Exhibit 4.2


 


EXECUTION COPY


 


BEST BUY CO., INC.


 


and


 


Wells Fargo Bank, N.A.,


as Trustee


 


First Supplemental Indenture


 


Dated as of June 24, 2008


 






 


6.75% Notes due 2013


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  1.01.

  	
  Definition
  Of Terms

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  
	
  THE SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  2.01.

  	
  Designation

  	
  8

  
	
  Section
  2.02.

  	
  Principal
  Amount; Series Treatment for Additional Securities

  	
  13

  
	
  Section
  2.03.

  	
  Form of
  Securities; Global Form

  	
  13

  
	
  Section
  2.04.

  	
  Restrictive
  Legends

  	
  14

  
	
  Section
  2.05.

  	
  Transfer
  Restrictions

  	
  15

  
	
  Section
  2.06.

  	
  Registration,
  Transfer and Exchange

  	
  15

  
	
  Section
  2.07.

  	
  Restrictions
  on Transfer and Exchange

  	
  18

  
	
  Section
  2.08.

  	
  Restricted
  Regulation S Global Notes

  	
  19

  
	
  Section
  2.09.

  	
  Additional
  Interest

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  
	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  3.01.

  	
  Covenants

  	
  21

  
	
  Section
  3.02.

  	
  Offer To
  Repurchase Upon Change Of Control Triggering Event

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  
	
  REDEMPTION OF THE NOTES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  4.01.

  	
  Optional
  Redemption by Company

  	
  22

  
	
  Section
  4.02.

  	
  Selection of
  Notes to Be Redeemed

  	
  23

  
	
  Section
  4.03.

  	
  Redemption
  Notice

  	
  23

  
	
  Section
  4.04.

  	
  Effect of
  Redemption Notice

  	
  24

  
	
  Section
  4.05.

  	
  Deposit of
  Redemption Price

  	
  24

  
	
  Section
  4.06.

  	
  Securities
  Redeemed in Part

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  
	
  DEFEASANCE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  5.01.

  	
  Defeasance
  By The Company

  	
  24

  



 


i

















 


	
  ARTICLE 6

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  6.01.

  	
  Rule 144A
  Information; No Resales By Affiliates

  	
  25

  
	
  Section
  6.02.

  	
  Ratification
  Of Indenture

  	
  25

  
	
  Section
  6.03.

  	
  Trustee Not
  Responsible For Recitals

  	
  25

  
	
  Section
  6.04.

  	
  Governing
  Law

  	
  26

  
	
  Section
  6.05.

  	
  Separability

  	
  26

  
	
  Section
  6.06.

  	
  Counterparts

  	
  26

  



 

















 


	
  EXHIBITS

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  Form of Note

  	
   

  
	
  EXHIBIT B

  	
  Restricted
  Legend

  	
   

  
	
  EXHIBIT C

  	
  DTC Legend

  	
   

  
	
  EXHIBIT D

  	
  Regulation S
  Certificate

  	
   

  
	
  EXHIBIT E

  	
  Rule 144A
  Certificate

  	
   

  
	
  EXHIBIT F

  	
  Certificate
  of Beneficial Ownership

  	
   

  



 

















 


SUPPLEMENTAL INDENTURE (this “First Supplemental Indenture”), dated as of
June 24, 2008, between Best Buy Co., Inc., a Minnesota corporation
(the “Company”), and Wells Fargo
Bank, N.A., as Trustee (the “Trustee”).


 


WHEREAS, the Company
and the Trustee executed and delivered an Indenture, dated as of June 24,
2008 (the “Base Indenture”), to
provide for the issuance by the Company from time to time of Securities (as
defined therein) to be issued in one or mores series as provided in the Base
Indenture;


 


WHEREAS, the
issuance and sale of $500,000,000 aggregate Principal Amount of an initial
series of the Securities of the Company under the Indenture, designated as its
6.75% Notes due 2013 (the “Notes”)
have been authorized by a written consent of the Board of Directors of the
Company;


 


WHEREAS,
the Company desires to issue $500,000,000 aggregate Principal Amount of the
Notes as of the date hereof;


 


WHEREAS, Sections
3.01 and 8.02 of the Base Indenture provide that the Company, when authorized
by a Board Resolution, and the Trustee may amend or supplement the Base
Indenture to provide for the issuance of and to establish the form or terms and
conditions of Securities of any series as permitted by the Base Indenture;


 


WHEREAS, the Company
desires to establish the form, terms and conditions of the Notes;


 


WHEREAS, all things
necessary to make this First Supplemental Indenture a valid and legally binding
supplement to the Base Indenture according to its terms and the terms of the
Base Indenture have been done;


 


WHEREAS,
the Company has delivered to the Trustee an Officer’s Certificate pursuant to Section 8.04
of the Base Indenture to the effect that the execution and delivery of the
First Supplemental Indenture is authorized or permitted under the Base
Indenture and that all conditions precedent provided for in the Base Indenture
to the execution and delivery of this First Supplemental Indenture to be
complied with by the Company have been complied with; and


 


WHEREAS,
the Company has requested that the Trustee execute and deliver this First
Supplemental Indenture.


 


NOW, THEREFORE:


 


In consideration of the premises stated
herein and the purchase of the Notes by the Holders thereof, the Company and
the Trustee mutually covenant and agree for the equal and proportionate benefit
of the respective Holders from time to time of the Notes as follows:


 

















 


ARTICLE 1

DEFINITIONS


 


Section 1.01.  Definition Of Terms.  Unless the context otherwise
requires:


 


(a)           a term defined in the
Base Indenture has the same meaning when used in this First Supplemental
Indenture unless the definition of such term is amended and supplemented
pursuant to this First Supplemental Indenture;


 


(b)           a term defined in this
First Supplemental Indenture has the same meaning throughout;


 


(c)           the singular includes
the plural, and vice versa;


 


(d)           except as otherwise
indicated, a reference to a Section or Article is to a Section or
Article of this First Supplemental Indenture;


 


(e)           headings are for
convenience of reference only and do not affect interpretation;


 


(f)            the following terms
have the meanings given to them in this Section 1.01(f):


 


“Additional
Interest” means any increase in Interest set forth in Section 2(e) of
the Registration Rights Agreement.


 


“affiliate”
means, with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with,
such Person.  For purposes of this
definition, “control” (including, with
correlative meanings, the terms “controlling,” “controlled by” and “under common control with”)
with respect to any Person, means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise.


 


“Certificate of Beneficial
Ownership” means a certificate substantially in the form of Exhibit F.


 


“Certificated Note”
means a Note in registered physical form without interest coupons.


 


“Change of Control”
means the occurrence of any of the following:


 


(1)           the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any person (other than the Company or one of the
Company’s Subsidiaries) becomes the beneficial owner (as defined in Rules 13d-3
and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of
the Company’s outstanding Voting


 


2

















 


Stock or other Voting Stock
into which the Company’s Voting Stock is reclassified, consolidated, exchanged
or changed, measured by voting power rather than number of shares; provided, however, that a
person shall not be deemed beneficial owner of, or to own beneficially any securities,
(A) tendered pursuant to a tender or exchange offer made by or on behalf
of such person or any of such person’s affiliates until such tendered
securities are accepted for purchase or exchange thereunder or (B) if such
beneficial ownership (i) arises solely as a result of a revocable proxy
delivered in response to a proxy or consent solicitation made pursuant to the
applicable rules and regulations under the Exchange Act and (ii) is
not also then reportable on Schedule 13D (or any successor schedule) under the
Exchange Act;


 


(2)           the direct or indirect sale, transfer,
conveyance or other disposition (other than by way of merger or consolidation),
in one or a series of related transactions, of all or substantially all of the
Company’s assets and the assets of the Company’s Subsidiaries, taken as a
whole, to one or more persons (other than to the Company or one of the Company’s
Subsidiaries); provided, however,
that none of the circumstances in this clause (2) shall be a Change of
Control if the persons that beneficially own the Company’s Voting Stock
immediately prior to the transaction own, directly or indirectly, shares with a
majority of the total voting power of all outstanding voting securities of the
surviving or transferee person that are entitled to vote generally in the
election of that person’s board of directors, managers or trustees immediately
after the transaction;


 


(3)           the Company consolidates with, or merges
with or into, any person or any such person consolidates with, or merges with
or into, the Company, in either case, pursuant to a transaction in which any of
the Company’s outstanding Voting Stock or the Voting Stock of such other person
is converted into or exchanged for cash, securities or other property, other
than pursuant to a transaction in which shares of the Company’s Voting Stock
outstanding immediately prior to the transaction constitute, or are converted
into or exchanged for, a majority of the Voting Stock of the surviving person
immediately after giving effect to such transaction;


 


(4)           the adoption of a plan relating to the
Company’s liquidation or dissolution; or


 


(5)           the first day on which a majority of the
members of the Company’s board of directors are not Continuing Directors.


 


Notwithstanding the foregoing, a transaction
shall not be deemed to involve a Change of Control if (a) the Company
becomes a direct or indirect wholly-owned subsidiary of a holding company (i.e., a parent company) and (b)(1) the direct or
indirect holders of the Voting Stock of such holding company immediately
following that transaction are substantially the same as the holders of the
Company’s Voting Stock immediately prior to that transaction or (2) immediately
following that transaction no person (other than a holding company


 


3

















 


satisfying the requirements of
this sentence) is the beneficial owner, directly or indirectly, of more than
50% of the Voting Stock of such holding company; provided
that any series of related transactions shall be treated as a single
transaction.  The term “person,” as used
in this definition, has the meaning given thereto in Section 13(d)(3) of
the Exchange Act.


 


“Change of Control
Triggering Event” means, with respect to the Notes, the occurrence
of both a Change of Control and a Rating Event with respect to the Notes.


 


“Clearstream” means Clearstream Banking S.A. and its
successors.


 


“Comparable Treasury Issue” means the United States Treasury
security or securities selected by an Independent Investment Banker as having
an actual or interpolated maturity comparable to the remaining term of the
Notes to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of
corporate notes of a comparable maturity to the remaining term of the Notes.


 


“Comparable Treasury Price” means, with respect to any
Redemption Date, (A) the arithmetic average of four Reference Treasury
Dealer Quotations for such Redemption Date, after excluding the highest and
lowest such Reference Treasury Dealer Quotations, or (B) if the Company
obtains fewer than four such Reference Treasury Dealer Quotations, the
arithmetic average of all such quotations for such Redemption Date.


