Document:

Exhibit No. 4.9

 

AGREED FORM
– 7 MAY 2008 AMENDED 27 JUNE 2008 AMENDED 6 NOVEMBER 2008

 

 

£475,000,000

FACILITY
AGREEMENT

 

 

6 NOVEMBER
2008

 

 

BEST BUY
EUROPE DISTRIBUTIONS LTD (formerly CPW DISTRIBUTION HOLDINGS LTD)

the Company

 

BEST BUY
CO., INC

the Guarantor

 

THE
CARPHONE WAREHOUSE GROUP PLC

the Lender

 

 

CONTENTS

 

	
  Clause

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Definitions and
  interpretation

  	
   

  	
  1

  
	
  2.

  	
   

  	
  The Facility

  	
   

  	
  11

  
	
  3.

  	
   

  	
  Purpose

  	
   

  	
  11

  
	
  4.

  	
   

  	
  Conditions of Utilisation

  	
   

  	
  12

  
	
  5.

  	
   

  	
  Utilisation

  	
   

  	
  12

  
	
  6.

  	
   

  	
  Optional Currencies

  	
   

  	
  13

  
	
  7.

  	
   

  	
  Repayment

  	
   

  	
  15

  
	
  8.

  	
   

  	
  Prepayment and
  Cancellation

  	
   

  	
  15

  
	
  9.

  	
   

  	
  Interest

  	
   

  	
  17

  
	
  10.

  	
   

  	
  Interest Periods

  	
   

  	
  17

  
	
  11.

  	
   

  	
  Changes to the Calculation
  of Interest

  	
   

  	
  18

  
	
  12.

  	
   

  	
  Fees

  	
   

  	
  19

  
	
  13.

  	
   

  	
  Tax Gross Up

  	
   

  	
  20

  
	
  14.

  	
   

  	
  Indemnities

  	
   

  	
  21

  
	
  15.

  	
   

  	
  Costs and Expenses

  	
   

  	
  22

  
	
  16.

  	
   

  	
  Guarantee

  	
   

  	
  23

  
	
  17.

  	
   

  	
  Representations

  	
   

  	
  25

  
	
  18.

  	
   

  	
  Information Undertakings

  	
   

  	
  26

  
	
  19.

  	
   

  	
  Financial Covenant

  	
   

  	
  27

  
	
  20.

  	
   

  	
  General Undertakings

  	
   

  	
  28

  
	
  21.

  	
   

  	
  Events of Default

  	
   

  	
  30

  
	
  22.

  	
   

  	
  Changes to the Parties

  	
   

  	
  33

  
	
  23.

  	
   

  	
  Payment Mechanics

  	
   

  	
  34

  
	
  24.

  	
   

  	
  Set-Off

  	
   

  	
  35

  
	
  25.

  	
   

  	
  Notices

  	
   

  	
  36

  
	
  26.

  	
   

  	
  Calculations and
  Certificates

  	
   

  	
  37

  
	
  27.

  	
   

  	
  Partial Invalidity

  	
   

  	
  37

  
	
  28.

  	
   

  	
  Remedies and Waivers

  	
   

  	
  37

  
	
  29.

  	
   

  	
  Amendments and Waivers

  	
   

  	
  37

  
	
  30.

  	
   

  	
  Counterparts

  	
   

  	
  37

  
	
  31.

  	
   

  	
  Governing Law

  	
   

  	
  38

  
	
  32.

  	
   

  	
  Enforcement

  	
   

  	
  38

  
	
  33.

  	
   

  	
  Lender indebtedness

  	
   

  	
  38

  

 

 

	
  Schedule

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Conditions Precedent

  	
   

  	
  39

  
	
  2.

  	
   

  	
  Utilisation Request

  	
   

  	
  40

  
	
  3.

  	
   

  	
  Form of Compliance
  Certificate

  	
   

  	
  41

  
	
  4.

  	
   

  	
  Timetables

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signatories

  	
   

  	
  43

  

 

 

THIS AGREEMENT is dated 6 November 2008 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 CO., INC (the Guarantor);
and

 

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

 

IT IS AGREED as follows:

 

SECTION 1

 

INTERPRETATION

 

1.             DEFINITIONS
AND INTERPRETATION

 

1.1          Definitions

 

In this Agreement:

 

Acceptable Bank means a commercial bank or trust company which has a
rating of A or higher by Standard & Poor’s Ratings Group or Fitch
Limited or A2 or higher by Moody’s Investors Services, Inc. or a
comparable rating from an internationally recognised credit rating agency for
its long-term debt obligations.

 

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 Lender acting
reasonably.

 

Available Commitment means the 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.

 

Base Currency means sterling.

 

Base Currency Amount means, in relation to a Loan, the amount specified in
the Utilisation Request delivered by the Company for that Loan (or, if the
amount requested is not denominated in the Base Currency, that amount converted
into the Base Currency at the Lender’s Spot Rate of Exchange on the date which
is three Business Days before the Utilisation Date or, if later, on the

 

1

 

date the Lender receives the Utilisation
Request) adjusted to reflect any repayment or prepayment of the Loan.

 

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

 

(a)             the interest (excluding the Margin) which the Lender
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 Lender 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 and:

 

(a)           (in relation to any date for payment or purchase of a
currency other than euro) the principal financial centre of the country of that
currency; or

 

(b)           (in relation to any date for payment or purchase of
euro) any TARGET Day.

 

Commitment means £475,000,000, to the extent not cancelled or
reduced under this Agreement.

 

Compliance Certificate means a certificate substantially in the form set out
in Schedule 3 (Form of Compliance Certificate).

 

Carphone Facility means the £550,000,000  revolving credit facility dated 13th March 2008
and agreed between the Lender and a group of relationship banks

 

Default means an Event of Default or any event or
circumstance specified in Clause 21 (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.

 

EBIT means, in relation to any Relevant Period, the total
consolidated operating profit of the Group for that Relevant Period before
taking into account:

 

(a)           Net Interest Expense;

 

(b)           Tax;

 

(c)             any share of the profit of any associated company or
undertaking, except for dividends received in cash by any member of the Group;
and

 

(d)           all extraordinary and exceptional items,

 

as determined (except as needed to reflect the
terms of Clause 19 (Financial Covenant)) from the financial statements of the
Group and Compliance Certificates delivered under Clause 18.1 (Financial
Statements) and Clause 18.2 (Compliance Certificate).

 

2

 

EBITDA means, in relation to any Relevant Period, EBIT for
that Relevant Period after adding back all amounts provided for depreciation,
amortisation and write-downs of goodwill and other intangible assets, as
determined (except as needed to reflect the terms of Clause 19 (Financial
Covenant)) from the financial statements of the Group and Compliance
Certificates delivered under Clause 18.1 (Financial Statements) and Clause 18.2
(Compliance Certificate).

 

Event of Default means any event or circumstance specified as such in
Clause 21 (Events of Default).

 

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

 

Final Maturity Date means the 13th March 2013.

 

Finance Document means this Agreement and any other document
designated as such by the Lender, the Guarantor 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.

 

3

 

Guarantee means the guarantee of the Guarantor contained in
Clause 16.

 

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

 

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 10 (Interest Periods) and, in relation to an Unpaid
Sum, each period determined in accordance with Clause 9.3 (Default interest).

 

Legal Reservations means any applicable bankruptcy, reorganisation,
insolvency, moratorium or similar laws affecting creditors’ rights generally
and subject, as to enforceability, to equitable principles of general
application.

 

Lender’s Spot Rate of Exchange
means the rate of exchange
at which the Lender can, acting reasonably, purchase the relevant currency with
the Base Currency in the London foreign exchange market.

 

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 Lender at its request quoted by the
Reference Banks to leading banks in the London interbank market,

 

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 the margin payable by the Lender for borrowings
under the Carphone Facility, initially 0.75 per cent. per annum until delivery
of a Compliance Certificate for the Relevant Period ended 31st March 2009.

 

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 Lender 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
the Lender that the cost to it of obtaining matching deposits in the Relevant
Interbank Market would be in excess of LIBOR.

 

4

 

Material Adverse Effect means a material adverse effect on the ability of the
Company to perform and comply with the financial covenant in Clause 19
(Financial Covenant) and/or any payment obligations under any Finance Document.

 

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;

 

(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.

