

 

(ii)                                  if a
Subsidiary is acquired by the Company after the end of the financial period to
which the latest annual audited or semi-annual consolidated financial
statements of the Group relate, those financial statements shall be adjusted as
if that Subsidiary had been shown in them by reference to its then latest
annual audited or semi-annual financial statements (consolidated if
appropriate) until annual audited or semi-annual consolidated financial
statements of the Group for the financial period in which the acquisition is
made have been prepared.

 

Month  means
a period starting on one day in a calendar month and ending on the numerically
corresponding day in the next calendar month, except that:

 

(a)                                  if
the numerically corresponding day is not a Business Day, that period shall end
on the next Business Day in that calendar month in which that period is to end
if there is one, or if there is not, on the immediately preceding Business Day;

 

(b)                                 if
there is no numerically corresponding day in the calendar month in which that
period is to end, that period shall end on the last Business Day in that
calendar month; and

 

(c)                                  notwithstanding
sub-paragraph (a) above, a period which commences
on the last Business Day of a month will end on the last Business Day in the
next month or the calendar month in which it is to end, as appropriate.

 

The above rules will
only apply to the last Month of any period.

 

New Carphone Admission Date the
date of Admission as defined in the Shareholders Agreement as amended on or
about the date of this Agreement.

 

Party means a party to
this Agreement and includes its successors in title.

 

Qualifying Lender means
a person which is beneficially entitled to interest payable to that person in
respect of an advance under a Finance Document and is:

 

(a)                                  a
company resident in the United Kingdom for United Kingdom tax purposes; or

 

5

 

(b)                                 a
partnership, each member of which is a company resident in the United Kingdom
for United Kingdom tax purposes or a company not resident in the United Kingdom
for tax purposes but which carries on a trade in the United Kingdom through a branch
or agency and is required to bring into account in computing its chargeable
profits for the purposes of section 19 of the Corporation Tax Act 2009 the
whole of any share of interest payable to it in respect of that advance which
is attributable to it by reason of Part 17 of the Corporation Tax Act
2009; or

 

(c)                                  a
company not resident in the United Kingdom for United Kingdom tax purposes
which carries on a trade in the United Kingdom through a branch or agency and
brings interest payable to it in respect of that advance into account in
computing its chargeable profits (within the meaning of section 19 of the
Corporation Tax Act 2009).

 

Quotation Day means, in
relation to any period for which an interest rate is to be determined, the
first day of that period.

 

Reference Banks means the
principal London offices of Barclays Bank PLC and HSBC Bank PLC or such other
banks as may be appointed by the Lenders in consultation with the Company.

 

Receivables
Financing Agreement means the receivables
financing agreement dated 3 July 2009 between, amongst others, The
Carphone Warehouse Limited, Mobiles.co.uk Limited and CPWCO 18 Limited and
Barclays Bank PLC as receivables purchaser.

 

Relevant Interbank Market
means the London interbank market.

 

Repeating Representations
means each of the representations set out in Clauses 15.1  (Status)
to 15.6  (Pari
Passu Ranking).

 

Rollover Loan means one or
more Loans:

 

(a)                                  made
or to be made on the same day that a maturing Loan is due to be repaid;

 

(b)                                 the
aggregate amount of which is equal to or less than the maturing Loan;

 

(c)                                  in
the same currency as the maturing Loan; and

 

(d)                                 made
or to be made to the Company for the purpose of refinancing a maturing Loan.

 

Screen Rate means in
relation to LIBOR, the British Bankers Association Interest Settlement Rate for
the relevant currency and period displayed on the appropriate page of the
Reuters screen.  If the agreed page is
replaced or service ceases to be available, the Lenders may specify another page or
service displaying the appropriate rate after consultation with the Company.

 

Security means a
mortgage, charge, pledge, lien or other security interest securing any
obligation of any person or any other agreement or arrangement intended to and
having substantially the same effect.

 

SHA Debt means all present and future sums,
liabilities and obligations (whether actual, contingent, present and/or future)
payable or owing by the Company to any SHA Lender under or in respect of the
SHA Loan Agreement.

 

6

 

SHA Lender means a lender under the SHA Loan
Agreement.

 

SHA Loan
means a loan advanced under the SHA Loan Agreement.

 

SHA Loan Agreement
means the loan agreement dated on or about the date of this Agreement between
the Company and the Lenders.

 

Shareholders Agreement
means the shareholders agreement dated 30 June 2008 (as amended from
time to time) relating to Best Buy Europe Distributions Limited between The
Carphone Warehouse Group PLC, CPW Retail Holdings Limited, Best Buy Co., Inc.
and Best Buy Distributions Limited.

 

Specified Time means a time
determined in accordance with Schedule 3 (Timetables).

 

Subsidiary means a
subsidiary within the meaning of section 1159 of the Companies Act 2006 and, in
relation to financial statements of the Group, a subsidiary undertaking within
the meaning of section 1162 of the Companies Act 2006.

 

Tax  means
any tax, levy, impost, duty or other charge or withholding of a similar nature
(including any penalty or interest payable in connection with any failure to
pay or any delay in paying any of the same).

 

Taxes Act means the Income
and Corporation Taxes Act 1988.

 

Tax Credit means a credit
against, relief or remission for, or repayment of any Tax.

 

Tax Deduction means a
deduction or withholding for or on account of Tax from a payment under a
Finance Document.

 

Tax Payment means an
increased payment made by the Company to the Lenders under Clause 12.1  (Tax
Gross-Up).

 

Total Commitments means
the aggregate of the Commitments.

 

Transfer Certificate
means a certificate substantially in the form set out in Schedule 4 (Form of Transfer Certificate) or any form as agreed
between the Lenders and the Company.

 

Transfer Date means, in
relation to a transfer, the later of the:

 

(a)                                  the
proposed Transfer Date specified in the Transfer Certificate; or

 

(b)                                 the
date on which the Lenders execute the Transfer Certificate.

 

UK Listing Rules means
the listing rules of the UK Listing Authority.

 

Unpaid Sum means any sum
due and payable but unpaid by the Company under the Finance Documents.

 

Utilisation means a
utilisation of the Facility.

 

Utilisation Date means the date
of a Utilisation, being the date on which the relevant Loan is to be made.

 

7

 

Utilisation Request
means a notice substantially in the form set out in Schedule 2
(Utilisation Request).

 

VAT means value
added tax as provided for in the Value Added Tax Act 1994 and any other tax of
a similar nature.

 

1.2                               Construction

 

(a)                                  Any
reference in this Agreement to:

 

(i)                                     assets includes present and future properties,
revenues and rights of every description;

 

(ii)                                  determines or determined
means, in relation to Clause 12 (Tax Gross Up), a
determination made in the absolute discretion of the person making the
determination;

 

(iii)                               a Finance Document, Receivables Financing Agreement, SHA Loan Agreement or
any other agreement or instrument is a reference to that Finance Document, Receivables Financing Agreement, SHA Loan
Agreements or other agreement or instrument as amended or novated;

 

(iv)                              financial statements of the Company includes a
reference to the audited and unaudited consolidated financial statements to be
delivered under Clause 16.1  (Financial Statements);

 

(v)                                 indebtedness includes any obligation
(whether incurred as principal or as surety) for the payment or repayment of
money, whether present or future, actual or contingent;

 

(vi)                              a person includes any person, firm, company, corporation,
government, state or agency of a state or any association, trust or partnership
(whether or not having separate legal personality) or two or more of the
foregoing;

 

(vii)                           a regulation includes any regulation, rule, official
directive, request or guideline (whether or not having the force of law) of any
governmental, intergovernmental or supranational body, agency, department or
regulatory, self-regulatory or other authority or organisation;

 

(viii)                        a
provision of law is a reference to that provision as amended or re-enacted; and

 

(ix)                                unless
a contrary indication appears, a time of day is a reference to London time.

 

(b)                                 Section,
Clause and Schedule headings are for ease of reference only.

 

(c)                                  Unless
a contrary indication appears, a term used in any other Finance Document or in
any notice given under or in connection with any Finance Document has the same
meaning in that Finance Document or notice as in this Agreement.

 

(d)                                 A
Default (other than an Event of Default) is “continuing”
if it has not been remedied or waived and an Event of Default is “continuing” if it has not been waived.

 

8

 

(e)                                  If
the directors of any member of the Group obtain a moratorium under Section 1A
of the Insolvency Act 1986, the ending of such moratorium will not remedy any
Event of Default which occurred as a result of such moratorium.

 

1.3                               Third Party
Rights

 

A person who is
not a Party other than any SHA Lender in respect of Clauses 21 (Sharing Among the Lenders) and 22 (Payment
Mechanics) has no rights under the Contracts (Rights of Third
Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.

 

2.                                      THE FACILITY

 

2.1                               The Facility

 

Subject to the
terms of this Agreement, the Lenders make available to the Company a sterling
revolving credit facility in an amount equal to the Total Commitments.

 

2.2                               Lenders’ rights
and obligations

 

(a)                                  The obligations
of each Lender under the Finance Documents are several.  Failure by a Lender to perform its
obligations under the Finance Documents does not affect the obligations of any
other Party under the Finance Documents. 
No Lender is responsible for the obligations of any other Lender under
the Finance Documents.

 

(b)                                 The
rights of each Lender under or in connection with the Finance Documents are
separate and independent rights and any debt arising under the Finance
Documents to a Lender from the Company shall be a separate and independent
debt.

 

(c)                                  A
Lender may, except as otherwise stated in the Finance Documents, separately
enforce its rights under the Finance Documents.

 

3.                                      PURPOSE

 

3.1                               Purpose

 

The Company shall
apply the amounts borrowed by it under the Facility towards the general
corporate purposes of the Group.

 

3.2                               Monitoring

 

No Lender is
bound to monitor or verify the application of any amount borrowed pursuant to
this Agreement.

 

4.                                      CONDITIONS OF UTILISATION

 

4.1                               Initial
conditions precedent

 

The Company may
not deliver a Utilisation Request unless the Lenders have received all of the
documents and other evidence listed in Part A of Schedule 1 (Conditions
Precedent) in form and substance satisfactory to the
Lenders, acting reasonably.  Each Lender
shall notify the Company promptly upon being so satisfied.