 


“Continuing Director” means, as of any date of determination,
any member of the Company’s Board of Directors who (1) was a member of
such Board of Directors on the Issue Date, (2) was nominated for election
to such Board of Directors with the approval of a committee of the Board of
Directors consisting of a majority of independent Continuing Directors or (3) was
nominated for election, elected or appointed to such Board of Directors with
the approval of a majority of the Continuing Directors who were members of such
Board of Directors at the time of such nomination, election or appointment
(either by a specific vote or by approval of the Company’s proxy statement in
which such member was named as a nominee for election as a director, without
objection to such nomination).


 


“DTC Legend”
means the legend set forth in Exhibit C.


 


“Euroclear”
means Euroclear Bank, S.A./N.V., and its successors or assigns, as operator of
the Euroclear System.


 


“Exchange
Notes” means the debt securities of the Company to be offered to
Holders in exchange for the Initial Notes pursuant to the Exchange Offer or
otherwise pursuant to a Registration of the Exchange Notes containing terms
identical to the Notes for which they are exchanged (except that (i) interest


 


4

















 


thereon shall accrue from the
last date on which interest was paid on the corresponding series of Notes
(unless the Exchange Note is issued after an interest record date and prior to
the corresponding Interest Payment Date, in which case interest shall accrue
from such Interest Payment Date) or, if no such interest has been paid, from
the first date that the corresponding series of Notes was originally issued
under the Base Indenture as supplemented by this First Supplemental Indenture
and (ii) the provisions relating to Additional Interest (other than any
Additional Interest accrued through the date of issuance of such Exchange
Notes) shall be eliminated.


 


“Exchange
Offer” means the exchange offer by the Company of Exchange Notes for
Initial Notes pursuant to the Registration Rights Agreement.


 


“Exchange
Offer Registration Statement” means a registration statement
relating to an Exchange Offer on an appropriate form and all amendments and
supplements to such registration statement, in each case including the
prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.


 


“Global Note”
has the meaning set forth in Section 2.03(b).


 


“Indenture”
means the Base Indenture as supplemented by this First Supplemental Indenture.


 


“Independent Investment
Banker” means one of the Reference Treasury Dealers appointed by the
Company after consultation with the Trustee; provided,
however, that if such Reference Treasury
Dealer ceases to be a Primary Treasury Dealer, the Company shall substitute
another Primary Treasury Dealer.


 


“Initial
Notes” means (i) all Notes issued on the Issue Date, (ii) any
additional Notes of this series issued under Section 2.02 in an offering
not registered under the Securities Act and (iii) any Notes issued in
replacement therefor, but not including any Exchange Notes issued in exchange
therefor.


 


“Initial Purchasers”
means J.P. Morgan Securities Inc., Goldman, Sachs & Co., and the other
initial purchasers named in the Purchase Agreement, dated June 19, 2008,
between the Company and J.P. Morgan Securities Inc. and Goldman, Sachs &
Co., as representatives of the initial purchasers.


 


“Interest”
means, with respect to the Notes, any interest payable on the Notes, including
Additional Interest, if any.


 


“Interest
Payment Date” means each January 15 and July 15,
commencing on January 15, 2009.


 


“Investment Grade Rating”
means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and
BBB- (or the equivalent) by S&P, and the


 


5

















 


equivalent investment grade
credit rating from any additional Rating Agency or Rating Agencies selected by
the Company.


 


“Issue Date”
means the first date that Notes were originally issued under this First
Supplemental Indenture.


 


“Non-U.S. Person”
means a Person that is not a U.S. person, as defined in Regulation S.


 


“Notes”
has the meaning set forth in the recitals above.


 


“Rating Agencies”
means each of Moody’s and S&P and, if any of Moody’s and S&P ceases to
rate the Notes or fails to make a rating of the Notes publicly available for
reasons outside of the control of the Company, a “nationally recognized
statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under
the Exchange Act selected by the Company (as certified by a Board Resolution)
and which is reasonably acceptable to the Trustee as a replacement agency for
Moody’s or S&P or both of them, as the case may be.


 


“Rating Event”
means the rating on the Notes is lowered independently by each of the Rating
Agencies and the Notes are rated below an Investment Grade Rating by each of
the Rating Agencies on any day during the period commencing on the earlier of
the date of the first public notice of the occurrence of a Change of Control or
the Company’s intention to effect a Change of Control and ending 60 days
following consummation of such Change of Control (which period shall be
extended so long as the rating of the Notes is under publicly announced
consideration for a possible downgrade by any of the Rating Agencies).


 


“Redemption Date”
has the meaning assigned in Section 4.01.


 


“Redemption Notice” has the meaning set
forth in Section 4.03.


 


“Redemption Price” has the meaning set forth in Section 4.01.


 


“Reference Treasury Dealer” means either of J.P. Morgan
Securities Inc. and Goldman, Sachs & Co. and their affiliates, which
are primary U.S. Government securities dealers in New York City, and their
respective successors plus two other primary U.S. Government securities dealers
in New York City selected by the Company; provided, however, that if any of the foregoing or their affiliates
shall cease to be a primary U.S. Government securities dealer in New York City
(a “Primary Treasury Dealer”), the
Company shall substitute therefor another Primary Treasury Dealer.


 


“Reference Treasury Dealer Quotations” means, with respect to
each Reference Treasury Dealer and any Redemption Date, the arithmetic average,
as determined by the Company, of the bid and asked prices for the Comparable


 


6

















 


Treasury Issue
(expressed in each case as a percentage of its Principal Amount) quoted in
writing to the Company by such Reference Treasury Dealer at 3:30 p.m. (New
York City time) on the third Business Day preceding such Redemption Date.


 


“Registration”
means a registered Exchange Offer for the Notes by the Company or other
registration of the Notes under the Securities Act pursuant to and in
accordance with the terms of the Registration Rights Agreement.


 


“Registration
Rights Agreement” means the Registration Rights Agreement, dated as
of June 24, 2008, between the Company and J.P. Morgan Securities Inc. and
Goldman, Sachs & Co., as Representatives of the several Initial
Purchasers.


 


“Registration
Statement” means the Registration Statement to be filed pursuant to
and as defined in the Registration Rights Agreement.


 


“Regular Record Date”
means, for the interest payable on any Interest Payment Date, the close of
business on January 1 or July 1 (whether or not a Business Day)
immediately preceding such Interest Payment Date.


 


“Regulation S”
means Regulation S under the Securities Act.


 


“Regulation S Certificate”
means a certificate substantially in the form of Exhibit D hereto.


 


“Regulation S Global Note”
means a Global Note representing Notes issued and sold pursuant to Regulation
S.


 


“Restricted Legend”
means the legend set forth in Exhibit B.


 


“Restricted Period”
means (i) two years in the case of a U.S. Global Note or (ii) the
relevant 40-day distribution compliance period as defined in Regulation S in
the case of a Regulation S Global Note.


 


“Restricted Regulation S
Global Note” means a Regulation S Global Note that bears the
Restricted Legend.


 


“Rule 144A”
means Rule 144A under the Securities Act.


 


“Rule 144A Certificate”
means (i) a certificate substantially in the form of Exhibit E hereto
or (ii) a written certification addressed to the Company and the Trustee
to the effect that the Person making such certification (x) is acquiring
such Note (or beneficial interest) for its own account or one or more accounts
with respect to which it exercises sole investment discretion and that it and
each such account is a “qualified institutional buyer” within the meaning of Rule 144A,
(y) is aware that the transfer to it or exchange, as applicable, is being
made in reliance upon the exemption from the provisions of Section 5 of
the Securities Act


 


7

















 


provided by Rule 144A, and
(z) acknowledges that it has received such information regarding the
Company as it has requested pursuant to Rule 144A(d)(4) or has
determined not to request such information.


 


“Securities
Act” means the Securities Act of 1933, as amended.


 


“Substitute Rating Agency” means a “nationally
recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under
the Exchange Act selected by the Company (pursuant to a Board Resolution and
reasonably acceptable to the Trustee) as a replacement agency for Moody’s or
S&P, or both of them, as the case may be.


 


“Treasury Rate” means, with respect to any Redemption Date,
the rate per year equal to the semiannual equivalent or interpolated (on a day
count basis) yield to maturity of the Comparable Treasury Issue, assuming a
price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such Redemption
Date.


 


“Unrestricted Regulation S
Global Note” means a Regulation S Global Note that does not bear the
Restricted Legend.


 


“U.S. Global Note”
means a Global Note that bears the Restricted Legend representing Notes issued
and sold pursuant to Rule 144A.


 


ARTICLE 2

THE SECURITIES


 


Section 2.01.  Designation.


 


(a)           The Company hereby
establishes a series of Securities designated the “6.75% Notes due 2013” for
issuance under the Indenture.  The Stated
Maturity of the Notes shall be July 15, 2013.


 


(b)           Interest Rate.


 


(i)            The rate at which the
Notes shall bear interest shall be 6.75% per annum, subject to Section 2.01(b)(ii);
the date from which interest shall accrue on the Notes shall be June 24,
2008, or the most recent Interest Payment Date to which interest has been paid
or provided for; the Interest Payment Dates for the Notes shall be January 15
and July 15 of each year, beginning on January 15, 2009; the interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date, shall be paid, in immediately available funds, to the Persons in whose
names the Notes (or one or more predecessor Notes) is registered at the close
of business on the Regular Record Date for such interest, which shall be the January 1
or July 1, as the case may be, next preceding such


 


8

















 


Interest
Payment Date, without regard to any transfer or exchange of such Notes
subsequent to the Regular Record Date and prior to such Interest Payment
Date.  Any such interest not punctually
paid or duly provided for shall, at the Company’s option, cease to be payable
to the respective Holders on such Regular Record Date, and such defaulted
interest may be paid to the Persons in whose names the Notes (or one or more
predecessor Notes) are registered at the close of business on a special record
date, which date may not be less than 10 days prior to the date of payment of
such defaulted interest, for the payment of such defaulted interest to be fixed
by the Trustee, notice whereof shall be given to Holders of Notes not less than
15 days prior to such special record date, or may be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Notes may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Base Indenture.
Payment of principal and interest on the Notes shall be made at the Corporate
Trust Office of the Trustee or such other office or agency of the Company as
may be designated for such purpose, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that each installment of interest and principal on
the Notes may at the Company’s option with written notice to the Trustee be
paid in immediately available funds by transfer to an account maintained by the
payee located in the United States, provided such
payee has given written wire transfer instructions to the Company.