 

Net Debt means, as at any particular time, Total Debt as at
that time, less:

 

(a)             any cash in hand or on deposit at call with any bank
or financial institution incorporated in any OECD country;

 

(b)             certificates of deposit, maturing within one year
after the relevant date of calculation, issued by an Acceptable Bank;

 

(c)             any investment in marketable obligations issued or
guaranteed by the government of the United States of America, the U.K. or a
member state of the European Union with a credit rating of AAA by Standard &
Poor’s Ratings Group or Fitch Limited or Aaa by Moody’s Investors Services, Inc.
or by an instrumentality or agency of the government of the United States of
America, the U.K. or such member state of the European Union having an
equivalent credit rating to the government of the United States of America, the
U.K. or such member state of the European Union respectively;

 

(d)           open market commercial paper, corporate bonds or
similar investments:

 

(i)            for which a recognised trading market exists;

 

(ii)           issued in the United States of America, the U.K. or a
member state of the European Union with a credit rating of AAA by Standard &
Poor’s Ratings Group or Fitch Limited or Aaa by Moody’s Investors Services, Inc.;

 

(iii)          which mature within one year after the relevant date
of calculation or which are repayable at call; and

 

(iv)          which, on the relevant date of calculation, has a:

 

(A)          short term credit rating of either A-1 by Standard &
Poor’s Ratings Group, F-1 by Fitch Limited or P-1 by Moody’s Investors Services, Inc.
in the case of investments maturing within one year of issue; or

 

5

 

(B)           long term credit rating of either A by Standard &
Poor’s Ratings Group or Fitch Limited or A2 by Moody’s Investors Services, Inc.
in the case of any other investments; or

 

(e)           the value of any investment in any money market or
similar fund which in each case has a credit rating of either AAA by Standard &
Poor’s Ratings Group or Fitch Limited or Aaa by Moody’s Investors Services, Inc.
provided that:

 

(i)            that investment is repayable at call; or

 

(ii)           (A)          under the terms of that fund, a member of the Group has the right to be
repaid the value of that investment on not more than 7 days’ notice; and

 

(B)           the maximum amount invested in such funds does not
exceed £25,000,000 (or its equivalent in any other currencies) in aggregate at
any time,

 

to the extent that:

 

(X)          the items in paragraphs (a) to (e) above
(inclusive) are denominated in any freely convertible and transferable
currencies;

 

(Y)           those items are beneficially owned by any member of
the Group and are unencumbered by any Security (except for any Security
securing obligations to the Lender under the Finance Documents); and

 

(Z)           no other person (except as a result of mandatory
provisions of law applying to companies generally in the relevant jurisdiction
of incorporation) has a prior claim which would at that time rank in priority
to a claim by any other unsecured and unsubordinated creditor against those
items on an insolvency of the relevant member of the Group.

 

Net Interest Expense means, in relation to any Relevant Period, the
aggregate amount of interest and any other finance charges (whether or not
paid, payable or capitalised) accrued by the Group in that Relevant Period in
respect of Total Debt:

 

(a)            including the interest element of leasing and hire
purchase payments;

 

(b)           including commitment fees, commissions, arrangement
fees and guarantee fees; and

 

(c)            including amounts in the nature of interest payable in
respect of any shares redeemable before the Final Maturity Date,

 

after (but without double counting):

 

(i)            adding back the net amount payable (or deducting the
net amount receivable) by members of the Group in respect of that Relevant
Period under any interest or (so far as they relate to interest) currency
hedging arrangements; and

 

(ii)           deducting interest income of the Group in respect of
that Relevant Period to the extent freely distributable to the Company in cash,

 

all as determined (except as needed to reflect
the terms of Clause 19 (Financial Covenant)) from the financial statements of
the Group and Compliance Certificates delivered under Clause 18.1 (Financial
Statements) and Clause 18.2 (Compliance Certificate).

 

6

 

Optional Currency means a currency (other than the Base Currency) which
complies with the conditions set out in Clause 4.3 (Conditions relating to
Optional Currencies).

 

Participating Member State has the meaning given to it in council Regulation
EC. No 1103/97 of 17th June, 1997 made under Article 235 of the
Treaty on European Union.

 

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

 

(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 11(2) of
the Taxes Act the whole of any share of interest payable to it in respect of
that advance which is attributable to it by reason of sections 114 and 115 of
the Taxes Act; 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 for the purposes of
section 11(2) of the Taxes Act, and therefore satisfies one of the
conditions in section 349B of the Taxes Act.

 

Quotation Day means, in relation to any period for which an
interest rate is to be determined,

 

(a)           (if the currency is sterling) the first day of that
period;

 

(b)           (if the currency is euro) two TARGET Days before the
first day of that period; or

 

(c)           (for any other currency) two Business Days before the
first day of that period,

 

unless market practice differs in the Relevant
Interbank Market for a currency, in which case the Quotation Day for that
currency will be determined by the Lender in accordance with market practice in
the Relevant Interbank Market (and if quotations for that currency and period
would normally be given by leading banks in the Relevant Interbank Market on
more than one day, the Quotation Day will be the last of those days).

 

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 Lender in consultation with the Company
and the Guarantor.

 

Relevant Date means 31 March or 30 September in any year
or the closest Saturday to these dates on which the Group prepares consolidated
accounts.

 

Relevant Interbank Market means the London interbank market.

 

Relevant Period means each period of 52 or 53 weeks ending on a
Relevant Date.

 

Repeating Representations means each of the representations set out in Clauses
17.1 (Status) to 17.4 (Power and Authority) and 17.5 (No Default).

 

7

 

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 (unless it
arose as a result of the operation of Clause 6.2 (Unavailability of a
currency)); 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 Lender 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.

 

Specified Time means a time determined in accordance with Schedule 4
(Timetables).

 

Subsidiary means a subsidiary within the meaning of section 736
of the Companies Act 1985 and, for the purpose of Clause 19 (Financial
Covenant) and in relation to financial statements of the Group, a subsidiary
undertaking within the meaning of section 258 of the Companies Act 1985.

 

TARGET means the Trans-European Automated Real-time Gross
Settlement Express Transfer payment system which utilises interlinked national
real time gross settlement systems and the European Central Bank’s payment
mechanism and which began operations on 4 January 1999.

 

TARGET2 means the Trans-European Automated Real-time Gross
Settlement Express Transfer payment system which utilises a single shared
platform and which was launched on 19 November 2007.

 

TARGET Day means:

 

(a)           until such time as TARGET is permanently closed down
and ceases operations, any day on which both TARGET and TARGET2 are; and

 

(b)           following such time as TARGET is permanently closed down
and ceased operations, any day on which TARGET2 is,

 

open for the settlement of payments in euro.

 

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.

 

8

 

Tax Payment means an increased payment made by the Company to the
Lender under Clause 13.1 (Tax Gross-Up).

 

Total Debt means, as at any particular time, the aggregate
outstanding principal, capital or nominal amount (and any fixed or minimum
premium payable on prepayment or redemption) of the Financial Indebtedness of
members of the Group owed to persons outside the Group other than any indebtedness
referred to in paragraph (g) of the definition of Financial Indebtedness,
and any guarantee or indemnity in respect of that indebtedness, and without
double-counting items referred to in the definition of Financial Indebtedness.

 

For this purpose, any amount outstanding or
repayable in a currency other than sterling shall on that day be taken into
account:

 

(a)           if an audited consolidated balance sheet of the Group has been prepared
as at that day, in their sterling equivalent at the rate of exchange used for
the purpose of preparing that balance sheet; and

 

(b)           in any other case, in their sterling equivalent at the rate of exchange
that would have been used had an audited consolidated balance sheet of the
Group been prepared as at that day in accordance with GAAP.

 

Treaty on European Union means the Treaty of Rome signed on 25th March, 1957
as amended by the Single European Act 1986 and the Maastricht Treaty on 7th
February, 1992.

 

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 and/or the Guarantor 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.

 

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 13 (Tax Gross Up), a determination made in the
absolute discretion of the person making the determination;

 

(iii)          a Finance Document
or any other agreement or instrument is a reference to that Finance Document or
other agreement or instrument as amended or novated;

 

9

 

(iv)          financial statements of the Company includes a reference to the audited
and unaudited consolidated financial statements to be delivered under Clause
18.1 (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.

 

(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 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.

 

10

 

SECTION 2

 

THE
FACILITY

 

2.             THE FACILITY

 

2.1          The Facility

 

Subject to the terms of this Agreement, the
Lender makes available to the Company a multicurrency revolving credit facility
in an amount equal to the Commitment.

 

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

 

The Lender is not bound to monitor or verify
the application of any amount borrowed pursuant to this Agreement.

 

11

 

SECTION 3

 

UTILISATION

 

4.             CONDITIONS OF
UTILISATION

 

4.1          Initial conditions precedent

 

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

 

4.2          Further conditions precedent

 

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

 

(i)            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

 

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

 

4.3          Conditions relating to Optional
Currencies

 

A currency will constitute an Optional Currency
in relation to a Loan if it:

 

(a)           is readily available in the amount required and freely
convertible into the Base Currency in the Relevant Interbank Market on the
Quotation Day and the Utilisation Date for that Loan; or

 

(b)           is approved by the Lender.

 

4.4          Maximum Number of Loans

 

Unless the Lender agrees, a Utilisation Request
may not be given if, as a result, there would be more than 10 Loans
outstanding.

