Document:

EXHIBIT
10.1

AMENDMENT NO. 8

TO

CREDIT AGREEMENT

THIS AMENDMENT NO. 8 TO CREDIT
AGREEMENT, is entered
into as of June 29, 2007 (the “Amendment”), by and among P&F INDUSTRIES, INC., a Delaware
corporation  (“P&F”), FLORIDA PNEUMATIC MANUFACTURING CORPORATION,
a Florida corporation (“Florida Pneumatic”), EMBASSY
INDUSTRIES, INC., a New York corporation (“Embassy”), GREEN MANUFACTURING, INC., a Delaware
corporation (“Green”), COUNTRYWIDE HARDWARE,
INC., a Delaware corporation (“Countrywide”), NATIONWIDE INDUSTRIES, INC., a Florida
corporation (“Nationwide”), WOODMARK INTERNATIONAL,
L.P., a Delaware limited partnership (“Woodmark”), PACIFIC STAIR PRODUCTS, INC., a Delaware corporation (“Pacific”),
WILP HOLDINGS, INC., a Delaware
corporation (“WILP”), CONTINENTAL TOOL GROUP,
INC., a Delaware corporation (“Continental”) and HY-TECH MACHINE, INC., a Delaware corporation (“Hy-Tech”;
and collectively with P&F, Florida Pneumatic, Embassy, Green, Countrywide,
Nationwide, Woodmark, Pacific, WILP and Continental,  the
“Co-Borrowers”), CITIBANK, N.A. and HSBC BANK USA, NATIONAL ASSOCIATION (formerly known as HSBC
Bank USA) (collectively, the “Lenders”) and CITIBANK,
N.A., as Administrative Agent for the Lenders.

BACKGROUND

The Co-Borrowers, the Lenders and the Administrative
Agent are parties to a Credit Agreement, dated as of June 30, 2004 (as same has
been and may be further amended, restated, supplemented or modified, the “Credit
Agreement”), pursuant to which the Lenders provide the Co-Borrowers with
certain financial accommodations.

The Original Co-Borrowers have requested, and the
Administrative Agent and the Lenders have agreed, subject to the terms and
conditions of this Amendment, to amend certain provisions of the Credit
Agreement and the other Loan Documents, as herein set forth.  Capitalized terms used herein and not defined
herein shall have the meanings given to them in the Credit Agreement.

Accordingly, in consideration of the premises and of
the mutual covenants and agreements hereinafter set forth, the parties hereto
agree as follows:

ARTICLE I.

Amendments to
Credit Agreement.

Section 1.1.            Clause
“(d)” of the definition of Consolidated EBITDA is hereby amended and restated
in its entirety to provide as follows:

“(d) non-cash losses
resulting from a write-down or write-off of goodwill or intangible assets in
the context of an acquisition,”

Section 1.2.            The
following definitions in Section 1.01 of the Credit Agreement are hereby
amended and restated in their entirety to provide as follows:

“Borrowing Base” shall mean
as of any Borrowing Date an amount equal to the sum of (a) 80% of the
value of the Obligor’s Eligible Accounts Receivable, and (b) the lesser of
(i) 50% of the aggregate value of the Obligor’s Eligible Inventory, and (ii)
$8,000,000; provided, however, such percentages and the foregoing
inventory limitation may be revised from time to time solely by the Required
Lenders in their Permitted Discretion 

(i) after review of each
field audit of the Obligor’s receivables and inventory, upon 30 days’ prior written
notice to the Co-Borrowers so long as no Default or Event of Default has
occurred and is then continuing or (ii) immediately upon written notice if a
Default or Event of Default has occurred and is then continuing.  The value of all Eligible Inventory shall be
determined at the lower of cost or market value on a first in first out basis
in accordance with Generally Accepted Accounting Principles applied on a
consistent basis.

“Revolving
Credit Commitment Termination Date” shall mean June 30, 2008.

Section 1.3.            Clause
“(e)” of the definition of Eligible Accounts Receivable in Section 1.01 of the
Credit Agreement is hereby amended and restated in its entirety to provide as
follows:

“not more than (i) one
hundred twenty (120) day have elapsed from the invoice date, with respect to
accounts receivable owing from Home Depot (or its Subsidiaries) or Sears (or
its Subsidiaries) or (ii) ninety (90) days have elapsed from the invoice date,
with respect to any other accounts receivable”

Section 1.4.            The
fourth sentence of Section 2.08 of the Credit Agreement is hereby amended and
restated in its entirety to provide as follows:

“Each New Term Loan Note
shall (a) be dated the Effective Date, (b) be stated to mature on the New Term
Loan Maturity Date and (c) be payable as to principal in twenty five (25)  consecutive quarterly installments commencing on January
31, 2008 and continuing on the last day of each January, April, July and
October thereafter as follows, each in an aggregate amount equal to 1/25th of the aggregate principal
amount outstanding under the New Term Loan as of January 31, 2008, all for the
pro-rata distribution to the Lenders based upon their New Term Loan Commitment,
provided that the final payment on the New Term Loan Maturity Date shall be in
an amount equal to the outstanding unpaid principal amount of the New Term
Loan.”

Section 1.5.            The table in Section 7.13(b) of the
Credit Agreement, Minimum Capital Base, is hereby amended and restated
in its entirety to provide as follows:

	
  Period

  	
   

  	
   

  	
   

  	
  Amount

  	
   

  
	
  June 30, 2007
  through December 30, 2007

  	
   

  	
  $

  	
  13,750,000

  	
   

  
	
  December 31,
  2007 through December 30, 2008

  	
   

  	
  $

  	
  16,000,000

  	
   

  
	
  December 31,
  2008 through December 30, 2009

  	
   

  	
  $

  	
  21,500,000

  	
   

  
	
  December 31,
  2009 to December 30, 2010

  	
   

  	
  $

  	
  26,000,000

  	
   

  
	
  December 31, 2010 and
  thereafter

  	
   

  	
  $

  	
  33,000,000

  	
   

  

 

Schedule 1.6. The table in Section 7.13(c) of
the Credit Agreement, Consolidated
Senior Debt to Consolidated EBITDA,  is hereby amended and restated in its entirety to provide as follows:

 

	
  Period

  	
   

  	
   

  	
   

  	
  Amount

  	
   

  
	
  June 30, 2007
  through September 29, 2007

  	
   

  	
  4.00:1.00

  	
   

  
	
  September 30,
  2007 through December 30, 2008

  	
   

  	
  3.75:1.00

  	
   

  
	
  December 31,
  2007 through December 30, 2008

  	
   

  	
  3.50:1.00

  	
   

  
	
  December 31,
  2008 through December 30, 2009

  	
   

  	
  2.75:1.00

  	
   

  
	
  December 31,
  2009 to December 30, 2010

  	
   

  	
  2.50:1.00

  	
   

  
	
  December 31, 2010 and
  thereafter

  	
   

  	
  2.00:1.00

  	
   

  

 

 2
 

ARTICLE
II.

Conditions of
Effectiveness; Further Conditions.

Section 2.1.            This
Amendment shall become effective as of the date hereof, upon receipt by the Administrative
Agent of the following: (a) this Amendment, duly executed by each Co-Borrower;
and (b) an Officer’s Certificate, substantially in the form of Exhibit 1
attached hereto.

ARTICLE III.

Representations
and Warranties; Effect on Credit Agreement.

Section 3.1. 
Each Co-Borrower hereby represents and warrants as follows:

a.             This
Amendment and the Credit Agreement, as amended hereby, constitute legal, valid
and binding obligations of the Co-Borrowers and are enforceable against the
Co-Borrowers in accordance with their respective terms.

b.             Upon
the effectiveness of this Amendment, the Co-Borrowers hereby reaffirm all
covenants, representations and warranties made in the Credit Agreement to the
extent that the same are not amended hereby and each Co-Borrower agrees that
all such covenants, representations and warranties shall be deemed to have been
remade as of the date hereof except to the extent such representations or
warranties relate to an earlier date in which case they shall be true and
correct in all material respects as of such earlier date.

c.             No
Default or Event of Default has occurred and is continuing or would exist after
giving effect to this Amendment.

d.             No
Co-Borrower has any defense, counterclaim or offset with respect to the Credit
Agreement.

Section 3.2.            Effect
on Credit Agreement and Loan Documents.

a.             Upon
the effectiveness of this Amendment, each reference in the Credit Agreement to “this
Agreement”, “hereunder”, “hereof”, “herein” or words of like import shall mean
and be a reference to the Credit Agreement as amended hereby.

b.             Except
as specifically amended herein, the Credit Agreement, and all other documents,
instruments and agreements executed and/or delivered in connection therewith,
shall remain in full force and effect, and are hereby ratified and confirmed.

c.             Except
as expressly provided  herein, the
execution, delivery and effectiveness of this Amendment shall not operate as a
waiver of any right, power or remedy of the Administrative Agent or the
Lenders, nor constitute a waiver of any provision of the Credit Agreement, or
any other documents, instruments or agreements executed and/or delivered under
or in connection therewith.

d.             The
other Loan Documents and all agreements, instruments and documents executed and
delivered in connection with the Credit Agreement and any other Loan Documents
shall 

 3
 

each be deemed to be amended and supplemented hereby to the extent
necessary, if any, to give effect to the provisions of this Amendment.

ARTICLE IV.

Miscellaneous.

Section 4.1.            This
Amendment shall be governed by and construed in accordance with the laws of the
State of New York.

Section 4.2.            Section
headings in this Amendment are included herein for convenience of reference
only and shall not constitute a part of this Amendment for any other purpose.

Section 4.3.            This
Amendment may be executed in one or more counterparts, each of which shall
constitute an original, and all of which, taken together, shall be deemed to
constitute one and the same agreement.

ARTICLE V.

Waiver.

The Co-Borrowers, the Lenders and the Administrative
Agent hereby acknowledge, confirm and agree that the Waiver to Credit Agreement
regarding the transaction between Embassy and tell Realty LLC, by and among the
Co-Borrowers, the Lenders and the Administrative Agent was executed, effective
and dated as of “February 23, 2007”

[next page is signature page]

 4
 

 

IN WITNESS WHEREOF, the Co-Borrowers, the Lenders and the
Administrative Agent have caused this Amendment to be duly executed by their
duly authorized officers as of the day and year first above written.

	
   

  	
  P&F INDUSTRIES, INC.

  
	
   

  	
  FLORIDA
  PNEUMATIC MANUFACTURING

  
	
   

  	
      CORPORATION

  
	
   

  	
  EMBASSY
  INDUSTRIES, INC.

  
	
   

  	
  GREEN MANUFACTURING, INC.

  
	
   

  	
  COUNTRYWIDE HARDWARE, INC.

  
	
   

  	
  NATIONWIDE INDUSTRIES, INC.

  
	
   

  	
  WOODMARK INTERNATIONAL, L.P.

  
	
   

  	
  By:

  	
  Countrywide Hardware, Inc., its General Partner

  
	
   

  	
  PACIFIC
  STAIR PRODUCTS, INC.