 


(ii)           The interest rate
payable on the Notes shall be subject to adjustments from time to time if
either Moody’s or S&P, or in either case, a Substitute Rating Agency
thereof, downgrades (or subsequently upgrades) the rating assigned to the
Notes, in the manner described below.


 


(A)          If the rating of the
Notes from Moody’s or any Substitute Rating Agency thereof is decreased to a
rating set forth in the immediately following table, the interest rate on the
Notes shall increase from the interest rate payable on the Notes on the Issue
Date by the percentage points set forth below opposite that rating:


 


	
  Moody’s Rating*

  	
   

  	
  Percentage Points

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Ba1

  	
   

  	
  0.25

  	
   

  
	
  Ba2

  	
   

  	
  0.50

  	
   

  
	
  Ba3

  	
   

  	
  0.75

  	
   

  
	
  B1 or below

  	
   

  	
  1.00

  	
   

  



 


* Including the equivalent ratings of any
Substitute Rating Agency.


 


9

















 


(B)           If the rating of the
Notes from S&P or any Substitute Rating Agency thereof is decreased to a
rating set forth in the immediately following table, the interest rate on the
Notes shall increase from the interest rate payable on the Notes on the Issue
Date by the percentage points set forth below opposite that rating:


 


	
  S&P Rating*

  	
   

  	
  Percentage Points

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BB+

  	
   

  	
  0.25

  	
   

  
	
  BB

  	
   

  	
  0.50

  	
   

  
	
  BB-

  	
   

  	
  0.75

  	
   

  
	
  B+ or below

  	
   

  	
  1.00

  	
   

  



 


* Including the equivalent ratings of any
Substitute Rating Agency.


 


(C)           If at any time the
interest rate on the Notes has been adjusted upward and either Moody’s or
S&P (or, in either case, a Substitute Rating Agency thereof), as the case
may be, subsequently increases its rating of the Notes to any of the ratings
set forth in the tables above, the interest rate on the Notes shall be
decreased such that the interest rate for the Notes equals the interest rate
payable on the Notes on the Issue Date plus the applicable percentage points
set forth opposite the ratings in the tables above in effect immediately
following the increase. If Moody’s or any Substitute Rating Agency thereof
subsequently increases its rating of the Notes to Baa3 (or its equivalent, in
the case of a Substitute Rating Agency) or higher and S&P or any Substitute
Rating Agency thereof increases its rating to BBB- (or its equivalent, in the
case of a Substitute Rating Agency) or higher, the interest rate on the Notes
shall be decreased to the interest rate payable on the Notes on the Issue Date.


 


(D)          Each adjustment required
by any decrease or increase in a rating set forth above, whether occasioned by
the action of Moody’s or S&P (or, in either case, any Substitute Rating
Agency thereof), shall be made independent of any and all other adjustments. In
no event shall (1) the interest rate on the Notes be reduced to below the
interest rate payable on the Notes on the Issue Date or (2) the total increase
in the interest rate on the Notes exceed 2.00 percentage points above the
interest rate payable on the Notes on the Issue Date.


 


(E)           No adjustments in the
interest rate of the Notes shall be made solely as a result of a Rating Agency
ceasing to


 


10

















 


provide a rating of the Notes. If at any time
less than two Rating Agencies provide a rating of the Notes for reason beyond
the Company’s control, the Company shall use its commercially reasonable
efforts to obtain a rating of the Notes from a Substitute Rating Agency, to the
extent one exists, and if a Substitute Rating Agency exists, for purposes of
determining any increase or decrease in the interest rate on the Notes pursuant
to the table above (x) such Substitute Rating Agency shall be substituted
for the last Rating Agency to provide a rating of the Notes but which has since
ceased to provide such rating, (y) the relative ratings scale used by such
Substitute Rating Agency to assign ratings to senior unsecured debt shall be
determined in good faith by an independent investment banking institution of
national standing appointed by the Company and, for purposes of determining the
applicable ratings included in the applicable table in Section 2.01(b)(ii)(A) or
2.01(b)(ii)(B) with respect to such Substitute Rating Agency, such ratings
shall be deemed to be the equivalent ratings used by Moody’s or S&P, as
applicable, in such table and (z) the interest rate on the Notes shall
increase or decrease, as the case may be, such that the interest rate equals
the interest rate payable on the Notes on the Issue Date plus the appropriate
percentage points, if any, set forth opposite the rating from such Substitute
Rating Agency in the applicable table in Section 2.01(b)(ii)(A) or
2.01(b)(ii)(B) (taking into account the provisions of clause (y) above)
(plus any applicable percentage points resulting from a decreased rating by the
other Rating Agency).


 


(F)           For so long as only one
Rating Agency provides a rating of the Notes, any subsequent increase or
decrease in the interest rate of the Notes necessitated by a reduction or
increase in the rating by such Rating Agency shall be twice the percentage
points set forth in the applicable table above. For so long as no Rating Agency
provides a rating of the Notes, the interest rate on the Notes shall increase
to, or remain at, as the case may be, 2.00 percentage points above the interest
rate payable on the Notes on the Issue Date.


 


(G)           The interest rate on
the Notes shall permanently cease to be subject to any adjustment described in
this Section 2.01(b)(ii) (notwithstanding any subsequent decrease in
the ratings by either or both Rating Agencies) if the Notes become rated A2 and
A (or its equivalent, in the case of a Substitute Rating Agency) or higher by
Moody’s and S&P, respectively (or, in either case, any Substitute Rating
Agency thereof), or one of these ratings if the Notes are only rated by one
Rating Agency.


 


11

















 


(H)          Any interest rate
increase or decrease described in this Section 2.01(b)(ii) shall take
effect from the first day of the interest period during which a rating change
requires an adjustment in the interest rate. If Moody’s or S&P or any
Substitute Rating Agency thereof changes its rating of the Notes more than once
during any particular interest period, the last change by such agency during
such period shall control for purposes of any interest rate increase or
decrease with respect to the Notes described above relating to such Rating
Agency’s action.


 


(I)            If the interest rate
payable on the Notes is increased as described in this Section 2.01(b)(ii),
then the term “interest,” as used in this First Supplemental Indenture, the
Base Indenture and the Notes, shall be deemed to include any such additional
interest unless the context otherwise requires.


 


(J)            The Company shall
deliver to the Trustee, and Paying Agent, if the Trustee shall not then be
acting as Paying Agent, within five calendar days after either Moody’s or S&P
or any Substitute Rating Agency thereof downgrades, or subsequently upgrades,
the rating assigned to the Notes as described by this Section 2.01(b)(ii),
an Officer’s Certificate stating (i) that the rating downgrade, or
subsequent upgrade, as the case may be, has occurred and (ii) the current
rating or ratings upon which the interest rate payable on the Notes shall be
based.


 


(c)           The Notes are not
subject to any sinking fund.


 


(d)           Interest (including
Additional Interest) on the Notes shall be computed on the basis of a 360-day
year consisting of twelve 30-day months and, in the case of an incomplete
month, the number of days elapsed.


 


(e)           The Notes shall be
issuable in registered form, without coupons, in denominations of $2,000 and
any integral multiples of $1,000 in excess thereof.


 


(f)            The principal of and
premium, if any, and interest on the Notes shall be payable at the office or
agency of the Company designated for that purpose as the Payment Office, as
provided in Section 4.05 of the Base Indenture; provided,
however, that interest may be payable at the option of the Company
by check mailed to the address of the Person entitled thereto as such address
shall appear on the Security Register on the record date for such interest
payment.


 


(g)           The currency of
denomination of the Notes shall be United States Dollars. Payment of principal
of and premium, if any, and interest on the Notes shall be made in United
States Dollars.


 


12
















 


Section 2.02.  Principal
Amount; Series Treatment for Additional Securities.


 


(a)           The Notes shall be initially
limited to an aggregate principal amount of $500,000,000, except for Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Sections 3.08, 3.09, 3.11 or 8.02
of the Base Indenture.  The Company may,
without notice to or the consent of the Holders of the outstanding Notes, issue
additional Notes of the same tenor as the Notes by Company Order, so that such
additional Notes and the outstanding Notes shall form a single series of
Securities under the Base Indenture as supplemented by this First Supplemental
Indenture.


 


(b)           Any additional Notes issued
under Section 2.02(a) shall have the same form and terms in all
respects as the outstanding Notes (other than the date of issuance and except
that interest shall accrue on the additional Notes from the most recent date to
which interest has been paid on the Notes or, if no interest has been paid on
the Notes, from the first date that the Notes were originally issued under this
First Supplemental Indenture), including the same right to receive accrued and
unpaid interest.


 


(c)           For all purposes of the
Indenture, all Notes, whether Initial Notes, Exchange Notes or additional Notes
issued under Section 2.02(a) shall constitute one series of Notes and
shall vote together as one series of Notes.


 


Section 2.03.  Form of Securities;
Global Form.


 


(a)           The Notes shall be
substantially in the form of Exhibit A hereto.  The terms and provisions contained in the
form of Notes set forth in Exhibit A shall constitute, and are hereby
expressly made, a part of the Base Indenture as supplemented by this First
Supplemental Indenture.


 


Any of the Notes may have such letters, numbers or
other marks of identification and such notations, legends, endorsements or
changes as the officers executing the same may approve (execution thereof to be
conclusive evidence of such approval) and as are not inconsistent with the
provisions of the Base Indenture, or as may be required by the Depositary or as
may be required for the Initial Notes to be tradeable on any market developed
for trading of securities pursuant to Rule 144A or as may be required to
comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any securities exchange
or automated quotation system on which the Notes may be listed, or to conform
to usage, or to indicate any special limitations or restrictions to which any
particular Notes are subject.


 


(b)           So long as any Notes of this
series are eligible for book-entry settlement with the Depositary, or unless
otherwise required by law, or otherwise contemplated by Section 3.08(b) of
the Base Indenture, all of the Notes of this series shall be represented by one
or more Notes in global form registered in the


 


13

















 


name of the Depositary or
the nominee of the Depositary (each and collectively, the “Global Note”).  The transfer and exchange of beneficial
interests in any such Global Note shall be effected through the Depositary in
accordance with the Indenture and the applicable procedures of the Depositary.  Except as provided in Section 3.08(b) of
the Base Indenture, beneficial owners of a Global Note shall not be entitled to
have certificates registered in their names, shall not receive or be entitled
to receive physical delivery of certificates in definitive form and shall not
be considered holders of such Global Note.