 

9

 

4.2                               Further
conditions precedent

 

The Lenders will
only be obliged to make a Loan if on the date of the Utilisation Request and on
the proposed Utilisation Date:

 

(a)                                  in
the case of a Rollover Loan, no Event of Default is continuing or would result
from the proposed Loan and, in the case of any other Loan, no Default is
continuing or would result from the proposed Loan; and

 

(b)                                 the
Repeating Representations to be made by the Company are true in all material
respects.

 

4.3                               Maximum Number of
Loans

 

Unless the
Lenders agree, a Utilisation Request may not be given if, as a result, there
would be more than ten (10) Loans outstanding.

 

5.                                      UTILISATION

 

5.1                               Delivery of a
Utilisation Request

 

The Company may
utilise the Facility by delivery to each Lender of a duly completed Utilisation
Request not later than the Specified Time.

 

5.2                               Completion of a
Utilisation Request

 

(a)                                  Each
Utilisation Request is irrevocable and will not be regarded as having been duly
completed unless:

 

(i)                                     the
proposed Utilisation Date is a Business Day within the Availability Period;

 

(ii)                                  the
currency and amount of the Utilisation comply with Clause 5.3  (Currency
and amount);

 

(iii)                               the
proposed Interest Period complies with Clause 9 (Interest Periods);
and

 

(iv)                              it
specifies the account and bank (which shall be based in London) to which the
proceeds of the Utilisation are to be credited.

 

(b)                                 Only
one Loan may be requested in each Utilisation Request.

 

5.3                               Currency and
amount

 

(a)                                  The
currency specified in a Utilisation Request must be the Base Currency.

 

(b)                                 The
amount of the proposed Loan must be an amount which is not more than the
Available Facility and which is a minimum of £5,000,000 and an integral
multiple of £1,000,000 or, if less, the Available Facility.

 

10

 

5.4                               Lenders’
participation

 

(a)                                  Subject
to paragraph (d) below, if the conditions set out in this Agreement
have been met, each Lender shall make its participation in each Loan available
by the Utilisation Date.

 

(b)                                 The
amount of each Lender’s participation in each Loan will be equal to the
proportion borne by its Available Commitment to the Available Facility immediately
prior to making the Loan.

 

(c)                                  If a
Lender (a Non-Participating Lender)
fails to make available all or part of its participation in a Loan, the other
Lender shall not be under any obligation to, advance all or part of the Loan
not so advanced by the Non-Participating Lender but such failure by the
Non-Participating Lender shall be without prejudice to that other Lender’s
obligation to make its participation available pursuant to paragraphs (a) and
(b) above in respect of that Loan or any future Utilisation requested in
accordance with this Agreement.

 

(d)                                 If
on a Utilisation Date a Lender is a Non-Participating Lender and a
Disproportionate Amount is outstanding, that Non-Participating Lender shall not
make any advance under this Agreement until such Disproportionate Amount ceases
to be outstanding with the exception of its participation in:

 

(i)                                     a Loan advanced pursuant to
Clause 5.6 (Equalisation Advance);
or

 

(ii)                                  any proportion of a Rollover
Loan which participation that Non-Participating Lender shall be obliged to
continue to make available.

 

5.5                               Availability of
Loans

 

(a)                                  If
the conditions set out in this Agreement have been met, the Lenders shall make
each Loan available by the Utilisation Date.

 

(b)                                 The
Lenders are not obliged to make a Loan if, as a result, the Loans would exceed
the Total Commitments.

 

5.6                               Equalisation Advance

 

(a)                                  If any SHA Loans have been
advanced under the SHA Loan Agreement and remain outstanding, notwithstanding
the rest of this Clause 5 (Utilisation),
the Non-Participating Lender may advance a Loan to the Company in an amount
equivalent to (and not less or more than) the aggregate amount of such SHA
Loans (an Equalisation
Advance) provided that:

 

(i)                                     it gives one Business Day’s
notice to the Company and the Disproportionate Lender; and

 

(ii)                                  the proceeds of such
Equalisation Advance are remitted directly by the Non-Participating Lender to
the SHA Lender and immediately applied by the Disproportionate Lender (in its
capacity as SHA Lender) in the repayment and discharge in full of the SHA
Loans.

 

11

 

(b)                                 Notwithstanding sub-paragraph
(a)(ii) above, the Equalisation Advance shall be treated as if it had been
advanced to the Company and incurred as a Loan under this Agreement with an
Interest Period of three months.

 

5.7                               Company undertaking connected
with Equalisation Advance

 

If any SHA Loans have been advanced under
the SHA Loan Agreement and the aggregate amount of these SHA Loans is equal to
or exceeds the Disproportionate Amount, the Company undertakes to the
Non-Participating Lender not to exercise any right or remedy it may have
against the Non-Participating Lender in respect of its failure to make
available its participation in any Loan requested under this Agreement.

 

5.8                               Equalisation Transfer

 

(a)                                  If a Disproportionate Amount is outstanding and no
SHA Loans have been advanced under the SHA Loan Agreement, the
Non-Participating Lender may purchase from the Disproportionate Lender, and the
Disproportionate Lender shall be obliged to transfer to the Non-Participating
Lender the portion of the Disproportionate Lender’s participation in
Disproportionate Loans in an amount equivalent to the Equalising Amount in
consideration for the Non-Participating Lender paying the Disproportionate
Lender cash in amount equivalent to such Equalising Amount.

 

(b)                                 Upon such transfer becoming effective, the
Non-Participating Lender shall be treated as if had advanced its pro rata
portion of the Disproportionate Loans when they were initially advanced but
shall not be entitled to any interest which had accrued before that time on the
those Disproportionate Loans.

 

(c)                                  For the purpose of paragraph (a) above,
Equalising Amount
means an amount equal to the amount of outstandings that would need to be transferred
by the Non-Participating Lender to the Disproportionate Lender to ensure that
the aggregate amount of the outstandings of each Lender under the Finance
Documents is the same.

 

6.                                      REPAYMENT

 

(a)                                  Subject
to paragraphs (b) and (c) below, the Company must repay each Loan in
full on the last day of the Interest Period applicable to that Loan.

 

(b)                                 Without prejudice to the
Company’s obligation under paragraph (a) above, if one or more Loans
are to be made available to a Company by way of a Rollover Loan or otherwise:

 

(i)                                     on the same day that a
maturing Loan is due to be repaid by that Company; and

 

(ii)                                  in whole or in part for the
purpose of refinancing the maturing Loan;

 

the aggregate amount of the new Loans shall
be treated as if applied in or towards repayment of the maturing Loan so that:

 

(A)                              if the amount of the maturing
Loan exceeds the aggregate amount of the new Loans:

 

(I)                                    the Company will only be
required to pay an amount in cash equal to that excess; and

 

12

 

(II)                                each Lender’s participation
(if any) in the new Loans shall be treated as having been made available and
applied by the Company in or towards repayment of that Lender’s participation
(if any) in the maturing Loan and that Lender will not be required to make its
participation in the new Loans available in cash; and

 

(B)                                if the amount of the maturing
Loan is equal to or less than the aggregate amount of the new Loans:

 

(I)                                    the Company will not be
required to make any payment in cash; and

 

(II)                                each Lender will be required
to make its participation in the new Loans available in cash only to the extent
that its participation (if any) in the new Loans exceeds that Lender’s
participation (if any) in the maturing Loan and the remainder of that Lender’s
participation in the new Loans shall be treated as having been made available
and applied by the Company in or towards repayment of that Lender’s
participation in the maturing .

 

(c)                                  If on the last day of an
Interest Period applicable to a Loan a Disproportionate Amount is outstanding,
that Loan shall be automatically be redrawn in full under this Agreement as a
Rollover Loan provided that the conditions set out in Clause 4.2 (Further conditions precedent) in respect
of Rollover Loans are satisfied.

 

(d)                                 Subject to the other terms of
this Agreement, any amounts repaid under paragraph (a) above may be reborrowed in
accordance with Clause 5 (Utilisation)
above.

 

7.                                      PREPAYMENT AND CANCELLATION

 

7.1                               Mandatory
prepayment - Illegality

 

If it becomes
unlawful in any jurisdiction for a Lender to perform any of its obligations as
contemplated by this Agreement or to fund or have outstanding any Loan:

 

(a)                                  that
Lender shall promptly notify the Company upon becoming aware of that event;

 

(b)                                 upon
the relevant Lender notifying the Company, the Commitments of each Lender will
be immediately cancelled; and

 

(c)                                  the
Company shall repay each Lender’s participation in the Loans on the last day of
the Interest Period for each Loan occurring after the relevant Lender has
notified the Company or, if earlier, the date specified by the relevant Lender
in the notice delivered to the Company (being no earlier than the last day of
any applicable grace period permitted by law).

 

7.2                               Automatic
cancellation

 

The Available
Commitment of each Lender will be automatically cancelled at the close of
business on the last day of the Availability Period.

 

13

 

7.3                               Voluntary
cancellation

 

Provided that no SHA Debt is outstanding, the
Company may, if it gives the Lenders not less than five Business Days’ (or such
shorter period as the Lenders may agree) prior notice, cancel the whole or any
part (being a minimum amount of £5,000,000 and an integral multiple of
£1,000,000) of the Available Commitment and such cancellation shall only be
made pro rata to the Commitments of the Lenders.

 

7.4                               Voluntary prepayment of Loans

 

(a)                                  Provided that no SHA Debt is
outstanding, the Company may, if it gives the Lenders not less than five
Business Days’ (or such shorter period as the Lenders may agree) prior notice,
prepay the whole or any part of any Loan (but, if in part, being an amount that
reduces the Base Currency Amount of the Loan by a minimum amount of £5,000,000
and an integral multiple of £1,000,000).

 

(b)                                 Any prepayment made pursuant
to paragraph (a) above which is not sufficient to prepay in full all of
the outstandings under the Finance Documents shall be applied in accordance
with Clause 22.3 (Partial Payments).