  
	
   

  	
  WILP
  HOLDINGS, INC.

  
	
   

  	
  CONTINENTAL
  TOOL GROUP, INC.

  
	
   

  	
  HY-TECH MACHINE, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph A. Molino, Jr.

  	
   

  
	
   

  	
   

  	
  Joseph A. Molino, Jr., the President of Green
  Manufacturing, Inc. and the Vice President of each of the other corporations
  named above

  
	
   

  	
   

  	
   

  
	
   

  	
  CITIBANK, N.A., as
  a Lender and as

  Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen Kelly

  	
   

  
	
   

  	
  Name:

  	
  Stephen Kelly

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HSBC BANK USA, NATIONAL

  
	
   

  	
  ASSOCIATION, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Raymond Fincken

  	
   

  
	
   

  	
  Name:

  	
  Raymond Fincken

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

 5Exhibit 10.1

 

EXECUTION COPY

 

GOLDMAN,
SACHS & CO. | 85 BROAD STREET | NEW YORK, NEW YORK 10004 | Tel: 212 902
1000

Opening Transaction

	
  To:

  	
  Best Buy Co.,
  Inc. 

  7601 Penn Avenue South 

  Richfield, MN 55423 

  Attention: Ryan Robinson

  
	
   

  	
   

  
	
  A/C:

  	
  028676435

  
	
   

  	
   

  
	
  From:

  	
  Goldman, Sachs
  & Co.

  
	
   

  	
   

  
	
  Re:

  	
  Collared
  Accelerated Stock Buyback

  
	
   

  	
   

  
	
  Ref.
  No:

  	
  As provided in
  the Supplemental Confirmation

  
	
   

  	
   

  
	
  Date:

  	
  June 26, 2007

  

 

This master confirmation (this “Master Confirmation”),
dated as of June 26, 2007 is intended to set forth certain terms and provisions
of certain Transactions (each, a “Transaction”)
entered into from time to time between Goldman, Sachs & Co. (“GS&Co.”) and Best Buy Co., Inc. (“Counterparty”).  This Master Confirmation, taken alone, is
neither a commitment by either party to enter into any Transaction nor evidence
of a Transaction.  The additional terms
of any particular Transaction shall be set forth in (i) a Supplemental
Confirmation in the form of Schedule A hereto (a “Supplemental
Confirmation”), which shall reference this Master Confirmation and
supplement, form a part of, and be subject to this Master Confirmation and (ii)
a Trade Notification in the form of Schedule B hereto (a “Trade
Notification”), which shall reference the relevant Supplemental
Confirmation and supplement, form a part of, and be subject to such
Supplemental Confirmation.  This Master
Confirmation, each Supplemental Confirmation and the related Trade Notification
together shall constitute a “Confirmation” as referred to in the Agreement
specified below.

The definitions and provisions contained in the 2002 ISDA Equity
Derivatives Definitions (the “Equity Definitions”),
as published by the International Swaps and Derivatives Association, Inc., are
incorporated into this Master Confirmation. 
This Master Confirmation, each Supplemental Confirmation and the related
Trade Notification evidence a complete binding agreement between Counterparty
and GS&Co. as to the subject matter and terms of each Transaction to which
this Master Confirmation, such Supplemental Confirmation and Trade Notification
relate and shall supersede all prior or contemporaneous written or oral
communications with respect thereto.

This Master Confirmation, each Supplemental Confirmation and each Trade
Notification supplement, form a part of, and are subject to an agreement in the
form of the 1992 ISDA Master Agreement (Multicurrency-Cross Border) (the “Agreement”) as if GS&Co. and Counterparty had executed
the Agreement on the date of this Master Confirmation (but without any Schedule
except for (i) the election of Loss and Second Method for purposes of
Section 6(e) of the Agreement, New York law (without regard to the conflicts of
law principles) as the governing law and US Dollars (“USD”) as the Termination
Currency, (ii) the election that subparagraph (ii) of
Section 2(c) will not apply to the Transactions, (iii) the election that
the “Cross Default” provisions of Section 5(a)(vi) shall apply to Counterparty,
with a “Threshold Amount” of USD100 million).

The Transactions shall be the sole Transactions under the
Agreement.  If there exists any ISDA
Master Agreement between GS&Co. and Counterparty or any confirmation or
other agreement between GS&Co. and Counterparty pursuant to which an ISDA
Master Agreement is deemed to exist between GS&Co. and Counterparty, then
notwithstanding anything to the contrary in such ISDA Master Agreement, such
confirmation or agreement or any other agreement to which GS&Co. and
Counterparty are parties, the Transactions shall not be considered Transactions
under, or otherwise governed by, such existing or deemed ISDA Master Agreement.

All provisions contained or incorporated by reference in the Agreement
shall govern this Master Confirmation, each Supplemental Confirmation and each
Trade Notification except as expressly modified herein or in the related
Supplemental Confirmation.

If, in relation to any Transaction to which this Master Confirmation, a
Supplemental Confirmation and a Trade Notification relate, there is any inconsistency
between the Agreement, this Master Confirmation, any Supplemental Confirmation,
any Trade Notification and the Equity Definitions, the following will prevail
for purposes of such Transaction in the order of precedence indicated:
(i) such Trade Notification, (ii) such Supplemental Confirmation;
(iii) this Master Confirmation; (iv) the Agreement; and (v) the
Equity Definitions.

1.                                       Subject
to the terms and conditions of this Master Confirmation and the relevant
Supplemental Confirmation and Trade Notification, on the Initial Share Delivery
Date (as defined below), GS&Co. shall deliver to Counterparty a number of
Shares equal to the Initial Shares for the relevant Transaction pursuant to
Initial Share Delivery below, and Counterparty shall pay to GS&Co. cash in
immediately available funds in an amount equal to the Prepayment Amount (as
defined below).  In addition, on the
Interim Share Delivery Date, GS&Co. shall deliver a number of Shares equal
to the excess, if any, of the Interim Shares over the Initial Shares pursuant
to Interim Share Delivery below. The additional terms of each Transaction set
forth below are intended to be an adjustment to the Prepayment Amount. Solely
for purposes of the Equity Definitions, each Transaction shall be treated as if
it were a Share Forward Transaction. 
However, the parties acknowledge that the Transaction is a Share buyback
transaction and is not intended to effect a net issuance of Shares or raise
equity capital for Counterparty.  Set
forth herein are the terms and conditions which, together with the terms and
conditions set forth in each Supplemental Confirmation and Trade Notification
relating to any Transaction, shall govern such Transaction.

	
  General Terms:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Trade Date:

  	
  For each Transaction,
  as set forth in the related Supplemental Confirmation.

  
	
   

  	
   

  
	
  Buyer:

  	
  Counterparty

  	
   

  
	
   

  	
   

  	
   

  
	
  Seller:

  	
  GS&Co.

  	
   

  
	
   

  	
   

  	
   

  
	
  Shares:

  	
  Common stock,
  par value $0.10 per share, of Counterparty (Ticker: BBY)

  
	
   

  	
   

  	
   

  
	
  Exchange:

  	
  New York Stock
  Exchange

  	
   

  
	
   

  	
   

  	
   

  
	
  Related Exchange(s):

  	
  All Exchanges.

  	
   

  
	
   

  	
   

  	
   

  
	
  Prepayment\Variable

  	
   

  	
   

  
	
  Obligation:

  	
  Applicable

  	
   

  
	
   

  	
   

  	
   

  
	
  Prepayment
  Amount:

  	
  For each
  Transaction, as set forth in the related Supplemental Confirmation.

  
	
   

  	
   

  	
   

  
	
  Prepayment Date:

  	
  For each
  Transaction, as set forth in the related Supplemental Confirmation.

  
	
   

  	
   

  	
   

  
	
  Valuation:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Hedge Period:

  	
  The period from
  and including the Hedge Period Start Date to and including the Hedge
  Completion Date.

  
	
   

  	
   

  	
   

  
	
  Hedge Completion
  Date:

  	
  For each
  Transaction, as set forth in the related Trade Notification, to be the
  Exchange Business Day on which GS&Co. finishes establishing its initial
  Hedge Positions in respect of such Transaction, as determined by GS&Co.
  in its sole discretion, but in no event later than the Hedge Period End Date.

  

 

 2
 

 

	
  Hedge Period Start Date:

  	
  For each
  Transaction, as set forth in the related Supplemental Confirmation.

  
	
   

  	
   

  	
   

  
	
  Hedge Period End
  Date:

  	
  For each
  Transaction, as set forth in the related Supplemental Confirmation.

  
	
   

  	
   

  	
   

  
	
  Hedge Period
  Reference

  	
   

  	
   

  
	
  Price:

  	
  For each
  Transaction, as set forth in the related Trade Notification, to be the
  average of the VWAP Prices for the Exchange Business Days in the Hedge
  Period, subject to Valuation Disruption below.

  
	
   

  	
   

  	
   

  
	
  VWAP Price:

  	
  For any Exchange
  Business Day, as determined by the Calculation Agent based on the New York
  10b-18 Volume Weighted Average Price per Share for the regular trading
  session (including any extensions thereof) of the Exchange on such Exchange
  Business Day (without regard to pre-open or after hours trading outside of
  such regular trading session for such Exchange Business Day), as published by
  Bloomberg at 4:15 p.m. New York time (or 15 minutes following the end of any
  extension of the regular trading session) on such Exchange Business Day, on
  Bloomberg page “BBY.N
  <Equity> AQR_SEC” (or any successor thereto), or if such price is not
  so reported on such Exchange Business Day for any reason, as reasonably
  determined by the Calculation Agent. For purposes of calculating the VWAP
  Price, the Calculation Agent will include only those trades that are reported
  during the period of time during which Counterparty could purchase its own
  shares under Rule 10b-18(b)(2) and are effected pursuant to the conditions of
  Rule 10b-18(b)(3), each under the Exchange Act (as defined herein) (such
  trades, “Rule 10b-18 eligible transactions”).

  
	
   

  	
   

  
	
  Forward Price:

  	
  The average of
  the VWAP Prices for the Exchange Business Days in the Calculation Period,
  subject to Valuation Disruption below.

  
	
   

  	
   

  
	
  Forward Price

  	
   

  
	
  Adjustment
  Amount:

  	
  For each Transaction,
  as set forth in the related Supplemental Confirmation.

  
	
   

  	
   

  	
   

  
	
  Calculation
  Period:

  	
  The period from
  and including the first Exchange Business Day immediately following the Hedge
  Completion Date to and including the Termination Date.

  
	
   

  	
   

  
	
  Termination
  Date:

  	
  For each
  Transaction, the Scheduled Termination Date set forth in the related
  Supplemental Confirmation; provided that
  GS&Co. shall have the right to designate any Exchange Business Day on or
  after the First Acceleration Date to be the Termination Date (the “Accelerated
  Termination Date”) by delivering notice to Counterparty of such
  designation prior to 11:59 p.m. New York City time on such Exchange Business
  Day.