 

5.             UTILISATION

 

5.1          Delivery of a Utilisation Request

 

The Company may utilise the Facility by
delivery to the 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;

 

12

 

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

 

(iii)          the proposed Interest Period complies with Clause 10
(Interest Periods); and

 

(iv)          it specifies the account and bank (which must be in
the principal financial centre of the country of the currency of the
Utilisation or, in the case of euro, the principal financial centre of a
Participating Member State or 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 or an Optional Currency.

 

(b)           The amount of the proposed Loan must be:

 

(i)            if the currency selected is the Base Currency, a
minimum of £5,000,000 and an integral multiple of £1,000,000 or, if less, the
Available Commitment; or

 

(ii)           if the currency selected is an Optional Currency, the
minimum amount (or an integral multiple, if required) specified by the Lender
as being the minimum amount for that currency (being the amount determined by
the Lender to be the nearest appropriate equivalent amount to the amount
described in sub-paragraph (i) above) or, if less, the Available
Commitment.

 

5.4          Availability of Loans

 

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

 

(b)           The Lender is not obliged to make a Loan if, as a
result, the Loans would exceed the Commitment.

 

(c)           The Lender shall determine the Base Currency Amount of
each Loan which is to be made in an Optional Currency.

 

6.             OPTIONAL
CURRENCIES

 

6.1          Selection of currency

 

The Company shall select the currency of a Loan
in a Utilisation Request.

 

6.2          Unavailability of a currency

 

(a)           If before the Specified Time on any Quotation Day:

 

(i)            the Optional Currency requested is not readily
available to the Lender in the amount required; or

 

(ii)           compliance with the Lender’s obligation to make
available a Loan in the proposed Optional Currency would contravene a law or
regulation applicable to it,

 

13

 

the Lender will give notice to the Company to
that effect by the Specified Time on that day. 
In this event, the Lender will be required to make the Loan in the Base
Currency (in an amount equal to the Base Currency Amount or, in respect of a
Rollover Loan, an amount equal to the Base Currency Amount of the maturing Loan
that is to be repaid).

 

(b)           A Loan will still be treated as a Rollover Loan if it
is not denominated in the same currency as the maturing Loan by reason only of
the operation of this subclause.

 

14

 

SECTION 4

 

REPAYMENT,
PREPAYMENT AND CANCELLATION

 

7.             REPAYMENT

 

(a)           The Company must repay each Loan in full on the last
day of the Interest Period applicable to that Loan.

 

(b)           Subject to the other terms of this Agreement, any
amounts repaid under paragraph (a) above may be reborrowed.

 

8.             PREPAYMENT
AND CANCELLATION

 

8.1          Mandatory prepayment - Illegality

 

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

 

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

 

(b)           upon the Lender notifying the Company, the Commitment
will be immediately cancelled; and

 

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

 

8.2          Automatic cancellation

 

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

 

8.3          Voluntary cancellation

 

The Company may, if it gives the Lender and the
Guarantor not less than five Business Days’ (or such shorter period as the
Lender 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.

 

8.4          Voluntary prepayment of Loans

 

The Company may, if it gives the Lender and the
Guarantor not less than five Business Days’ (or such shorter period as the
Lender 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).

 

8.5          Restrictions

 

(a)           Any notice of cancellation or prepayment given by any
Party under this Clause 8 (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.

 

15

 

(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 7 (Repayment) or prepaid in accordance with Clause 8.4 (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 Commitment except at the times
and in the manner expressly provided for in this Agreement.

 

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

 

16

 

SECTION 5

 

COSTS OF
UTILISATION

 

9.                                      INTEREST

 

9.1                               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.

 

9.2                               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).

 

9.3                               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 Lender (acting
reasonably).  Any interest accruing under
this Clause 9.3 shall be immediately payable by the Company on demand of the
Lender.

 

(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.

 

9.4                               Notification of rates of interest

 

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

 

10.                               INTEREST
PERIODS

 

10.1                        Selection of Interest Periods

 

(a)                                  Each Loan has one Interest Period only.

 

17

 

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

 

(c)                                  Subject to this Clause 10, the Company may select an
Interest Period of one, two, three or six Months or for four or five weeks or
any other period agreed between the Company and the Lender.

 

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

 

10.2                        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).

 

11.                               CHANGES TO
THE CALCULATION OF INTEREST

 

11.1                        Absence of Quotations

 

Subject to Clause 11.2 (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.

 

11.2                        Market disruption

 

If a Market Disruption Event occurs in relation
to a Loan for any Interest Period, then the rate of interest on 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 the 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 the Lender of funding that Loan from whatever source it may
reasonably select.

 

11.3                        Alternative Basis of Interest or
Funding

 

(a)                                  If a Market Disruption Event occurs and the Lender or
the Company so requires, the Lender 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.

 

11.4                        Break Costs

 

(a)                                  The Company shall, within three Business Days of
demand by the Lender, pay to the 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)                                 The 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.

 

18

 

12.                               FEES

 

12.1                        Arrangement Fee

 

(a)                                  Subject to paragraph (b) below, the Company shall
pay to the Lender an arrangement fee in the Base Currency computed at a rate of
0.325 per cent. of the Commitment (such amount being GBP1,543,750 (One Million
Fivee Hundred and Forty Three Thousand d Seven 
Hundred and Fifty pounds sterling). The arrangement fee is payable in 60
(sixty) instalments of GBP25,729.17 (Twenty Five Thousand Seven Hundred and
Twenty Nine pounds sterling and Seventeen new pence) from the date of this
Agreement and monthly thereafter until the Final Maturity Date.

 

(b)                                 If additional fees for the purpose of maintaining,
amending, obtaining waivers or any other purpose are payable by the Lender in respect
of  the Carphone Facility, the amounts
payable in 12.1 (a)  will be increased to take account of such additional
fees.

 

(c)                                  If the whole Commitment is cancelled under this
Agreement, the obligation of the Company to pay any further instalments of the
arrangement fee referred to in paragraph (a) above after the date of
cancellation shall terminate.

 

12.2                        Commitment Fee

 

(a)                                  The Company shall pay to the Lender a commitment fee
in the Base Currency computed at the rate of 40 per cent. of the Margin which
would then be applicable to new Loans on the undrawn, uncancelled amount of
each 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 fee is
also payable to the Lender on the date the Commitment is cancelled in full.

 

19

 

SECTION 6

 

ADDITIONAL
PAYMENT OBLIGATIONS

 

13.                               TAX GROSS UP

 

13.1                        Tax Gross-Up

 

(a)                                  Each of the Company and the Guarantor shall make all
payments to be made by it without any Tax Deduction, unless a Tax Deduction is
required by law.

 

(b)                                 The Company, the Guarantor or the Lender shall
promptly upon becoming aware that the Company or the Guarantor 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 or the Guarantor, as the case may be, the amount of the payment due
from the Company or the Guarantor, as the case may be, 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 and the Guarantor is not required to make
an increased payment to the Lender under (c) above for a Tax Deduction in
respect of tax imposed by the United Kingdom from a payment of interest on the
Loan, if on the date on which the payment falls due, the Company or the
Guarantor is able to demonstrate that the payment could have been made to the
Lender without the Tax Deduction if it was a Qualifying Lender, but on that
date the 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 or the Guarantor 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 or the
Guarantor, as the case may be, shall deliver to the Lender evidence reasonably
satisfactory to the Lender that the Tax Deduction has been made or (as
applicable) any appropriate payment paid to the relevant taxing authority.

 

13.2                        Tax Credit

 

If the Company or the Guarantor makes a Tax
Payment and the 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)                                 the Lender has obtained, utilised and retained that
Tax Credit,

 

the Lender shall pay an amount to the Company
or the Guarantor, as the case may be, which the 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 or the Guarantor, as the case
may be.

 

20

 

13.3                        Stamp Taxes

 

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

 

13.4                        Value Added Tax

 

(a)                                  All consideration expressed to be payable under a
Finance Document by any Party to the Lender shall be deemed to be exclusive of
any VAT.  If VAT is chargeable on any
supply made by the Lender to any Party in connection with a Finance Document,
that Party shall pay to the 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 the Lender for any costs or expenses, that Party shall also at the
same time pay and indemnify the Lender against all VAT incurred by the Lender
in respect of the costs or expenses to the extent that the Lender reasonably
determines that it is not entitled to a credit or repayment in respect of that
VAT.

 

14.                               INDEMNITIES

 

14.1                        Currency Indemnity

 

(a)                                  If any sum due from the Company or the Guarantor 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
or the Guarantor, as the case may be;

 

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

 

the Company or the Guarantor, as the case may
be, shall as an independent obligation, within three Business Days of demand,
indemnify the 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 the Lender at
the time of its receipt of that Sum.

 

(b)                                 Each of the Company and the Guarantor 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.

 

14.2                        Other Indemnities

 

The Company shall, within three Business Days
of demand, indemnify the Lender against any cost, loss or liability incurred by
the 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;

 

21

 

(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 the 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.