 

7.5                               Restrictions

 

(a)                                  Any
notice of cancellation or prepayment given by any Party under this Clause 7 (Prepayment
and Cancellation) shall be irrevocable and, unless a
contrary indication appears in this Agreement, shall specify the date or dates
upon which the relevant cancellation or prepayment is to be made and the amount
of that cancellation or prepayment.

 

(b)                                 Any
prepayment under this Agreement shall be made together with accrued interest on
the amount prepaid and, subject to any Break Costs, without premium or penalty.

 

(c)                                  Any
part of the Facility which is repaid in accordance with Clause 6  (Repayment)
or prepaid in accordance with Clause 7.4  (Voluntary prepayment of Loans)
may be reborrowed in accordance with the terms of this Agreement.

 

(d)                                 The
Company shall not repay or prepay all or any part of the Loans or cancel all or
any part of the Commitments of the Lenders except at the times and in the
manner expressly provided for in this Agreement.

 

(e)                                  No
amount of the Total Commitments cancelled under this Agreement may be
subsequently reinstated.

 

8.                                      INTEREST

 

8.1                               Calculation of
interest

 

The rate of
interest on each Loan for each Interest Period is the percentage rate per annum
which is the aggregate of the:

 

(a)                                  Margin;
and

 

(b)                                 LIBOR.

 

14

 

8.2                               Payment of
interest

 

The Company shall
pay accrued interest on each Loan on the last day of its Interest Period (and
if that Interest Period is longer than six Months, on the dates falling at six
monthly intervals after the first day of the Interest Period).

 

8.3                               Default interest

 

(a)                                  If
the Company fails to pay any amount payable by it under a Finance Document on
its due date, interest shall accrue on the overdue amount from the due date up
to the date of actual payment (both before and after judgment) at a rate which
is the sum of 1 per cent. and the rate which would have been payable if the
overdue amount had, during the period of non-payment, constituted a Loan in the
currency of the overdue amount for successive Interest Periods, each of a duration
selected by the Lenders (acting reasonably). 
Any interest accruing under this Clause 8.3  shall be
immediately payable by the Company on demand of the Lenders.

 

(b)                                 However
if the overdue amount is principal of a Loan and became due on a day other than
the last day of an Interest Period relating to that Loan, the first Interest
Period applicable to that overdue amount shall be of a duration equal to the
unexpired portion of that Interest Period and the rate of interest on that
overdue amount for that Interest Period shall be the sum of 1 per cent.
and the rate applicable to it immediately before it became due.

 

(c)                                  Default
interest (if unpaid) arising on an overdue amount will be compounded with the
overdue amount at the end of each Interest Period applicable to that overdue
amount but will remain immediately due and payable.

 

8.4                               Notification of
rates of interest

 

The Lenders shall
promptly notify the Company of the determination of a rate of interest under
this Agreement.

 

9.                                      INTEREST PERIODS

 

9.1                               Selection of
Interest Periods

 

(a)                                  Each
Loan has one Interest Period only.

 

(b)                                 The
Company must select an Interest Period for a Loan in the Utilisation Request
for that Loan.

 

(c)                                  Subject
to this Clause 9, the Company may select an Interest Period of one, two, three
or six Months or for four weeks or any other period agreed between the Company
and the Lenders.

 

(d)                                 An
Interest Period for a Loan shall not extend beyond the Final Maturity Date.

 

9.2                               Non-Business Days

 

If an Interest
Period would otherwise end on a day which is not a Business Day, that Interest
Period will instead end on the next Business Day in that calendar month (if
there is one) or the preceding Business Day (if there is not).

 

15

 

10.                               CHANGES TO THE CALCULATION OF INTEREST

 

10.1                        Absence of Quotations

 

Subject to Clause
10.2  (Market
disruption), if LIBOR is to be determined by reference
to the Reference Banks but a Reference Bank does not supply a quotation by
11.00 a.m. on the Quotation Day, the applicable LIBOR shall be determined
on the basis of the quotations of the remaining Reference Bank.

 

10.2                        Market disruption

 

If a Market
Disruption Event occurs in relation to a Loan for any Interest Period, then the
rate of interest on each Lender’s share of that Loan for the Interest Period
shall be the rate per annum which is the sum of:

 

(a)                                  the
Margin; and

 

(b)                                 the
rate notified to the Company by that Lender as soon as practicable and in any
event before interest is due to be paid in respect of that Interest Period, to
be that which expresses as a percentage rate per annum the cost to that Lender
of funding that Loan from whatever source it may reasonably select.

 

10.3                        Alternative Basis of
Interest or Funding

 

(a)                                  If a
Market Disruption Event occurs and the Lenders or the Company so requires, the
Lenders and the Company shall enter into negotiations (for a period of not more
than thirty days) with a view to agreeing a substitute basis for determining
the rate of interest.

 

(b)                                 Any
alternative basis agreed pursuant to paragraph (a) above shall be
binding on all Parties.

 

10.4                        Break Costs

 

(a)                                  The
Company shall, within three Business Days of demand by a Lender, pay to that
Lender its Break Costs attributable to all or any part of a Loan or Unpaid Sum
being paid by the Company on a day other than the last day of an Interest
Period for that Loan or Unpaid Sum.

 

(b)                                 Each
Lender shall, as soon as reasonably practicable after a demand by the Company,
provide a certificate confirming the amount of its Break Costs for any Interest
Period in which they accrue.

 

11.                               FEES

 

11.1                        Commitment Fee

 

(a)                                  The
Company shall pay to each Lender a commitment fee in the Base Currency computed
at the rate of 50 per cent. of the Margin which would then be applicable to new
Loans on the undrawn, uncancelled amount of that Lender’s Commitment during the
Availability Period.

 

(b)                                 The
accrued commitment fee is calculated on a daily basis and is payable from and
including the date of this Agreement quarterly in arrear.  The accrued commitment 

 

16

 

fee is also
payable to the relevant Lender on the date its Commitments are cancelled in
full.

 

12.                               TAX GROSS UP

 

12.1                        Tax Gross-Up

 

(a)                                  The
Company shall make all payments to be made by it without any Tax Deduction,
unless a Tax Deduction is required by law.

 

(b)                                 The
Company or a Lender shall promptly upon becoming aware that the Company must
make a Tax Deduction (or that there is any change in the rate or the basis of a
Tax Deduction) notify the other parties accordingly.

 

(c)                                  If a
Tax Deduction is required by law to be made by the Company the amount of the
payment due from the Company shall be increased to an amount which (after
making any Tax Deduction) leaves an amount equal to the payment which would
have been due if no Tax Deduction had been required.

 

(d)                                 The
Company is not required to make an increased payment to a Lender under
paragraph (c) above for a Tax Deduction in respect of tax imposed by
the United Kingdom from a payment of interest on a Loan, if on the date on
which the payment falls due, the Company is able to demonstrate that the
payment could have been made to the relevant Lender without the Tax Deduction
if it was a Qualifying Lender, but on that date that Lender is not or has ceased
to be a Qualifying Lender other than as a result of any change after the date
it became a Party under this Agreement in (or the interpretation,
administration, or application of) any law or double taxation agreement, or any
published practice or concession of any relevant taxing authority.

 

(e)                                  If
the Company is required to make a Tax Deduction, it shall make that Tax
Deduction and any payment required in connection with that Tax Deduction within
the time allowed and in the minimum amount required by law.

 

(f)                                    Within
thirty days of making either a Tax Deduction or any payment required in
connection with that Tax Deduction, the Company shall deliver to the Lenders
evidence reasonably satisfactory to the Lenders that the Tax Deduction has been
made or (as applicable) any appropriate payment paid to the relevant taxing
authority.

 

12.2                        Tax Credit

 

If the Company
makes a Tax Payment and a Lender determines that:

 

(a)                                  a
Tax Credit is attributable either to an increased payment of which that Tax
Payment forms part, or to that Tax Payment; and

 

(b)                                 that
Lender has obtained, utilised and retained that Tax Credit,

 

the relevant
Lender shall pay an amount to the Company which that Lender determines will
leave it (after that payment) in the same after-Tax position as it would have
been in had the Tax Payment not been made by the Company.

 

17

 

12.3                        Stamp Taxes

 

The Company shall
pay and, within three Business Days of demand, indemnify each Lender against
any cost, loss or liability that Lender incurs in relation to all stamp duty,
registration and other similar Taxes payable in respect of any Finance
Document.

 

12.4                        Value Added Tax

 

(a)                                  All
consideration expressed to be payable under a Finance Document by any Party to
a Lender shall be deemed to be exclusive of any VAT.  If VAT is chargeable on any supply made by
that Lender to any Party in connection with a Finance Document, that Party
shall pay to that Lender (in addition to and at the same time as paying the
consideration) an amount equal to the amount of the VAT.

 

(b)                                 Where
a Finance Document requires any Party to reimburse a Lender for any costs or
expenses, that Party shall also at the same time pay and indemnify that Lender
against all VAT incurred by the relevant Lender in respect of the costs or
expenses to the extent that such Lender reasonably determines that it is not
entitled to a credit or repayment in respect of that VAT.

 

13.                               INDEMNITIES

 

13.1                        Currency Indemnity

 

(a)                                  If
any sum due from the Company under the Finance Documents (a Sum), or any order, judgment or
award given or made in relation to a Sum, has to be converted from the currency
(the First Currency) in which that Sum is
payable into another currency (the Second Currency)
for the purpose of:

 

(i)                                     making
or filing a claim or proof against the Company;

 

(ii)                                  obtaining
or enforcing an order, judgment or award in relation to any litigation or
arbitration proceedings,

 

the Company shall
as an independent obligation, within three Business Days of demand, indemnify
each Lender against any cost, loss or liability arising out of or as a result
of the conversion including any discrepancy between (A) the rate of
exchange used to convert that Sum from the First Currency into the Second
Currency and (B) the rate or rates of exchange available to that Lender at
the time of its receipt of that Sum.

 

(b)                                 The
Company waives any right it may have in any jurisdiction to pay any amount
under the Finance Documents in a currency or currency unit other than that in
which it is expressed to be payable.