  
	
   

  	
   

  
	
  First
  Acceleration Date:

  	
  For each
  Transaction, as set forth in the related Supplemental Confirmation.

  
	
   

  	
   

  
	
  Valuation
  Disruption:

  	
  The definition
  of “Market Disruption Event” in Section 6.3(a) of the Equity Definitions is
  hereby amended by deleting the words “at any time during the one-hour period
  that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in
  Valuation Time or Knock-out Valuation Time, as the case may be” and inserting
  the words “at any time on any Scheduled Trading Day during the Hedge Period,
  Calculation Period or Settlement Valuation Period” after the word “material,”
  in the third line thereof.

  
	
   

  	
   

  
	
   

  	
  Notwithstanding
  anything to the contrary in the Equity Definitions, to the extent that a
  Disrupted Day occurs (i) in the Hedge Period or the Calculation Period, the
  Calculation Agent may, in its good faith and commercially reasonable

  

 

 3
 

 

	
  

  	
  discretion,
  postpone either or both of the Hedge Period End Date or the Scheduled
  Termination Date, or (ii) in the Settlement Valuation Period, the Calculation
  Agent may extend the Settlement Valuation Period. If any such Disrupted Day
  is a Disrupted Day because of a Market Disruption Event (or a deemed Market
  Disruption Event as provided herein), the Calculation Agent shall determine
  whether (i) such Disrupted Day is a Disrupted Day in full, in which case the VWAP
  Price for such Disrupted Day shall not be included for purposes of
  determining the Hedge Period Reference Price, the Forward Price or the
  Settlement Price, as the case may be, or (ii) such Disrupted Day is a
  Disrupted Day only in part, in which case the VWAP Price for such Disrupted
  Day shall be determined by the Calculation Agent based on Rule 10b-18
  eligible transactions in the Shares on such Disrupted Day effected before the
  relevant Market Disruption Event occurred and/or after the relevant Market Disruption
  Event ended, and the weighting of the VWAP Price for the relevant Exchange
  Business Days during the Hedge Period, the Calculation Period or the
  Settlement Valuation Period, as the case may be, shall be adjusted in a
  commercially reasonable manner by the Calculation Agent for purposes of
  determining the Hedge Period Reference Price, the Forward Price or the
  Settlement Price, as the case may be, with such adjustments based on, among
  other factors, the duration of any Market Disruption Event and the volume,
  historical trading patterns and price of the Shares.

  
	
   

  	
   

  
	
   

  	
  If a Disrupted
  Day occurs during the Hedge Period, the Calculation Period or the Settlement
  Valuation Period, as the case may be, and each of the nine immediately
  following Scheduled Trading Days is a Disrupted Day, then the Calculation
  Agent, in its good faith and commercially reasonable discretion, may deem
  such ninth Scheduled Trading Day to be an Exchange Business Day that is not a
  Disrupted Day and determine the VWAP Price for such ninth Scheduled Trading
  Day using its good faith estimate of the value of the Shares on such ninth
  Scheduled Trading Day based on the volume, historical trading patterns and
  price of the Shares and such other factors as it deems appropriate.

  
	
   

  	
   

  
	
  Settlement Terms:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Physical
  Settlement:

  	
  Applicable to
  GS&Co.; provided that GS&Co. does
  not, and shall not, make the agreement or the representations set forth in
  Section 9.11 of the Equity Definitions related to the restrictions imposed by
  applicable securities laws with respect to any Shares delivered by GS&Co.
  to Counterparty under any Transaction. Counterparty Settlement Provisions are
  set forth in Annex A hereto.

  
	
   

  	
   

  
	
  Number of Shares

  	
   

  	
   

  
	
  to be Delivered:

  	
  A number of
  Shares equal to (a) the Prepayment Amount divided by
  (b) the Forward Price minus the
  Forward Price Adjustment Amount; provided that
  the Number of Shares to be Delivered shall not be less than the Minimum
  Shares and not greater than the Maximum Shares. The Number of Shares to be
  Delivered on the Settlement Date shall be reduced, but not below zero, by any
  Shares delivered pursuant to the Initial Share Delivery and the Interim Share
  Delivery described below.

  
	
   

  	
   

  
	
  Excess Dividend
  Amount:

  	
  For the
  avoidance of doubt, all references to the Excess Dividend Amount shall be
  deleted from Section 9.2(a)(iii) of the Equity Definitions.

  
	
   

  	
   

  
	
  Settlement Date:

  	
  The date that is
  one Settlement Cycle immediately following the Termination Date.

  

 

 4
 

 

	
  Settlement Currency:

  	
  USD

  
	
   

  	
   

  
	
  Initial Share
  Delivery:

  	
  GS&Co. shall
  deliver a number of Shares equal to the Initial Shares to Counterparty on the
  Initial Share Delivery Date in accordance with Section 9.4 of the Equity
  Definitions, with the Initial Share Delivery Date deemed to be a “Settlement
  Date” for purposes of such Section 9.4.

  
	
   

  	
   

  
	
  Initial Share Delivery Date:

  	
  For each
  Transaction, as set forth in the related Supplemental Confirmation.

  
	
   

  	
   

  
	
  Initial Shares:

  	
  For each
  Transaction, as set forth in the related Supplemental Confirmation.

  
	
   

  	
   

  	
   

  
	
  Interim Share Delivery:

  	
  GS&Co. shall
  deliver a number of Shares equal to the excess, if any, of the Interim Shares
  over the Initial Shares on the Interim Share Delivery Date in accordance with
  Section 9.4 of the Equity Definitions, with the Interim Share Delivery Date
  deemed to be a “Settlement Date” for purposes of such Section 9.4.

  
	
   

  	
   

  
	
  Interim Share
  Delivery

  	
   

  	
   

  
	
  Date:

  	
  The date one
  Settlement Cycle immediately following the Hedge Completion Date.

  
	
   

  	
   

  
	
  Interim Shares:

  	
  For each
  Transaction, as set forth in the related Supplemental Confirmation.

  
	
   

  	
   

  
	
  Minimum Shares:

  	
  For each
  Transaction, as set forth in the related Supplemental Confirmation.

  
	
   

  	
   

  
	
  Maximum Shares:

  	
  For each
  Transaction, as set forth in the related Supplemental Confirmation.

  
	
   

  	
   

  
	
  Share
  Adjustments:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Potential Adjustment
  Event:

  	
  Notwithstanding
  anything to the contrary in Section 11.2(e) of the Equity Definitions, an
  Extraordinary Dividend shall not constitute a Potential Adjustment Event.

  
	
   

  	
   

  
	
   

  	
  It shall
  constitute an additional Potential Adjustment Event if the Termination Date
  for any Transaction is postponed pursuant to “Valuation Disruption” above, in
  which case the Calculation Agent may, in its commercially reasonable
  discretion, adjust any relevant terms of the such Transaction as necessary to
  preserve as nearly as practicable the fair value of such Transaction to
  GS&Co. prior to such postponement.

  
	
   

  	
   

  
	
  Extraordinary
  Dividend:

  	
  For any fiscal
  quarter of the Issuer occurring (in whole or in part) during the period from
  and including the first day of the Hedge Period to and including the
  Termination Date, any dividend or distribution on the Shares with an
  ex-dividend date occurring during such fiscal quarter (other than any
  dividend or distribution of the type described in Section 11.2(e)(i) or
  Section 11.2(e)(ii)(A) or (B) of the Equity Definitions) (a “Dividend”) the amount or value of which (as determined by
  the Calculation Agent), when aggregated with the amount or value (as
  determined by the Calculation Agent) of any and all previous Dividends with
  ex-dividend dates occurring in the same fiscal quarter, exceeds the Ordinary
  Dividend Amount. For the avoidance of
  doubt, it being understood that extraordinary and ordinary dividends shall only be authorized and
  declared by the Board of Directors of the Counterparty.

  
	
   

  	
   

  
	
  Ordinary
  Dividend Amount:

  	
  For each
  Transaction, as set forth in the Supplemental Confirmation

  
	
   

  	
   

  	
   

  
	
  Method of
  Adjustment:

  	
  Calculation
  Agent Adjustment

  	
   

  

 

 5
 

 

	
  Extraordinary Events:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Consequences of

  	
   

  	
   

  
	
  Merger Events:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (a)

  	
  Share-for-Share:

  	
  Modified
  Calculation Agent Adjustment

  
	
   

  	
   

  	
   

  
	
  (b)

  	
  Share-for-Other:

  	
  Cancellation and
  Payment

  
	
   

  	
   

  	
   

  
	
  (c)

  	
  Share-for-Combined:

  	
  Component
  Adjustment

  
	
   

  	
   

  	
   

  
	
  Tender Offer:

  	
  Applicable; provided that Sections 12.3(a) and 12.3(d) of the Equity
  Definitions shall each be amended by replacing each occurrence of the words
  “Tender Offer Date” by “Announcement Date.”

  
	
   

  	
   

  
	
  Consequences of

  	
   

  	
   

  
	
  Tender Offers:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (a)

  	
  Share-for-Share:

  	
  Modified
  Calculation Agent Adjustment or Cancellation and Payment, at the election of
  GS&Co.

  
	
   

  	
   

  	
   

  
	
  (b)

  	
  Share-for-Other:

  	
  Modified
  Calculation Agent Adjustment or Cancellation and Payment, at the election of
  GS&Co.

  
	
   

  	
   

  	
   

  
	
  (c)

  	
  Share-for-Combined:

  	
  Modified
  Calculation Agent Adjustment or Cancellation and Payment, at the election of
  GS&Co.

  
	
   

  	
   

  	
   

  
	
  Nationalization,

  	
   

  	
   

  
	
  Insolvency or
  Delisting:

  	
  Cancellation and
  Payment; provided that in addition to the
  provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also
  constitute a Delisting if the Exchange is located in the United States and
  the Shares are not immediately re-listed, re-traded or re-quoted on any of
  the New York Stock Exchange, the American Stock Exchange, The NASDAQ Global
  Select Market or The NASDAQ Global Market (or their respective successors),
  and if the Shares are immediately re-listed, re-traded or re-quoted on any
  such exchange or quotation system, such exchange or quotation system shall be
  deemed to be the Exchange.

  
	
   

  	
   

  
	
  Additional Disruption Events:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (a)

  	
  Change in Law:

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  (b)

  	
  Failure to
  Deliver:

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  (c)

  	
  Insolvency
  Filing:

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  (d)

  	
  Loss of Stock
  Borrow:

  	
  Applicable; provided that Sections 12.9(a)(vii) and 12.9(b)(iv) of the
  Equity Definitions are hereby amended by deleting the words “at a rate equal
  to or less than the Maximum Stock Loan Rate” and replacing them with “at a
  rate of return equal to or greater than zero”.

  
	
   

  	
   

  	
   

  
	
   

  	
  Hedging Party:

  	
  GS&Co.

  
	
   

  	
   

  	
   

  
	
   

  	
  Determining
  Party:

  	
  GS&Co.