 

15.                               COSTS AND
EXPENSES

 

15.1                        Amendment Costs

 

If:

 

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

 

(b)                                 an amendment is required pursuant to Clause 23.7
(Change of Currency),

 

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

 

15.2                        Enforcement Costs

 

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

 

22

 

SECTION 7

 

GUARANTEE

 

16.                               GUARANTEE

 

16.1                        Guarantee

 

Subject to the provisions of Clause 16.2
(Limitation), the Guarantor, at the Company’s request, irrevocably and
unconditionally undertakes with the Lender that whenever the Company does not
pay any amount when due under or in connection with any Finance Document, the
Guarantor shall within 5 Business Days of demand pay that amount as if it was
the principal obligor.

 

16.2                        Limitation

 

Notwithstanding the other provisions of this
Clause 16, the Guarantee is not intended to be, and shall not be construed as,
a guarantee of the whole of the indebtedness of the Company under any Finance
Document, and the maximum liability of the Guarantor under the Guarantee shall
be limited to an amount which is equivalent to 50% of the amount unpaid by the
Company under any Finance Document.

 

16.3                        Waiver of defences

 

The obligations of the Guarantor under the
Guarantee will not be affected by an act, omission, matter or thing which, but
for this Clause, would reduce, release or prejudice any of its obligations
under the Guarantee (without limitation and whether or not known to it or the
Lender) including:

 

(a)                                  with the prior written consent of the Guarantor, any
time, waiver or consent granted to, or composition with, the Lender or other
person;

 

(b)                                 any incapacity or lack of power, authority or legal
personality of or dissolution or change in the members or status of the Lender
or any other person;

 

(c)                                  with the prior written consent of the Guarantor, any
amendment, novation, supplement, extension, restatement (however fundamental
and whether or not more onerous) or replacement of any Finance Document or any
other document or security including without limitation any change in the
purpose of, any extension of or any increase in any facility or the addition of
any new facility under any Finance Document or other document or security;

 

(d)                                 any unenforceability, illegality or invalidity of any
obligation of any person under any Finance Document or any other document or
security; or

 

(e)                                  any insolvency or similar proceedings.

 

16.4                        Immediate recourse

 

The Guarantor waives any right it may have of
first requiring the Lender (or any trustee or agent on its behalf) to proceed
against or enforce any other rights or security or claim payment from any
person before claiming from the Guarantor under the Guarantee.  This waiver applies irrespective of any law
or any provision of a Finance Document to the contrary.

 

23

 

16.5                        Additional security

 

The Guarantee is in addition to and is not in
any way prejudiced by any other guarantee or security now or subsequently held
by the Lender.

 

16.6                        Guarantee payment

 

(a)                                  The Company shall immediately on demand reimburse the
Guarantor for any payment it makes under the Guarantee.

 

(b)                                 The Company irrevocably and unconditionally authorises
the Guarantor to pay any claim made or purported to be made under the
Guarantee.

 

24

 

SECTION 8

 

REPRESENTATIONS,
UNDERTAKINGS AND EVENTS OF DEFAULT

 

17.                               REPRESENTATIONS

 

The Company makes the representations and
warranties set out in this Clause 17 to the Lender on the date of this
Agreement.

 

17.1                        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.

 

17.2                        Binding Obligations

 

Subject to the Legal Reservations, the
obligations expressed to be assumed by it in each Finance Document are legal,
valid, binding and enforceable obligations.

 

17.3                        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;

 

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

 

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

 

17.4                        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.

 

17.5                        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.

 

17.6                        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 obligations mandatorily preferred by law applying to companies in its
jurisdiction of incorporation generally.

 

25

 

17.7                        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.

 

17.8                        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.

 

18.                               INFORMATION
UNDERTAKINGS

 

The undertakings in this Clause 18 remain in
force from the date of this Agreement for so long as any amount is outstanding
under the Finance Documents or the Commitment is in force.

 

18.1                        Financial Statements

 

(a)                                  The Company shall supply to the Lender, 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.

 

18.2                        Compliance Certificate

 

(a)                                  The Company shall supply to the Lender and the
Guarantor, with each set of financial statements delivered pursuant to paragraph
(a) or (b) of Clause 18.1 (Financial Statements), a Compliance
Certificate:

 

(i)            setting out (in reasonable detail) computations as to compliance with
Clause 19 (Financial Covenant) as at the date as at which those
financial statements were drawn up or as at the last day of the relevant
period;

 

(ii)           setting out the extent of any adjustments to EBITDA pursuant to Clause
19.3 (EBITDA adjustments); and

 

(iii)          confirming that no Default is continuing (or if a Default is continuing,
specifying the Default and the steps being taken to remedy it).

 

(b)                                 Each Compliance Certificate shall be signed by two
directors of the Company.

 

18.3                        Requirements as to Financial
Statements

 

(a)                                  Each set of financial statements delivered by the
Company pursuant to Clause 18.1 (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 18.1
(Financial Statements) are prepared using GAAP.

 

26

 

18.4                        Information: Miscellaneous

 

The Company shall supply to the 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 the Lender may
reasonably request.

 

18.5                        Notification of Default

 

(a)           The Company shall notify the Lender and the Guarantor 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 the Lender and/or the Guarantor, the Company
shall supply to the Lender and/or the Guarantor 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).

 

19.                               FINANCIAL
COVENANT

 

19.1                        Financial Condition

 

(a)                                  The Company shall ensure that the ratio of Net Debt
(as at any Relevant Date falling on 31 March 2009 and thereafter) to
EBITDA (in respect of the Relevant Period ending on that Relevant Date) will
not be greater than 3.0 to 1.

 

(b)                                 In the event the Company acquires 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 purpose of the UK Listing Rules, the
financial ratio mentioned in (a) above shall not be tested on any Relevant
Date which falls less than six (6) months after the completion of such
acquisition.

 

19.2                        Financial Covenant Calculations

 

EBIT, EBITDA, Net Interest Expense, Net Debt
and Total Debt shall be calculated and interpreted on a consolidated basis in
accordance with GAAP and shall be expressed in sterling.

 

19.3                        EBITDA adjustments

 

(a)                                  This Clause 19.3 applies if, and to the extent that,
any member of the Group acquires or disposes of any business or Subsidiary
after the date of this Agreement.

 

(b)                                 For any Relevant Period ending less than 12 Months
after the date on which any such business or Subsidiary is acquired, EBITDA
will be calculated on a pro forma basis as if such business or Subsidiary had
been acquired by the Group at the beginning of that Relevant Period.

 

27

 

(c)                                  For any Relevant Period ending less than 12 Months
after the date on which any such business or Subsidiary is disposed of, EBITDA
will be calculated on a pro forma basis as if such business or Subsidiary had
been disposed of by the Group at the beginning of that Relevant Period.

 

(d)                                 If any adjustment is made to EBITDA for any Relevant
Period pursuant to this Clause 19.3, the Company will set out in the Compliance
Certificate for that Relevant Period details of that adjustment.

 

20.                               GENERAL
UNDERTAKINGS

 

The undertakings in this Clause 20 remain in
force from the date of this Agreement for so long as any amount is outstanding
under the Finance Documents or the Commitment is in force.

 

20.1                        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 Lender 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.

 

20.2                        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.

 

20.3                        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.

 

28

 

(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;

 

(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:

 

I.              the Security was not created in contemplation of the acquisition of that
asset by a member of the Group;

 

II.            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

 

III.           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:

 

I.              the Security was not created in contemplation of the acquisition of that
company;

 

II.            the principal amount secured has not increased in contemplation of or
since the acquisition of that company; and

 

III.           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 Lender and the Guarantor;

 

(vii)                           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

 

(viii)                        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.

 

20.4        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

 

29

 

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.

 

20.5                        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 obligations mandatorily preferred
by law applying to companies generally.

 

21.                               EVENTS OF
DEFAULT

 

Each of the events or circumstances set out in
this Clause 21 is an Event of Default.

 

21.1                        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.

 

21.2                        Financial and other Covenants

 

(a)                                  Any requirement of Clause 19 (Financial Covenant) is
not satisfied;

 

(b)                                 The Company does not comply with Clause 3.1 (Purpose)
or 20.5 (Ranking of Obligations);

 

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

 

21.3                        Insolvency

 

(a)                                  The Company or the Guarantor 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 the
Guarantor 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 the Guarantor.

 

21.4                        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 arrangement or otherwise) of the Company or the
Guarantor;

 

30

 

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

 

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

 

(d)                                 enforcement of any Security over any assets of the
Company 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.

 

21.5                        Creditors’ process

 

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

 

21.6                        Unlawfulness

 

(a)                                  It is or becomes unlawful for the Company or the
Guarantor 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 or the Guarantor to be
ineffective in accordance with its terms for any reason.

 

21.7                        Repudiation

 

The Company or the Guarantor repudiates a Finance
Document.

 

21.8                        Acceleration

 

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

 

(a)                                  cancel the Commitment whereupon it 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; and/or

 

(c)                                  declare that all or part of the Loans be payable on
demand, whereupon they shall immediately become payable on demand by the
Lender.