 

13.2                        Other Indemnities

 

The Company
shall, within three Business Days of demand, indemnify each Lender against any
cost, loss or liability incurred by that Lender as a result of:

 

(a)                                  the
occurrence of any Event of Default;

 

(b)                                 a failure
by the Company to pay any amount due under a Finance Document on its due date;

 

18

 

(c)           funding, or making
arrangements to fund a Loan requested by the Company in a Utilisation Request
but not made by reason of the operation of any one or more of the provisions of
this Agreement (other than by reason of default or negligence by that Lender
alone); or

 

(d)           a Loan (or part of a Loan)
not being prepaid in accordance with a notice of prepayment given by the
Company.

 

14.          COSTS AND EXPENSES

 

14.1        Amendment Costs

 

If:

 

(a)           the Company requests an
amendment, waiver or consent; or

 

(b)           an amendment is required
pursuant to Clause 22.9  (Change of Currency),

 

the Company shall, within three Business Days of demand, reimburse each
Lender for the amount of all costs and expenses (including legal fees)
reasonably incurred by that Lender in responding to, evaluating, negotiating or
complying with that request or requirement.

 

14.2        Enforcement Costs

 

The Company shall, within three Business Days of demand, pay to each
Lender the amount of all costs and expenses (including legal fees) incurred by
that Lender in connection with the enforcement of, or the preservation of any
rights under, any Finance Document.

 

15.          REPRESENTATIONS

 

The Company makes the representations and warranties set out in this
Clause 15 to the Lenders on the date of this Agreement.

 

15.1        Status

 

(a)           It is a corporation, duly
incorporated and validly existing under the law of its jurisdiction of
incorporation.

 

(b)           It and each of its
Subsidiaries has the power to own its assets and carry on its business as it is
being conducted.

 

15.2        Binding
Obligations

 

The obligations expressed to be assumed in each Finance Document are,
subject to any general principle of law limiting its obligations, which are
specifically referred to in any legal opinion delivered pursuant to Clause 4 (Conditions of Utilisation) or Clause 19 (Changes to the Parties), legal, valid, binding and
enforceable obligations.

 

15.3        Non-Conflict with
Other Obligations

 

The entry into and performance by it of, and the transactions
contemplated by, the Finance Documents do not and will not conflict with:

 

(a)           any law or regulation
applicable to it;

 

19

 

(b)           the constitutional documents
of any member of the Group; or

 

(c)           any agreement or instrument
relating to Financial Indebtedness or any other agreement or instrument binding
upon it or any member of the Group or any of its or any member of the Group’s
assets.

 

15.4        Power and
Authority

 

It has the power to enter into, perform and deliver, and has taken all
necessary action to authorise its entry into, performance and delivery of, the
Finance Documents to which it is a party and the transactions contemplated by
those Finance Documents.

 

15.5        No Default

 

(a)           No Event of Default is
continuing or would result from the making of any Utilisation.

 

(b)           No other event or
circumstance is outstanding which constitutes a default under any other
agreement or instrument which is binding on it or any of its Subsidiaries or to
which its (or any of its Subsidiaries’) assets are subject which would have a
Material Adverse Effect.

 

15.6        Pari Passu
Ranking

 

Its payment obligations under the Finance Documents rank at least pari passu with the claims of all its other unsecured and
unsubordinated creditors, except for:

 

(a)           obligations owed to any SHA Lender under or
in connection with the SHA Loan Agreement; and

 

(b)           obligations mandatorily preferred by law
applying to companies in its jurisdiction of incorporation generally.

 

15.7        No Proceedings
Pending or Threatened

 

No litigation, arbitration or administrative proceedings of or before
any court, arbitral body or agency have (to the best of its knowledge and
belief) been started or threatened against it or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect.

 

15.8        Repetition

 

The Repeating Representations are deemed to be made by the Company by
reference to the facts and circumstances then existing on the date of each
Utilisation Request and on the first day of each Interest Period.

 

16.          INFORMATION UNDERTAKINGS

 

The undertakings in this Clause 16 remain in force from the date of
this Agreement for so long as any amount is outstanding under the Finance
Documents or any Commitment is in force.

 

20

 

16.1        Financial Statements

 

(a)           The Company shall supply to
the Lenders, as soon as the same become available, but in any event within 120
days after the end of each of its Financial Years, its audited consolidated
financial statements for that Financial Year; and

 

(b)           As soon as the same become
available, but in any event within 90 days after the end of the first half of
each of its Financial Years, its unaudited consolidated financial statements
for that financial half year.

 

16.2        Requirements as
to Financial Statements

 

(a)           Each set of financial
statements delivered by the Company pursuant to Clause 16.1  (Financial
Statements) shall be certified by a director of the
Company as fairly representing its financial condition and operations as at the
end of and for the period in relation to which those financial statements were
drawn up.

 

(b)           The Company shall procure
that the consolidated financial statements of the Company delivered pursuant to
Clause 16.1 (Financial Statements) are prepared using GAAP.

 

16.3        Information:
Miscellaneous

 

The Company shall supply to each Lender:

 

(a)           all documents dispatched by
the Company to its shareholders generally (or any class of them) or its
creditors generally at the same time as they are dispatched;

 

(b)           promptly upon becoming aware
of them, the details of any litigation, arbitration or administrative
proceedings which are current, threatened or pending against any member of the
Group, and which might, if adversely determined, have a Material Adverse
Effect; and

 

(c)           promptly, such further information
regarding the financial condition, business and operations of any member of the
Group as any Lender may reasonably request.

 

16.4        Notification of
Default

 

(a)           The Company shall notify the
Lenders of any Default (and the steps, if any, being taken to remedy it)
promptly upon becoming aware of its occurrence.

 

(b)           Promptly upon a request by a
Lender, the Company shall supply to each Lender a certificate signed by two of
its directors or senior officers on its behalf certifying that so far as they
are aware (without personal liability) no Default is continuing (or if a
Default is continuing, specifying the Default and the steps, if any, being
taken to remedy it).

 

17.          GENERAL UNDERTAKINGS

 

The undertakings in this Clause 17 shall remain in force from the date
of this Agreement for so long as any amount is outstanding under the Finance
Documents or any Commitment is in force.

 

21

 

17.1        Authorisations

 

The Company shall promptly:

 

(a)           obtain, comply with and do
all that is necessary to maintain in full force and effect; and

 

(b)           supply certified copies to
the Lenders of,

 

any Authorisation required under any law or regulation of its
jurisdiction of incorporation to enable it to perform its obligations under the
Finance Documents and to ensure the legality, validity, enforceability or
admissibility in evidence in its jurisdiction of incorporation of any Finance
Document.

 

17.2        Compliance with
Laws

 

The Company shall comply in all respects with all laws, regulations and
Authorisations to which it may be subject, if failure so to comply would
materially impair its ability to perform its obligations under the Finance
Documents.

 

17.3        Negative Pledge

 

(a)           Subject to paragraph (c) below,
the Company shall not (and shall ensure that no other member of the Group will)
create or permit to subsist any Security over any of its assets.

 

(b)           Subject to paragraph (c) below,
the Company shall not (and shall ensure that no other member of the Group
will):

 

(i)            sell, transfer or otherwise
dispose of any of its assets on terms whereby they are or may be leased to or
re-acquired by any other member of the Group;

 

(ii)           sell, transfer or otherwise
dispose of any of its receivables on recourse terms;

 

(iii)          enter into any arrangement under
which money or the benefit of a bank or other account may be applied, set-off
or made subject to a combination of accounts; or

 

(iv)          enter into any other
preferential arrangement intended to have and having substantially the same
commercial effect,

 

in circumstances where the arrangement or transaction is entered into
primarily as a method of raising Financial Indebtedness or of financing the
acquisition of an asset.

 

(c)           Paragraphs (a) and (b) above
do not apply to:

 

(i)            any netting or set-off or
lien arrangement (including, but not limited to, cash pooling arrangements),
entered into by any member of the Group in the ordinary course of its banking
arrangements for the purpose of netting debit and credit balances;

 

(ii)           any lien arising by
operation of law and in the ordinary course of trading;

 

22

 

(iii)          any lien created by a
Subsidiary in favour of a bank in the ordinary course of its banking
arrangements pursuant to standard banking terms of business;

 

(iv)          any Security over or
affecting any asset acquired by a member of the Group after the date of this
Agreement if:

 

(A)          the Security was not created
in contemplation of the acquisition of that asset by a member of the Group;

 

(B)           the principal amount secured
has not been increased in contemplation of or since the acquisition of that
asset by a member of the Group; and

 

(C)           the Security is removed or
discharged within three Months of the date of acquisition of such asset;

 

(v)           any Security over or affecting
any asset of any company which becomes a member of the Group after the date of
this Agreement, where the Security is created prior to the date on which that
company becomes a member of the Group, if:

 

(A)          the Security was not created
in contemplation of the acquisition of that company;

 

(B)           the principal amount secured
has not increased in contemplation of or since the acquisition of that company;
and

 

(C)           the Security is removed or
discharged within three Months of that company becoming a member of the Group;

 

(vi)          any Security created with
the prior written consent of the Lenders;

 

(vii)         any Security over
receivables, assets and shares subsisting in respect of or granted from time to
time by any member of the Group (other than the Company) under or in connection
with, the Receivables Financing Agreement;

 

(viii)        any disposal of any receivables by any member
of the Group (other than the Company) from time to time under or in connection
with the Receivables Financing Agreement;

 

(ix)           any Security over goods and
documents of title to goods arising in the ordinary course of letter of credit
transactions entered into in the ordinary course of trading; or

 

(x)            any Security securing
indebtedness and/or any sale and leaseback involving an asset or assets the
principal amount of which (when aggregated with the principal amount of any
other indebtedness which has the benefit of Security and/or any sale and
leaseback involving an asset or assets other than any permitted under
paragraphs  (i) to
(vii) above)
does not exceed £25,000,000 (or its equivalent in another currency or
currencies) outstanding at any time.

 

23

 

17.4        Disposals

 

The Company shall not (and the Company shall ensure that no other
member of the Group will) enter into a single transaction or a series of
transactions (whether related or not and whether voluntary or involuntary) to
sell, lease, transfer or otherwise dispose of any asset where such disposal
would constitute a Class 1 transaction for the purposes of the UK Listing Rules (assuming
only for the purpose of this Clause 17.4 that the Company was subject to the
listing rules of the UK Listing Authority) other than with the consent of
the Lenders with the exception of any disposals to be made under or in
connection with the Receivables Financing Agreement.