  
	
   

  	
   

  	
   

  
	
  Additional
  Termination Event(s):

  	
  Notwithstanding
  anything to the contrary in the Equity Definitions, if, as a result of an
  Extraordinary Event, any Transaction would be cancelled or terminated 

  
					

 

 6
 

 

	
  

  	
  (whether in
  whole or in part) pursuant to Article 12 of the Equity Definitions, an
  Additional Termination Event (with such terminated Transaction(s) (or
  portions thereof) being the Affected Transaction(s) and Counterparty being
  the sole Affected Party) shall be deemed to occur, and, in lieu of Sections
  12.7, 12.8 and 12.9 of the Equity Definitions, Section 6 of the Agreement
  shall apply to such Affected Transaction(s).

  
	
   

  	
   

  
	
   

  	
  The declaration
  by the Issuer of any Extraordinary Dividend, the ex-dividend date for which
  occurs or is scheduled to occur during the Hedge Period or the Calculation
  Period, will constitute an Additional Termination Event, with Counterparty as
  the sole Affected Party and all Transactions hereunder as the Affected
  Transactions.

  
	
   

  	
   

  
	
  Non-Reliance/Agreements
  and

  	
   

  	
   

  
	
  Acknowledgements
  Regarding

  	
   

  	
   

  
	
  Hedging
  Activities/Additional

  	
   

  	
   

  
	
  Acknowledgements:

  	
  Applicable

  	
   

  
	
   

  	
   

  	
   

  
	
  Transfer:

  	
  Notwithstanding
  anything to the contrary in the Agreement, GS&Co. may assign, transfer
  and set over all rights, title and interest, powers, privileges and remedies
  of GS&Co. under any Transaction, in whole or in part, to an affiliate of
  GS&Co. whose obligations are guaranteed by The Goldman Sachs Group, Inc.
  without the consent of Counterparty.

  
	
   

  	
   

  
	
  GS&Co.
  Payment Instructions:

  	
  Chase Manhattan
  Bank New York

  	
   

  
	
   

  	
  For A/C Goldman,
  Sachs & Co.

  	
   

  
	
   

  	
  A/C
  #930-1-011483

  	
   

  
	
   

  	
  ABA: 021-000021

  	
   

  
	
   

  	
   

  	
   

  
	
  Counterparty’s
  Contact Details

  	
   

  	
   

  
	
  for Purpose of
  Giving Notice:

  	
  Best Buy Co.,
  Inc.

  	
   

  
	
   

  	
  7601 Penn Avenue
  South

  	
   

  
	
   

  	
  Richfield, MN
  55423

  	
   

  
	
   

  	
  Attention:
  Director, Treasury

  	
   

  
	
   

  	
  Telephone No.:
  (612) 291-9274

  	
   

  
	
   

  	
  Facsimile No.:
  (952) 430-6389

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
   

  
	
   

  	
  Latham &
  Watkins LLP

  	
   

  
	
   

  	
  885 Third Avenue

  	
   

  
	
   

  	
  New York, New
  York 10022

  	
   

  
	
   

  	
  Attention:
  Carlos Alvarez, Esq.

  	
   

  
	
   

  	
   

  	
   

  
	
  GS&Co.’s
  Contact Details for

  	
   

  	
   

  
	
  Purpose of
  Giving Notice:

  	
  Telephone No.:

  	
  (212) 902-8996

  
	
   

  	
  Facsimile No.:

  	
  (212) 902-0112

  
	
   

  	
  Attention:
  Equity Operations: Options and Derivatives

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
  Tracey McCabe

  
	
   

  	
  Equity Capital
  Markets

  
	
   

  	
  One New York
  Plaza

  
	
   

  	
  New York, NY
  10004

  
	
   

  	
  Telephone No.:

  	
  (212) 357-0428

  
	
   

  	
  Facsimile No.:

  	
  (212) 902-3000

  
				

 

 7
 

2.                                       Calculation
Agent.                                            GS&Co.

3.                                       Additional
Mutual Representations, Warranties and Covenants of GS&Co. and Counterparty.  In addition to the representations,
warranties and covenants in the Agreement, each party represents, warrants and
covenants to the other party that:

(a)          Eligible Contract
Participant.  It is an “eligible
contract participant”, as defined in the U.S. Commodity Exchange Act (as
amended), and is entering into each Transaction hereunder as principal (and not
as agent or in any other capacity, fiduciary or otherwise) and not for the
benefit of any third party.

(b)         Accredited Investor.  Each party acknowledges that the offer and
sale of each Transaction to it is intended to be exempt from registration under
the Securities Act of 1933, as amended (the “Securities
Act”), by virtue of Section 4(2) thereof and the provisions of
Regulation D promulgated thereunder (“Regulation
D”).  Accordingly, each party
represents and warrants to the other that (i) it has the financial ability to
bear the economic risk of its investment in each Transaction and is able to
bear a total loss of its investment, (ii) it is an “accredited investor”
as that term is defined under Regulation D and (iii) the disposition of each
Transaction is restricted under this Master Confirmation, the Securities Act
and state securities laws.

4.                                       Additional
Representations, Warranties and Covenants of Counterparty.  In addition to the representations,
warranties and covenants in the Agreement, Counterparty represents, warrants
and covenants to GS&Co. that:

(a)                                  It
is not entering into any Transaction (i) on the basis of, and is not aware of,
any material non-public information with respect to the Shares (ii) in
anticipation of, in connection with, or to facilitate, a distribution of its
securities, a self tender offer or a third-party tender offer or (iii) to create
actual or apparent trading activity in the Shares (or any security convertible
into or exchangeable for the Shares) or to raise or depress or otherwise
manipulate the price of the Shares (or any security convertible into or
exchangeable for the Shares), in each case for the purpose of inducing the
purchase or sale of the Shares by others.

(b)                                 Each
Transaction is being entered into pursuant to a publicly disclosed Share
buy-back program and its Board of Directors has approved the use of derivatives
to effect the Share buy-back program.

(c)                                  Counterparty
intends that each Transaction qualifies as an equity instrument for purposes of
EITF Issue No. 00-19 as in effect on the Trade Date.  Notwithstanding the foregoing and without
limiting the generality of Section 13.1 of the Equity Definitions, it
acknowledges that neither GS&Co. nor any of its affiliates is making any
representations or warranties or taking any position or expressing any view
with respect to the treatment of any Transaction under any accounting standards
including FASB Statements 128, 133 as amended, or 149, 150, EITF 00-19, 01-6 or
EITF 03-6 (or any successor issue statements) or under the Financial Accounting
Standards Board’s Liabilities & Equity Project.

(d)                                 As
of (i) the date hereof and (ii) the Trade Date for each Transaction hereunder,
Counterparty is in compliance with its reporting obligations under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)
and its most recent Annual Report on Form 10-K, together with all reports
subsequently filed by it pursuant to the Exchange Act, taken together and as
amended and supplemented to the date of this representation, do not, as of
their respective filing dates, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading;

(e)                                  Counterparty is aware of its reporting
obligations under Regulation S-K and/or Regulation S-B under the Exchange Act,
as applicable, in respect of the Transaction.

(f)                                    The
shares are not, and Counterparty will not cause the Shares to be, subject to a
“restricted period” (as defined in Regulation M promulgated under the Exchange
Act) at any time during any Regulation M Period (as defined below) for any
Transaction unless Counterparty has provided written notice to GS&Co. of
such restricted period not later than the Scheduled Trading Day immediately
preceding the first day of such “restricted period”; Counterparty acknowledges
that any such notice may cause a Disrupted Day to occur pursuant to Section 5
below; accordingly, Counterparty acknowledges that its delivery of such notice
must comply with the standards set 

 8
 

forth in Section 6 below; “Regulation M
Period” means, for any Transaction, the period commencing on the
first day of the Hedge Period for such Transaction and ending on the last day
of the Relevant Period (as defined below) for such Transaction, or such earlier
day as elected by GS&Co. and communicated to Counterparty on such day. “Relevant Period” means, for any
Transaction, the period commencing on the first day of the Calculation Period
for such Transaction and ending on the last Additional Relevant Day (as
specified in the related Supplemental Confirmation) for such Transaction (or,
if later, the First Acceleration Date without regard to any acceleration
thereof pursuant to “Special Provisions Relating to Friendly Transaction
Announcements” below), or such earlier day as elected by GS&Co. and
communicated to Counterparty on such day.

(g)                                 As
of the Trade Date, the Prepayment Date, the Initial Share Delivery Date, the
Interim Share Delivery Date, the Settlement Date and the Second Settlement
Date, if any, for each Transaction, Counterparty is not “insolvent” (as such
term is defined under Section 101(32) of the U.S. Bankruptcy Code (Title 11 of
the United States Code) (the “Bankruptcy Code”))
and Counterparty would be able to purchase a number of Shares equal to the
Maximum Shares in compliance with the laws of the jurisdiction of
Counterparty’s incorporation.

(h)                                 Counterparty
is not and, after giving effect to any Transaction, will not be, required to
register as an “investment company” as such term is defined in the Investment
Company Act of 1940, as amended.

(i)                                     Counterparty
will not take any action that would limit or in any way adversely affect
GS&Co.’s rights under the Agreement, this Master Confirmation, any
Supplemental Confirmation or any Trade Notification.

(j)                                     With
the exception of any Uncollared Accelerated Stock Buyback transaction evidenced
by the other confirmation dated June 26, 2007 between Counterparty and
GS&Co. and any supplemental confirmations thereto Counterparty has not and,
during the Hedge Period or Relevant Period or, if applicable, the Settlement
Valuation Period for any Transaction, will not enter into agreements similar to
the Transactions described herein where any initial hedge period, calculation
period, relevant period or settlement valuation period (each however defined)
in such other transaction will overlap at any time (including as a result of
extensions in such initial hedge period, calculation period, relevant period or
settlement valuation period as provided in the relevant agreements) with any
Hedge Period, Relevant Period or, if applicable, any Settlement Valuation
Period under this Master Confirmation. 
In the event that the initial hedge period, relevant period, calculation
period or settlement valuation period in any other similar transaction overlaps
with any Hedge Period, Relevant Period or, if applicable, Settlement Valuation
Period under this Master Confirmation as a result of any postponement of the
Termination Date or extension of the Settlement Valuation Period pursuant to
Valuation Disruption above, Counterparty shall promptly amend such transaction
to avoid any such overlap.

5.                                       Regulatory
Disruption.  In the event that
GS&Co. concludes, in its reasonable discretion, that it is appropriate with
respect to any legal, regulatory or self-regulatory requirements or related
policies and procedures (whether or not such requirements, policies or
procedures are imposed by law or have been voluntarily adopted by GS&Co.),
for it to refrain from purchasing Shares on any Scheduled Trading Day during
the Hedge Period, the Calculation Period or, if applicable, the Settlement
Valuation Period, GS&Co. may by written notice to Counterparty elect to
deem that a Market Disruption Event has occurred on such Scheduled Trading Day.  The notice shall not specify, and GS&Co.
shall not otherwise communicate to Counterparty, the reason for GS&Co.’s
election.