 


Any Global Note shall represent the outstanding
Notes and shall provide that it shall represent the aggregate amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
amount of outstanding Notes represented thereby may from time to time be
increased or reduced to reflect redemptions, transfers or exchanges permitted
hereby.  Any endorsement of a Global Note
to reflect the amount of any increase or decrease in the amount of outstanding
Notes represented thereby shall be made by the Trustee in such manner and upon
instructions given by the Holder of such Notes in accordance with the Base
Indenture.


 


Section 2.04.  Restrictive
Legends.


 


(a)           Except as otherwise provided
in Section 2.04(e), each Initial Note or additional Note issued under Section 2.02(a)
(other than an Unrestricted Regulation S Note) shall bear the Restricted
Legend.


 


(b)           Each Global Note, whether or
not an Initial Note or additional Note issued under Section 2.02(a), shall
bear the DTC Legend.


 


(c)           Each Restricted Regulation S
Global Note shall bear the Restricted Legend.


 


(d)           Initial Notes and additional
Notes issued under Section 2.02(a) offered and sold in reliance on
Regulation S shall be issued as provided in Section 2.08.


 


(e)           (i) If the Company determines
(upon the advice of counsel and such other certifications and evidence as the
Company may reasonably require) that a Note is eligible for resale pursuant to Rule 144
under the Securities Act (or a successor rule) and that the Restricted Legend is
no longer necessary or appropriate in order to ensure that subsequent transfers
of the Note (or a beneficial interest therein) are effected in compliance with
the Securities Act; or (ii) or after an Initial Note is (x) subject
to an effective registration statement under the Securities Act, pursuant to
the Registration Rights Agreement or otherwise, or (y) exchanged for an
Exchange Note, the Company may, subject to the provision of an Officer’s
Certificate and an Opinion of Counsel in accordance with Section 14.05 of
the Base Indenture, instruct the Trustee to cancel such Note and issue to the
Holder thereof (or to its transferee) a new Note of like tenor and


 


14

















 


amount, registered in the
name of the Holder thereof (or its transferee), that does not bear the
Restricted Legend, and the Trustee shall comply with such instruction.


 


Section 2.05.  Transfer
Restrictions.


 


(a)           By its acceptance of any
Note bearing the Restricted Legend, each Holder of such a Note acknowledges the
restrictions on transfer of such Note set forth in this First Supplemental
Indenture and in the Restricted Legend and agrees that it shall transfer such
Note only as provided in this First Supplemental Indenture and the Restricted
Legend. The Company and the Trustee as Registrar shall not register a transfer
of any Note unless such transfer complies with the restrictions on transfer of
such Note set forth in this First Supplemental Indenture and the Restricted
Legend. In connection with any transfer of Notes, each Holder agrees by its
acceptance of the Notes to furnish the Trustee as Registrar or the Company such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that
the Trustee shall not be required to determine (but may rely on a determination
made by the Company with respect to) the sufficiency of any such
certifications, legal opinions or other information.


 


The Trustee shall retain copies of all letters,
notices and other written communications received pursuant to the Base
Indenture or this Section 2.05(a). 
The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon
the giving of reasonable written notice to the Trustee.


 


The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under this First Supplemental Indenture or under applicable
law with respect to any transfer of any interest in any Security (including any
transfers between or among members of, or participants in, the Depositary or
beneficial owners of interests in any Global Note) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this First Supplemental Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.


 


Section 2.06.  Registration, Transfer and
Exchange.


 


(a)           The Notes shall be issued in
registered form only, without coupons, and except under the circumstances
described in Section 2.06(b)(iv), the Notes shall be issued in global form
only.  The Company shall cause the
Trustee to maintain the Security Register of the Notes, for registering the
record ownership of Notes by the Holders thereof and transfers and exchanges of
the Notes.


 


15

















 


(b)           (i)   Each
Global Note shall be registered in the name of the Depositary or its nominee
and, so long as DTC is serving as the Depositary thereof, shall bear the DTC
Legend.


 


(ii)           Each Global Note shall be delivered to the Trustee
as custodian for the Depositary. Transfers of a Global Note (but not a
beneficial interest therein) shall be limited to transfers thereof in whole,
but not in part, to the Depositary, its successors or their respective
nominees, except as set forth in Section 2.06(b)(iv).


 


(iii)          Agent Members shall have no rights under the
Indenture with respect to any Global Note held on their behalf by the
Depositary, and the Depositary may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner and Holder of
such Global Note for all purposes whatsoever. Notwithstanding the foregoing,
the Depositary or its nominee may grant proxies and otherwise authorize any
Person (including any Agent Member and any Person that holds a beneficial
interest in a Global Note through an Agent Member) to take any action which a
Holder is entitled to take under the Indenture or the Notes, and nothing herein
shall impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a holder of any
security.


 


(iv)          If (x) the Depositary notifies the Company that
it is unwilling or unable to continue as Depositary for a Global Note and a
successor depositary is not appointed by the Company within 90 days of the
notice or (y) an Event of Default has occurred and is continuing and the
Trustee has received a request from the Depositary, the Trustee shall promptly
exchange each beneficial interest in each Global Note for one or more
Certificated Notes in authorized denominations having an equal aggregate
principal amount registered in the name of the owner of such beneficial
interest, as identified to the Trustee by the Depositary, and thereupon each
Global Note shall be deemed canceled. If a Global Note does not bear the
Restricted Legend, then the Certificated Notes issued in exchange therefor
shall not bear the Restricted Legend. If a Global Note bears the Restricted
Legend, then the Certificated Notes issued in exchange therefor shall bear the
Restricted Legend; provided that
any Holder of any such Certificated Note issued in exchange for a beneficial
interest in a Restricted Regulation S Global Note shall have the right upon
presentation to the Trustee of a duly completed Certificate of Beneficial
Ownership after the Restricted Period to exchange such Certificated Note for a
Certificated Note of like tenor and amount that does not bear the Restricted
Legend, registered in the name of such Holder.


 


(c)           Each Certificated Note
issued pursuant to Section 2.06(b)(iv) shall be registered in the
name of the Holder thereof or its nominee.


 


16

















 


(d)           A Holder may transfer a Note
(or a beneficial interest therein) to another Person or exchange a Note (or a
beneficial interest therein) for another Note or Notes of any authorized
denomination by presenting to the Trustee a written request therefor stating the
name of the proposed transferee or requesting such an exchange, accompanied by
any certification, opinion or other document required by Section 2.07. The
Trustee shall promptly register any transfer or exchange that meets the
requirements of this Article 2 by noting the same in the register
maintained by the Trustee for the purpose; provided that:


 


(i)            no transfer or exchange shall be effective until it
is registered in such register, and


 


(ii)           the Trustee shall not be required (x) to issue,
register the transfer of or exchange any Note for a period of 15 days before a
selection of Notes to be redeemed or purchased pursuant to a Change of Control
Offer, (y) to register the transfer of or exchange any Note so selected
for redemption or purchase in whole or in part, except, in the case of a
partial redemption or purchase, that portion of any Note not being redeemed or
purchased, or (z) if a redemption or a purchase pursuant to a Change of
Control Offer is to occur after a Regular Record Date but on or before the
corresponding Interest Payment Date, to register the transfer of or exchange
any Note on or after the Regular Record Date and before the date of redemption
or purchase. Prior to the registration of any transfer, the Company, the
Trustee and their agents shall treat the Person in whose name any Note is
registered as the owner and Holder thereof for all purposes (whether or not the
Note is overdue), and shall not be affected by notice to the contrary.


 


From time to time the Company shall execute and the
Trustee shall authenticate additional Notes as necessary in order to permit the
registration of a transfer or exchange in accordance with this Section 2.06.


 


No service charge shall be imposed in connection
with any transfer or exchange of any Note, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than a transfer tax or other similar
governmental charge payable upon exchange pursuant to Section 2.06(b)(iv)).


 


(e)           (i) Global Note to Global Note. If a beneficial interest in a
Global Note is transferred or exchanged for a beneficial interest in another
Global Note, the Trustee shall (x) record a decrease in the principal
amount of the Global Note being transferred or exchanged equal to the principal
amount of such transfer or exchange and (y) record a like increase in the
principal amount of the other Global Note. Any beneficial interest in one
Global Note that is transferred to a Person who takes delivery in the form of
an interest in another Global Note, or exchanged for an interest in another
Global Note, shall, upon transfer or exchange, cease to be an interest in such
Global Note and become an interest in


 


17

















 


the other Global Note and,
accordingly, shall thereafter be subject to all transfer and exchange
restrictions, if any, and other procedures applicable to beneficial interests
in such other Global Note for as long as it remains such an interest.


 


(ii)           Certificated Note to Certificated Note. If a
Certificated Note is transferred or exchanged for another Certificated Note,
the Trustee shall (x) cancel the Certificated Note being transferred or
exchanged, (y) deliver one or more new Certificated Notes in authorized
denominations having an aggregate principal amount equal to the principal
amount of such transfer or exchange to the transferee (in the case of a
transfer) or the Holder of the canceled Certificated Note (in the case of an
exchange), registered in the name of such transferee or Holder, as applicable,
and (z) if such transfer or exchange involves less than the entire
principal amount of the canceled Certificated Note, deliver to the Holder
thereof one or more Certificated Notes in authorized denominations having an
aggregate principal amount equal to the untransferred or unexchanged portion of
the canceled Certificated Note, registered in the name of the Holder thereof.


 


Section 2.07.  Restrictions on Transfer and
Exchange.


 


(a)           The transfer or exchange of
any Note (or a beneficial interest therein) may only be made in accordance with
this Section 2.07 and Section 2.06 and, in the case of a Global Note
(or a beneficial interest therein), the applicable rules and procedures of
the Depositary. The Trustee shall refuse to register any requested transfer or
exchange that does not comply with the preceding sentence.


 


(b)           Subject to Section 2.07(c),
the transfer or exchange of any Note (or a beneficial interest therein) of the
type set forth in column A below for a Note (or a beneficial interest therein)
of the type set forth opposite in column B below may only be made in compliance
with the certification requirements, if any, described in the clause of this
paragraph set forth opposite in column C below.


 


	
  A

  	
   

  	
  B

  	
   

  	
  C

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  U.S. Global Note

  	
   

  	
  U.S. Global
  Note

  	
   

  	
  (i)

  	
   

  
	
  U.S. Global Note

  	
   

  	
  Regulation S
  Global Note

  	
   

  	
  (ii)

  	
   

  
	
  Certificated Note

  	
   

  	
  Certificated
  Note

  	
   

  	
  (iii)

  	
   

  
	
  Regulation S Global Note

  	
   

  	
  U.S. Global
  Note

  	
   

  	
  (iv)

  	
   

  
	
  Regulation S Global Note

  	
   

  	
  Regulation S
  Global Note

  	
   

  	
  (i)

  	
   

  



 


(i)            No certification is required.