 

17.5        Priority
Borrowing

 

(a)           The Company shall ensure
that each member of the Group other than the Company shall not create, assume,
guarantee, permit to subsist or otherwise be liable in respect of any Financial
Indebtedness owed to persons outside the Group except for:

 

(i)            Financial Indebtedness
created or incurred with the prior consent of the Lenders;

 

(ii)           Financial Indebtedness
created or incurred under or in connection with the Receivables Financing
Agreement; or

 

(iii)          other Financial Indebtedness
the unpaid principal amount of which, when aggregated with the unpaid principal
amount of all other Financial Indebtedness (other than any permitted under
paragraph (a) above) of Subsidiaries of the Company does not exceed
£30,000,000 or its equivalent in another currency or currencies (calculated at
the time the relevant Financial Indebtedness is incurred).

 

17.6        Merger

 

(a)           Subject to paragraph (b) below,
the Company shall not (and shall ensure that no other member of the Group will)
enter into any amalgamation, demerger, merger or corporate reconstruction.

 

(b)           Nothing in this Clause 17.6
shall restrict:

 

(i)            any solvent amalgamation,
demerger, merger or corporate reconstruction of any member or members of the
Group (other than the Company) which does not involve any person outside the
Group; or

 

(ii)           any transaction that is
necessary to permit the implementation of the demerger of The Carphone
Warehouse Group PLC.

 

17.7        Change of
Business

 

The Company shall procure that no substantial change is made to the
general nature of the business of the Group as a whole from that carried on at
the date of this Agreement.

 

24

 

17.8        Insurance

 

The Company shall
(and shall ensure that each other member of the Group will) maintain insurances
on and in relation to its business and assets with reputable underwriters or
insurance companies against those risks, and to the extent, usually insured
against by prudent companies located in the same or a similar location and
carrying on a similar business.

 

17.9        Acquisitions

 

The Company shall
not (and the Company shall procure that no other member of the Group will)
acquire or agree to acquire any business or part of any business or any company
or any shares in any company where such acquisition would constitute a Class 1
transaction for the purposes of the UK Listing Rules other than with the
consent of the Lenders

 

17.10      Ranking of
Obligations

 

The Company will
ensure that its payment obligations under the Finance Documents rank and will
at all times rank at least pari passu with
the claims of all its other unsecured and unsubordinated creditors, except for:

 

(a)           obligations owed to any SHA Lender under or
in connection with the SHA Loan Agreement; and

 

(a)           obligations mandatorily preferred by law
applying to companies generally.

 

18.          EVENTS OF DEFAULT

 

Each of the events or circumstances set out in this Clause 18  is
an Event of Default.

 

18.1        Non-Payment

 

The Company does not pay on the due date any amount payable pursuant to
a Finance Document at the place at and in the currency in which it is expressed
to be payable unless:

 

(a)           its failure to pay is caused
by administrative or technical error; and

 

(b)           payment is made within three
Business Days of its due date.

 

18.2        Covenants and
other obligations

 

(a)           The Company does not comply with any
provision of the Finance Documents (other than those referred to in
Clause 3.1 (Purpose), Clause 17.10 (Ranking of Obligations) or Clause 18.1  (Non-Payment)).

 

(b)           No Event of Default under
paragraph (a) above will occur if the failure to comply is capable of
remedy and is remedied within 21 days of the Lenders jointly giving notice to
the Company or the Company becoming aware of the failure to comply.

 

18.3        Misrepresentation

 

Any representation or statement made or deemed to be made by the
Company in the Finance Documents or any other document delivered by or on
behalf of the Company under or in 

 

25

 

connection with any Finance Document is or proves to have been
incorrect or misleading in any material respect when made or deemed to be made.

 

18.4        Cross Default

 

(a)           Any Financial Indebtedness
of any member of the Group is not paid when due nor within any originally
applicable grace period.

 

(b)           Any Financial Indebtedness
of any member of the Group is declared to be or otherwise becomes due and
payable prior to its specified maturity as a result of an event of default
(however described).

 

(c)           Any commitment for any
Financial Indebtedness of any member of the Group is cancelled or suspended by
a creditor of any member of the Group as a result of an event of default
(however described).

 

(d)           Any creditor of any member
of the Group becomes entitled to declare any Financial Indebtedness of any
member of the Group due and payable prior to its specified maturity as a result
of an event of default (however described).

 

(e)           No Event of Default will
occur under this Clause 18.4  if the aggregate amount of Financial
Indebtedness or commitment for Financial Indebtedness falling within
paragraphs (a) to (d) above is less than £5,000,000 (or its
equivalent in any other currency or currencies).

 

18.5        Insolvency

 

(a)           The Company or any Material
Subsidiary is unable or admits inability to pay its debts as they fall due,
suspends making payments on any of its debts or, by reason of actual or
anticipated financial difficulties, commences negotiations with one or more of
its creditors with a view to rescheduling any of its indebtedness.

 

(b)           The value of the assets of
the Company or any Material Subsidiary is less than its liabilities (taking
into account contingent and prospective liabilities).

 

(c)           A moratorium is declared in
respect of any indebtedness of the Company or any Material Subsidiary.

 

18.6        Insolvency
Proceedings

 

Any corporate action, legal proceedings or other procedure or step is
taken (other than a petition for winding-up filed by a creditor which is
contested in good faith and is withdrawn or discharged by the date which is the
earlier of 21 days after its presentation and the hearing date for such
petition) in relation to:

 

(a)           the suspension of payments,
a moratorium of any indebtedness, winding-up, dissolution, administration or
reorganisation (by way of voluntary arrangement, scheme of the arrangement or
otherwise) of the Company or any Material Subsidiary;

 

(b)           a composition, assignment or
arrangement with any creditor of the Company or any Material Subsidiary;

 

(c)           the appointment of a
receiver, administrator, administrative receiver, compulsory manager,
liquidator (other than in respect of a solvent liquidation of a member of the 

 

26

 

Group other than the Company or any Material Subsidiary) or other similar
officer in respect of the Company or any Material Subsidiary or any of its
assets;

 

(d)           enforcement of any Security
over any assets of the Company or any Material Subsidiary securing an amount in
excess of £5,000,000 (or its equivalent in any other currency or currencies),

 

or any analogous procedure or step is taken in any jurisdiction.

 

18.7        Creditors’
process

 

Any expropriation, attachment, sequestration, distress or execution
affects any asset or assets of the Company or any Material Subsidiary and is
not discharged within 14 days.

 

18.8        Cessation of
business

 

The Company, any Material Subsidiary or Group as a whole ceases, or
threatens to cease, to carry on all or a substantial part of its business
except as a result of any disposal allowed under this Agreement.

 

18.9        Unlawfulness

 

(a)           It is or becomes unlawful
for the Company to perform all or any of its obligations under the Finance
Documents.

 

(b)           Any Finance Document is not
valid or effective in accordance with its terms or is alleged by the Company to
be ineffective in accordance with its terms for any reason.

 

18.10      Repudiation

 

The Company repudiates a Finance Document or evidences its intention to
repudiate a Finance Document.

 

18.11      Material Adverse
Change

 

Any event or circumstance occurs which has or reasonably be expected to
have a Material Adverse Effect.

 

18.12      Acceleration

 

On and at any time after the occurrence of an Event of Default the
Lenders may jointly, by notice to the Company:

 

(a)           cancel the Total Commitments
whereupon they shall immediately be cancelled;

 

(b)           declare that all or part of
the Loans, together with accrued interest, and all other amounts accrued under
the Finance Documents be immediately due and payable, whereupon they shall
become immediately due and payable;

 

(c)           declare that all or part of
the Loans be payable on demand, whereupon they shall immediately become payable
on demand by the Lenders; and/or

 

(d)           exercise their respective
rights under the Shareholders Agreement.

 

27

 

19.          CHANGES TO THE PARTIES

 

19.1        Assignment and
Transfer by the Company

 

The Company may not assign, transfer or barter any of its rights or
sell, transfer or barter any of its rights or obligations under the Finance
Documents without the prior written consent of each Lender.

 

19.2        Assignment and
Transfer by the Lender

 

No Lender may assign any of its rights or transfer any of its rights
and obligations under the Finance Documents to a new Lender other than:

 

(a)           to any person to which that Lender has
transferred all of their rights and obligations under, and in accordance with,
the Shareholders Agreement;

 

(b)           to an Affiliate of that Lender;

 

(c)           pursuant to Clause 19.6 (Transfer to Successor Carphone Lender); or

 

(d)           to a Non-Participating Lender by a
Disproportionate Lender pursuant to Clause 5.8 (Equalisation Transfer).

 

19.3        Conditions of
Assignment or Transfer

 

(a)           An assignment will only be
effective on receipt by a Lender (an Existing Lender)
of written confirmation from the new Lender (a New
Lender) in the form of a Transfer Certificate countersigned by that
New Lender that the New Lender will assume the same obligations to the other
Lenders as it would have been under if it was an Existing Lender.

 

(b)           A transfer will only be
effective if the procedure set out in Clause 19.5 (Procedure
for Transfer) is complied with.

 

(c)           No assignment or transfer
under this Clause 19 will be effective until the Existing Lender has completed
all “know your customer” requirements relating to any person that it is
required to carry out in relation to such assignment or transfer.  The Lenders are not obliged to execute a
Transfer Certificate until they have completed all “know your customer”
requirements to their reasonable satisfaction.

 

(d)           If:

 

(i)            a Lender assigns or
transfers any of its rights or obligations under the Finance Documents; and

 

(ii)           as a result of circumstances
existing at the date the assignment, transfer or change occurs, the Company
would be obliged to make a payment to the New Lender under Clause 12 (Tax Gross Up),

 

then the New
Lender is only entitled to receive payment under that Clause 12 to the same
extent as the Existing Lender would have been if the assignment, transfer or
change had not occurred.

 

28

 

(e)           A partial transfer by the
Lender must be for a minimum of £5,000,000.

 

(f)            A Lender may not transfer
any of its rights and obligations under the SHA Loan Agreement without a
corresponding transfer of its rights and obligations under the Finance Documents
or vice versa.