6.                                       10b5-1 Plan.  Counterparty represents,
warrants and covenants to GS&Co. that:

(a)                                  Counterparty is entering into this Master
Confirmation and each Transaction hereunder in good faith and not as part of a
plan or scheme to evade the prohibitions of Rule 10b5-1 under the Exchange Act
(“Rule 10b5-1”) or any other antifraud or
anti-manipulation provisions of the federal or applicable state securities laws
and that it has not entered into or altered and will not enter into or alter
any corresponding or hedging transaction or position with respect to the
Shares.  Counterparty acknowledges that
it is the intent of the parties that each Transaction entered into under this Master
Confirmation comply with the requirements of paragraphs (c)(1)(i)(A) and (B) of
Rule 10b5-1 and each Transaction entered into under this Master Confirmation
shall be interpreted to comply with the requirements of Rule 10b5-1(c).

 9
 

(b)                                 Counterparty will not seek to control or
influence GS&Co.’s decision to make any “purchases or sales” (within the
meaning of Rule 10b5-1(c)(1)(i)(B)(3)) under any Transaction entered into under
this Master Confirmation, including, without limitation, GS&Co.’s decision
to enter into any hedging transactions.

(c)                                  Counterparty
acknowledges and agrees that any amendment, modification, waiver or termination
of this Master Confirmation, the relevant Supplemental Confirmation or Trade
Notification must be effected in accordance with the requirements for the
amendment or termination of a “plan” as
defined in Rule 10b5-1(c).

7.                                       Counterparty Purchases.

Counterparty (or any
“affiliated purchaser” as defined in Rule 10b-18 under the Exchange Act (“Rule 10b-18”)) shall not, without the prior written consent
of GS&Co., directly or indirectly purchase any Shares (including by means
of a derivative instrument), listed contracts on the Shares or securities that
are convertible into, or exchangeable or exercisable for Shares (including,
without limitation, any Rule 10b-18 purchases of blocks (as defined in Rule
10b-18)) during any Hedge Period or Relevant Period or, if applicable,
Settlement Valuation Period, except through
GS&Co.; provided that
purchases effected by or for an issuer plan by an agent independent of the
issuer within the meaning of Rule 10b-18(a)(13)(ii) shall not be subject to
this Section 7.

8.                                       Special
Provisions for Merger Transactions. 
Notwithstanding anything to the contrary herein or in the Equity
Definitions:

(a)                                  Counterparty
agrees that it:

(i)                                     will
not during the period commencing on the Trade Date through the end of the
Relevant Period for any Transaction make, or permit to be made, any public
announcement (as defined in Rule 165(f) under the Securities Act) of any Merger
Transaction or potential Merger Transaction unless such public announcement is
made prior to the opening or after the close of the regular trading session on
the Exchange for the Shares;

(ii)                                  shall
promptly (but in any event prior to the next opening of the regular trading
session on the Exchange) notify GS&Co. following any such announcement that
such announcement has been made; and

(iii)                               shall
promptly (but in any event prior to the next opening of the regular trading
session on the Exchange) provide GS&Co. with written notice specifying (i)
Counterparty’s average daily Rule 10b-18 Purchases (as defined in Rule 10b-18)
during the three full calendar months immediately preceding the announcement
date that were not effected through GS&Co. or its affiliates and (ii) the
number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under
the Exchange Act for the three full calendar months preceding the announcement
date.  Such written notice shall be
deemed to be a certification by Counterparty to GS&Co. that such
information is true and correct.  In
addition, Counterparty shall promptly notify GS&Co. of the earlier to occur
of the completion of such transaction and the completion of the vote by target
shareholders.  Counterparty acknowledges
that any such notice may cause the terms of any Transaction to be adjusted or
such Transaction to be terminated; accordingly, Counterparty acknowledges that
its delivery of such notice must comply with the standards set forth in Section
7 above.

(b)                                 In
connection with any Merger Transaction, GS&Co. in its reasonable discretion
may (i) suspend the Hedge Period, Calculation Period and/or the Relevant Period
and postpone the Termination Date and make related adjustments as though such
event were a Potential Adjustment Event or (ii) treat the occurrence of such
public announcement as an Additional Termination Event with Counterparty as the
sole Affected Party and the Transactions hereunder as the Affected
Transactions.

“Merger
Transaction” means any merger, acquisition or similar transaction
involving a recapitalization as contemplated by Rule 10b-18(a)(13)(iv) under
the Exchange Act.

 10
 

9.                                       Special
Provisions for Friendly Transaction Announcements.

(a)                                  If
a Friendly Transaction Announcement occurs on or prior to the Settlement Date
for any Transaction, then the Number of Shares to be Delivered for such
Transaction shall be determined as if the words “not less than the Minimum
Shares and” and “, but not below zero,” were deleted from the definition
thereof. If a Friendly Transaction Announcement occurs after the Trade Date,
but prior to the First Acceleration Date of any Transaction, the First
Acceleration Date shall be the date of such Friendly Transaction Announcement.
If a Friendly Transaction Announcement occurs after the Settlement Date for any
Transaction or any earlier date of termination or cancellation of such
Transaction pursuant to Section 6 of the Agreement or Article 12 of the Equity
Definitions, then a second settlement of such Transaction (a “Second Settlement”) shall occur
(notwithstanding such earlier termination or cancellation) with a Number of
Shares to be Delivered equal to the lesser of (i) zero and (ii) (x) the Number
of Shares to be Delivered determined pursuant to the first preceding sentence
in this paragraph as if such Friendly Transaction Announcement occurred prior
to such Settlement Date minus (y) the
Number of Shares to be Delivered determined pursuant to Section 1 of this
Confirmation (provided that in the case of a
Second Settlement occurring after such an early termination or cancellation, a
Number of Shares to be Delivered shall not be determined and instead a Forward
Cash Settlement Amount will be determined as provided in Annex A).  If the Number of Shares to be Delivered for
any settlement of any Transaction is a negative number, then the terms of the
Counterparty Settlement Provisions in Annex A shall apply.

(b)                                 “Friendly Transaction Announcement” means (i) an Acquisition
Transaction Announcement by Counterparty or its board of directors prior to the
last day of the Relevant Period or any earlier date of termination or
cancellation of the relevant Transaction pursuant to Section 6 of the Agreement
or Article 12 of the Equity Definitions (such date, the “Actual
Termination Date”), (ii) an announcement prior to the date three
months following the Scheduled Termination Date that an Acquisition Transaction
that is the subject of an Acquisition Transaction Announcement occurring prior
to the Actual Termination Date has been approved, agreed to, recommended by or
otherwise consented to by Counterparty or its board of directors, or negotiated
by Counterparty or any authorized representative of Counterparty, or (iii)
where Counterparty or its board of directors has a legal obligation to make a
recommendation to its shareholders in respect of any such Acquisition
Transaction prior to the date three months following the Scheduled Termination
Date, the absence of a recommendation that its shareholders reject such
transaction.

“Acquisition Transaction Announcement”
means (i) the announcement of an Acquisition Transaction, (ii) an announcement
that Counterparty or any of its subsidiaries has entered into an agreement, a
letter of intent or an understanding designed to result in an Acquisition
Transaction, (iii) the announcement of the intention to solicit or enter into,
or to explore strategic alternatives or other similar undertaking that may
include, an Acquisition Transaction, or (iv) any other announcement that in the
reasonable judgment of the Calculation Agent may result in an Acquisition
Transaction. For the avoidance of doubt, announcements as used in the
definition of Acquisition Transaction Announcement refer to any public
announcement whether made by the Issuer or a third party.

“Acquisition Transaction”
means (i) any Merger Event (for purposes of this definition the definition of
Merger Event shall be read with the references therein to “100%” being replaced
by “15%” and to “50%” by “75%” and without reference to the clause beginning
immediately following the definition of Reverse Merger therein to the end of
such definition) or Tender Offer, or any other transaction involving the merger
of Counterparty with or into any third party, (ii) the sale or transfer of all
or substantially all of the assets of Counterparty, (iii) a recapitalization,
reclassification, binding share exchange or other similar transaction and (iv)
any transaction in which Counterparty or its board of directors has a legal
obligation to make a recommendation to its shareholders in respect of such
transaction (whether pursuant to Rule 14e-2 under the Exchange Act or
otherwise).

10.                                 Acknowledgments.  (a) The parties hereto intend for:

(i)                                     each Transaction
to be a “securities contract” as defined in Section 741(7) of the Bankruptcy Code,
a “swap agreement” as defined in Section 101(53B) of the Bankruptcy Code and a
“forward contract” as defined in Section 101(25) of the Bankruptcy Code, and
the parties hereto to be entitled to the protections afforded by, among other
Sections, Sections 362(b)(6), 362(b)(17), 362(b)(27), 362(o), 546(e), 546(g),
546(j), 555, 556, 560 and 561 of the Bankruptcy Code;

 11
 

(ii)                                  the Agreement to be a
“master netting agreement” as defined in Section 101(38A) of the Bankruptcy
Code;

(iii)                               a party’s right to liquidate,
terminate or accelerate any Transaction, net out or offset termination values
or payment amounts, and to exercise any other remedies upon the occurrence of
any Event of Default or Termination Event under the Agreement with respect to
the other party or any Extraordinary Event that results in the termination or
cancellation of any Transaction to constitute a “contractual right” (as defined
in the Bankruptcy Code);

(iv)                              any cash, securities or
other property transferred as performance assurance, credit support or
collateral with respect to each Transaction to constitute “margin payments” (as
defined in the Bankruptcy Code); and

(v)                                 all payments for,
under or in connection with each Transaction, all payments for the Shares
(including, for the avoidance of doubt, payment of the Prepayment Amount) and
the transfer of such Shares to constitute “settlement payments” and “transfers”
(as defined in the Bankruptcy Code).

(b)                                 Counterparty
acknowledges that:

(i)                                     during the term of
any Transaction, GS&Co. and its affiliates may buy or sell Shares or other
securities or buy or sell options or futures contracts or enter into swaps or
other derivative securities in order to establish or adjust its hedge position
with respect to such Transaction;

(ii)                                  GS&Co. and its
affiliates may also be active in the market for the Shares other than in
connection with hedging activities in relation to any Transaction;

(iii)                               GS&Co. shall make
its own determination as to whether, when or in what manner any hedging or
market activities in Counterparty’s securities shall be conducted and shall do
so in a manner that it deems appropriate to hedge its price and market risk
with respect to the Forward Price and the VWAP Price;

(iv)                              any market activities of
GS&Co. and its affiliates with respect to the Shares may affect the market
price and volatility of the Shares, as well as the Forward Price and VWAP
Price, each in a manner that may be adverse to Counterparty; and

(v)                                 each Transaction is a
derivatives transaction in which it has granted GS&Co. an option;  GS&Co. may purchase shares for its own
account at an average price that may be greater than, or less than, the price
paid by Counterparty under the terms of the related Transaction.