 


(ii)           The Person requesting the transfer or exchange must
deliver or cause to be delivered to the Trustee a duly completed Regulation S
Certificate.


 


18

















 


(iii)          The Person requesting the transfer or exchange must
deliver or cause to be delivered to the Trustee (x) a duly completed Rule 144A
Certificate or (y) a duly completed Regulation S Certificate, and/or an
Opinion of Counsel and such other certifications and evidence as the Company
may reasonably require in order to determine that the proposed transfer or
exchange is being made in compliance with the Securities Act and any applicable
securities laws of any state of the United States; provided
that if the requested transfer or exchange is made by the Holder of a
Certificated Note that does not bear the Restricted Legend, then no
certification is required. In the event that (1) the requested transfer or
exchange takes place after the Restricted Period and a duly completed
Regulation S Certificate is delivered to the Trustee or (2) a Certificated
Note that does not bear the Restricted Legend is surrendered for transfer or
exchange, upon transfer or exchange the Trustee shall deliver a Certificated
Note that does not bear the Restricted Legend.


 


(iv)          The Person requesting the transfer or exchange must
deliver or cause to be delivered to the Trustee a duly completed Rule 144A
Certificate.


 


(c)           No certification is required
in connection with any transfer or exchange of any Note (or a beneficial
interest therein) after such Note (i) is eligible for resale pursuant to Rule 144
under the Securities Act (or a successor provision); provided
that the Company has provided the Trustee with an Officer’s Certificate to that
effect, and the Company may require from any Person requesting a transfer or
exchange in reliance upon this clause an opinion of counsel and any other
reasonable certifications and evidence in order to support such certificate; or
(ii) (x) subject to an effective registration statement under the
Securities Act, pursuant to the Registration Rights Agreement or otherwise, or (y) exchanged
for an Exchange Note.


 


Any Certificated Note delivered in reliance upon
this Section 2.07(c) shall not bear the Restricted Legend.


 


(d)           The Trustee shall retain
copies of all certificates, opinions and other documents received in connection
with the transfer or exchange of a Note (or a beneficial interest therein), and
the Company shall have the right to inspect and make copies thereof at any
reasonable time upon reasonable prior written notice to the Trustee.


 


Section 2.08.  Restricted Regulation S Global
Notes.


 


(a)           Each Note originally sold by
the Initial Purchasers in reliance upon Regulation S shall be evidenced by one
or more Regulation S Global Notes that bear the Restricted Legend.


 


19

















 


(b)           An owner of a beneficial
interest in a Restricted Regulation S Global Note (or a Person acting on behalf
of such an owner) may provide to the Trustee (and the Trustee shall accept) a
duly completed Certificate of Beneficial Ownership at any time after the
Restricted Period (it being understood that the Trustee shall not accept any
such certificate during the Restricted Period). Promptly after acceptance of a
Certificate of Beneficial Ownership with respect to such beneficial interest,
the Trustee shall cause such beneficial interest to be exchanged for an
equivalent beneficial interest in an Unrestricted Regulation S Global Note, and
shall (x) permanently reduce the principal amount of such Restricted
Regulation S Global Note by the amount of such beneficial interest and (y) increase
the principal amount of such Unrestricted Regulation S Global Note by the
amount of such beneficial interest.


 


(c)           Notwithstanding anything to
the contrary contained herein, beneficial interests in a Restricted Regulation
S Global Note may be held through the Depositary only through Euroclear and
Clearstream and their respective direct and indirect participants.


 


If
after the Restricted Period any Initial Purchaser owns a beneficial interest in
a Restricted Regulation S Global Note, such Initial Purchaser may, upon written
request to the Trustee accompanied by a certification as to its status as an
Initial Purchaser, exchange such beneficial interest for an equivalent
beneficial interest in an Unrestricted Regulation S Global Note, and the
Trustee shall comply with such request and shall (x) permanently reduce
the principal amount of such Restricted Regulation S Global Note by the amount
of such beneficial interest and (y) increase the principal amount of such
Unrestricted Regulation S Global Note by the amount of such beneficial
interest.


 


Section 2.09.  Additional
Interest.


 


If Additional Interest is required to be paid with
respect to any Notes, the interest rate borne by such Notes shall be increased
as provided in the Registration Rights Agreement.


 


The Company shall deliver to the Trustee, and Paying
Agent, if the Trustee shall not then be acting as Paying Agent, within five
calendar days of the date on which Additional Interest is required to be paid
with respect to any Notes, an Officer’s Certificate stating that such
Additional Interest has become payable with respect to the Notes.


 


Additional Interest shall, for the purposes of the
Notes, constitute “interest” used
in Article 4 of the Base Indenture and interest for purposes of this First
Supplemental Indenture and Global Note.


 


20

















 


ARTICLE 3

COVENANTS


 


Section 3.01. Covenants.


 


The Notes shall be subject
to the covenants set forth in Article 4 of the Base Indenture.


 


Section 3.02.  Offer To Repurchase Upon Change Of Control
Triggering Event.


 


(a)           If a Change of Control
Triggering Event occurs with respect to the Notes, unless the Company has
exercised its option to redeem the Notes under Article 4 hereof or the
Notes, the Company shall make an offer (the “Change of
Control Offer”) to each Holder of Notes to repurchase all or any
part (equal to $2,000 or any integral multiple of $1,000 in excess thereof) of
such Holder’s Notes on the terms set forth herein and in the Notes.


 


(b)           In such Change of Control
Offer, the Company shall offer payment in cash (the “Change of
Control Payment”) equal to 101% of the aggregate Principal Amount of
the Notes to be repurchased, plus accrued and unpaid interest, if any, on the
Notes up to, but not including, the date of repurchase.


 


(c)           Within 30 days following any
Change of Control Triggering Event or, at the Company’s option, prior to any Change
of Control, but after public announcement of the transaction that constitutes
or may constitute the Change of Control, the Company shall send notice of such
Change of Control Offer by first-class mail, with a copy to the Trustee, to
each Holder of Notes describing the transaction that constitutes or may
constitute the Change of Control Triggering Event with respect to the Notes and
offering to repurchase the Notes on the date specified in the notice, which
date shall be no earlier than 30 days and no later than 60 days from the date
such notice is mailed, or, if the notice is mailed prior to the Change of
Control, no earlier than 30 days and no later than 60 days from the date on
which the Change of Control Triggering Event with respect to the Notes occurs
(the “Change of Control Payment Date”).  The notice shall, if mailed prior to the date
of consummation of the Change of Control, state that the offer to repurchase is
conditioned on the Change of Control Triggering Event occurring on or prior to
the Change of Control Payment Date.


 


(d)           On the Change of Control
Payment Date, the Company shall, to the extent lawful:


 


(i)            accept for payment all Notes or portions of Notes
properly tendered pursuant to the Change of Control Offer;


 


21

















 


(ii)           deposit with the Paying Agent an amount equal to the
Change of Control Payment in respect of Notes or portions of Notes properly
tendered; and


 


(iii)          deliver or cause to be delivered to the Trustee the
Notes properly accepted together with an Officer’s Certificate stating the
aggregate Principal Amount of Notes or portions of Notes being repurchased.


 


The Company shall publicly
announce the results of the Change of Control Offer on, or as soon as possible
after, the date of purchase.


 


(e)           The Company shall not be
required to make a Change of Control Offer upon the occurrence of a Change of
Control Triggering Event if a third party makes such an offer in the manner, at
the time and otherwise in compliance with the requirements for an offer made by
the Company and the third party purchases all Notes properly tendered and not
withdrawn under its offer.  In addition,
the Company shall not repurchase any Notes if there has occurred and is continuing
on the Change of Control Payment Date an Event of Default under the Indenture,
other than a default in the payment of the Change of Control Payment upon a
Change of Control Triggering Event.


 


(f)            The Company shall comply in
all material respects with the requirements of Rule 14e-1 under the
Exchange Act, and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control Triggering Event.  To the extent that the provisions of any such
securities laws or regulations conflict with the Change of Control Offer
provisions of this First Supplemental Indenture or the Notes, the Company shall
comply with those securities laws and regulations and shall not be deemed to have
breached its obligations under the Change of Control Offer provisions by virtue
of any such conflict.


 


ARTICLE 4

REDEMPTION OF THE NOTES


 


Section 4.01.  Optional Redemption by
Company.


 


(a)           The provisions of Article 10
of the Base Indenture shall apply to the Notes.


 


(b)           At any time and from time to
time, the Notes shall be redeemable, as a whole or in part, at the Company’s
option, on at least 30 days, but not more than 60 days, prior notice mailed to
the registered address of each Holder of the Notes (the “Redemption Date”), at a redemption price
(the “Redemption Price”) equal to the greater
of: (i) 100% of the Principal Amount of the Notes to be redeemed


 


22

















 


and (ii) the sum of the
present values of the remaining scheduled payments of interest and principal on
the Notes (exclusive of interest accrued and unpaid to, but not including, the
Redemption Date) discounted to the Redemption Date on a semiannual basis,
assuming a 360-day year consisting of twelve 30-day months, at the Treasury
Rate plus 50 basis points, plus, in either case, accrued and unpaid interest
to, but not including, the Redemption Date.


 


Section 4.02.   Selection of Notes to Be
Redeemed.


 


(a)           If less than all of the
Notes are to be redeemed, unless the procedures of the Depositary provide
otherwise, the Trustee shall select the Notes to be redeemed by lot, on a pro
rata basis or by another method the Trustee considers fair and appropriate (so
long as such method is not prohibited by the rules of any stock exchange
or quotation association on which the Notes are then traded or quoted, if
any).  Subject to the previous sentence,
the Trustee shall make the selection within five Business Days after it receives
the notice provided for in Section 4.01 from outstanding Notes not
previously called for redemption.


 


Notes and portions of Notes that the Trustee selects
shall be in principal amounts of $2,000 or an integral multiple of $1,000.  Provisions of this First Supplemental
Indenture that apply to Notes called for redemption also apply to portions of
Notes called for redemption.  The Trustee
shall notify the Company promptly of the Notes or portions of the Notes to be
redeemed.


 


Section 4.03.   Redemption Notice.