 

21.9                        Right to Cure Financial Covenant

 

Notwithstanding anything to the contrary
contained in this Clause 21, in the event that the Company fails to comply with
the requirements of the financial covenant referred to in Clause 19 (Financial
Covenant) (the Financial
Covenant), until the thirtieth day subsequent to delivery of the
Compliance Certificate, the Company shall have the right to  arrange the contribution of equity by way of cash
injection to the capital of the Company (collectively, the Cure Right), and with
the consent of the Lender (such consent not to be unreasonably withheld) and
upon the receipt by the Company of such cash (the Cure Amount) pursuant to the exercise by
the Company of such Cure Right the Financial Covenant shall be recalculated
giving effect to the following pro forma adjustments:

 

31

 

(a)                                  EBITDA shall be increased, in accordance with the
definition thereof, solely for the purpose of measuring the Financial Covenant
and not for any other purpose under this Agreement, by an amount equal to the
Cure Amount;

 

(b)                                 if, after giving effect to the foregoing
recalculations, the Company shall then be in compliance with the Financial
Covenant, the Company shall be deemed to have satisfied the requirements of the
Financial Covenant as of the relevant date of determination with the same
effect as though there had been no failure to comply therewith at such date,
and the applicable breach or default of the Financial Covenant which had
occurred shall be deemed cured for all purposes of this Agreement.

 

32

 

SECTION 9

 

CHANGES TO
THE PARTIES

 

22.                               CHANGES TO
THE PARTIES

 

22.1                        Assignment and Transfer by the
Company

 

The Company may not assign any of its rights or
transfer any of its rights or obligations under the Finance Documents without
the prior written consent of the Lender and the Guarantor.

 

22.2                        Assignment and Transfer by the Lender

 

The Lender may not assign any of its rights or
transfer any of its rights and obligations under the Finance Documents without
the prior written consent of the Guarantor.

 

33

 

SECTION 10

 

ADMINISTRATION

 

23.                               PAYMENT
MECHANICS

 

23.1                        Payments to the Lender

 

(a)                                  On each date on which the Company and/or the Guarantor
is required to make a payment under a Finance Document, the Company and/or the
Guarantor shall make the same available to the Lender (unless a contrary
indication appears in a Finance Document) for value on the due date at the time
and in such funds specified by the Lender as being customary at the time for
settlement of transactions in the relevant currency in the place of payment.

 

(b)                                 Payment shall be made to such account in the principal
financial centre of the country of that currency (or, in relation to euro,
London) with such bank as the Lender specifies.

 

23.2                        Distributions to the Company

 

The Lender may (with the consent of the Company
or in accordance with Clause 24 (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 from the Company under the Finance Documents or in
or towards purchase of any amount of any currency to be so applied.

 

23.3                        Partial Payments

 

(a)                                  If the Lender receives a payment that is insufficient
to discharge all the amounts then due and payable by the Company and/or the
Guarantor under the Finance Documents, the Lender shall apply that payment
towards the obligations of the Company under the Finance Documents in the
following order:

 

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

 

(ii)           secondly, in or towards payment pro rata
of any accrued fees, interest or commission due but unpaid under this
Agreement;

 

(iii)          thirdly, in
or towards payment pro rata of
any principal due but unpaid under this Agreement; and

 

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

 

(b)                                 Paragraphs (a) will override any appropriation
made by the Company.

 

23.4                        No set-off by the Company

 

Subject to the provisions of Clause 33 (Lender
indebtedness), all payments to be made by the Company under the Finance
Documents shall be calculated and be made without (and free and clear of any
deduction for) set-off or counterclaim.

 

34

 

23.5                        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.

 

23.6                        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 Finance Documents
is payable in sterling.

 

23.7                        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 Finance Documents to, and any obligations arising
under the 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 Lender (after consultation with the Company and the
Guarantor); 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
Lender (acting reasonably).

 

(b)                                 If a change in any currency of a country occurs, this
Agreement will, to the extent the Lender (acting reasonably and after
consultation with the Company and the Guarantor) specifies 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.

 

24.                               SET-OFF

 

The Lender may set off any matured obligation
due from the Company under the Finance Documents (to the extent beneficially
owned by the Lender) against any matured obligation owed by the 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 Lender may convert either obligation at a
market rate of exchange in its usual course of business for the purpose of the
set-off.

 

35

 

25.                               NOTICES

 

25.1                        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.

 

25.2                        Addresses

 

The address and fax number (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, the Guarantor and the Lender, that identified with its name below or
any substitute address, fax number or department or officer as the Party may
notify to the Lender (or the Lender may notify to the other Parties, if a
change is made by the Lender) by not less than five Business Days’ notice.

 

25.3                        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 25.2
(Addresses), if addressed to that department or officer.

 

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

 

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

 

25.4                        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 Lender,
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.

 

36

 

26.                               CALCULATIONS
AND CERTIFICATES

 

26.1                        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 the Lender are prima
facie evidence of the matters to which they relate.

 

26.2                        Certificates and Determinations

 

Any certification or determination by the
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.

 

26.3                        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
denominated in the Base Currency, a year of 360 days for amounts denominated in
any Optional Currency or, in any case where the practice in the Relevant Interbank
Market differs, in accordance with that market practice.

 

27.                               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.

 

28.                               REMEDIES AND
WAIVERS

 

No failure to exercise, nor any delay in
exercising, on the part of the 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.

 

29.                               AMENDMENTS
AND WAIVERS

 

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

 

30.                               COUNTERPARTS

 

Each Finance Document 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 the Finance Document.

 

37

 

SECTION 11

 

GOVERNING
LAW AND ENFORCEMENT

 

31.                               GOVERNING LAW

 

This Agreement is governed by English law.

 

32.                               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 32 is for the benefit of the Lender
only.  As a result, the Lender shall not
be prevented from taking proceedings relating to a Dispute in any other courts
with jurisdiction.  To the extent allowed
by law, the Lender may take concurrent proceedings in any number of
jurisdictions.

 

33.                               LENDER
INDEBTEDNESS

 

Notwithstanding any other provisions of this
Agreement:

 

(a)                                  any indebtedness owed by the Lender to the Company
shall accrue interest at the percentage rate per annum which is the aggregate
of the:

 

(i)                                     Margin; and

 

(ii)                                  LIBOR;

 

(b)                                 the amount payable by the Company under this Agreement
on any relevant date shall be the amount owed by the Company under this
Agreement minus the amount of any indebtedness including interest accrued
thereon owed by the Lender to the Company on such date; and

 

(c)                                  without prejudice to the generality of the foregoing,
if the Lender exercises its rights pursuant to Clause 21.8 (Acceleration) or if
the Commitment is otherwise cancelled in accordance with this Agreement:

 

(i)            the amount payable by the Company under this Agreement shall be reduced
by the amount of any indebtedness including interest accrued thereon owed by
the Lender to the Company; and

 

(ii)           if after applying the reduction in paragraph (i) above indebtedness
is still owed by the Lender to the Company, the Lender shall pay such
indebtedness including interest accrued thereon to the Company as the Company
may direct.

 

For the purpose of this Clause 33, indebtedness
shall exclude intra-group trading indebtedness.

 

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

 

38

 

SCHEDULE 1

 

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 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 Lender considers 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 fees then due from the Company pursuant to Clause 12
(Fees) have been paid or will be paid by the first Utilisation Date.

 

39

 

SCHEDULE 2

 

UTILISATION
REQUEST

 

From:      Best Buy Europe Distributions Ltd

 

To:          The Carphone Warehouse Group PLC

 

Dated:

 

Dear
Sirs

 

Best Buy
Europe Distributions Ltd —£475,000,000 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)

  
	
   

  	
   

  	
   

  
	
  Currency of Loan:

  	
   

  	
  [                   ]

  
	
   

  	
   

  	
   

  
	
  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

  

 

40

 

SCHEDULE 3

 

FORM OF
COMPLIANCE CERTIFICATE

 

To:          The Carphone Warehouse Group PLC

 

From:      Best Buy Europe Distributions Ltd

 

Dated:

 

Dear
Sirs

 

Best Buy
Europe Distributions Ltd  - £475,000,000
Facility Agreement

dated
[                   ]
(the Facility Agreement)

 

1.                                       We refer to the Facility Agreement.  This is a Compliance Certificate.

 

2.                                       [We confirm that no Default is continuing.](1)

 

3.                                       We confirm that the ratio of Net Debt to EBITDA in
respect of the Relevant Period ended on
[                   ]
was [                   ]
to 1; and

 

4.                                       [EBITDA has been adjusted pursuant to Clause 19.3
(EBITDA adjustments) as follows:

 

[                                            ].]

 

This
certificate is given without personal liability.

 

 

	
  Signed:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  of

  	
   

  	
  of

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Best Buy Europe Distributions Ltd

  	
   

  	
  Best Buy Europe Distributions Ltd

  

 

(1)                                  If this statement cannot be made, the certificate should identify any Default that is continuing and the
steps, if any, being taken to remedy it.