 

19.4        Limitation of
Responsibility of Existing Lender

 

(a)           Unless expressly agreed to
the contrary, no Existing Lender makes a representation or warranty and assumes
no responsibility to a New Lender for:

 

(i)            the legality, validity, effectiveness,
adequacy or enforceability of the Finance Documents or any other documents;

 

(ii)           the financial condition of
the Company;

 

(iii)          the performance and
observance by the Company of its obligations under the Finance Documents or any
other documents; or

 

(iv)          the accuracy of any
statements (whether written or oral) made in or in connection with any Finance
Document or any other document,

 

and any
representations or warranties implied by law are excluded.

 

(b)           Each New Lender confirms to
the Existing Lender and the other Lender that is not transferring its
Commitments (Non-Transferring
Lender) that it:

 

(i)            has made (and shall continue
to make) its own independent investigation and assessment of the financial
condition and affairs of the Company and its related entities in connection
with its participation in this Agreement and has not relied exclusively on any
information provided to it by the Existing Lender in connection with any
Finance Document; and

 

(ii)           will continue to make its
own independent appraisal of the creditworthiness of the Company and its
related entities whilst any amount is or may be outstanding under the Finance
Documents or any Commitment is in force.

 

(c)           Nothing in any Finance
Document obliges an Existing Lender to:

 

(i)            accept a re-transfer from a New Lender of
any of the rights and obligations assigned or transferred under this Clause 19;
or

 

(ii)           support any losses directly or indirectly
incurred by the New Lender by reason of the non-performance by the Company of
its obligations under the Finance Documents or otherwise.

 

19.5        Procedure for
Transfer

 

(a)           Subject to the conditions
set out in Clause 19.3 (Conditions of Assignment
or Transfer), a transfer is effected in accordance with
paragraph (b) when the Non-Transferring Lender executes an otherwise
duly completed Transfer Certificate delivered to them by the Existing Lender
and the New Lender.  The Non-Transferring
Lender shall, as soon as reasonably practicable after receipt by it of a duly
completed Transfer Certificate appearing on its face to comply with the terms
of this Agreement 

 

29

 

and delivered in accordance with the terms of this Agreement, execute
that Transfer Certificate.

 

(b)           The Non-Transferring Lender
shall only be obliged to execute a Transfer Certificate delivered to them by
the Existing Lender and the New Lender once they are satisfied that they have
complied with all necessary “know your customer” or other similar checks under
all applicable laws and regulations in relation to the assignment of such New
Lender.

 

(c)           On the Transfer Date:

 

(i)            to the extent that in the
Transfer Certificate the Existing Lender seeks to transfer by novation its
rights and obligations under the Finance Documents, the Company and the
Existing Lender shall be released from further obligations towards one another
under the Finance Documents and their respective rights against one another
shall be cancelled (being the Discharged
Rights and Obligations);

 

(ii)           the Company and the New Lender
shall assume obligations towards one another and/or acquire rights against one
another which differ from the Discharged Rights and Obligations only insofar as
the Company and the New Lender have assumed and/or acquired the same in place
of the Company and the Existing Lender;

 

(iii)          the New Lender and the
Non-Transferring Lender shall acquire the same rights and assume the same
obligations between themselves as they would have acquired and assumed had the
New Lender been an Existing Lender with the rights and/or obligations acquired
or assumed by it as a result of the transfer and to that extent the Existing
Lender shall be released from further obligations to each other under this
Agreement; and

 

(iv)          the New Lender shall become
a Party as a Lender.

 

19.6        Transfer to
Successor Carphone Lender

 

(a)           Upon the occurrence of the New Carphone
Admission Date:

 

(i)            all of the rights and
obligations of the Original Carphone Lender under the Combined Finance
Documents shall be transferred in full to the Successor Carphone Lender
notwithstanding that the facts, circumstances or events giving rise to any of
them arose or occurred before or after the New Carphone Admission Date;

 

(ii)           the Company and the Original Carphone
Lender shall be released from further obligations towards one another under the
Combined Finance Documents and their respective rights against one another
shall be cancelled (being the Relevant  Discharged
Rights and Obligations);

 

(iii)          the Company and the Original Carphone
Lender shall assume obligations towards one another and/or acquire rights
against one another which differ from the Relevant Discharged Rights and
Obligations only insofar as the Original Carphone Lender and the Successor
Carphone Lender have assumed and/or acquired the same in place of the Company
and the Original Carphone Lender; and

 

30

 

(iv)          the Successor Carphone Lender and the Best
Buy Lender shall acquire the same rights and assume the same obligations
between themselves as they would have acquired and assumed had the Successor
Carphone Lender been the Original Carphone Lender with the rights and/or
obligations acquired or assumed by it as a result of the transfer and to that
extent the Original Carphone Lender shall be released from further obligations
to each other under the Combined Finance Documents.

 

(b)           The Successor Carphone Lender indemnifies and agrees to keep the
Original Carphone Lender indemnified on demand in respect of any claims
including all reasonable costs, expenses, fines and interest that any person
including the Original Best Buy Lender and/or the CPW Retail Holdings Limited
may bring against the Original Carphone Lender in respect of it being a Party.

 

19.7        Disclosure of
Information

 

Any Lender may disclose to any of its Affiliates and any other person:

 

(a)           to any of its Affiliates and any of its or
their officers, directors, employees, professional advisers, auditors,
partners, delegates, agents, managers, administrators, nominees, attorneys,
trustees or custodians such Confidential Information as that Lender shall
consider appropriate if any person to whom the Confidential Information is to
be given pursuant to this paragraph (a) has entered into a
Confidentiality Undertaking except that there shall be no requirement for a
Confidentiality Undertaking if the recipient is a professional adviser and is
subject to professional obligations to maintain the confidentiality of the
Confidential Information; and

 

(b)           to any person:

 

(i)            to (or through) whom it assigns or
transfers (or may potentially assign or transfer) all or any of its rights
and/or obligations under this Agreement;

 

(ii)           with (or through) whom it enters into (or
may potentially enter into), whether directly or indirectly, any
sub-participation in relation to, or any other transaction under which payments
are to be made or may be made by reference to, this Agreement or the Company;

 

(iii)          to whom information is required or
requested to be disclosed by any court of competent jurisdiction or any governmental,
banking, taxation or other regulatory authority or similar body, the rules of
any relevant stock exchange or pursuant to any applicable law or regulation;

 

(iv)          to whom information is required to be
disclosed in connection with, and for the purposes of, any litigation,
arbitration, administrative or other investigations, proceedings or disputes;

 

(v)           who is a Party; or

 

(vi)          with the consent of the Company and the
other Lender;

 

in each case,
such Confidential Information as that Lender shall consider appropriate if:

 

31

 

(A)          in relation to paragraphs (b)(i) and
(b)(ii), the person to whom the Confidential Information is to be given has
entered into a Confidentiality Undertaking except that there shall be no
requirement for a Confidentiality Undertaking if the recipient is a
professional adviser and is subject to professional obligations to maintain the
confidentiality of the Confidential Information;

 

(B)           in relation to paragraphs(b)(iv) above,
the person to whom the Confidential Information is to be given is informed of
its confidential nature and that some or all of such Confidential Information
may be price-sensitive information except that there shall be no requirement to
so inform if, in the opinion of that Lender, it is not practicable so to do in
the circumstances.

 

20.          CONDUCT OF BUSINESS BY THE LENDERS

 

No provision of this Agreement will:

 

(a)           interfere with the right of
any Lender to arrange its affairs (tax or otherwise) in whatever manner it thinks
fit;

 

(b)           oblige any Lender to
investigate or claim any credit, relief, remission or repayment available to it
or the extent, order and manner of any claim; or

 

(c)           oblige any Lender to
disclose any information relating to its affairs (tax or otherwise) or any
computations in respect of Tax.

 

21.          SHARING AMONG THE LENDERS

 

21.1        Payments to the
Lenders

 

If a Lender in any capacity (the Recovering
Lender) receives or recovers any payment or distribution in cash
or kind in respect of the Facility Debt from the Company or from any other
source other than in accordance with Clause 22 (Payment
Mechanics) (a Recovered
Amount) the Recovering Lender shall, within three Business Days
of such receipt or recovery, notify details of the receipt or recovery to the other
Lender:

 

(a)           to the extent that any SHA Debt is outstanding and the
Recovering Lender is not the SHA Lender:

 

(i)            the Recovered Amount shall be held in trust by such
Lender, and shall forthwith be paid or, as the case may be, transferred or
assigned to the SHA Lender, to be applied against the SHA Debt; or

 

(ii)           if the trust referred to in paragraph (a) above
fails or cannot be given effect to, the Recovering Lender (so as also to bind
any agent or trustee on its behalf) will pay over such Recovered Amount in the
form received to the to the SHA Lender, to be applied against the SHA Debt; or

 

(b)           if no SHA Debt is outstanding or the SHA
Debt has been fully discharged pursuant to paragraph (a) above and a
portion of the Recovered Amount remains outstanding:

 

(i)            the Lenders shall determine in good faith
whether the receipt or recovery is in excess of the amount the Recovering
Lender would have been paid had the 

 

32

 

receipt or
recovery been received by that Lender in accordance with Clause 22  (Payment mechanics);
and

 

(ii)           the Recovering Lender shall pay to the
other Lender an amount (the Sharing
Payment) equal to such receipt or recovery less any amount which
the Lenders determine in good faith may be retained by the Recovering Lender as
its share of any payment which has been made in accordance with Clause 22 (Payment Mechanics) and until such payment has been made the
Recovering Lender will hold the Sharing Payment on trust for the other Lender.

 

21.2        Recovering Lender’s
rights

 

On the payment by a Recovering Lender of the Sharing Payment to the
other Lender under Clause 21.1(b)(ii), as between the Company and the
Recovering Lender, an amount of the Recovered Amount equal to the Sharing
Payment will be treated as not having been paid by the Company.