 


(a)           At least 30 days but not
more than 60 days before a Redemption Date, the Company shall mail a notice of
redemption (a “Redemption Notice”) by first-class
mail, postage prepaid, to each Holder of Notes to be redeemed.


 


(b)           The notice shall identify
the Notes to be redeemed and shall state:


 


(1)               the Redemption Date;


 


(2)               the Redemption Price;


 


(3)               the name and address of the Paying Agent;


 


(4)               that Notes called for redemption shall be
redeemed on the Redemption Date;


 


(5)               that Notes called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price;


 


(6)               if fewer than all of the outstanding Notes
are to be redeemed, the certificate numbers, if any, and principal amounts of
the particular Notes to be redeemed;


 


23

















 


(7)           that, unless the Company defaults in making payment
of such Redemption Price, interest and Additional Interest, if any, on Notes
called for redemption shall cease to accrue on and after the Redemption Date;
and


 


(8)           the CUSIP number(s) of the Notes.


 


At the Company’s request, the Trustee shall give the
Redemption Notice in the Company’s name and at the Company’s expense; provided that the Company makes such request at least 15
calendar days prior to the date by which such Redemption Notice must be given to
Holders in accordance with this Section 4.03 and the text of such notice
is provided by the Company.


 


Section 4.04.   Effect of Redemption
Notice.


 


Once the Redemption Notice
is mailed, the Notes called for redemption shall become due and payable on the Redemption
Date and at the Redemption Price stated in the notice. Upon surrender to the
Paying Agent, such Notes shall be paid at the Redemption Price stated in the
notice.


 


Section 4.05.   Deposit of Redemption
Price.


 


Prior to 11:00 a.m.,
New York City time, on the Redemption Date, the Company shall deposit with a
Paying Agent or the Trustee money sufficient to pay the Redemption Price of all
Notes to be redeemed on that date other than Notes or portions of Notes called
for redemption which on or prior thereto have been delivered by the Company to
the Trustee for cancellation.  If such
money is then held by the Company in trust and is not required for such purpose
it shall be discharged from such trust.


 


Section 4.06.   Securities Redeemed in
Part.


 


Upon surrender of a Note
that is redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder a new Note in an authorized denomination
equal in principal amount to the unredeemed portion of the Note surrendered.


 


ARTICLE 5

DEFEASANCE


 


Section 5.01.  Defeasance By The Company.


 


The Notes shall be subject
to defeasance at the option of the Company in accordance with the terms and
conditions set forth in Article 11 of the Base Indenture.


 


24

















 


ARTICLE 6

MISCELLANEOUS


 


Section 6.01.  Rule 144A Information; No
Resales By Affiliates.


 


(a)           Within the period prior to
the expiration of the holding period applicable to sales thereof under Rule 144
under the Securities Act (or any successor provision), the Company covenants
and agrees that it shall, during any period in which it is not subject to Section 13
or 15(d) under the Exchange Act, make available to any Holder or
beneficial Holder of Initial Notes in connection with any sale thereof and any
prospective purchaser of Initial Notes designated by such Holder or beneficial
Holder, the information required pursuant to Rule 144A(d)(4) under
the Securities Act upon the request of any Holder or beneficial Holder of the
Initial Notes and it shall take such further action as any Holder or beneficial
Holder of such Initial Notes may reasonably request, all to the extent required
from time to time to enable such Holder or beneficial Holder to sell its
Initial Notes without registration under the Securities Act within the
limitation of the exemption provided by Rule 144A, as such Rule may
be amended from time to time.  Upon the
request of any Holder or any beneficial Holder of the Initial Notes, the
Company shall deliver to such Holder a written statement as to whether it has
complied with such requirements.


 


(b)           Any Initial Notes that,
prior to the expiration of the holding period applicable to sales thereof under
Rule 144 under the Securities Act (or any successor provision), are
purchased or owned by the Company or any affiliate thereof (within the meaning
of Rule 144) that is controlled by the Company may not be resold by the
Company or such affiliate unless registered under the Securities Act or resold
pursuant to an exemption from the registration requirements of the Securities
Act in a transaction which results in such Initial Notes no longer being “restricted
securities” (as defined under Rule 144).


 


Section 6.02.  Ratification Of Indenture.


 


The Base Indenture, as supplemented by this First
Supplemental Indenture, is in all respects ratified and confirmed, and this
First Supplemental Indenture shall be deemed part of the Base Indenture in the
manner and to the extent herein and therein provided.


 


Section 6.03.  Trustee Not Responsible For Recitals.


 


The recitals herein contained are made by the
Company and not by the Trustee, and the Trustee assumes no responsibility for
the correctness thereof.  The Trustee
makes no representation as to the validity or sufficiency of this First
Supplemental Indenture.


 


25

















 


Section 6.04.  Governing Law.


 


This First Supplemental Indenture and each Note
shall be governed by, and construed in accordance with, the laws of the State
of New York.


 


Section 6.05.  Separability.


 


In case any one or more of the provisions contained
in this First Supplemental Indenture or in the Notes shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
First Supplemental Indenture or of the Notes, but this First Supplemental
Indenture and the Notes shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.


 


Section 6.06.  Counterparts.


 


This First Supplemental Indenture may be executed in
any number of counterparts each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.


 


26

















 


IN WITNESS WHEREOF, the parties hereto have caused
this First Supplemental Indenture to be duly executed as of the date first
above written.


 


	
   

  	
  BEST
  BUY CO., INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ryan D. Robinson

  
	
   

  	
   

  	
  Name:  Ryan D. Robinson

  
	
   

  	
   

  	
  Title:    Senior
  Vice president, U.S. SBU CFO and Treasurer

  



 

















 


	
   

  	
  WELLS
  FARGO BANK, N.A., as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jane Y. Schweiger

  
	
   

  	
   

  	
  Name:  Jane Y. Schweiger

  
	
   

  	
   

  	
  Title:  Vice President

  



 
















 


EXHIBIT A


 


Best Buy Co., Inc.


 


6.75% Notes due 2013


 


[CUSIP] [144A]: [086516AG6]

[ISIN] [144A]: [US086516AG65]


 


[CUSIP] [Reg S]: [U3091KAA4]

[ISIN] [Reg S]: [USU3091KAA44]


 


[CUSIP] [Registered]:
[086516AJ0]

[ISIN] [Registered]: [US086516AJ05]


 


	
  No. [R-1][S-1]

  	
   

  	
  $                         

  



 


Best Buy Co., Inc., a Minnesota corporation
(herein called the “Company”,
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede &
Co., or registered assigns, the principal sum of
$                              ,
or such other Principal Amount as may be set forth in the records of the
Trustee (hereinafter referred to) in accordance with the terms of the
Indenture, on July 15, 2013 (the “Maturity
Date”) (except to the extent redeemed or repaid prior to the
Maturity Date) and to pay interest thereon from June 24, 2008 (the “Original Issue Date”) or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for semi-annually at the rate of 6.75% per annum, on January 15 and July 15
(each such date, an “Interest Payment Date”),
commencing on January 15, 2009, until the principal hereof is paid or made
available for payment.


 


Subject to the limitations set forth in Section 2.01(b) of
the First Supplemental Indenture (as defined herein), the interest rate payable
on the Notes (as defined herein) will be subject to adjustment from time to
time, on the terms set forth in the Indenture, if either Moody’s or S&P
downgrades (or subsequently upgrades) the debt rating assigned to the Notes. If
the interest rate payable on this Note is increased in accordance with the
terms hereof and of the Indenture, then the term “interest,” as used in this
Note and the Indenture, will be deemed to include any such additional interest
unless the context otherwise requires.


 


1. Payment of Interest. The interest
so payable, and punctually paid or made available for payment, on any Interest
Payment Date, will, as provided in the Indenture, be paid, in immediately
available funds, to the Person in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on January 1 or July 1
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date (the “Regular Record
Date”),


 

















 


without regard to any transfer or exchange of
such Notes subsequent to the Regular Record Date and prior to such Interest
Payment Date. Any such interest not punctually paid or duly provided for (“Defaulted Interest”) shall, at the
Company’s option, cease to be payable to the Holder on such Regular Record
Date, and such Defaulted Interest may be paid to the Person in whose name this
Note (or one or more predecessor Notes) is registered at the close of business
on a special record date (the “Special Record
Date”), which date may not be less than 10 days prior to the date of
payment of such Defaulted Interest, for the payment of such Defaulted Interest
to be fixed by the Trustee, notice whereof shall be given to Holders of Notes
not less than 15 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed and upon such notice as
may be required by such exchange, all as more fully provided in the Indenture.


 


2. Place of Payment. Payment of
principal of and premium, if any, and interest on this Note will be made at the
Corporate Trust Office of the Trustee or such other office or agency of the
Company as may be designated for such purpose, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that each installment of principal of and premium,
if any, and interest on this Note may at the Company’s option with written
notice to the Trustee be paid in immediately available funds by transfer to an
account maintained by the payee located in the United States, provided such payee has given written wire transfer
instructions to the Company.


 


3. Time of Payment. In any case
where any Interest Payment Date, the Maturity Date or any date fixed for
redemption or repayment of the Notes shall not be a Business Day, then
(notwithstanding any other provision of the Indenture or this Note), payment of
principal, premium, if any, or interest need not be made on such date, but may
be made on the next succeeding Business Day with the same force and effect as
if made on such Interest Payment Date, the Maturity Date or the date so fixed
for redemption or repayment, and no interest shall accrue in respect of the
delay.


 


4. General. This Note is
one of a duly authorized issue of Securities of the Company, issued and to be
issued in one or more series under an indenture (the “Base Indenture”), dated as of June 24,
2008, as supplemented by a First Supplemental Indenture thereto, dated as of June 24,
2008 (the “First Supplemental Indenture”
and, together with the Base Indenture, the “Indenture”),
between the Company and Wells Fargo Bank, N.A., as Trustee (herein called the “Trustee”, which term includes any successor
Trustee under the Indenture with respect to the series of Securities of which
this Note is a part). Reference is hereby made to the Indenture for a statement
of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of this Note and of the
terms upon which this Note is, and will be, authenticated and delivered. This
Note is one of a duly authorized series


 


A-2

















 


of Securities designated as 6.75% Notes due
2013 (collectively, the “Notes”),
initially limited in aggregate Principal Amount to $500,000,000.