 

41

 

SCHEDULE 4

 

TIMETABLES

 

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

 

	
   

  	
   

  	
  Loans in
  sterling

  	
   

  	
  Loans in
  other

  currencies

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Delivery of a duly completed Utilisation Request (Clause 5.1 (Delivery
  of a Utilisation Request))

  	
   

  	
  D-1

  1.00 p.m.

  	
   

  	
  D-3

  1.00 p.m.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lender gives notice in accordance with Clause 6.2 (Unavailability of a
  currency)

  	
   

  	
   

  	
   

  	
  Quotation Day

  10.00 a.m.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LIBOR is fixed

  	
   

  	
  Quotation Day

  as of

  11.00 a.m.

  	
   

  	
  Quotation Day

  as of

  11.00 a.m.

  

 

42

 

SIGNATORIES

 

	
  The Company

  	
   

  
	
   

  	
   

  
	
  BEST BUY EUROPE DISTRIBUTIONS LIMITED

  	
  )

  
	
  By:

  	
  /s/ John Noble

  	
  )

  
	
  Best Buy Europe Distributions Limited

  	
   

  
	
  1 Portal Way

  	
   

  
	
  London W3 6RS

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  The Guarantor

  	
   

  
	
   

  	
   

  
	
  BEST BUY CO., INC

  	
  )

  
	
  By:

  	
  /s/ David P. Berg

  	
  )

  
	
  7601 Penn Avenue South

  	
   

  
	
  Richfield

  	
   

  
	
  MN55423 -3645 — USA.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  The Lender

  	
   

  
	
   

  	
   

  
	
  THE CARPHONE WAREHOUSE GROUP PLC

  	
  )

  
	
  By:

  	
  /s/ Roger Taylor

  	
  )

  
	
  The Carphone Warehouse Group PLC

  	
   

  
	
  1 Portal Way

  	
   

  
	
  London W3 6RS

  	
   

  

 

43Exhibit No. 10.7

 

BEST
BUY CO., INC.

LONG-TERM
INCENTIVE PROGRAM AWARD AGREEMENT

Award Date: October 31, 2008

 

I.      The Award and the Plan. 
As of the Award Date set forth above and in the Award Notification
accompanying this Performance Award (the “Award Date”), Best Buy Co., Inc.
(“Best Buy”) grants to you (a) an option to purchase the number of Shares
of Best Buy common stock set forth in such Award Notification (the “Option”) at
the option price per Share set forth in such Award Notification; and/or (b) the
number of restricted Shares of Best Buy common stock (the “Restricted Shares”)
set forth in such Award Notification, all on the terms and conditions contained
in this Long-Term Incentive Program Award Agreement (this “Agreement”) and the
Best Buy Co., Inc. 2004 Omnibus Stock and Incentive Plan, as amended (the “Plan”).  Capitalized terms not defined in the body of
this Agreement are defined in the attached Addendum or in the Plan.  Except as otherwise stated, all references to
“Sections” or “Articles” refer to Sections or Articles of this Agreement.

 

II.    Terms of
Option Grant.  This Article II applies to you only if your Award Notification
includes the grant of an Option.

 

2.1                 Duration, Vesting and
Exercisability of Option.  You may not exercise any portion
of the Option before the first anniversary of the Award Date; and the Option
expires on the last day of the 10-year period beginning on the Award Date (the “Expiration
Date”).  You may exercise the Option in
cumulative installments of 25% each, on and after each of the first four
anniversaries of the Award Date.  The
entire Option will vest earlier and become exercisable upon your Qualified
Retirement, Disability or death or if, within 12 months following a Change of
Control, your employment is terminated without Cause or you terminate your
employment for Good Reason, but only if your employment terminates in any such
case at a time when no member of the Company Group is entitled to terminate
your employment for Cause.  The Option
may only be exercised by you during your lifetime, and may not be assigned or
transferred other than by will or the laws of descent and distribution.

 

2.2                 Exercise
and Tax Withholding.  The Option may
be exercised in whole or in part by written notice to Best Buy (through the Plan
administrator or other means as shall be specified by Best Buy from
time-to-time) stating the number of Shares to be purchased under the Option and
the method of payment.  The notice must
be accompanied by payment in full of the exercise price for all Shares
designated in the notice.  Payment of the
exercise price may be made by cash, check, delivery of previously owned Shares
having a Fair Market Value on the date of exercise that is equal to the
exercise price, or withholding of Shares that would otherwise be issued upon
such exercise having a Fair Market Value on the date of exercise that is equal
to the exercise price, or a combination thereof.  The Option is a Non-Qualified Stock Option
that is not eligible for treatment as a qualified or incentive stock option for
federal income tax purposes.  You are
liable for any federal and state income or other taxes applicable upon the
grant or exercise of the Option, your receipt of any dividends or other
distributions (whether cash, stock, or otherwise) paid on the underlying
Shares, or any disposition of the underlying Shares; and you acknowledge that
you should consult with your own tax advisor regarding the applicable tax
consequences.  Upon exercise of the
Option, Best Buy will withhold from the Shares that would otherwise be
delivered to you a number of Shares having a Fair Market Value equal to the
amount of all applicable taxes required by Best Buy to be withheld or collected
upon the exercise of the Option, unless your notice of exercise indicates your
desire to satisfy such withholding obligations through your payment to Best Buy
of cash or your delivery of previously acquired Shares, and such cash or Shares
are delivered to Best Buy promptly thereafter. 
You have no rights in the Shares subject to the Option until such Shares
are received by you upon exercise of the Option.

 

2.3                 Limited
Exercise Rights after Retirement, Disability, Death or other Termination of
Employment.  Your employment
with the Company Group may be terminated by your employer at any time for any
reason (or no reason).  Subject to the
forfeiture provisions of Article IV and the exceptions in paragraph (d) of
this Section 2.3:

 

(a)                        If your employment with the Company Group
is terminated by your employer without Cause, or if you resign or otherwise
voluntarily terminate your employment with the Company Group, you will have 60
days after the date of your termination to exercise the Option, to the extent
the Option had become vested as of your termination date.

 

 

(b)                       Upon your
Qualified Retirement from the Company Group, you will have one year after the
effective date of your retirement to exercise the Option, to the extent the Option had become
vested as of your termination date.

 

(c)                        If you die while
employed by the Company Group, the representative of your estate or your heirs
will have one year after the date of your death to exercise the Option, to the extent the Option had become
vested as of the date of your death.  If you become Disabled while employed with
the Company Group, you will have one year after the effective date of such
classification to exercise the Option, to the extent the Option had become vested as of
your termination date.

 

(d)                       In no case,
however, may the Option be exercised after the Expiration Date.  The Option may not be exercised following
termination of your employment with the Company Group for Cause, or if your
employment terminated for any reason at a time when any member of the Company
Group was entitled to terminate your employment for Cause.

 

III.   Terms of Restricted Share
Grant.  This Article III applies to you only if your
Award Notification includes a grant of Restricted Shares.

 

3.1                 Restricted
Period.  Until your Restricted Shares
become vested as provided below, they are subject to the restrictions described
in Section 3.2 (the “Restrictions”) during the period (the “Restricted
Period”) beginning on the Award Date and ending four years from the Award Date,
subject to the provisions of Section 3.3. 
Except as otherwise provided in Section 3.3 and Article IV,
the Restrictions will lapse and the Restricted Shares will become transferable
and non-forfeitable in cumulative installments as follows:

 

	
  1st Anniversary
  of Award Date

  	
   

  	
  25

  	
  %

  
	
  2nd Anniversary
  of Award Date

  	
   

  	
  25

  	
  %

  
	
  3rd Anniversary
  of Award Date

  	
   

  	
  25

  	
  %

  
	
  4th Anniversary
  of Award Date

  	
   

  	
  25

  	
  %

  

 

Upon vesting of each 25% installment, the Restricted
Shares that have become vested will be delivered to you within 30 days, in the
form of either book-entry registration or a stock certificate.

 

3.2                 Restrictions.  The Restricted Shares are subject to
forfeiture or recovery at any time pursuant to Article IV and, during the
Restricted Period, are also subject to the following Restrictions:

 

(a)                        The Restricted
Shares are subject to forfeiture to Best Buy as provided in this Agreement and
the Plan.

 

(b)                       During the Restricted Period, you may not
sell, assign, pledge or otherwise transfer the Restricted Shares (or any
interest in or right to the Restricted Shares), other than by will or the laws
of descent and distribution, and any such attempted transfer will be void.

 

3.3                 Effect
of Retirement, Disability, Death or other Termination of Employment.  Your employment with the Company Group may be
terminated by your employer at any time for any reason (or no reason).  Subject to the forfeiture provisions of Article IV
and the exception in paragraph (d) of this Section 3.3:

 

(a)                        If your
employment with the Company Group is terminated by reason of your Qualified
Retirement or death, or you become Disabled before the fourth anniversary of
the Award Date, the Restrictions will lapse and Restricted Shares that are
unvested as of the date of termination will become non-forfeitable and
transferable.