(c)                                  Counterparty
and GS&Co. agree that neither Counterparty nor GS&Co., nor any of their
respective affiliates, intend to treat the payment of the Prepayment Amount by
Counterparty to GS&Co. on the Prepayment Date with respect to any
Transaction as a loan for purposes of filing any U.S. federal, state, local or
other tax return.

(d)                                 GS&Co.
represents and warrants to Counterparty that (A) on the Trade Date, GS&Co.
and its affiliates subject to aggregation with GS&Co. for the purposes of
the “beneficial ownership” test under Section 13 of the Exchange Act do not
“beneficially own” (within the meaning of Section 13 under the Exchange Act and
the rules promulgated thereunder) a number of Shares in excess of 5% of the
number of Shares outstanding on the Trade Date (based on the total number of
Shares outstanding shown on Counterparty’s Annual Report on Form 10-K for the
fiscal year ended March 3, 2007) and (B) no delivery of Shares on any of the
Prepayment Date, the Initial Share Delivery Date, the Interim Share Delivery
Date, the Settlement Date or the Second Settlement Date, if any, for any
Transaction will constitute in excess of 5% of the number of Shares outstanding
on such date (based on the total number of Shares outstanding shown on
Counterparty’s most recent Annual Report on Form 10-K or Quarterly Report on
Form 10-Q).

 12
 

11.                                 Credit
Support Documents.  The parties
hereto acknowledge that no Transaction hereunder is secured by any collateral
that would otherwise secure the obligations of Counterparty herein or pursuant
to the Agreement.

12.                                 Limitation
on Set-off.  (a) The parties agree
that upon the occurrence of an Event of Default or Termination Event with
respect to a party who is the Defaulting Party or an Affected Party (“X”), the other party (“Y”)
will have the right (but not be obliged) without prior notice to X or any other
person to set-off or apply any obligation of X owed to Y (or any Affiliate of
Y) (whether or not matured or contingent and whether or not arising under the
Agreement, and regardless of the currency, place of payment or booking office
of the obligation) against any obligation of Y (or any Affiliate of Y) owed to
X (whether or not matured or contingent and whether or not arising under the
Agreement, and regardless of the currency, place of payment or booking office
of the obligation).  Y will give notice
to the other party of any set-off effected under this Section 12.

Amounts (or the relevant
portion of such amounts) subject to set-off may be converted by Y into the
Termination Currency at the rate of exchange at which such party would be able,
acting in a reasonable manner and in good faith, to purchase the relevant
amount of such currency.  If any
obligation is unascertained, Y may in good faith estimate that obligation and
set-off in respect of the estimate, subject to the relevant party accounting to
the other when the obligation is ascertained. 
Nothing in this Section 12 shall be effective to create a charge or
other security interest.  This Section 12
shall be without prejudice and in addition to any right of set-off, combination
of accounts, lien or other right to which any party is at any time otherwise
entitled (whether by operation of law, contract or otherwise).

(b)                                 Notwithstanding
anything to the contrary in the foregoing, GS&Co. agrees not to set off or
net amounts due from Counterparty with respect to any Transaction against
amounts due from GS&Co. to Counterparty with respect to contracts or
instruments that are not Equity Contracts. 
“Equity Contract” means any
transaction or instrument that does not convey rights to GS&Co. that are senior
to claims of common stockholders in the event of Counterparty’s bankruptcy.

13.                                 Delivery
of Shares.  Notwithstanding anything
to the contrary herein, GS&Co. may, by prior notice to Counterparty,
satisfy its obligation to deliver any Shares or other securities on any date
due (an “Original Delivery Date”) by making
separate deliveries of Shares or such securities, as the case may be, at more
than one times on or prior to such Original Delivery Date, so long as the
aggregate number of Shares and other securities so delivered on or prior to
such Original Delivery Date is equal to the number required to be delivered on
such Original Delivery Date. In addition, if GS&Co. determines, in its sole
discretion, that delivery of Shares or other securities, as the case may be, on
an Original Delivery Date could give rise to payment, reporting or registration
obligations or other requirements applicable to GS&Co. under any
state or federal laws, regulations or regulatory orders applicable to
ownership of Shares or such other securities or policies of GS&Co. related
to compliance therewith, GS&Co. may, by notice to Counterparty prior to any
Original Delivery Date, elect to satisfy its obligation to deliver any Shares
or other securities to be delivered hereunder on such Original Delivery Date by
making separate deliveries of Shares or such other securities, as the case may
be, on such Original Delivery Date and up to three Exchange Business Days
immediately following such Original Delivery Date, so long as the aggregate
number of Shares and other securities so delivered is equal to the number
required to be delivered on such Original Delivery Date.

14.                                 Early
Termination.  In the event that an
Early Termination Date (whether as a result of an Event of Default or a Termination
Event) occurs or is designated with respect to any Transaction (except as a
result of a Merger Event in which the consideration or proceeds to be paid to
holders of Shares consists solely of cash), if either party would owe any
amount to the other party pursuant to Section 6(d)(ii) of the Agreement (any
such amount, a “Payment Amount”), then, in lieu of
any payment of such Payment Amount, Counterparty may, no later than the Early
Termination Date or the date on which such Transaction is terminated, elect to
deliver or for GS&Co. to deliver, as the case may be, to the other party a
number of Shares (or, in the case of a Merger Event, a number of units, each
comprising the number or amount of the securities or property that a
hypothetical holder of one Share would receive in such Merger Event (each such
unit, an “Alternative Delivery Unit” and, the
securities or property comprising such unit, “Alternative
Delivery Property”)) with a value equal to the Payment Amount, as
determined by the Calculation Agent (and the parties agree that, in making such
determination of value, the Calculation Agent may take into account a number of
factors, including the market price of the Shares or Alternative Delivery
Property on the Early Termination Date and, if such delivery is made by
GS&Co., the prices at which GS&Co. purchases Shares or Alternative
Delivery Property to fulfill its delivery obligations under this Section 14); provided that in 

 13
 

determining the
composition of any Alternative Delivery Unit, if the relevant Merger Event
involves a choice of consideration to be received by holders, such holder shall
be deemed to have elected to receive the maximum possible amount of cash. If
such delivery is made by Counterparty, paragraphs 2 through 7 of Annex A shall
apply as if such delivery were a settlement of the Transaction to which Net
Share Settlement applied, the Cash Settlement Payment Date were the Early
Termination Date and the Forward Cash Settlement Amount were zero (0) minus the Payment Amount owed by Counterparty.

15.                                 Calculations
and Payment Date upon Early Termination. 
The parties acknowledge and agree that in calculating Loss pursuant to
Section 6 of the Agreement, GS&Co. may (but need not) determine losses
without reference to actual losses incurred but based on expected losses
assuming a commercially reasonable (including without limitation with regard to
reasonable legal and regulatory guidelines) risk bid were used to determine
loss to avoid awaiting the delay associated with closing out any hedge or related
trading position in a commercially reasonable manner prior to or sooner
following the designation of an Early Termination Date.  Notwithstanding anything to the contrary in
Section 6(d)(ii) of the Agreement, all amounts calculated as being due in respect
of an Early Termination Date under Section 6(e) of the Agreement will be
payable on the day that notice of the amount payable is effective; provided that if Counterparty elects to
receive Shares or Alternative Delivery Property in accordance with Section 14,
such Shares or Alternative Delivery Property shall be delivered on a date
selected by GS&Co. as promptly as practicable.

16.                                 Special
Provisions for Counterparty Payments. 
The parties hereby agree that, notwithstanding anything to the contrary
herein or in the Agreement, in the event that an Early Termination Date
(whether as a result of an Event of Default or a Termination Event) occurs or
is designated with respect to any Transaction and, as a result, Counterparty
owes to GS&Co. an amount calculated under Section 6(e) of the Agreement,
such amount shall be deemed to be zero; provided that
following a Friendly Transaction Announcement, this Section 16 shall cease to
apply.  Each party acknowledges that
Counterparty shall have the right, in its sole discretion, to make any payment
required to be made by it, pursuant to Section 6(e) of the Agreement (including
pursuant to the modification of the application of Sections 12.7 or 12.9 of the
Equity Definitions (except with respect to any portion of the consideration for
the Shares consisting of cash in the event of a Merger Event or Tender Offer))
following the occurrence of an Early Termination Date or Extraordinary Event,
by electing to share settle the Transactions under this Master Confirmation
pursuant to the terms and conditions of the Counterparty Settlement Provisions
set forth in Annex A.  In no event shall the number of Shares required to
be delivered by Counterparty in connection with such a share settlement exceed
the number of Reserved Shares (as defined in the Supplemental Confirmation).

17.                                 Agreement
in Respect of Adjustments.  In
determining any adjustment in respect of any Transaction pursuant to Article 11
or Article 12 of the Equity Definitions, the Calculation Agent shall make such
adjustments without regard to changes in expected dividends since the Trade
Date for such Transaction.

18.                                 Agreement
in Respect of Dividends.  For the
avoidance of doubt, if an Early Termination Date occurs in respect of any
Transaction as a result of an Additional Termination Event of the type
described in the second paragraph opposite “Additional Termination Event(s)”
above, the relevant party’s Loss for purposes of Section 6(e) of the Agreement
in respect of such Additional Termination Event shall be determined without
regard to the difference between such Extraordinary Dividend giving rise to
such Additional Termination Event and the expected dividend as of the Trade
Date for such Transaction.

19.                                 Claim
in Bankruptcy.  GS&Co.
acknowledges and agrees that this Confirmation is not intended to convey to it
rights with respect to the Transaction that are senior to the claims of common
stockholders in the event of Counterparty’s bankruptcy.  For the avoidance of doubt, the parties agree
that the preceding sentence shall not apply at any time other than during
Counterparty’s bankruptcy to any claim arising as a result of a breach by
Counterparty of any of its obligations under this Confirmation or the
Agreement.

20.                                 General
Obligations Law of New York.  With
respect to each Transaction, (i) this Master Confirmation, together with the
related Supplemental Confirmation, as supplemented by the related Trade
Notification, is a “qualified financial contract”, as such term is defined in
Section 5-701(b)(2) of the General Obligations Law of New York (the “General Obligations Law”); (ii) such Trade Notification
constitutes a “confirmation in writing sufficient to indicate that a contract
has been made between the parties” hereto, as set forth in Section
5-701(b)(3)(b) 

 14
 

of the General
Obligations Law; and (iii) this Master Confirmation, together with the related
Supplemental Confirmation, constitutes a prior “written contract” as set forth
in Section 5-701(b)(1)(b) of the General Obligations Law, and each party hereto
intends and agrees to be bound by this Master Confirmation and the related
Supplemental Confirmation, as supplemented by the Trade Notification.

21.                                 Governing
Law.  The Agreement, this Master
Confirmation, each Supplemental Confirmation, each Trade Notification and all
matters arising in connection with the Agreement, this Master
Confirmation,  each Supplemental
Confirmation and each Trade Notification shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York (without
reference to its choice of laws doctrine).