 


5. Further Issuance. The Company
may from time to time, without the consent of the Holders of the Notes, issue
additional Securities (the “Additional
Securities”) of this series having the same ranking and the same
interest rate, Maturity and other terms as the Notes. Any Additional Securities
of this series and the Notes will constitute a single series under the
Indenture and all references to the Notes shall include the Additional
Securities unless the context otherwise requires.


 


6. Events of Default. If an Event
of Default with respect to the Notes shall have occurred and be continuing, the
principal of the Notes may be declared or become due and payable in the manner
and with the effect provided in the Indenture.


 


7. Sinking Fund. The Notes
shall not be subject to any sinking fund.


 


8. Optional Redemption. The Notes
will be redeemable at any time, at the option of the Company, in whole or from
time to time in part, upon not less than 30 days nor more than 60 days prior
notice, on any date prior to their Maturity at a redemption price, calculated
pursuant to the First Supplemental Indenture, which includes any accrued
interest thereon to, but not including, the Redemption Date. In the case of any
partial redemption, selection of the Notes for redemption will be made by the
Trustee by such methods as the Trustee in its sole discretion shall deem fair
and appropriate. If any Note is to be redeemed in part only, the notice of
redemption relating to such Note shall state the portion of the Principal
Amount thereof to be redeemed. A new Note in Principal Amount equal to the
unredeemed portion thereof will be issued in the name of the Holder thereof
upon cancellation of this Note.


 


9. Offer to Repurchase upon a
Change of Control Triggering Event. Upon the occurrence of a
Change of Control Triggering Event with respect to the Notes, the Company shall
be required to make an offer to repurchase the Notes on the terms set forth in
the First Supplemental Indenture.


 


10. Full Defeasance and Covenant
Defeasance. The Indenture contains provisions for defeasance
at any time of (a) the entire Indebtedness of the Company represented by
this Note and (b) certain restrictive covenants and the related Defaults
and Events of Default, upon compliance by the Company with certain conditions
set forth therein, which provisions apply to this Note.


 


11. Modification and Waivers;
Obligations of the Company Absolute. The Indenture permits,
with certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and the rights of the
Holders of the Notes. Such amendment may be effected under the Indenture at any
time by the Company and the Trustee with the consent of the


 


A-3

















 


Holders of not less than a majority in
aggregate Principal Amount of the outstanding Notes of each series affected
thereby. The Indenture also contains provisions permitting the Holders of not
less than a majority in aggregate Principal Amount of the Notes at the time
outstanding, on behalf of the Holders of all outstanding Notes, to waive
compliance by the Company with certain provisions of the Indenture.
Furthermore, provisions in the Indenture permit the Holders of not less than a
majority in aggregate Principal Amount of the outstanding Notes of a series to
waive on behalf of all of the Holders of Notes of such series certain past
defaults under the Indenture and their consequences. Any such consent or waiver
shall be conclusive and binding upon the Holder of this Note and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.


 


No reference herein to the Indenture and no
provision of this Note or of the Indenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of
and premium, if any, and interest on this Note at the time, place, and rate,
and in the coin or currency, herein prescribed.


 


12. Limitation on Suits. As set forth
in, and subject to, the provisions of the Indenture, no Holder of any Note will
have any right to institute any proceeding with respect to the Indenture or for
any remedy thereunder, unless such Holder shall have previously given to the
Trustee written notice of a continuing Event of Default with respect to this
series, the Holders of not less than 25% in Principal Amount of the outstanding
Notes shall have made written request, and offered reasonable indemnity, to the
Trustee to institute such proceedings as trustee, and the Trustee shall not
have received from the Holders of a majority in Principal Amount of the
outstanding Notes a direction inconsistent with such request and shall have
failed to institute such proceeding within 60 days; provided,
however, that such limitations do not
apply to a suit instituted by the Holder hereof for the enforcement of payment
of the principal of or interest on this Note on or after the respective due
dates expressed herein.


 


13. Authorized Denominations. The Notes are
issuable only in registered form without coupons in denominations of $2,000 or
any integral multiple of $1,000 in excess thereof.


 


14. Registration of Transfer or
Exchange. As provided in the Indenture and subject to certain
limitations herein and therein set forth, the transfer of this Note is
registrable in the register of the Notes maintained by the Registrar upon
surrender of this Note for registration of transfer, at the office or agency of
the Company in any place where the principal of and premium, if any, and
interest on this Note are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Registrar, duly executed by the Holder hereof or its attorney duly authorized
in writing, and thereupon one


 


A-4

















 


or more new Notes, of authorized
denominations and for the same aggregate Principal Amount, will be issued to
the designated transferee or transferees.


 


As provided in the Indenture and subject to certain
limitations herein and therein set forth, the Notes are exchangeable for a like
aggregate Principal Amount of Notes of different authorized denominations, as
requested by the Holders surrendering the same.


 


No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.


 


Prior to due presentment of this Note for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Holder as the owner hereof for all purposes,
whether or not this Note be overdue, and neither the Company, the Trustee nor
any such agent shall be affected by notice to the contrary.


 


15. Defined Terms. All terms
used in this Note, which are defined in the Indenture and are not otherwise
defined herein, shall have the meanings assigned to them in the Indenture.


 


16. Governing Law. This Note shall be governed by, and construed in accordance with, the
laws of the State of New York.


 


Unless the certificate of authentication hereon has
been executed by the Trustee by manual signature, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.


 


A-5

















 


IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed and its seal to be hereunto affixed and
attested.


 


Dated:        ,
2008


 


	
   

  	
  BEST
  BUY CO., INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


A-6

















 


TRUSTEE’S CERTIFICATE OF
AUTHENTICATION


 


This
is one of the Securities of the series designated therein referred to in the
within-mentioned Base Indenture, as supplemented by the within-mentioned First
Supplemental Indenture.


 


Dated:        ,
2008


 


 


	
   

  	
  WELLS
  FARGO BANK, N.A., as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


A-7

















 


[FORM OF
TRANSFER NOTICE]


 


FOR VALUE RECEIVED the undersigned registered holder
hereby sell(s), assign(s) and transfer(s) unto


 


Insert
Taxpayer Identification No.


 


 




 





Please print or typewrite name and address including zip code of
assignee


 


 




 





the within Note and all rights thereunder, hereby irrevocably
constituting and appointing


 


attorney
to transfer such Note on the books of the Company with full power of
substitution in the premises.


 


A-8

















 


[THE FOLLOWING PROVISION TO BE INCLUDED ON ALL


CERTIFICATES BEARING A RESTRICTED LEGEND]


 


In connection with any transfer of this Note
occurring prior to the Resale Restriction Termination Date, the undersigned
confirms that such transfer is made without utilizing any general solicitation
or general advertising and further as follows:


 


Check One


 


o            (1)  This Note is being transferred to a “qualified
institutional buyer” in compliance with Rule 144A under the Securities Act
of 1933, as amended, and certification in the form of Exhibit E to the
Indenture is being furnished herewith.


 


o            (2)  This Note is being transferred to a Non-U.S.
Person in compliance with the exemption from registration under the Securities
Act of 1933, as amended, provided by Regulation S thereunder, and certification
in the form of Exhibit D to the Indenture is being furnished herewith.


 


or


 


o            (3)  This Note is being transferred other than in
accordance with (1) or (2) above and documents are being furnished
which comply with the conditions of transfer set forth in this Note and the
Indenture.


 


If none of the foregoing boxes is checked, the
Trustee is not obligated to register this Note in the name of any Person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in the Indenture have been satisfied.


 


	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Seller

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  



 


NOTICE: The signature to this assignment must correspond with the name
as written upon the face of the within-mentioned instrument in every
particular, without alteration or any change whatsoever.


 


A-9

















 


 


	
  Signature
  Guarantee:1

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  To
  be executed by an executive officer

  
					



 


1 Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the
Note Transfer Agent Medallion Program (“STAMP”) or
such other “signature guarantee program” as may
be determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.


 


A-10

















 


OPTION OF HOLDER TO ELECT PURCHASE


 


If you wish to have this Note purchased by the
Company pursuant to a Change of Control Offer pursuant to Section 3.01 of
the First Supplemental Indenture, check the box: o


 


If you wish to have a portion of this Note purchased
by the Company pursuant to a Change of Control Offer pursuant to Section 3.01
of the First Supplemental Indenture, state the amount (in principal amount):
$                                  .


 


	
  Date:

  	
   

  	
   

  
	
   

  
	
  Your
  Signature:

  	
   

  	
   

  
	
   

  	
  (Sign
  exactly as your name appears on the other side of this Note)

  
	
   

  
	
  Signature
  Guarantee:2

  	
   

  	
   

  
							



 


2 Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the
Note Transfer agent Medallion Program (“STAMP”) or such
other “signature guarantee program” as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.


 


A-11

















 


Schedule I


 


[Include as Schedule I only for a Global Note]


SCHEDULE OF EXCHANGES OF GLOBAL
NOTES


 


Best Buy Co., Inc.

6.75% Notes due 2013


 


No. [   ]


 


The following exchanges of a part of this
Global Note have been made:


 


	
  Date of Exchange

  	
   

  	
  Amount of decrease in

  Principal Amount of this

  Global Note

  	
   

  	
  Amount of increase in

  Principal amount of this

  Global Note

  	
   

  	
  Principal Amount of this

  Global Note following

  such decrease (or

  increase)

  	
   

  	
  Signature of authorized

  signatory of Trustee or

  Security Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 
















 


EXHIBIT B


 


RESTRICTED LEGEND


 


THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.
NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS NOTE, BY
ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR
ACCOUNT FOR WHICH IT HAS PURCHASED NOTES, TO OFFER, SELL OR OTHERWISE TRANSFER
SUCH NOTE, PRIOR TO THE DATE (THE “RESALE
RESTRICTION TERMINATION DATE”) THAT IS [IN THE CASE OF RULE 144A
NOTES: TWO YEARS] [IN THE CASE OF REGULATION S NOTES: 40 DAYS] AFTER THE LATER
OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH BEST BUY CO., INC.
(THE “COMPANY”) OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE), ONLY (A) TO
THE COMPANY, (B) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE PURSUANT TO RULE
144A, (C) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (D) TO
AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL
ACCREDITED INVESTOR ACQUIRING THE NOTE FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM
PRINCIPAL AMOUNT OF THE NOTES OF $500,000, FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT, (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (F) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSES (C), (D) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, 


 

















 


CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY
TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE.


 


B-2

















 


EXHIBIT C


 


DTC LEGEND


 


UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS A BENEFICIAL INTEREST HEREIN.