 

(b)                       If, before the
fourth anniversary of the Award Date, and within 12 months following a Change
in Control, your employment with the Company Group is terminated by your
employer without Cause or you terminate your employment with the Company Group
for Good Reason, the restrictions will lapse and the Restricted Shares will
become non-forfeitable and transferable as of the date of such termination.

 

(c)                        If your
employment with the Company Group is terminated before the fourth anniversary
of the Award Date, for any other reason, your rights to all unvested Restricted
Shares will be immediately and irrevocably forfeited.

 

(d)                       If your
employment with the Company Group is terminated for any reason before the
fourth anniversary of the Award Date, at a time when any member of the Company
Group is entitled to terminate your 

 

2

 

employment
for Cause, your rights to all unvested Restricted Shares will be immediately
and irrevocably forfeited.

 

3.4                 Limitation
of Rights Regarding Shares.  Until issuance of the Restricted Shares, you
will not have any rights of a shareholder with respect to the Restricted
Shares.  Upon issuance of the Restricted
Shares, you will, subject to the Restrictions and Article IV, have all of
the rights of a shareholder with respect to the Restricted Shares, unless and
until the Restricted Shares are forfeited or recovered by Best Buy under this
Agreement or the Plan, except that:

 

(a)                        you will not
have the right to vote the Restricted Shares during the Restricted Period; and

 

(b)                       any dividends or
other distributions (whether in cash, stock, or otherwise) paid on Restricted
Shares during the Restricted Period will be held by Best Buy until the end of
the Restricted Period for those Shares, at which time Best Buy will pay you all
such dividends and other distributions, less any applicable tax withholding
amounts payable with respect to the lapse of Restrictions or otherwise related
to the Restricted Shares.  However, if
any of the Restricted Shares are forfeited as described in Section 3.3 of
this Agreement, then all rights to any such payments that relate to the
forfeited Shares will also be forfeited.

 

3.5                 Income
Taxes.  You are liable for any federal
and state income or other taxes applicable upon the lapse of the Restrictions
on any Restricted Shares, your receipt of any dividends or other distributions
(whether cash, stock, or otherwise) paid on the Restricted Shares, and your
subsequent disposition of any Restricted Shares that have become vested; and
you acknowledge that you should consult with your own tax advisor regarding the
applicable tax consequences.  Upon the
lapse of Restrictions on any Restricted Shares, Best Buy will withhold from
those Restricted Shares the number of Shares having a Fair Market Value equal
to the amount of all applicable taxes required by Best Buy to be withheld upon
the lapse of the Restrictions on those Restricted Shares.

 

IV.   Restrictive Covenant and
Forfeiture Remedies.  By accepting
this Award, you agree to the restrictions and agreements contained in Section 4.1
(the “Restrictive Covenant”), and also Section 4.4; and you agree that the
Restrictive Covenant and the forfeiture remedies described in Section 4.2
and 4.4 are reasonable and necessary to protect the legitimate interests of the
Company Group.

 

4.1                 Confidentiality
Restrictive Covenant.  In consideration of the Award, you acknowledge
that the Company Group operates in a competitive environment and has a
substantial interest in protecting its Confidential Information, and you agree,
during your employment with the Company Group and thereafter, to maintain the
confidentiality of the Company Group’s Confidential Information and to use such
Confidential Information for the exclusive benefit of the Company Group.

 

4.2                 Forfeiture for Violation of
Restrictive Covenant.  In consideration of the terms of the Award
and in recognition of the fact that you will receive Confidential Information
during your employment with the Company Group, you agree to be bound by the
Restrictive Covenant set forth in Section 4.1 and agree that, if you
violate any provision of the Restrictive Covenant, then, notwithstanding any
other provision of this Agreement, (a) any unvested portion of the Option,
(b) all unvested Restricted Shares (the “Forfeited Shares”), and (c) all
unpaid dividends or other distributions on such Forfeited Shares shall be
forfeited and any rights thereto shall become null and void.

 

4.3                 Committee Discretion. 
You may be released from your Restrictive Covenant under this Article IV
only if, and to the extent that, the Committee (or its duly appointed agent)
determines in its sole discretion that such action is in the best interests of
the Company Group.

 

4.4                 Impact
of Restatement of Financial Statements Upon Award.

 

(a)                        Forfeiture
or Recovery of Award.  If any of
Best Buy’s financial statements are required to be restated as a result of any
errors, omissions or fraud in which you were involved, the Committee may (in
its sole discretion, but acting in good faith) direct that all or a portion of
the Award under this Agreement, with respect to any fiscal year of Best Buy for
which the financial results are negatively affected by such restatement, shall
be forfeited or recovered from you.  The
amount to be forfeited or recovered from you shall be the amount by which the
value of the Award under this Agreement exceeded the amount that would have
been payable to you had the financial statements been initially filed as
restated, or any greater or lesser amount (including, but not limited to, the
entire Award) that the Committee may determine. 
In no event shall the amount to be forfeited or recovered by Best Buy be
less than the amount required to be forfeited or recovered as a matter of
law.  The Committee shall determine
whether Best 

 

3

 

Buy
shall effect any such forfeiture or recovery (i) by seeking repayment from
you pursuant to this Article IV; (ii) by reducing (subject to
applicable law and the terms and conditions of the applicable plan, program or
arrangement) the amount that would otherwise be payable to you under this
Agreement and any other compensatory plan, program or arrangement maintained by
the Company Group; (iii) by
requiring that you forfeit all or any portion of the Option, the underlying
Shares and the Restricted Shares (either before or after the exercise of the
Option or the lapse of the Restrictions), in which case any rights thereto
shall become null and void, (iv) by withholding payment of future
increases in compensation (including the payment of any discretionary bonus
amount) or grants of compensatory awards that would otherwise have been made to
you in accordance with the otherwise applicable compensation practices of the
Company Group, or (v) by any combination of the foregoing.

 

(b)                       Right of
Set-Off.  By accepting this Agreement,
you consent to a deduction from any amounts any member of the Company Group
owes you from time to time (including amounts owed to you as wages or other
compensation, fringe benefits or vacation pay, as well as any other amounts
owed to you by any member of the Company Group), to the extent of the amounts
you owe any member of the Company Group under this Section 4.4.  Whether or not the Company Group elects to
make any set-off in whole or in part, if the Company Group does not recover by
means of set-off the full amount you owe, calculated as set forth above, you
agree to immediately pay the unpaid balance to Best Buy.

 

4.5                 Partial Invalidity. 
If any portion of this Article IV is determined by any court of
competent jurisdiction to be unenforceable in any respect, it shall be
interpreted to be valid to the maximum extent for which it reasonably may be
enforced, and enforced as so interpreted, all as determined by such court in
such action.  You acknowledge the
uncertainty of the law in this respect and expressly stipulate that this
Agreement is to be given the construction that renders its provisions valid and
enforceable to the maximum extent (not exceeding its express terms) possible
under applicable law.

 

V.    General Terms and Conditions.

 

5.1                 Employment
and Terms of Plan.  This
Agreement does not guarantee your continued employment nor alter the right of
any member of the Company Group to terminate your employment at any time.  This Award is granted pursuant to the Plan
and is subject to its terms.  In the
event of any conflict between the provisions of this Agreement and the Plan,
the provisions of the Plan will govern.  By your acceptance of this Award,
you acknowledge receipt of a copy of the Prospectus for the Plan and your
agreement to the terms and conditions of the Plan and this Agreement.

 

5.2                 Jurisdiction and Venue. 
You and Best Buy agree that the state and federal courts located in the
State of Minnesota shall have personal jurisdiction over the parties to this
Agreement, and that the sole venues to adjudicate any dispute arising under
this Agreement shall be the District Courts of Hennepin County, State of
Minnesota and the United States District Court for the District of Minnesota;
and each party waives any argument that any other forum would be more convenient
or proper.

 

5.3                 Costs of Enforcement. 
In addition to any other remedy to which any member of the Company Group
is entitled under this Agreement, you agree that the Company Group shall be
entitled to recover from you any attorney’s fees, costs or disbursements
reasonably incurred by the Company Group to enforce any provision of this
Agreement, or to otherwise defend itself from any claim brought by you or any
of your beneficiaries against any member of the Company Group under any
provision of this Agreement.

 

4

 

ADDENDUM TO

BEST
BUY CO., INC.

LONG-TERM INCENTIVE PROGRAM AWARD AGREEMENT

Award Date: October 31, 2008

 

Capitalized terms not defined in
the body of this Agreement are defined in the Plan or, if not defined therein,
will have the following meanings:

 

“Affiliate” is generally defined
in the Plan, but will mean, solely for purposes of the definitions of “Change
of Control” and “Person” in this Addendum, a company controlled directly or
indirectly by Best Buy, where “control” will mean the right, either directly or
indirectly, to elect a majority of the directors or other governing body
thereof without the consent or acquiescence of any third party.