 

21.3        Reversal of
redistribution

 

If any part of the Sharing Payment received or recovered by the
Recovering Lender becomes repayable and is repaid by the Recovering Lender,
then:

 

(a)           the other Lender shall pay to
the Recovering Lender an amount equal to the Sharing Payment (together with an
amount as is necessary to reimburse that Recovering Lender for its proportion
of any interest on the Sharing Payment which that Recovering Lender is required
to pay) (the Redistributed
Amount); and

 

(b)           as between the Company and
such other Lender, an amount equal to the Redistributed Amount will be treated
as not having been paid by the Company.

 

21.4        Exceptions

 

(a)           This Clause 21 shall not
apply to the extent that the Recovering Lender would not, after making any
payment pursuant to this Clause, have a valid and enforceable claim against the
Company.

 

(b)           The Recovering Lender is not
obliged to share with the other Lender any amount which the Recovering Lender
has received or recovered as a result of taking legal or arbitration
proceedings, if:

 

(i)            it notified that other
Lender of the legal or arbitration proceedings; and

 

(ii)           that other Lender had an
opportunity to participate in those legal or arbitration proceedings but did
not do so as soon as reasonably practicable having received notice and did not
take separate legal or arbitration proceedings.

 

22.          PAYMENT MECHANICS

 

22.1        Payments to the
Lenders

 

(a)           On each date on which the
Company is required to make a payment under a Finance Document, the Company
shall make the same available to the relevant Lender (unless a contrary
indication appears in the Finance Documents) for value on the due date at 

 

33

 

the time and in such funds specified by that Lender as being customary
at the time for settlement of transactions in the relevant currency in the
place of payment.

 

(b)           Any payment under a Finance
Document which is stated in that Finance Document as being required to be made
to the Lenders (unless otherwise expressly stated to the contrary in this
Agreement) shall be made by the Company to each Lender in the same proportion
as the proportion that the amount of the participation of that Lender in the
Loans outstanding under this Agreement bears to the aggregate amount of the
Loans outstanding under this Agreement.

 

(c)           Payment shall be made to
such account in London in the Base Currency with such bank as the relevant
Lender specifies.

 

(d)           The Company shall keep
proper books and records of the amounts it has borrowed under this Agreement
and the amounts it owes under the Finance Documents. If a Lender fails to make
its participation in a Loan available to the Company pro rata its Commitments,
in the absence of manifest error, the determination of the other Lender shall
be conclusive as to the amounts that each Lender is owed under the Finance
Documents.

 

22.2        Distributions to
the Company

 

Each Lender may (with the consent of the Company or in accordance with
Clause 23  (Set-Off))
apply any amount received by it for the Company in or towards payment (on the
date and in the currency and funds of receipt) of any amount due to that Lender
from the Company under the Finance Documents or in or towards purchase of any
amount of any currency to be so applied.

 

22.3        Partial Payments

 

(a)           If the Lenders receive any
payment that is insufficient to discharge all the amounts then due and payable
by the Company under the Combined Finance Documents, the Lenders shall apply
the amount of such payment towards the obligations of the Company under the
Combined Finance Documents in the following order:

 

(i)            first,  if on the date of such payment any SHA
Debt is outstanding:

 

(A)          first in or towards payment of SHA
Debt; and

 

(B)           secondly, to the extent that the SHA
Debt has been discharged in full, in accordance with subparagraphs (ii) and
(iii) below;

 

(ii)           secondly, if
on the date of such payment a Disproportionate Amount is outstanding:

 

(A)          first in or towards payment of the
Disproportionate Lender’s participation in any Disproportionate Loans (as
selected by the Disproportionate Lender in its sole discretion and notified in
writing to the other Lender but only to the extent that such repayment of a
Disproportionate Loan would not cause the Disproportionate Lender’s
participation in that Loan to be less the participation of the other Lender);
and

 

34

 

(B)           secondly, to the extent that the
Disproportionate Amount has been repaid in full in accordance with the order
set out in subparagraphs (iii)(A) to (iii)(D) below; and

 

(iii)          thirdly, if on the date of such payment
a Disproportionate Amount is not outstanding:

 

(A)          first, in or towards payment pro rata of any unpaid fees, costs and expenses of the
Lenders under the Finance Documents;

 

(B)           secondly, in or towards payment pro rata of any accrued fees, interest or commission due but
unpaid under the Finance Documents;

 

(C)           thirdly, in or towards
payment  pro rata of any principal due but unpaid under the Finance
Documents; and

 

(D)          fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance
Documents.

 

(b)           The Lenders may agree to
vary the order set out in subparagraphs (iii)(A) to (iii)(D) above.

 

(c)           Paragraph (a) will
override any appropriation made by the Company.

 

22.4        Ranking of SHA Debt

 

The Parties
agree that the SHA Debt shall rank in right and priority of payment ahead of
the Facility Debt.

 

22.5        Subordination on Insolvency

 

If any Event
of Default specified in Clause 18.5 (Insolvency),
Clause 18.6 (Insolvency Proceedings)
or Clause 18.7 (Creditors’ process)
occurs in respect of the Company, any Facility Debt shall be subordinated in
right of payment to the SHA Debt.

 

22.6        No set-off by the
Company

 

All payments to be made by the Company under the Combined Finance
Documents shall be calculated and be made without (and free and clear of any
deduction for) set-off or counterclaim.

 

22.7        Business Days

 

(a)           Any payment which is due to
be made on a day that is not a Business Day shall be made on the next Business
Day in the same calendar month (if there is one) or the preceding Business Day
(if there is not).

 

(b)           During any extension of the
due date for payment of any principal or an Unpaid Sum under this Agreement
interest is payable on the principal or Unpaid Sum at the rate payable on the
original due date.

 

35

 

22.8        Currency of
Account

 

(a)           A repayment of a Loan or
Unpaid Sum or a part of a Loan or Unpaid Sum shall be made in the currency in
which that principal amount is denominated on its due date.

 

(b)           Each payment of interest
shall be made in the currency in which the relevant amount in respect of which
it is payable is denominated.

 

(c)           Each payment in respect of
costs, expenses or Taxes shall be made in the currency in which they are
incurred.

 

(d)           Each other amount payable
under the Combined Finance Documents is payable in sterling.

 

22.9        Change of
Currency

 

(a)           Unless otherwise prohibited
by law, if more than one currency or currency unit are at the same time
recognised by the central bank of any country as the lawful currency of that
country, then:

 

(i)            any reference in the
Combined Finance Documents to, and any obligations arising under the Combined
Finance Documents in, the currency of that country shall be translated into, or
paid in, the currency or currency unit of that country designated by the
Lenders (after consultation with the Company); and

 

(ii)           any translation from one
currency or currency unit to another shall be at the official rate of exchange
recognised by the central bank for the conversion of that currency or currency
unit into the other, rounded up or down by the Lenders (acting reasonably).

 

(b)           If a change in any currency
of a country occurs, this Agreement will, to the extent the Lenders (acting
reasonably and after consultation with the Company) specify to be necessary, be
amended to comply with any generally accepted conventions and market practice
in the Relevant Interbank Market and otherwise to reflect the change in
currency.

 

23.          SET-OFF

 

Each Lender may set off any matured obligation due from the Company
under the Finance Documents (to the extent beneficially owned by that Lender)
against any matured obligation owed by a Lender to the Company, regardless of
the place of payment, booking branch or currency of either obligation.  If the obligations are in different
currencies, the relevant Lender may convert either obligation at a market rate
of exchange in its usual course of business for the purpose of the set-off.

 

24.          NOTICES

 

24.1        Communications in
Writing

 

Any communication to be made under or in connection with the Finance
Documents shall be made in writing and, unless otherwise stated, may be made by
fax or letter.

 

36

 

24.2        Addresses

 

The postal address, fax number and email (and the department or
officer, if any, for whose attention the communication is to be made) of each
Party for any communication or document to be made or delivered under or in
connection with the Finance Documents is, in the case of each of the Company
and the Lenders, that identified with its name below or any substitute address,
fax number or department or officer as the Company may notify to the Lenders
(or a Lender may notify to the other Parties, if a change is made by that
Lender) by not less than five Business Days’ notice.

 

24.3        Delivery

 

(a)           Any communication or
document made or delivered by one person to another under or in connection with
the Finance Documents will only be effective:

 

(i)            if by way of fax, when
received in legible form; or

 

(ii)           if by way of letter, when it
has been left at the relevant address or five Business Days after being
deposited in the post postage prepaid in an envelope addressed to it at that
address,

 

and, if a particular department or officer is specified as part of its
address details provided under Clause 24.2  (Addresses),
if addressed to that department or officer.

 

(b)           Any communication or
document to be made or delivered to a Lender will be effective only when
actually received by that Lender and then only if it is expressly marked for
the attention of the department or officer identified with that Lender’s
signature below (or any substitute department or officer as that Lender shall
specify for this purpose).

 

(c)           Any communication made to a
Lender by fax must subsequently be confirmed by way of letter provided that
non-receipt of such letter by that Lender does not invalidate or render
ineffective in any way the initial fax communication.

 

24.4        English Language

 

(a)           Any notice given under or in
connection with any Finance Document must be in English.

 

(b)           All other documents provided
under or in connection with any Finance Document must be:

 

(i)            in English; or

 

(ii)           if not in English, and if so
required by the Lenders, accompanied by a certified English translation and, in
this case, the English translation will prevail unless the document is a
constitutional, statutory or other official document.

 

37

 

25.          CALCULATIONS AND CERTIFICATES

 

25.1        Accounts

 

In any litigation or arbitration proceedings arising out of or in
connection with a Finance Document, the entries made in the accounts maintained
by a Lender are prima facie evidence of the
matters to which they relate.

 

25.2        Certificates and
Determinations

 

Any certification or determination by a Lender of a rate or amount
under any Finance Document is, in the absence of manifest error, prima facie evidence of the matters to which it relates.

 

25.3        Day Count
Convention

 

Any interest, commission or fee accruing under a Finance Document will
accrue from day to day and is calculated on the basis of the actual number of
days elapsed and a year of 365 days for any amounts or, in any case where the
practice in the Relevant Interbank Market differs, in accordance with that
market practice.