22.                                 Offices.

(a)                                  The
Office of GS&Co. for each Transaction is: 
One New York Plaza, New York, New York 10004.

(b)                                 The
Office of Counterparty for each Transaction is: 
7601 Penn Avenue, South

Richfield, MN 55423.

23.                                 Arbitration.  The Agreement, this Master Confirmation, each
Supplemental Confirmation and each Trade Notification are subject to the
following arbitration provisions:

(a)                                  All
parties to this Confirmation are giving up the right to sue each other in
court, including the right to a trial by jury, except as provided by the rules
of the arbitration forum in which a claim is filed.

(b)                                  Arbitration
awards are generally final and binding; a party’s ability to have a court
reverse or modify an arbitration award is very limited.

(c)                                  Counterparty
agrees that any and all controversies that may arise between Counterparty and
GS&Co., including, but not limited to, those arising out of or relating to
the Agreement or any Transaction hereunder, shall be determined by arbitration
conducted before The New York Stock Exchange, Inc. (“NYSE”) or NASD Dispute
Resolution (“NASD-DR”), or, if the NYSE and NASD-DR decline to hear the matter,
before the American Arbitration Association, in accordance with their
arbitration rules then in force.  The
award of the arbitrator shall be final, and judgment upon the award rendered
may be entered in any court, state or federal, having jurisdiction.

(d)                                The
ability of the parties to obtain documents, witness statements and other
discovery is generally more limited in arbitration than in court proceedings.

(e)                                  The
arbitrators do not have to explain the reason(s) for their award.

(f)                                    The
panel of arbitrators will typically include a minority of arbitrators who were
or are affiliated with the securities industry, unless Counterparty is a member
of the organization sponsoring the arbitration facility, in which case all
arbitrators may be affiliated with the securities industry.

(g)                                 The
rules of some arbitration forums may impose time limits for bringing a claim in
arbitration.  In some cases, a claim that
is ineligible for arbitration may be brought in court.

(h)                                 The
rules of the arbitration forum in which the claim is filed, and any amendments
thereto, shall be incorporated into this Confirmation.

(i)                                  No
person shall bring a putative or certified class action to arbitration, nor
seek to enforce any pre-dispute arbitration agreement against any person who
has initiated in court a putative class action or who is a member of a putative
class who has not opted out of the class with respect to any claims encompassed
by the putative class action until: (i) the class certification is denied; (ii)
the class is decertified; or (iii) Counterparty is excluded from the class by
the court.

 15
 

(j)                                  Such
forbearance to enforce an agreement to arbitrate shall not constitute a waiver
of any rights under this Confirmation except to the extent stated herein.”

24.                                 Counterparts.                       This Master
Confirmation may be executed in any number of counterparts, all of which shall
constitute one and the same instrument, and any party hereto may execute this
Master Confirmation by signing and delivering one or more counterparts.

 16

EXECUTION COPY

 

 

	
   

  	
  Yours faithfully,

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  GOLDMAN, SACHS & CO.

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Debra Tageldein

  	 

	
   

  	
   

  	
  Authorized
  Signatory

  	 

	
   

  	
   

  	 

	
  Agreed and Accepted By:

  	
   

  	 

	
   

  	
   

  	 

	
  BEST BUY CO., INC.

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
  By:

  	
  /s/ Ryan D. Robinson

  	
   

  	
   

  	 

	
   

  	
   Name: 

  	
  Ryan D. Robinson

  	
   

  
	
   

  	
   Title: 

  	
  Senior Vice President and Chief Financial Officer –
  New Growth Platforms

  	 

								

 

SCHEDULE A

SUPPLEMENTAL CONFIRMATION

	
  To:

  	
   

  	
  Best Buy Co., Inc. 

  7601 Penn Avenue South 

  Richfield, MN 55423

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  Goldman, Sachs & Co.

  
	
   

  	
   

  	
   

  
	
  Subject:

  	
   

  	
  Collared Accelerated Stock Buyback

  
	
   

  	
   

  	
   

  
	
  Ref.
  No:

  	
   

  	
  [Insert Reference No.]

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  June 26, 2007

  

 

The purpose of this Supplemental Confirmation is to confirm the terms
and conditions of the Transaction entered into between Goldman, Sachs & Co.
(“GS&Co.”) and Best Buy Co., Inc. (“Counterparty”) (together, the “Contracting
Parties”) on the Trade Date specified below.  This Supplemental Confirmation is a binding
contract between GS&Co. and Counterparty as of the relevant Trade Date for
the Transaction referenced below.

1.             This Supplemental
Confirmation supplements, forms part of, and is subject to the Master
Confirmation dated as of June 26, 2007 (the “Master
Confirmation”) between the Contracting Parties, as amended and
supplemented from time to time.  All
provisions contained in the Master Confirmation govern this Supplemental
Confirmation except as expressly modified below.

2.             The terms of the
Transaction to which this Supplemental Confirmation relates are as follows:

	
  Trade Date:

  	
  [           ]

  	 

	
   

  	
   

  	 

	
  Forward Price Adjustment Amount:

  	
  USD[           ]

  
	
   

  	
   

  
	
  Hedge Period Start Date:

  	
  [           ]

  
	
   

  	
   

  
	
  Hedge Period End Date:

  	
  [           ]
  or such earlier day as elected by GS&Co.

  
	
   

  	
   

  
	
  Scheduled Termination Date:

  	
  [           ]

  
	
   

  	
   

  
	
  First Acceleration Date:

  	
  [           ]

  
	
   

  	
   

  
	
  Prepayment Amount:

  	
  USD[           ]

  
	
   

  	
   

  
	
  Prepayment Date:

  	
  [           ]

  
	
   

  	
   

  
	
  Initial Share Delivery Date:

  	
  [           ]

  
	
   

  	
   

  
	
  Initial Shares:

  	
  [                   ];
  provided that if GS&Co. is unable
  to borrow or otherwise acquire a number of Shares equal to the Initial Shares
  for delivery to Counterparty on the Initial Share Delivery Date, the Initial
  Shares shall be reduced to such number of Shares that GS&Co. is able to
  so borrow or otherwise acquire.

  

 

 A-1
 

 

	
  Interim
  Shares:

  	
  As set forth in the Trade Notification, to be a
  number of Shares equal to the greater of (a) the Initial Shares and (b) [           ]%
  of the Prepayment Amount divided by the Hedge Period Reference Price.

  
	
   

  	
   

  
	
  Minimum Shares:

  	
  As set forth in the Trade Notification, to be a
  number of Shares equal to (a) the Prepayment Amount divided
  by (b) [           ]%
  of the Hedge Period Reference Price.

  
	
   

  	
   

  
	
  Maximum Shares:

  	
  As set for in the Trade Notification, to be a number
  of Shares equal to (a) the Prepayment Amount divided
  by (b) [           ]%
  of the Hedge Period Reference Price.

  
	
   

  	
   

  
	
  Ordinary Dividend Amount:

  	
  [With respect to the quarterly dividend of the
  Issuer for the fiscal quarter of the Issuer beginning [           ],
  which is payable on [           ]
  to shareholders of record as of the close of business on [           ], USD[           ]. 
  For any fiscal quarter of the Issuer thereafter,] USD[           ].

  
	
   

  	
   

  
	
  Additional Relevant Days:

  	
  The [           ]
  Exchange Business Days immediately following the later of the last day of the
  Calculation Period or, if applicable, any settlement date pursuant to the
  terms of Annex A not in respect of a Second Settlement.

  

 

3.             Counterparty
represents and warrants to GS&Co.
that neither it nor any “affiliated purchaser” (as defined in Rule 10b-18 under
the Exchange Act) has made any purchases of blocks pursuant to the proviso in
Rule 10b-18(b)(4) under the Exchange Act during the four full calendar weeks
immediately preceding the Trade Date.

4.             This Supplemental
Confirmation may be executed in any number of counterparts, all of which shall
constitute one and the same instrument, and any party hereto may execute this
Supplemental Confirmation by signing and delivering one or more counterparts.

 A-2
 

 

	
  

  	
   

  	
  Yours sincerely,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GOLDMAN, SACHS & CO.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  
	
  Agreed and Accepted By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BEST BUY CO., INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   Name: 

  	
   

  	
   

  	 

	
   

  	
   Title: 

  	
   

  	 

								

 

 A-3

SCHEDULE B

TRADE NOTIFICATION

	
  To:

  	
   

  	
  Best Buy Co.,
  Inc.

  7601 Penn Avenue South

  Richfield, MN 55423

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  Goldman, Sachs
  & Co.

  
	
   

  	
   

  	
   

  
	
  Subject:

  	
   

  	
  Collared
  Accelerated Stock Buyback

  
	
   

  	
   

  	
   

  
	
  Ref.
  No:

  	
   

  	
  [Insert
  Reference No.]

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  [Insert
  Date]

  

 

The purpose of this Trade Notification is to notify
you of certain terms in the Transaction entered into between Goldman, Sachs
& Co. (“GS&Co.”) and Best Buy Co.,
Inc. (“Counterparty”) (together, the “Contracting Parties”) on the Trade Date specified below.

This Trade Notification
supplements, forms part of, and is subject to the Supplemental Confirmation
dated as of  June 26, 2007 (the “Supplemental Confirmation”) between the Contracting Parties,
as amended and supplemented from time to time. 
The Supplemental Confirmation is subject to the Master Confirmation
dated as of June 26, 2007 (the “Master Confirmation”)
between the Contracting Parties, as amended and supplemented from time to time.

	
  Hedge Completion Date:

  	
   

  	
  [                  ]

  
	
   

  	
   

  	
   

  
	
  Hedge Period Reference Price:

  	
   

  	
  USD[                  ]

  
	
   

  	
   

  	
   

  
	
  Interim Shares:

  	
   

  	
  [                  ]

  
	
   

  	
   

  	
   

  
	
  Minimum Shares:

  	
   

  	
  [                  ]

  
	
   

  	
   

  	
   

  
	
  Maximum Shares:

  	
   

  	
  [                  ]

  

 

	
  

  	
  Yours sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GOLDMAN, SACHS & CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  

 

 B-1

ANNEX A

COUNTERPARTY SETTLEMENT PROVISIONS

1.             The
following Counterparty Settlement Provisions shall apply to the extent
indicated under the Master Confirmation:

	
  Settlement Currency:

  	
  USD

  
	
   

  	
   

  
	
  Settlement
  Method Election:

  	
  Applicable; provided that
  (i) Section 7.1 of the Equity Definitions is hereby amended by deleting
  the word “Physical” in the sixth line thereof
  and replacing it with the words “Net Share”
  and (ii) the Electing Party may make a settlement method election only if the
  Electing Party represents and warrants to GS&Co. in writing on the date
  it notifies GS&Co. of its election that, as of such date, the Electing
  Party is not aware of any material non-public information concerning
  Counterparty or the Shares and is electing the settlement method in good
  faith and not as part of a plan or scheme to evade compliance with the
  federal securities laws.