 

“Beneficial Owner” will have the
meaning defined in Rule 13d-3 under the Securities Exchange Act of 1934,
as amended, or any successor provision.

 

“Cause” for termination of your
employment with the Company Group shall, for purposes of this Agreement, is
deemed to exist if you:

 

	
  (I)

  	
  are convicted of or enter a plea of guilty or nolo contendere to: (a) a felony, (b) a crime of
  moral turpitude, dishonesty, breach of trust or unethical business conduct,
  or (c) any crime involving the business of the Company Group;

  
	
   

  	
   

  
	
  (II)

  	
  in the performance of your duties for the Company
  Group or otherwise to the detriment of the Company Group, engage in:
  (a) dishonesty that is harmful to the Company Group, monetarily or
  otherwise, (b) willful or gross misconduct, (c) willful or gross
  neglect, (d) fraud, (e) misappropriation, (f) embezzlement, or
  (g) theft;

  
	
   

  	
   

  
	
  (III)

  	
  willfully disobey the directions of the Board acting
  within the scope of its authority;

  
	
   

  	
   

  
	
  (IV)

  	
  willfully fail to comply with the policies and
  practices of the Company Group;

  
	
   

  	
   

  
	
  (V)

  	
  fail to devote substantially all of your business
  time and effort to the Company Group;

  
	
   

  	
   

  
	
  (VI)

  	
  are adjudicated in any civil suit, or acknowledge in
  writing in any agreement or stipulation, to have committed any theft,
  embezzlement, fraud, or other intentional act of dishonesty involving any
  other person;

  
	
   

  	
   

  
	
  (VII)

  	
  are determined, in the sole judgment of the Board or
  any individual or individuals the Board authorizes to act on its behalf, to
  have engaged in a pattern of poor performance;

  
	
   

  	
   

  
	
  (VIII)

  	
  are determined, in the sole judgment of the Board or
  any individual or individuals the Board authorizes to act on its behalf, to
  have willfully engaged in conduct that is harmful to the Company Group,
  monetarily or otherwise;

  
	
   

  	
   

  
	
  (VIII)

  	
  breach any material provision of this Agreement
  (including but not limited to Section 4.1, concerning Confidential
  Information) or any other agreement between you and any member of the Company
  Group; or

  
	
   

  	
   

  
	
  (IX)

  	
  engage in any activity intended to benefit any
  entity at the expense of the Company Group or intended to benefit any
  competitor of the Company Group.

  

 

All determinations and other decisions relating to Cause (as defined
above) for termination of your employment shall be within the sole discretion
of the Board or any individual or individuals the Board authorizes to act on
its behalf; and shall be final, conclusive and binding upon you.  In the event that there exists Cause (as
defined above) for termination of your employment, the member of the Company
Group that employs you may terminate 

 

A-1

 

your employment and this Agreement immediately, upon written
notification of such termination for Cause, given to you by the Board or any
individual or individuals the Board authorizes to act on its behalf.

 

A “Change of Control” will be
deemed to have occurred solely for purposes of this Agreement, if the
conditions set forth in any one of the following paragraphs are satisfied after
the Award Date:

 

(I)            any Person is or
becomes the Beneficial Owner, directly or indirectly, of securities of Best Buy
representing 50% or more of the combined voting power of Best Buy’s then
outstanding securities excluding, at the time of their original acquisition,
from the calculation of securities beneficially owned by such Person, any
securities acquired directly from Best Buy or its Affiliates or in connection
with a transaction described in clause (a) of paragraph III below; or

 

(II)           individuals who at the
Award Date constitute the Board and any new director (other than a director whose
initial assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent solicitation, relating
to the election of directors of Best Buy) whose appointment or election by the
Board or nomination for election by Best Buy’s shareholders was approved or
recommended by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at the Award Date or whose appointment,
election or nomination for election was previously so approved or recommended,
cease for any reason to constitute a majority thereof; or

 

(III)         there is consummated a
merger or consolidation of Best Buy or any Affiliate with any other company,
other than (a) a merger or consolidation which would result in the voting
securities of Best Buy outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof), in combination with
the ownership of any trustee or other fiduciary holding securities under an
employee benefit plan of Best Buy or any Affiliate, at least 50% of the
combined voting power of the voting securities of Best Buy or such surviving
entity or parent thereof outstanding immediately after such merger or
consolidation, or (b) a merger or consolidation effected to implement a
recapitalization of Best Buy (or similar transaction) in which no Person is or
becomes the Beneficial Owner, directly or indirectly of securities of Best Buy
representing 50% or more of the combined voting power of Best Buy’s then
outstanding securities; or

 

(IV)         the shareholders of Best
Buy approve a plan of complete liquidation of Best Buy or there is consummated
an agreement for the sale or disposition by Best Buy of all or substantially
all Best Buy’s assets, other than a sale or disposition by Best Buy of all or
substantially all of Best Buy’s assets to an entity, at least 50% of the
combined voting power of the voting securities of which are owned by
shareholders of Best Buy in substantially the same proportions as their
ownership of Best Buy immediately before such sale; or

 

(V)           the Board determines in
its sole discretion that a change in control of Best Buy has occurred.

 

(VI)         Notwithstanding the
foregoing, a “Change in Control” will not be deemed to have occurred by virtue
of the consummation of any transaction or series of integrated transactions
immediately following which the record holders of the common stock of Best Buy
immediately before such transaction or series of transactions continue to have
substantially the same proportionate ownership in an entity which owns all or
substantially all of the assets of Best Buy immediately following such
transaction or series of transactions.

 

“Company Group” will mean,
collectively, Best Buy and its Affiliates.

 

“Confidential Information” will
mean any and all information in whatever form, whether written, electronically
stored, orally transmitted or memorized pertaining to:  trade secrets; customer lists, records and
other information regarding customers; price lists and pricing policies,
financial plans, records, ledgers and information; purchase orders, agreements
and related data; business development plans; products and technologies;
product tests; manufacturing costs; product or service pricing; sales and
marketing plans; research and development plans; personnel and employment
records, files, data and policies (regardless of whether the information
pertains to you or other employees of the Company Group); tax or financial
information; business and sales methods and 

 

A-2

 

operations; business
correspondence, memoranda and other records; inventions, improvements and
discoveries; processes and methods; and business operations and related data
formulae; computer records and related data; know-how, research and
development; trademark, technology, technical information, copyrighted
material; and any other confidential or proprietary data and information which
you encounter during employment, all of which are held, possessed and/or owned
by the Company Group and all of which are used in the operations and business
of the Company Group.  Confidential
Information does not include information which is or becomes generally known
within the Company Group’s industry through no act or omission by you;
provided, however, that the compilation, manipulation or other exploitation of
generally known information may constitute Confidential Information.

 

“Disabled” will mean that you
either (a) have qualified for long term disability payments under the long
term disability plan of the Company Group member then employing you; or (b) are
unable to perform the essential functions of your position (with or without
reasonable accommodation) with any such Company Group member due to a physical
or mental impairment resulting from your illness, pregnancy (if you are a
woman) or injury, and such inability to perform continues for at least six
consecutive months.  If any such Company
Group member does not have a long term disability plan in effect at such time,
you will be deemed disabled for the purposes hereof if you would have qualified
for long term disability payments under Best Buy’s long term disability plan
had you then been an employee of Best Buy.

 

“Good Reason” will
mean the occurrence of any of the following events following a Change in
Control, except for the occurrence of such an event in connection with your
death, the termination of your employment with the Company Group by your
employer (or any successor company or affiliated entity then employing you for
Cause, or any termination of your employment for Disability:

 

(I)            the assignment of
employment duties or responsibilities that are not substantially comparable or
greater in responsibility and status to the employment duties and
responsibilities held by you immediately before the Change in Control;

 

(II)           a material reduction in
your base salary as in effect immediately before the Change in Control; or

 

(III)         being required to work in
a location more than 50 miles from your office location immediately before the
Change in Control, except for requirements of temporary travel on the Company
Group’s business to an extent substantially consistent with your business
travel obligations immediately before the Change in Control.

 

“Person” is generally defined in
the Plan, but solely for purposes of the definition of “Change of Control” in
this Addendum, will have the meaning defined in Sections 3(a)(9) and 13(d) of
the Securities Exchange Act of 1934, as amended, except that such term will not
include (i) Best Buy or any of its Affiliates, (ii) a trustee or
other fiduciary holding securities under an employee benefit plan of Best Buy
or any of its Affiliates, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (iv) a
corporation owned, directly or indirectly, by the shareholders of Best Buy in
substantially the same proportions as their ownership of stock of Best Buy.

 

“Qualified Retirement” will mean
any termination of your employment with the Company Group that occurs on or
after your 60th birthday, at a time when no member of the Company Group is
entitled to discharge you for Cause, so long as you have served the Company
Group continuously for at least the three-year period immediately preceding
that termination.

 

A-3

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