 

26.          PARTIAL INVALIDITY

 

If, at any time, any provision of the Finance Documents is or becomes
illegal, invalid or unenforceable in any respect under any law of any jurisdiction,
neither the legality, validity or enforceability of the remaining provisions
nor the legality, validity or enforceability of such provision under the law of
any other jurisdiction will in any way be affected or impaired.

 

27.          REMEDIES AND WAIVERS

 

No failure to exercise, nor any delay in exercising, on the part of a
Lender, any right or remedy under the Finance Documents shall operate as a
waiver, nor shall any single or partial exercise of any right or remedy prevent
any further or other exercise or the exercise of any other right or
remedy.  The rights and remedies provided
in this Agreement are cumulative and not exclusive of any rights or remedies
provided by law.

 

28.          AMENDMENTS AND WAIVERS

 

Any term of the Finance Documents may be amended or waived
only with the consent of each of the Lenders and the Company and any such
amendment or waiver will be binding on all Parties.

 

29.          COUNTERPARTS

 

This Agreement may be executed in any number of counterparts, and by
each party on separate counterparts. Each counterpart is an original, but all
counterparts shall together constitute one and the same instrument. Delivery of
a counterpart of this Agreement by e-mail attachment or telecopy shall be an
effective mode of delivery.

 

30.          GOVERNING LAW

 

This Agreement and any non-contractual obligations arising out of or in
connection with it are governed by English law.

 

38

 

31.                               ENFORCEMENT

 

(a)                                  The
courts of England have exclusive jurisdiction to settle any dispute arising out
of or in connection with this Agreement (including a dispute regarding the
existence, validity or termination of this Agreement) (a Dispute).

 

(b)                                 The
Parties agree that the courts of England are the most appropriate and
convenient courts to settle Disputes and accordingly no Party will argue to the
contrary.

 

(c)                                  This
Clause 31 is for the benefit of the Lenders only.  As a result, no Lender shall be prevented
from taking proceedings relating to a Dispute in any other courts with
jurisdiction.  To the extent allowed by
law, the Lenders may take concurrent proceedings in any number of
jurisdictions.

 

THIS
AGREEMENT has been entered into on the date stated at
the beginning of this Agreement.

 

39

 

SCHEDULE 1

 

PART A 

 

CONDITIONS PRECEDENT

 

1.                                      THE
COMPANY

 

1.1                                 A
copy of the constitutional documents of the Company.

 

1.2                                 A
copy of a resolution of the board of directors of the Company:

 

(a)                                  approving
the terms of, and the transactions contemplated by, the Finance Documents to
which it is a party and resolving that it execute the Finance Documents to
which it is a party;

 

(b)                                 authorising
a specified person or persons to execute the Finance Documents to which it is a
party on its behalf; and

 

(c)                                  authorising
a specified person or persons, on its behalf, to sign and/or despatch all
documents and notices (including, if relevant, any Utilisation Request) to be
signed and/or despatched by it under or in connection with the Finance
Documents to which it is a party.

 

1.3                                 A
specimen of the signature of each person authorised by the resolution referred
to in paragraph 1.2 above.

 

1.4                                 A
certificate of the Company (signed by a director) confirming that borrowing the
Total Commitments would not cause any borrowing or similar limit binding on the
Company to be exceeded.

 

1.5                                 A
certificate of an authorised signatory of the Company certifying that each copy
document relating to it specified in this paragraph 1 of Schedule 1
is correct, complete and in full force and effect as at a date no earlier than
the date of this Agreement.

 

2.                                      OTHER
DOCUMENTS AND EVIDENCE

 

2.1                                 A copy of any other
Authorisation or other document, opinion or assurance which the Lenders
consider to be necessary (if it has notified the Company accordingly prior to
the date of this Agreement) in connection with the entry into and performance
of the transactions contemplated by any Finance Document or for the validity
and enforceability of any Finance Document.

 

2.2                                 Evidence
that the £475,000,000 facility agreement dated 6 November 2008 (as amended
from time to time) between the Company, Best Buy Co, Inc. as guarantor and
The Carphone Warehouse Group PLC, as lender, has been prepaid in full or
cancelled as of the date of this Agreement. 

 

40

 

PART B

 

LENDERS
AND COMMITMENTS

 

	
  Original Lender

  	
   

  	
  Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Best Buy
  Distributions Limited

  	
   

  	
  £

  	
  62,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The Carphone
  Warehouse Group PLC

  	
   

  	
  £

  	
  62,500,000

  	
   

  

 

41

 

SCHEDULE 2

 

UTILISATION REQUEST

 

From:                  Best Buy Europe
Distributions Ltd

 

To:                              The
Lenders

 

Dated:

 

Dear Sirs

 

Best Buy Europe
Distributions Ltd — £125,000,000 Facility Agreement dated
[                   ]
(the Facility Agreement)

 

1.                                       We
wish to draw-down a Loan on the following terms:

 

	
  Proposed Utilisation Date:

  	
  [                   ]
  (or, if that is not a Business Day, the next Business Day)

  
	
   

  	
   

  
	
  Amount:

  	
  [                   ]
  or, if less, the Available Commitment

  
	
   

  	
   

  
	
  Interest Period:

  	
  [                   ]

  

 

2.                                       We
confirm that each condition specified in Clause 4.2 (Further conditions precedent)
is satisfied on the date of this Utilisation Request.

 

3.                                       The
proceeds of this Loan should be credited to [account].

 

4.                                       This
Utilisation Request is irrevocable.

 

Yours faithfully

 

 

 

	
   

  	
   

  	
   

  
	
  Authorised Signatory of

  	
   

  	
  Authorised Signatory of

  
	
  Best Buy Europe Distributions Ltd

  	
   

  	
  Best Buy Europe Distributions Ltd

  

 

42

 

SCHEDULE 3

 

TIMETABLE

 

D -
refers to the number of Business Days before the relevant Utilisation Date/the
first day of the relevant Interest Period.

 

	
   

  	
   

  	
  Loans in sterling

  
	
   

  	
   

  	
   

  
	
  Delivery of a duly completed Utilisation Request 

  (Clause 5.1  (Delivery
  of a Utilisation Request))

  	
   

  	
  D-3 

  1.00 p.m.

  
	
   

  	
   

  	
   

  
	
  LIBOR is fixed

  	
   

  	
  Quotation Day  

  as of  

  11.00 a.m.

  

 

43

 

SCHEDULE 4

 

Part A

 

FORM OF
TRANSFER CERTIFICATE

 

To:                              [            ] (the Lenders)

 

From:                  [The Existing
Lender] (the “Existing Lender”) and [The New Lender] (the “New Lender”)

 

Dated:

 

Best
Buy Europe Distributions Limited — £125,000,000 Facility Agreement

 

dated
[           ] (the “Agreement”)

 

1.                                       We
refer to the Agreement.  This is a Transfer
Certificate.  Terms defined in the
Agreement have the same meaning in this Transfer Certificate unless given a
different meaning in this Transfer Certificate.

 

2.                                       We
refer to Clause 19.5 (Procedure for transfer):

 

(a)                                  The
Existing Lender and the New Lender agree to the Existing Lender transferring to
the New Lender by novation all or part of the Existing Lender’s Commitment,
rights and obligations referred to in the Schedule in accordance with Clause
19.5 (Procedure for transfer).

 

(b)                                 The
proposed Transfer Date is [            ].

 

(c)                                  The
address, fax number and attention details for notices of the New Lender for the
purposes of Clause 24.2 (Addresses) are
set out in the Schedule.

 

3.                                       The
New Lender expressly acknowledges the limitations on the Existing Lender’s
obligations set out in paragraph (c) of Clause 19.4 (Limitation
of responsibility of Existing Lenders).

 

4.                                       This
Transfer Certificate may be executed in any number of counterparts and this has
the same effect as if the signatures on the counterparts were on a single copy
of this Transfer Certificate.

 

5.                                       This
Transfer Certificate is governed by English law.

 

44

 

THE
SCHEDULE

 

Commitment/rights
and obligations to be transferred

 

[insert relevant details]

 

[Lenders’ address, fax number and attention details
for notices and account details for payments.]

 

[Existing Lender]                                                      [New
Lender]

 

	
   

  	
  By:

  	
  By:

  

 

 

This Transfer
Certificate is accepted by the Lenders and the Transfer Date is confirmed as

 

[                                ].

 

[insert details of the Lenders]

 

By:

 

45

 

SIGNATORIES

 

	
  The Company

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BEST BUY EUROPE DISTRIBUTIONS LIMITED

  	
   

  	
  )

  
	
  By:

  	
  /s/ JAMES L. MUEHLBAUER

  	
   

  	
  )

  
	
  1 Portal Way

  	
   

  	
  )

  
	
  London W3 6RS

  	
   

  	
  )

  
	
  Fax:

  	
   

  	
  [·]

  
	
  Email:

  	
   

  	
  [·]

  
	
   

  	
   

  	
   

  
	
  The Original Lenders

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BEST BUY DISTRIBUTIONS LIMITED

  	
   

  	
  )

  
	
  By:

  	
  /s/ JAMES L. MUEHLBAUER

  	
   

  	
  )

  
	
  100 New Bridge Street

  	
   

  	
  )

  
	
  London EC4V 6JA

  	
   

  	
  )

  
	
  Fax:

  	
   

  	
  [·]

  
	
  Email:

  	
   

  	
  [·]

  
	
   

  	
   

  	
   

  
	
  THE CARPHONE WAREHOUSE GROUP PLC

  	
   

  	
  )

  
	
  By:

  	
  /s/ TIM MORRIS

  	
   

  	
  )

  
	
  1 Portal Way

  	
   

  	
  )

  
	
  London

  	
   

  	
  )

  
	
  W3 6RS

  	
   

  	
  )

  
	
  Fax:

  	
   

  	
  [·]

  
	
  Email:

  	
   

  	
  [·]

  
	
   

  	
   

  	
   

  
	
  Successor Carphone Lender

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NEW CARPHONE WAREHOUSE PLC

  	
   

  	
  )

  
	
  By

  	
  /s/ TIM MORRIS

  	
   

  	
  )

  
	
   

  	
   

  	
  )

  
	
   

  	
   

  	
  )

  
	
  Fax:

  	
   

  	
  [·]

  
	
  Email:

  	
   

  	
  [·]

  

 

46

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