 


TRANSFERS OF THIS GLOBAL NOTE ARE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL NOTE ARE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE TRANSFER
PROVISIONS OF THE INDENTURE.


 

















 


EXHIBIT D


 


Regulation S Certificate


 


                     
,           


 


Wells
Fargo Bank, N.A.


Corporate
Trust Services


625
Marquette Avenue, 11th Floor


Minneapolis, Minnesota 55402


 


Re:                               Best Buy Co., Inc.


6.75% Notes due 2013 (the “Notes”) 

Issued under the Indenture as supplemented by the First 

Supplemental Indenture thereto relating to the Notes (the 

“Indenture”), each dated as of June 24,
2008


 


Dear Sirs:


 


Terms are used in this Certificate as used in
Regulation S (“Regulation S”) under the
Securities Act of 1933, as amended (the “Securities Act”),
except as otherwise stated herein.


 


[CHECK A OR B AS APPLICABLE.]


 


o  A.                 This Certificate relates to our proposed
transfer of $         principal amount
of Notes issued under the Indenture.  We
hereby certify as follows:


 


1.             The offer and sale of the
Notes was not and will not be made to a person in the United States (unless
such person is excluded from the definition of “U.S. person”
pursuant to Rule 902(k)(2)(vi) or the account held by it for which it
is acting is excluded from the definition of “U.S. person”
pursuant to Rule 902(k)(2)(i) under the circumstances described in Rule 902(g)(3))
and such offer and sale was not and will not be specifically targeted at an
identifiable group of U.S. citizens abroad.


 


2.             Unless the circumstances
described in the parenthetical in paragraph 1 above are applicable, either (a) at
the time the buy order was originated, the buyer was outside the United States
or we and any person acting on our behalf reasonably believed that the buyer
was outside the United States or (b) the transaction was executed in, on
or through the facilities of a designated offshore securities market, and
neither we nor any person acting on our behalf knows that 


 

















 


the transaction was pre-arranged with a buyer in the United States.


 


3.                                       Neither we, any
of our affiliates, nor any person acting on our or their behalf has made any
directed selling efforts in the United States with respect to the Notes.


 


4.                                       The proposed
transfer of Notes is not part of a plan or scheme to evade the registration
requirements of the Securities Act.


 


5.                                       If we are a
dealer or a person receiving a selling concession, fee or other remuneration in
respect of the Notes, and the proposed transfer takes place during the
Restricted Period (as defined in the Indenture), or we are an officer or
director of the Company or an Initial Purchaser (as defined in the Indenture),
we certify that the proposed transfer is being made in accordance with the
provisions of Rule 904(b) of Regulation S.


 


o  B.      This
Certificate relates to our proposed exchange of
$         principal amount of Notes
issued under the Indenture for an equal principal amount of Notes to be held by
us.  We hereby certify as follows:


 


1.                                       At the time the
offer and sale of the Notes was made to us, either (i) we were not in the
United States or (ii) we were excluded from the definition of “U.S. person”
pursuant to Rule 902(k)(2)(vi) or the account held by the Company for
which we were acting was excluded from the definition of “U.S. person” pursuant
to Rule 902(k)(2)(i) under the circumstances described in Rule 902(g)(3);
and we were not a member of an identifiable group of U.S. citizens abroad.


 


2.                                       Unless the
circumstances described in paragraph 1(ii) above are applicable, either (a) at
the time our buy order was originated, we were outside the United States or (b) the
transaction was executed in, on or through the facilities of a designated
offshore securities market and we did not prearrange the transaction in the
United States.


 


3.                                       The proposed
exchange of Notes is not part of a plan or scheme to evade the registration
requirements of the Securities Act.


 


D-2

















 


You and the Company are entitled to rely upon this
Certificate and are irrevocably authorized to produce this Certificate or a
copy hereof to any interested party in any administrative or legal proceeding
or official inquiry with respect to the matters covered hereby.


 


	
   

  	
   

  	
  Very
  truly yours,

   

   

  [NAME
  OF SELLER (FOR 

  TRANSFERS) OR OWNER (FOR 

  EXCHANGES)]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
  Address:

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  	
   

  
								



 


D-3

















 


EXHIBIT E


 


Rule 144A Certificate


 


                     
,      


 


Wells
Fargo Bank, N.A.


Corporate
Trust Services


625
Marquette Avenue, 11th Floor


Minneapolis, Minnesota 55402


 


Re:                               Best Buy Co., Inc.


6.75% Notes due 2013 (the “Notes”) 

Issued under the Indenture as supplemented by the First 

Supplemental Indenture thereto relating to the Notes (the 

“Indenture”), each dated as of June 24,
2008


 


Ladies and Gentlemen:


 


TO BE COMPLETED BY PURCHASER IF (1) ABOVE IS
CHECKED.


 


This Certificate relates to:


 


[CHECK A OR B AS APPLICABLE.]


 


o  A.                 Our proposed purchase of $        
principal amount of Notes issued under the Indenture.


 


o  B.                   Our proposed exchange of $        
principal amount of Notes issued under the Indenture for an equal principal
amount of Notes to be held by us.


 


We and, if applicable, each account for which we are
acting in the aggregate owned and invested more than $100,000,000 in securities
of issuers that are not affiliated with the Company (or such accounts, if
applicable), as of            ,
20      , which is a date on or since close of
our most recent fiscal year.  We and, if
applicable, each account for which we are acting, are a qualified institutional
buyer within the meaning of Rule 144A (“Rule 144A”)
under the Securities Act of 1933, as amended (the “Securities
Act”).  If we are acting on
behalf of an account, we exercise sole investment discretion with respect to
such account.  We are aware that the
transfer of Notes to us, or such exchange, as applicable, is being made in
reliance upon the exemption from the provisions of Section 5 of the
Securities Act provided by Rule 144A. 
Prior to the date of this Certificate we have received such information
regarding the Company as we have requested pursuant to Rule 144A(d)(4) or
have determined not to request such information.


 


You and the Company are entitled to rely upon this
Certificate and are irrevocably authorized to produce this Certificate or a
copy hereof to any 


 

















 


interested party in any administrative or
legal proceeding or official inquiry with respect to the matters covered
hereby.


 


	
   

  	
   

  	
  Very
  truly yours,

   

   

  [NAME
  OF PURCHASER (FOR 

  TRANSFERS) OR OWNER (FOR 

  EXCHANGES)]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:       

  
	
   

  	
   

  	
  Title:         

  
	
   

  	
   

  	
  Address: 

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
								



 


E-2

















 


EXHIBIT F


 


[COMPLETE FORM I OR FORM II
AS APPLICABLE.]


 


[FORM I]


 


Certificate of Beneficial
Ownership


 


To:          Wells Fargo Bank, N.A.


                Corporate Trust Services


                625 Marquette Avenue, 11th
Floor


                Minneapolis, Minnesota 55402 OR


 


[Euroclear Bank S.A./N.V., as operator of the
Euroclear System] OR


 


[Clearstream Banking S.A.]


 


Re:                               Best Buy Co., Inc.

6.75% Notes due 2013 (the “Notes”)

Issued under the Indenture as supplemented by the First 

Supplemental Indenture thereto relating to the Notes (the 

“Indenture”), each dated as of June 24,
2008


 


Ladies and Gentlemen:


 


We are the beneficial owner of
$         principal amount of Notes
issued under the Indenture and represented by a Restricted Regulation S Global
Note (as defined in the Indenture).


 


We hereby certify as follows:


 


[CHECK A OR B AS APPLICABLE.]


 


o  A.      We are a
non-U.S. person (within the meaning of Regulation S under the Securities Act of
1933, as amended).


 


o  B.      We are a U.S.
person (within the meaning of Regulation S under the Securities Act of 1933, as
amended) that purchased the Notes in a transaction that did not require
registration under the Securities Act of 1933, as amended.


 


You and the Company are entitled to rely upon this
Certificate and are irrevocably authorized to produce this Certificate or a
copy hereof to any interested party in any administrative or legal proceeding
or official inquiry with respect to the matters covered hereby.


 


F-1

















 


	
   

  	
   

  	
  Very
  truly yours,

   

   

  [NAME
  OF BENEFICIAL OWNER]

   

   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:       

  
	
   

  	
   

  	
  Title:         

  
	
   

  	
   

  	
  Address: 

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  	
   

  
									



 


F-2

















 


[FORM II]


 


Certificate of Beneficial
Ownership


 


To:          Wells Fargo Bank, N.A.


Corporate
Trust Services


625
Marquette Avenue, 11th Floor


Minneapolis,
Minnesota 55402


 


Re:                               Best Buy Co., Inc. 

6.75% Notes due 2013 (the “Notes”)

Issued under the Indenture as supplemented by the First Supplemental 

Indenture thereto relating to the Notes (the “Indenture”),
each dated as of 

June 24, 2008


 


Ladies and Gentlemen:


 


This is to certify that based solely on
certifications we have received in writing, by tested telex or by electronic
transmission from member organizations (“Member Organizations”)
appearing in our records as persons being entitled to a portion of the
principal amount of Notes represented by a Restricted Regulation S Global Note
issued under the above-referenced Indenture, that as of the date hereof, $        
principal amount of Notes represented by the Restricted Regulation S Global
Note being submitted herewith for exchange is beneficially owned by persons
that are either (i) non-U.S. persons (within the meaning of Regulation S
under the Securities Act of 1933, as amended) or (ii) U.S. persons that
purchased the Notes in a transaction that did not require registration under
the Securities Act of 1933, as amended.


 


We further certify that (i) we are not
submitting herewith for exchange any portion of such Restricted Regulation S
Global Note excepted in such Member Organization certifications and (ii) as
of the date here of we have not received any notification from any Member
Organization to the effect that the statements made by such Member Organization
with respect to any portion of such Restricted Regulation S Global Note
submitted herewith for exchange are no longer true and cannot be relied upon as
of the date hereof.


 


You and the Company are entitled to rely upon this
Certificate and are irrevocably authorized to produce this Certificate or a
copy hereof to any interested party in any administrative or legal proceeding
or official inquiry with respect to the matters covered hereby.


 


F-1

















 


	
   

  	
   

  	
  Yours
  faithfully,

   

  [EUROCLEAR
  BANK S.A./N.V., as 

  operator of the Euroclear System]

   

   

  OR

   

   

  [CLEARSTREAM
  BANKING S.A.]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:          

  
	
   

  	
   

  	
  Title:            

  
	
   

  	
   

  	
  Address:    

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  	
   

  
								



 


F-2