  
	
   

  	
   

  
	
  Electing Party:

  	
  Counterparty

  
	
   

  	
   

  
	
  Settlement Method

  Election Date:

  	
  

  The earlier of (i) the Scheduled Termination Date and (ii) the Accelerated
  Termination Date, as the case may be; provided
  that if a Friendly Transaction Announcement occurs after the Settlement Date,
  the Settlement Method Election Date for the Second Settlement shall be the
  date of the Friendly Transaction Announcement.

  
	
   

  	
   

  
	
  Default Settlement
  Method:

  	
  Physical Settlement

  
	
   

  	
   

  
	
  Forward Cash Settlement

  Amount:

  	
  

  The Number of Shares to be Delivered multiplied
  by the Settlement Price; provided that, in the case of a Second
  Settlement occurring after an early termination or cancellation of the
  relevant Transaction pursuant to Section 6 of the Agreement or Article 12 of
  the Equity Definitions, the Forward Cash Settlement Amount shall equal the lesser  of
  (i) zero and (ii)(x) the Payment Amount (as defined below) that would have been
  calculated for such early termination or cancellation if the words “not less
  than the Minimum Shares and” and “,but not below zero,” had been deleted from
  the definition of Number of Shares to be Delivered and, for purposes of
  “Special Provisions for Counterparty Payments” of the Master Confirmation,
  the relevant Friendly Transaction Announcement had occurred prior to such
  calculation, as determined by the Calculation Agent (with an amount that
  would have been owed by Counterparty expressed as a negative number for
  purposes of this calculation) minus
  (y) the actual Payment Amount calculated for such early termination or
  cancellation.

  
	
   

  	
   

  
	
  Settlement Price:

  	
  The average of the VWAP Prices for the Exchange
  Business Days in the Settlement Valuation Period, subject to Valuation
  Disruption as specified in the Master Confirmation.

  

 

 1
 

 

	
  Settlement Valuation Period:

  	
  A number of Scheduled Trading Days selected by
  GS&Co. in its reasonable discretion, beginning on the Scheduled Trading
  Day immediately following the Termination Date or, in the case of a Second
  Settlement, the date of the Friendly Transaction Announcement.

  
	
   

  	
   

  
	
  Cash Settlement:

  	
  If Cash Settlement is applicable, then Buyer shall
  pay to Seller the absolute value of the Forward Cash Settlement Amount on the
  Cash Settlement Payment Date.

  
	
   

  	
   

  
	
  Cash Settlement

  Payment Date:

  	
  The date one Settlement Cycle following the last day
  of the Settlement Valuation Period.

  
	
   

  	
   

  
	
  Net Share Settlement

  Procedures:

  	
  

  If Net Share Settlement is applicable, Net Share Settlement shall be made in
  accordance with paragraphs 2 through 7 below.

  

 

2.                                       Net
Share Settlement shall be made by delivery on the Cash Settlement Payment Date
of a number of Shares satisfying the conditions set forth in paragraph 3 below
(the “Registered Settlement Shares”), or a
number of Shares not satisfying such conditions (the “Unregistered
Settlement Shares”), in either case with a value equal to the
absolute value of the Forward Cash Settlement Amount, with such Shares’ value
based on the value thereof to GS&Co. (which value shall, in the case of
Unregistered Settlement Shares, take into account a commercially reasonable
illiquidity discount), in each case as determined by the Calculation Agent.

3.                                       Counterparty
may only deliver Registered Settlement Shares pursuant to paragraph 2 above if:

(a)                                  a
registration statement covering public resale of the Registered Settlement
Shares by GS&Co. (the “Registration Statement”)
shall have been filed with, and declared effective by, the Securities and Exchange
Commission under the Securities Act on or prior to the date of delivery, and no
stop order shall be in effect with respect to the Registration Statement; a
printed prospectus relating to the Registered Settlement Shares (including any
prospectus supplement thereto, the “Prospectus”)
shall have been delivered to GS&Co., in such quantities as GS&Co. shall
reasonably have requested, on or prior to the date of delivery;

(b)                                 the
form and content of the Registration Statement and the Prospectus (including,
without limitation, any sections describing the plan of distribution) shall be
satisfactory to GS&Co. in its reasonable discretion;

(c)                                  as
of or prior to the date of delivery, GS&Co. and its agents shall have been
afforded a reasonable opportunity to conduct a due diligence investigation with
respect to Counterparty customary in scope for underwritten offerings of equity
securities and the results of such investigation are satisfactory to
GS&Co., in its reasonable discretion; and

(d)                                 as
of the date of delivery, an agreement (the “Underwriting
Agreement”) shall have been entered into with GS&Co. in
connection with the public resale of the Registered Settlement Shares by
GS&Co. substantially similar to underwriting agreements customary for
underwritten offerings of equity securities, in form and substance reasonably
satisfactory to GS&Co., which Underwriting Agreement shall include, without
limitation, provisions substantially similar to those contained in such
underwriting agreements relating to the indemnification of, and contribution in
connection with the liability of, GS&Co. and its affiliates.

 2
 

4.                                       If
Counterparty delivers Unregistered Settlement Shares pursuant to paragraph 2
above:

(a)                                  all
Unregistered Settlement Shares shall be delivered to GS&Co. (or any
affiliate of GS&Co. designated by GS&Co.) pursuant to the exemption
from the registration requirements of the Securities Act provided by Section
4(2) thereof;

(b)                                 as
of or prior to the date of delivery, GS&Co. and any potential purchaser of
any such shares from GS&Co. (or any affiliate of GS&Co. designated by
GS&Co.) identified by GS&Co. shall be afforded a commercially
reasonable opportunity to conduct a due diligence investigation with respect to
Counterparty customary in scope for private placements of equity securities
(including, without limitation, the right to have made available to them for
inspection all financial and other records, pertinent corporate documents and
other information reasonably requested by them); and

(c)                                  as
of the date of delivery, Counterparty shall enter into an agreement (a “Private Placement Agreement”) with GS&Co. (or any
affiliate of GS&Co. designated by GS&Co.) in connection with the
private placement of such shares by Counterparty to GS&Co. (or any such
affiliate) and the private resale of such shares by GS&Co. (or any such
affiliate), substantially similar to private placement purchase agreements
customary for private placements of equity securities, in form and substance
commercially reasonably satisfactory to GS&Co., which Private Placement
Agreement shall include, without limitation, provisions substantially similar
to those contained in such private placement purchase agreements relating to
the indemnification of, and contribution in connection with the liability of, GS&Co.
and its affiliates, and shall provide for the payment by Counterparty of all
reasonable fees and expenses in connection with such resale, including all
reasonable fees and expenses of one counsel for GS&Co., and shall contain
representations, warranties and agreements of Counterparty reasonably necessary
or advisable to establish and maintain the availability of an exemption from
the registration requirements of the Securities Act for such resales.

5.                                       GS&Co.,
itself or through an affiliate (the “Selling Agent”)
or, with the consent of Counterparty, any underwriter(s), will sell all, or
such lesser portion as may be required hereunder, of the Registered Settlement
Shares or Unregistered Settlement Shares and any Makewhole Shares (as defined
below) (together, the “Settlement Shares”)
delivered by Counterparty to GS&Co. pursuant to paragraph 6 below
commencing on the Net Share Settlement Date and continuing until the date on
which the aggregate Net Proceeds (as such term is defined below) of such sales,
as determined by GS&Co., is equal to the absolute value of the Forward Cash
Settlement Amount (such date, the “Final Resale Date”).  If the proceeds of any sale(s) made by
GS&Co., the Selling Agent or any underwriter(s), net of any fees and
commissions (including, without limitation, underwriting or placement fees)
customary for similar transactions under the circumstances at the time of the
offering, together with carrying charges and expenses incurred in connection
with the offer and sale of the Shares (including, but without limitation to,
the covering of any over-allotment or short position (syndicate or otherwise))
(the “Net Proceeds”) exceed the absolute
value of the Forward Cash Settlement Amount, GS&Co. will refund, in U.S.
Dollars, such excess to Counterparty on the date that is three (3) Business
Days immediately following the Final Resale Date, and, if any portion of the
Settlement Shares remains unsold, GS&Co. shall return to Counterparty on
that date such unsold Shares.

6.                                       If
the Calculation Agent determines that the Net Proceeds received from the sale
of the Registered Settlement Shares or Unregistered Settlement Shares or any
Makewhole Shares, if any, pursuant to this paragraph 6 are less than the
absolute value of the Forward Cash Settlement Amount (the amount in U.S.
Dollars by which the Net Proceeds are less than the absolute value of the
Forward Cash Settlement Amount being the “Shortfall” and
the date on which such determination is made, the “Deficiency
Determination Date”), Counterparty shall on the Exchange Business
Day next succeeding the Deficiency Determination Date (the “Makewhole Notice Date”) deliver to GS&Co., through the
Agent, a notice of Counterparty’s election that Counterparty shall either (i)
pay an amount in cash equal to the Shortfall on the day that is one (1)
Business Day after the Makewhole Notice Date, or (ii) deliver additional
Shares.  If Counterparty elects to
deliver to GS&Co. additional Shares, then Counterparty shall deliver
additional Shares in compliance with the terms and conditions of paragraph 3 or
paragraph 4 above, as the case may be (the “Makewhole
Shares”), on the first Clearance System Business Day which is also
an Exchange Business Day following the Makewhole Notice Date in such number as
the Calculation Agent reasonably believes would have a market value on that
Exchange Business Day equal to the Shortfall. 
Such Makewhole Shares shall be sold by GS&Co. in accordance with the
provisions above; provided that if the sum of the
Net Proceeds from the sale of the originally delivered Shares and the Net
Proceeds from the sale of any Makewhole Shares is less than the

 3
 

absolute value of
the Forward Cash Settlement Amount then Counterparty shall, at its election,
either make such cash payment or deliver to GS&Co. further Makewhole Shares
until such Shortfall has been reduced to zero.

7.                                       Notwithstanding
the foregoing, in no event shall the aggregate number of Settlement Shares and
Makewhole Shares be greater than the Reserved Shares minus
the amount of any Shares actually delivered by Counterparty under any other
Transaction(s) under this Master Confirmation (the result of such calculation,
the “Capped Number”).  Counterparty represents and warrants (which
shall be deemed to be repeated on each day that a Transaction is outstanding)
that the Capped Number is equal to or less than the number of Shares determined
according to the following formula:

A – B

	
  Where

  	
   

  	
  A = the number of authorized but unissued shares of
  the Counterparty that are not reserved for future issuance on the date of the
  determination of the Capped Number; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B = the maximum number of Shares required to be
  delivered to third parties if Counterparty elected Net Share Settlement of
  all transactions in the Shares (other than Transactions in the Shares under
  this Master Confirmation) with all third parties that are then currently
  outstanding and unexercised.

  

 

“Reserved Shares”
means 100 million Shares.

 4

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